Two cooks in the kitchen? Dealing with leadership overlap
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Businesses go through leadership transitions for many reasons, including retirements, resignations, buyouts, and more. What happens when a transition occurs, and the previous owner is still in the picture?
Recently, I was appointed president of our organization and my predecessor moved up into our parent company. As we worked through the transition, we experienced leadership overlap and found effective ways to deal with it to benefit ourselves, our clients, and employees.
If your company will be going through an acquisition and the principal will become part of the parent firm, you may encounter some of these issues. Here’s what we’ve learned from our experience along with watching client transitions via sales and successions.
Timing
Timing job transitions can be tricky if the deal and leadership announcements are kept under wraps until final signatures. The absorbed company won’t be able to do an open search for new leadership before the promotion of the previous principal. The former head may find themselves doing two jobs until a successor is hired. The result can be chaotic, with unmanageable numbers of direct reports and an unsustainable workload.
Having a person in mind and quietly observing them to see if their leadership style is a good fit can accelerate the search process. Naming an interim CEO is another way to avoid a leadership vacuum.
Tangled reporting chains
When the previous head is still “in the picture,” staff may have trouble breaking old reporting habits. They may bypass the new leadership – either out of habit or perhaps out of a sense of loyalty to their former manager.
Clear lines of reporting need to be established and adhered to for new leadership to effectively become trusted management. That means the new leader steps forward while the old one consciously steps back.
Providing room for new principal to work
Just as plants in a garden need room to grow, a new leader needs space to establish their management style. Even if well-intentioned, too much involvement by the previous principal can hamstring the new leader’s ability to chart their own course. Leaders are hired to lead – not just to copy the methods of their predecessors – and they need to have the freedom to do so.
Successful transitions occur when the previous leader provides mentoring but is not so involved that new one can’t make their own decisions. Fortunately, in our situation, my predecessor did a great job of giving me the space I needed while always being available to help when needed.
Clear communication for clients
Without clear communication, transitions can confuse clients and potentially disrupt their relationship with the business. For example, top-tier clients accustomed to personal service from the firm’s founder may question whether the successor will provide the same level of attention. Some may want to continue dealing with the previous principal in a transition period because, “After all, you’re still part of the same company. Can’t I just keep seeing you?”
Introducing new leadership in a series of personal, one-on-one meetings with key clients goes a long way to protecting relationships and avoiding confusion. Under normal circumstances, relationships with key clients demand a significant amount of time; in a transition, they require even more.
Fear of asking questions
Having one’s predecessor continuing to work in the organization can be intimidating. The successor may want to prove themselves but take a back seat with the previous leader still hanging around. Don’t miss this golden opportunity to learn from your predecessor while they’re still around.
Get in their head. Ask questions not just addressing the person who’s stepping back but also key members of their team. Some of the questions might sound simple, but they’re so important to reduce risk repeating mistakes.
The previous owner and the successor should schedule regular meetings, with the agenda being set by the latter. With that arrangement, the predecessor avoids telling the successor how to do their job but is available to answer questions.
Be flexible
No matter how well-planned a transition is, hiccups will occur. A key client may leave despite heavy doses of TLC from the previous and new leadership. Key staff might not like the change and decide to find another job.
Being flexible is key to weathering these situations. Stay focused on the mission, vision, and values of the business while being open to new opportunities will allow an organization to make it through the challenges of leadership transition.
Alicia Chandler is president of Indianapolis-based Oak Street Funding, a First Financial Bank company, with customized loan products and services for specialty lines of business including certified public accountants, registered investment advisors and insurance agents nationwide.