The legends about CEO transitions are every whit justified. Change in leadership at the top – however planned and streamlined it is – involves changes in the ideology that affect nearly every way a business operates. If a new entrant does not bring new organizational norms, it is only a matter of time before they would. Or, it might stay as an exception and not the rule. Either way, it behooves the HR department and the CHRO to prepare for leadership transitions as early and as thoroughly as possible. When they do this right, they are well-equipped to help other departments ride the change successfully and with minimal friction.
It is unsurprising that succession planning has become an ongoing activity. Every professional who concerns themselves with the growth of their organization and their own career path would keep an eye out for CEO transitions. Even the employees at the bottom of the hierarchy would, indeed should, watch how the organization managing CEO transitions fares before and after, if merely out of academic interest. For the watchful observer, CEO transitions denote deep management lessons concerning every management functional area from brand management to business continuity and entrepreneurship.
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The CHRO’s role in leadership change is critical. The one department that can offer ongoing support from start to end in succession planning and roll-over to new CEO transitions is that of HR. They are led by a chief of personnel who can anticipate struggles and bottlenecks in various hierarchical levels and smooth out the way for the continued meeting of business goals. Here are a few ways how HR can help support a new CEO:
- An outside CEO is usually hired to turn around a company’s lagging fortunes or get it out of a rut. In such a case, it is the CHRO’s role to act as the conduit between the operating principles and transitions from the old management to the new.
- A CEO groomed internally to ascend through the various ranks is less of a surprise to the organization. Here, the CHRO plays a long-term game of strategizing and introducing them by stages. An announcement about the transfer of power may not be met with shock and fear of uncertainty if the messaging is well-thought-out.
- CEO transitions from outside require a transfer of large sets of data and information. Transitioning to a new CEO makes the people wary. The CHRO can be the reassuring bridge that quells disturbed sentiments during this sensitive period. Making reports and repositories available appropriately without being judgmental about it is the CHRO’s direct responsibility.
- Most corporate leaders would have a period of settling in. During this time, they only observe and absorb information without taking an active part in decision-making. The CHRO can assist this phase in the day-to-day by arranging meetings, offering inputs on ongoing deals such as integration activity or market performance, and historical data about how these events were handled by each department.
- The trickiest and most significant activity for the CHRO would be the introductions of the C-suite peers and executives in the company to the CEO. This is where opinions and words have to be applied with utmost caution and as much objectivity as possible. Even so, the CHRO would also be among the persons who will be watched closely by the CEO.
Supporting a new entrant, and not just any entrant but the most important decision-maker, is a delicate matter for the head of HR. But being humane and transparent can go a long way in ensuring the mileage of the company and its market position. CEO transitions, whether reactive or planned, should be spread over time out as much as possible. The results produced are the best markers of successful CEO transitions. These higher aims can give direction to the CHRO as they conduct a new CEO through the most important transition.
Reference: How HR can help support a new CEO | HRM Online | Susan Sadler | 5 July, 2019
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