«Personel direction» magazine
A company is always more powerful than any of its top managers
«Only by raising the status and the fees, I was able to push of the real control away from the top management» — a young, but already honored the CEO of a large company has surprised us once.
A somewhat provocative phrase, if it has to do with life, it is in a very indirect way. Based on the quote, the CEO raised the fees of the people so that they stop working. For a manager it is unwise, since it is at odds with common sense.
Did he really have no other way in a situation where the shareholders are inviting the CEO for the company’s growth, but do not allow him to change the team, with which they grew and created a business?
The CEO, taking over the management of the new company has to discuss all the details. If one of the conditions of the transition is the taboo on the changing of the team, it is necessary to get acquainted with the tops beforehand, to evaluate their professionalism and attitude. In the case that you realize that the founders are not allowing you to change the team, and you can not work with it, agreeing to such a job is not worth it.
Administrative audit — how much time and effort is necessary for the new CEO to understand who is who in the new company?
It all depends on the number of employees, departments, divisions, top managers, directors, founders, and so on. In a company where you have 7 direct subordinates, and the number of employees does not exceed 100–200 people, two weeks are enough for an inspection. For large enterprises this timeline stretches from three to six months. If the company has several offices in different cities, you will not be able to invite the whole top management to a meeting at the same time to understand the whole picture. It is necessary to assess the real work of the tops, to travel to the places, to delve into the process, join the team.
How can a new CEO explore and assess the real authority and capacity of the tops?
A structurization of actions is needed. First of all you need to see the map of processes and the strategic map of the company to understand the organizational structure. This will allow to understand how the system should operate in theory. It sometimes happens that theory and practice are far apart, so the next step is to understand how things work in reality. With corporate email an elementary survey is launched: «Who is your boss," «If you are have not completed your task, what will follow?», «Who is the soul of the company?», Etc. The analysis of the responses will help to identify the shadow leader and to show who has what powers. Following the results two models are formed. First — this is how it should be according to the founders, or the current leadership, and the second — what is the situation in reality.
Change the entire team of old top managers or work with it — is there any other options in the situation a the new CEO joining a company?
There are these options — to replace it partially or to not come to the new company.
«I do not have other writers — work with these» — Stalin told Fadeyev in response to his complaints. Writers — Okay, but what about working with old top managers?
If the management audit and analysis have shown that the tops are in fact good employees, it is certainly necessary to benefit from their experience. It is important to understand why they are looking for a new CEO. It is necesary to find out what happened with the previous, and why the replacement is taking place. For example, the CEO did not achieve the desired results. You must understand — is the problem in the old CEO or did the whole team fail to achieve the goals. If the CEO just moved to a new place of employment, the situation is completely different.
Therefore, while answering the question «How to work with the old top managers?», I would say that first of all it is necessary to determine whether these tops can work and how well suited they are to perform the tasks. If the tops are effectient, than with charisma, experience and an increase in fees and status you engage them in your team and lead them behind you. This option works for a CEO with strong leadership qualities. But not always the CEO — is the leader. You can always find a shadow leader in a company and engage into an agreement with him to achieve the desired results and performance.
The new boss of RZD has recently promised not to change the tops, but after a while he started firing them anyways. Why?
Perhaps he did not initially understand the situation. He decided that the team was great and that he could work with it. Once immersed, he gradually revealed weaknesses and started to introduce changes.
So why do the majority of new CEOs, one way or another, dismiss the old tops of the companies?
It is easier and more convenient to work with your own team. A person almost always resists novelty. To adopt an innovation, you have to go through four stages — denial, thinking, searching the pros and only then — approval. Approval is preceded by a struggle with objections and innovations. Human nature is such that, while passing these stages, it will fight back. To avoid a fight, it is easier to bring in his own team. You are used to all the people, you know how they work, what they want and they understand what you want from them.
A good leader can act differently. He is not afraid to work with a new team, because he understands that development stands behind the novelty. Moving to Kazan from my favorite St. Petersburg to launch a new entertainment center FUN24, was honestly, scary. I’m a fan of Petersburg, and the change of residence appeared to be a disaster for me. For business I had to go to a beautiful, great (as I learned later), but diferent city. It was a complete exit from my comfort zone.
Now I can say with confidence that this decision has given tremendous results for my own development and my career. Not only the city, the team or the company changes, but also your mind, the circle of communication and your knowledge base expands. I began to realize that no matter how much i loved Petersburg, i will gladly go to another city. The new project, team, people, the climate change — it is always a development. Firstly, internal, because you come out of your comfort zone, namely beyond it’s borders begins the process of personal growth. Secondly, while teaching others, you are also developing yourself.
Jack Welch has succeeded in this, was it possible to «avoid blood» in GE?
A real leader, like Jack Welch is not afraid to take strong players into his team, because he understands that only this leads to success. You can accumulate weak personnel around you that will not aspire to take your position, but this road leads nowhere. Firstly, this limits the leader’s own development. Secondly, the efficiency and effectiveness of this approach is unsatisfactory. Ideally, when a lion forms a team of lions just like himself, together they form a pride — a strong group with common goals and interests.
How can err when changing tops?
The company should be above any of the top manager that works in it. It is necessary to forsee the possibility that the outgoing top manager will give away or steal the database. To avoid this, the knowledge of the company should be structured and considerably more extensive than the information in the possession of top management. That is why a database and a knowledge base of the company are formed. The rest is details. For example, in our projects, we do not link our e-mail to our names, to be safe in case of an employee leaving and to facilitate the work of newcomers.
How to start preparing for the change of top managers?
First of all you have to be confident in the outcome. Destroying is always easier than building. The existence of a control system for the knowledge base of the company management, the confidence in the new tops and the maximum support from the founders and the line employees will help to change the management team without revolutions.
How can the old tops react to a fundamental change in management and in the decision-making system?
The old tops can react to any innovations as described above. They can reject the change explicitly or implicitly, but they can also accept it and learn to work in a new way.
Different types of businesses require different approaches: what is acceptable in the trade business, and what it is impossible in the IT when changing the system?
Despite the fact that various different types of businesses are different, the management systems may be similar. The main thing is to focus on the basic principles. In any business, in my opinion, the best a manager will be the one who knows the business from the bottom up. If we take two identical managers with the only difference being that one knows the business down from the beginning (production, information gathering, and so on.) up to the transfering of services (goods) to the client, the manager, who is a professional, not only in the management but in the production also will of course also be a better manager.
Is the individual approach in this process irreplaceable? To what particular attention should be paid?
The devil is in the details, so in any case, an individual approach is required. Only soft skills and principles can remain as common.
Who should negotiate with the tops the removal of their former power and how it should be done, regardless of their merits and achievements?
Ideally, someone acceted the tops to the job. If such a person is no longer there, the removal function has to be performed by the immediate supervisor or a representative of the HR department.
What airtight arguments should be named to the dismissed tops in the first place?
If the dismissal is due to non-fulfillment of key performance indicators or official duties, you may use that as an argument. Ideally, it is necessary to thank the employee for their work in the company.
Blackmailing the top management — which arguments against it they may use? How to avoid them?
If the top will not agree with the new policy of the company and the methodology of work with the new CEO, his argumentation should be considered as a possible option to improve the company. Using the knowledge of tops for the benefit of the company. Any attempt to blackmail should be stopped asap. The company is always more powerful than any of its tops.
How to calculate the risks and damage that a resentful top may cause?
As I said, it is important to have a system of conservation and management of the company’s knowledge base and to say goodbye to the tops with gratitude for their work. Then, the risks can be reduced.
The former tops are often left on the board of directors, making use of their experience and connections. What is your opinion on that?
If it benifits the company, it is logical to do so. This is a favorable resolution of the situation, and a smooth transition from one management to another.
But there are «heavyweights» (hippos), that nobody is able to move. What should be done with them?
If they have such weight and importance in a company, therefore they hav earned it somehow. It is necessary to think about how you can use the experience and skills of these people.
How and how should the CEO leave, to avoid becoming such a «heavyweight»?
If the company is achieving the required performance, and top-manager performs his tasks, why should he leave?
Interviewed bt Anna Bagramova
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Source: «Personel Management» Magazine, № 2 January 2016, pages 59–64