The Phoenix Factor: Restoring Leadership Effectiveness

There are many reasons why a company might change directions and move forward with a new business strategy. Some transformations are brought on by external forces like buyouts, mergers or acquisitions. Others are an attempt to keep up with evolving markets, such as developing new product lines or placing greater emphasis on service and customer intimacy. Whatever the motivating factor, any major strategic shift can change the upper management profile of success; what good leadership looks like to guide the organization forward.

What happens to executives who are strong from a technical perspective or who have successfully driven results based on the old profile of success, but are misaligned with the new model? Often, when people have been around for a long time their history precedes them — their projected future is ingrained in others' minds and it is difficult to see exactly how they could make the necessary changes to fit a new corporate vision. In this issue of Executive Insight, we explore the conundrum of what to do with a leader who has fallen out of favor but still has valuable skills to offer the organization. We identify the signals that help assess whether the individual has the potential to turn things around, regain credibility and make a strong contribution in the future.

What Usually Happens
Shifts in strategy and direction require parallel adjustments in leadership to successfully execute the plan. Organizations are typically strong in defining business objectives and the steps required to move the company forward, but often fail to clearly define leadership requirements for a new course of action. Adjustments to the strategic mission can result in some colleagues being left behind as the nature and focus of the business outgrows them. The new rules of engagement are often unwritten and not clearly communicated. Those who need to adopt a new management style are often given corrective feedback too late (if at all) and not provided with clear guidelines regarding the behavior that is expected from them in the future. Rather than deal with a situation early and incrementally, there is a delay and the "old school" leader gets blindsided with a demand for new outcomes using different methods. Some either miss the call to change or cannot adjust quickly enough which opens a gap that makes them increasingly untenable in a role. This gap looks significantly larger when the individual is typecast as resistant to change or seen as too far removed from the new profile of success.

The fact that this gap is left to grow is the real problem. Many failing executives report not receiving adequate feedback early enough in the process to help them identify the need for change and make the necessary adjustments ahead of time. When the feedback does finally come, it often includes a litany of issues that sound insurmountable. Most people recognize at this point that they are on shaky ground and their commitment to the organization fades. They perceive disrespect and develop a lack of trust in their peers. There is a real danger that a potentially valuable human asset may feel marginalized and resign, taking knowledge, skills and contacts out the door. A disenfranchised strong contributor can suddenly become a fierce and motivated competitor.

Evaluating the Situation
Before addressing the re-development of an ineffective leader, it is essential to first step back and establish the need for the individual's talents in the organization. This should be part of the management due diligence process undertaken before a change initiative, acquisition, buyout or merger takes place. The strategic goals of the organization should be outlined to determine where the company is heading and what it will take to get there. Once a vision of the new organization and the senior team culture is in place, the determination can be made if there is a definite need for the skills, talent and experience of the person in question and if he or she has the capability to make the changes needed to be a future force.

Establishing the Need
With the picture of the new organization in place, the determination of how the failing leader fits into the future can commence. Senior stakeholders, including the CEO, should consider the following before deciding to proceed: did the assessment of the organization requirements and current team members reveal gaps in certain critical areas which match the unique talents or institutional knowledge base of the individual; is the person still valued by the organization; are there key strengths that can be leveraged in addition to the things that need to change?

Determining the Probability of Success
Once decided that the executive has potential value to the company the next step is to ascertain whether he or she recognizes the need to change and has the necessary level of motivation to make the required behavioral modifications. In many situations, significant changes to personal leadership techniques are critical, e.g. a shift from a command-control approach to a more engaging (coach, engage, develop, retain) style. There may be mounting pressure to think and act strategically, influence without authority, lead effectively in a matrix organization, operate with a cross-functional mindset, or lead and champion change. Real or perceived side issues relating to personality and style also need to be addressed, such as how the individual uses (and potentially abuses) power, treats and interacts with others, or respects other functions and embraces their value.