Communication Breakdowns During Leadership Transitions

Stephen Michael Impink, Andrea Prat, and Raffaella Sadun have published a thought-provoking paper titled "Communication within Firms: Evidence from CEO Turnovers." Impink and his co-authors studied internal communication data for more than 100 companies in the period around a CEO transition.  They found an interesting pattern.  First, during the three months following the appointment of a new CEO, email traffic and the number of meetings declined by approximately 20%.  Roughly five months after new CEOs began their tenure, communication increased to slightly more than the amount prior to the leadership transition.   Six months after the transition, meetings and email volume returned to approximately the level prior to the appointment of the new CEO.  

Why does communication dip immediately following the leadership transition? The authors suggest that employees are uncertain about the future strategy and direction of the organization.  Perhaps they are a bit confused.  People are waiting and watching, trying to interpret signals and analyze statements emerging from the C-suite.  A great deal of speculation about the future probably occurs, though likely amidst informal communication at the water cooler rather than through formal meetings.  

You can see the risk associated with this communication pattern.  The new leader may not want to pronounce their strategy in those first few weeks, as they learn about organization and diagnose the situation. Still, they have to be careful about just how much confusion and uncertainty might affect the organization.  If you leave people a vacuum, they will fill it... but with speculation and gossip, which might do more harm than good. 

Leaders would be well-served to keep employees in the loop as they proceed with their diagnostic and learning process.  Providing regular updates on the transition and meeting with people to collect feedback can help reduce stress and tamper down speculation. Giving people a rough timeline of how the transition will proceed can be helpful.  You don't want people paralyzed during a transition.  You want them to stay focused on executing, while the strategy reset is unfolding.  Finally, leaders need to ask themselves: what will most certainly NOT change?  Will the organization's foundational purpose remain the same? Will its values stay unchanged?  If so, let people know - loudly and clearly.  Reassure them regarding the things that will stay the same.  That will help alleviate much of the stress and confusion surrounding a transition.