Leaders in Transition

The Tensions at Work as New Leaders Take Charge

Gilles Amado, Richard Elsner

• Publisher: Routledge
• Year: 2018
• Print ISBN: 9780367105716
• eBook ISBN: 9780429915598
• Topic: Psychology
• Subtopic: History & Theory in Psychology
• Index: Psychology

Leaders in Transition brings a new perspective on why some leaders succeed more than others when taking charge of an organisation. Based on in-depth case studies, when four new leaders and their teams in large and complex international organisations were tracked for over a year, this book uncovers that success in managing transition is directly related to leaders' ability to balance tensions, appropriately to the context. The reasons for each leader's effectiveness are explored and analysed, allowing the authors then to extrapolate some general conclusions about the ways in which these tensions reveal themselves during all leadership transitions. Evidently, the success or failure of a new leader is the result of the way multiple actors (the new leader, his or her boss, his organisation and its stakeholders) behave, before and during the taking charge. These multiple interactions are revealed and discussed.

Chapter 1
Diane, Pierre, Max and John: leaders confronting their own challenges

As we stated in the Introduction, our study focused on eight leaders and their teams in very different environments between 2000 and 2003. The conclusions we have reached and the lessons we have drawn–as developed in this book–derive directly from these eight situations.

In this chapter, we invite the reader to engage with four of these transition case studies and to accompany the leaders and organisations through the story of their unique experience. Why them? Why Diane, Pierre, Max and John and not the other four?

Firstly, because we, the authors, have researched and accompanied these four since the very beginning of our research in 2000, building up a relationship with them that enabled us to ask them to participate in the follow-up study. Secondly, because each of these experiences illustrates a particular business context, thus providing us with a fairly complete overall picture of the kind of situation that faces a new leader in transition as he or she takes up a new role. For Diane, at ConsuCo, the mission was to sustain the success of a healthy organisation. Pierre found in Venus an organisation which, following a merger, needed to be given a new impetus, to achieve realignment. At AMI, Max’s mission was to manage a unit that was going through difficult times, to the extent that its very survival was in jeopardy and to operate a turnaround. John’s task at Netco was to create an entirely new sector of activity, to undertake a start-up.

Diane and ConsuCo

In July 2000, Diane officially took up her new position as general manager of the French subsidiary of the ConsuCo group. The remit she was given by the head office of the Europe Division, based in Holland, was to stabilise the organisation and its processes and to recruit suitable subordinates for the posts that were vacant, while maintaining its financial performance. As Diane was arriving, the European Division was in the process of deciding to make its products “European”, that is, to create a uniform product offering across Europe, with one manufacturing unit for each product for all of Europe.

Diane thus returned to France, her native country, after spending more than fifteen years in various foreign countries–the United States, Hong Kong and Holland. For this young woman, the return to her native soil was anything but nostalgic. She had accepted this three-year assignment in France because this would be the first time in her career that she had been appointed general manager; she hoped that she would thereafter be able to move on to a more international position.

Although she had thought long and hard about her decision, it was not without some trepidation that she approached this new mission–she had begun to doubt her ability to succeed in this appointment which was completely new to her, involved a sector of activity that she knew nothing about and was based in a country whose culture had become largely foreign to her.

An unexpected challenge for Diane

Decentralization and entrepreneurism

When Diane joined ConsuCo, the group was highly decentralized. Entrepreneurism was an important element in the ConsuCo value system: her subordinates were expected to behave as though the company belonged to them.

The Country general managers were almost completely free to take whatever decisions they thought fit, as long as the financial returns of their subsidiary reached expectations. This entrepreneurial culture gave the Country managers the freedom to develop their units as though the company were their’s. It enabled Alan, Diane’s predecessor, to put the French subsidiary on the path to spectacular growth.

For many of her subordinates, however, this decentralization plus the highly ambitious financial targets that accompanied it were not without risk. “The requirement to show a good financial return took precedence over everything else; nobody worried about whether the foundations were solid enough to ensure future development. It was short-term reasoning. Initially, the French subsidiary was a very small affair; turnover doubled with the same staff, but today we realise that the rest has not kept pace”.

Some went as far as to say that the historical autonomy of the French subsidiary and its culture of growth meant that the company had become disorganized and self-centred. “The requisite processes and procedures had not been established and management roles were not clearly defined at all. The overall impression was that we were rushing after anything and everything that happened to turn up. The management ethos was very ‘French’ and marked by a kind of conservatism. The staff had been there for many a long year and were not particularly keen on participating in projects with an international dimension”.

Clouds on the horizon

The first signs of weakness in the company began to appear six months before Alan’s departure. Diane’s arrival coincided with several major problems: the departure of half of the marketing team, supply problems and a drop in profits.

For many of her subordinates, the high financial targets needed to be revised downwards so as to take account of the difficult situation in which the company found itself. They wondered whether Diane would be able to stand firm against the pressure to retain the high targets which would come from head office; Head office and its demands for continual growth in revenue, had taken on an almost mythical dimension in the minds of her subordinates.

There were further difficulties in this period of transition: the firm’s clientele were dissatisfied, the marketing director was a new recruit from outside the firm and the management of a business unit was being relocated in another country. In addition, there was no regional vice-president based in Holland and recruiting one was proving complicated. For the first year, therefore, Diane had to report directly to the Division President based in the US.

Diane readies herself

A charismatic predecessor

Alan, Diane’s predecessor, had left after ten years as head of the French subsidiary in order to take up the post of general manager of the subsidiary of another Division belonging to the group–and that Division had its offices in the same building.

Alan was an imposing figure both as regards his personality and as to the results he had engineered: in the space of four years, he had quadrupled the sales of the French subsidiary. His management style seems to have been somewhat paternalistic and he was appreciated more for his communication skills than his organisational skills. He was renowned particularly as a strong marketeer, a capability which he appeared to have put to good use in leading the company to record growth.

The picture that Alan’s former subordinates painted was of a very humane and charismatic person, who was also driven by results. Although a team player, he could also be quite harsh whenever the financial results were not on target. But, despite this, Alan attracted strong loyalty. As one manager said: “Everybody supported him”. The sales personnel in particular appreciated his “straight-from-theheart leadership”.

Alan’s driven and highly personalised leadership style, however, was felt to have undermined relations with the Dutch head office of the Division and also to have restricted the sense of autonomy of those working with him. As one of his subordinates put it: “The whole organisation is impregnated with his way of doing things–the French way. He established a very powerful culture here, in particular a fear of the Dutch. People here were convinced that the Dutch were ready to make drastic cuts in our cost structure. That was his alibi for developing very directive and hierarchical methods ... Which meant that people refrained from putting forward suggestions; they expected to be told what to do ...”

Taking over from such a man was no easy task. His former subordinates were still very much attached to him and his ghost still seemed to haunt the firm. To make matters even more complicated, Alan’s new offices were in the same building, so that he made a habit of talking with his former team. Diane, however, was not overalarmed at this; she saw herself as a very different style of manager to Alan, with his typical “French” style.

The expectations of head office

The decision to recruit Diane, as well as her subsequent actions, make sense if these are seen within the context of the overall strategy of the group to re-focus on five cross-European product lines decided by the Division, with decreased power to national units and a gradual movement towards greater centralisation.

The Group was looking for a general manager of national units with specific qualities: “We are looking for people who are able to work in the context of a federation of companies, based on strong inter-dependence between the various units, while at the same time having a high degree of personal responsibility”. This implied the ability to manage local business activity while strengthening cooperation between the countries through sharing experiences, processes, products, etc.

For its French subsidiary, the Division wanted someone with an international background, someone different, someone who would change things. The choice of a woman was quite deliberate. The Division wanted to make a point about its commitment to equal opportunities policy, but also to allow the new general manager to make a break with the recent past. Diane had quite a number of assets. Not only was she a skilled manager with particular strengths in process management, she had also worked for several years with another American multinational. She was strong in marketing and was comfortable with strategic thinking. She was perceived as having a strong but friendly personality. She was said to have good leadership qualities and to be particularly resolute. She had proved that she had strength of character and that she had a long-term view of her career. To her demerit, however, she was recognised to be new in the role of general manager and to have limited knowledge of the retail trade in France. The Division, however, was prepared to take the risk.

Head office had the impression that it would take Diane about a year to settle into her new job as general manager.

As regards their expectations of the French subsidiary, senior managers in the Division had a range of views. The most powerful voices, to which Diane listened most, thought this: “Diane’s success or failure will depend on her ability to build up a reliable organisation with the appropriate key processes, not only on the supply side, but also as regards sales and marketing. Financial returns will follow on from that–but whether or not this happens within her term of office is another question. If she can show that she has put in place the correct processes, that she has stabilized the situation, improved matters and in addition reached financial break-even, that will be fine”. Others in the Division felt financial performance was key: “Diane must get results in order to have sufficient time at her disposal to make structural changes and transform the organisation. Further, she must develop her subordinates and protect them from any pressure that will be brought to bear on them if financial performance is not good”. Other people hoped the French subsidiary would meet both expectations: “Within the next twelve months, she will have to have built up a management team, helped her direct reports to show real progress and supervised the recruitment of candidates who will be future management material. She will first of all have to set up the appropriate structures, find the right people, deal with the processes which need improving and finally handle the transformation of the information and management systems. All of this has to be heading in the same direction. That will be the criterion of success or failure. Giving people the opportunity to realise their full potential will of course take longer. But the financial returns must be clear for all to see by the next fiscal year”.

A bare six months after taking over, Diane was seen by head office in Holland to have made a good start; they had no regrets about the choice they had made. “She does what has to be done, she argues for her ideas and defends her subordinates’ positions. She is open-minded and frank, she says what she thinks of people and of situations. When a problem arises, we say so and we discuss it. She works in a very structured problem-solving way. But on our side, we have to make sure that the ship doesn’t go down too much”.

The myth of the big bad Dutchman

Diane soon realised that she had a lot of work on her hands if she were to improve relations between the French subsidiary and head office, perceived as a kind of “big bad wolf”. When the French managers went to present their annual budgets and programmes, they saw themselves as lambs being led to the slaughter.

Furthermore, the new strategy of the Division, with its planned centralization of certain processes and re-focussing on the common product lines, was looked on with suspicion by people in the French subsidiary.

In such a context, Diane might well have been perceived as an envoy from head office, sent to take control of the French subsidiary and oversee all that was taking place there. This impression of collusion with head office could have gathered strength from the fact that Diane spoke Dutch and had lived in Holland. Diane herself felt that the fact that she had had some experience of the Dutch way of life had been a strong factor in her being appointed.

Action!

Diane soon came to realise that she was going to have to cope with a complex series of tasks–find solutions to problems that could not wait, get the team members settled into their new positions, produce a long-term strategic plan–even though she still had a great deal to learn.

A new team

Diane’s appointment came as a surprise to her French subordinates–although, for many of them, it was welcome in a number of ways. Some were slightly anxious, wondering how anyone from outside the company could ever fit in. Overall, however and somewhat surprisingly, the change of general manager was felt to be an opportunity and a good thing for the company. It became clear that many people thought that Alan was not the person needed to instigate the kind of change that had become necessary in the company from mid-2000 onwards. He had been the builder, but he was not seen to be the type leader to consolidate the firm, with all the reorganisation which that implied.

It became apparent that, by and large, the staff had positive expectations of Diane, based on what they knew of her previous career, of her profile and, implicitly, of what they wanted for the business as a whole.

In spite of her ties with Holland, Diane did not seem to be perceived as a spy sent from head office but rather as someone who would carry out the transformations that had to be made: these would involve inventing new ways of doing things, reorganising the marketing and sales departments, bringing the subsidiary’s methods and practices into line with those of the rest of the Division and renovating the company itself.

A time for learning

Diane spent some time with each member of her team in order to gain a better understanding of his or her activity and of the firm as a whole. She seemed to have a flair for seeking out relevant information and for getting the right people to collaborate with her. She avoided claiming to be the expert and taking decisions on her own. Well aware of her lack of knowledge of the firm, she sought the views of those who had this deep knowledge and turned her meetings into real learning opportunities.

People around her remarked on her pragmatism and on her ability to reach a rapid diagnosis with the person responsible for a given activity; she would then prioritise the issues involved. That done, she would leave her subordinates to carry out the plan of action they had agreed on together, avoiding the temptation to intervene when other people knew more about a subject than she did.

Four months after taking charge, Diane made customer visits with regional sales representatives, going as far as to help them place their products on supermarket shelves. “She wants to know and to understand what goes on, to have as thorough a grasp of things as possible. At first people were wary of her intentions, they wondered if she’d come to check them out and to decide whether their job was necessary or not. But in fact she was there to observe. She had no intention of reducing the number of sales staff; she wanted to find ways of improving our sales operation”.

In spite of the pressure to get things moving quickly, Diane was determined not to take any decision without having reached some understanding of the situation. She distinguished between two levels of urgency: those issues that were priority and or absolutely necessary and longer-term projects, such as more fundamental organisational changes.

First actions

A certain number of changes were rapidly introduced, in particular improvements in the marketing department and in customer services, as well as solving ...

Table of contents

• Cover
• Half Title
• Title
• Copyright
• Contents
• ACKNOWLEDGEMENTS
• ABOUT THE AUTHORS
• Introduction
• 1 Diane, Pierre, Max and John: leaders confronting their own challenges
• 2 Tensions and dynamics
• 3 The context
• 4 Tensions and transitions: what the leaders think
• 5 The psychology of transition
• Conclusion
• BIBLIOGRAPHY
• INDEX