Most recent studies on managerial transitions converge on an alarming finding. With the resurgence of the pandemic and increasing uncertainty, organizations are increasingly adopting stand-still attitudes, favoring familiar faces and strategies, rather than disruptive bets. Whether at the private sector level, where there is a decline in leadership changes, or at the public level, where most leaders should be renewed in their positions and the same coalitions renewed in the upcoming elections. Are we doomed to 'change everything so that nothing changes' in this particular context?
Do the boards of directors have a broken compass with the pandemic, where do they prefer to bet on the outgoing teams in order not to take risks? A study that was almost ignored during the summer, carried out by the leading research firm Spencer Stuart in collaboration with the strategy consulting firm Bain & Company, indeed reports a drop in CEO changes of the order of 32%. According to this source, boards of directors generally tend to favor stability during global crises, that of the Coronavirus being no exception. According to analyzes carried out by the two firms, during the global financial crisis of 2008, managerial changes fell by nearly 62% on average, regardless of the conditions in which companies were operating. In short, faced with the impossibility of attributing responsibility for mediocre performance to management or to the crisis, the shareholders, like the decision-making circles, favor continuity, even if it means worsening the situation of the institution.
To change or not to change anything?
Of course, this attitude is partly understandable. Handing over the management of a company to a new manager or a new team is usually a delicate matter. To do so in times of crisis becomes almost an impossible task, so great is the uncertainty. It is therefore almost normal to want to keep "familiar faces", which can reassure bankers, partners, as well as customers. Except that this very conservative attitude in the face of an uncertain context can have an enormous cost: that of plunging the company into an even more serious situation by missing technological, managerial or cultural turns.
Indeed, faced with the crisis, the leaders adopt sometimes paradoxical attitudes. They are trying at all costs to reduce costs, keeping their noses fixed on available cash. External growth operations, sometimes essential for gaining new territories or investing in new businesses, are often put on hold until there is “more visibility”. However, the Covid crisis has just given us the scathing demonstration: it is now possible that uncertainty will become the rule, and that the fog will remain thick for many more months, even years.
A governance crisis that generates an HR crisis
From this immobilist temptation often results a much more muted and pernicious crisis, that of the flight of talent. Indeed, keeping management teams in place almost automatically means that internal talent promotion will be seized up. Those who aspired to a promotion or access to the famous corner offices are chomping at the bit. Usually, they are told that they will have to be patient. The result: the best people often leave the ship, attracted by the few offers still available from competitors, or attracted by new business niches that appeared during the crisis. This trend is further infecting the situation of the institution, because those who have the qualities required to be at the helm during the crisis are those who leave the boat the fastest. In fact, the managerial qualities of post-Covid bosses are not the same as those that prevailed before the pandemic. To be able to navigate in troubled waters, it becomes necessary to be more curious, more agile, more humble and more empathetic. These qualities often run counter to those of the teams kept in place, which, having the confidence of their boards of directors or their shareholders, often demonstrate a feeling of omnipotence that contradicts the economic situation in which we are.
How to get out?
In 1999, a book by Andy Grove, former CEO of Intel, would become the bible of contemporary management and leadership. Entitled "Only the Paranoid Survive" this book tells how the microprocessor giant has managed to overcome major crises by relying on a major strategic inflection point. According to the author, “progress is never final. It is up to the leaders to adapt the values they want to save. Often copied, but rarely equaled, the "Grove Method" has over the years become the Alpha and Omega of modern leaders, as was the doctrine of iconic General Electric boss Jack Welch in its day. which recommended “Up or Out” as a management method. Except that these two antiphons, namely agility and performance, have now lived with the virus. Indeed, well beyond the managerial philosophy, the pandemic has accelerated a profound change in our societies, the confinement of which has revealed a major societal transformation: the now deep interest that workers and consumers have in the sense of their business and its purpose.
The “raison d'être”, a Has Been subject that has become fashionable
A topic almost immediately "Has Been" when it began to be talked about by a few top bosses in the mid-2000s, the "raison d'être" of the company is now at the heart of the global conversation about the company. Consisting of aligning the interests of consumers with those of shareholders, this concept goes well beyond social and environmental responsibility, and covers aspects such as well-being at work, collaborative modes, the gradual elimination of relations of subjection , as well as the framework in which the employees evolve. As such, the promoters of the "raison d'être" have in the pandemic a sort of revenge on history, suddenly becoming fashionable. This is where the role of boards of directors and shareholders must find the favorable crucible to, on the contrary, accelerate managerial transitions when they are necessary, and abandon the precautionary principle that has prevailed until then. The stake goes well beyond the private sector, because it is quite possible that a certain number of peoples decide to renew populist leaders to their posts for fear of uncertainty.
As Sylvie Kauffman described in a striking shortcut in a column in Le Monde in 2016: “the camp of the progressives, defeated, divided, ridiculed by their opponents, has no more time to lose to plunge into paranoia and identify, by redefining its values, the leap to be made. In some countries, intellectuals are coming together to launch this reconstruction work. Paranos of all countries, unite! ". In this very special period, never have his words had so much significance, because democracy, whatever one may think of it, is not immortal.