Manage Divided Loyalties During Leadership Transitions

In June, Men’s Wearhouse fired its founder and chairman George Zimmer due to what was described as an internal power struggle. Zimmer had relinquished his CEO spot to Douglas Ewert two years earlier, but according to many reports still craved more control than the board was willing to accept. For company founders and long-time CEOs, ceding even a minimal amount of control is never easy.

What’s often lost in such power shifts is the impact that they have on the entire organization – from the leadership team on down. For those who have worked closely with someone like Zimmer through years of growth and success, there may be a tendency to side with that person who has been their boss, friend and mentor. And yet they must be loyal to the new CEO for the good of the company.

The divisions formed in these situations can disrupt and compromise the entire business. What should a human resources executive or talent manager do? There are several courses of action:

  • Put the company first. As high-ranking employees, talent leaders may have strong and valid feelings during tense leadership transitions, but must keep their opinions in check and remind themselves that their loyalty first and foremost is to the firm and its future.
  • Prepare peers and colleagues. History tells us these situations are never easy and can be corrosive to morale. Without sounding alarmist, talent leaders can make it clear to everyone that a leadership transition involving a founder or long-tenured CEO won’t be without headaches and hurdles, but that the company will endure.
  • Urge the board of directors to explicitly delineate responsibilities for both former and new leaders. It is critical for all leaders to know the parameters of their roles, and for the rest of the organization to know where the buck stops in given situations.
  • Be candid with the founder or former CEO about his or her reduced role. The most senior HR executive must sit down with the leader of the old guard and establish the ground rules for a new era. The conversation might go something like this: “You have a new role and we understand it’s going to be a challenge for you. For the good of the company, we need your support, but within the guidelines of your new position. If this is too much to ask, then perhaps it’s best not to do it at all.” The point is that the new paradigm must be abundantly clear.
  • Monitor the first six months. This is the critical period in such a major transition. Within these first few months it should become clear whether the new leadership arrangement is working out. Be proactive and ready to step in when it seems either side, new or old, might be veering off course or overstepping their bounds.
  • Maintain consistency of message. Work with the board and senior communications executives to ensure a consistency of spokespersons and messages to customers, clients and media members. Reiterate to all employees that spreading hearsay and rumors, especially at a time like this, is unprofessional and potentially damaging to the organization.

Charles W.B. Wardell III, Witt/Kieffer President and Chief Executive Officer, is internationally regarded as a leader in the executive search industry. He can be reached at editor@talentmgt.com.