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Talent Management Perspectives

Published June 2009

Managing Internal Leadership Transitions After Downsizing

  Rebecca Schalm

Unemployment is at an all-time high. Firms are shedding employees and few have plans to start hiring again. Rather than tap the external market for talent as staffing needs shift to accommodate different strategic and operational priorities, companies are opting to re-deploy what's left of their existing resources.

Downsizing inevitably leads to a reorganization of people and departments. Responsibilities shift. In addition to dealing with the emotional upheaval caused by layoffs, employees have to adapt to new, often increased, work demands. The pressure to get up to speed quickly can be intense. 

But organizations have a poor history when it comes to managing employee transition. According to Alexcel Corporation and the Institute of Executive Development research from 2008, 21 percent of internal leadership transfers are unsuccessful. This is surprising considering the shifted employees and their talents are, presumably, well-known. If the failure rate is this high when organizations are rich with talent, what are the chances it will improve when talent is tight and moves are sudden and unplanned?

RHR International recently undertook research to identify internal transition challenges and to develop strategies for helping individuals and organizations manage these successfully. Early results suggest a number of key factors influence transition success. Three of particular relevance during downsizing are pre-move preparation, role clarity and organizational support.

Prepare Leaders for Transition
Under normal circumstances, employees often have little formal advance preparation for an internal move. When an organization is downsizing, this scenario is exacerbated. For example, as a result of recent layoffs, one client suddenly went from being the vice president of human resources — a role he held for eight months — to vice president HR and communications, a completely foreign function. To help leaders prepare for these types of rapid transitions, talent managers should explicitly identify knowledge and skill gaps and put a plan in place to close, manage or mitigate them. Then they should create overlap. If possible, arrange for an exiting employee to stay long enough to help train their replacement and transfer important information. 

Clarify Role, Responsibilities and Expectations
According to research findings, it takes employees — even those with significant tenure — some time to fully understand and appreciate the demands of a new role and the expectations of their boss and other key stakeholders. Even those well past the six-month mark consistently complained that it was difficult to gain clarity. Unlike external searches, internal moves often lack the pre-hire conversations about the job, and people step in with a good-luck slap to the back and only a vague understanding of the role.  Organizations are also more likely to assume that existing employees will be able to figure things out on their own. But without role clarity, it's difficult for people to drive the results expected of them. During a downsizing, the situation may be complicated by a lack of continuity in other important roles. A newly appointed leader may find himself reporting to a newly appointed boss, who needs to figure out his or her own job. To help accelerate role clarity and success, consider the following:

• Create role descriptions that define key areas of responsibility and deliverables, and review these with the employee.
• Insist managers hold meetings with direct reports, even if the reporting relationship is not new, to explicitly discuss expectations. Facilitate these to ensure they take place.
• Maintain reporting relationships where possible. Leaders who report to a previous manager have an easier time.

Organizational Support
According to research findings, there is little support for internal transitions. When participants were asked what help transitioning employees needed, requests for support dominated — be it from a boss, peer, mentor, coach, predecessor or HR. Employees want to engage with people to ask questions and discuss issues that pose challenges to their successful integration. For some, it's about understanding and adjusting to a different group culture. For others, it's the need to get up to speed on new products, services or the business. Some need to adjust to operating at a new level of leadership. When transitions happen during a downsizing, the probability that people will get thrown into unfamiliar waters, over their head, increases dramatically. It's important to provide support by pairing up new transfers with established team members to provide support and guidance. Then, check in with the leader at regular intervals and ask who they would really like to talk to. Arrange an introduction or facilitate a meeting.

Downsizing is tough enough on organizations without adding transition failure to the equation. Talent managers must consider carefully which employees they move into new roles and how to help them be successful by preparing them, clarifying roles and offering support.
     

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