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Five Leadership Tips During Executive Turnover

Executive turnover happens (just ask Twitter). Here's how leaders can steer an even course.

[Photo: Flickr user haru__q]

This week hasn't been short on major corporate changes. On Sunday night, Twitter announced that four senior executives are leaving the company. It's the biggest leadership shakeup since CEO Jack Dorsey took over in order to breathe life back into the social media company. Meanwhile, Staples, which has been quietly closing locations over the past two years as it battles the Federal Trade Commission over its bid to acquire Office Depot, announced a slate of leadership changes on Monday geared to streamlining its business. And to round things off, the Cleveland Cavaliers replaced their head coach despite the best win-loss record in their part of the league.

Top-level leadership changes usually raise questions about an organization's immediate and long-term future. It can even have a measurable effect on a company's value and stock pricing. In the aftermath of shakeups like those, people inside and outside a company look to its CEO to learn what to expect. Here are a few things that Jack Dorsey (of Twitter), Ron Sargent (of Staples), and Tyronne Lue (of the Cavaliers)—and any leader steering an organization through a transition—need to keep in mind:

1. Be Aware Of How Departures Look To Outsiders

Ideally, leaders should be made stronger by those they surround themselves with. But it should cut both ways, multiplying others' abilities and making their teams stronger in turn. Especially during times of transition, leaders should talk about "we" more than "I." When an entire team leaves, especially a handful of executives, it may send a signal to investors and others watching that a leader isn't empowering his or her leadership team the way they should.

2. Underscore Your Track Record During Tough Times

An effective leader delivers results and takes personal responsibility for doing so. In tech companies (like Uber and Amazon, for instance), there's often what's known as "patient" capital that provides market value far beyond earnings. But individual leaders don't usually earn or hold that same level of confidence for long when their businesses undergo major transitions. To help weather them, executives need strong track records of delivering measurable results amid uncertainty. At times when doubts run high, a CEO should reassure everyone watching that he or she has a plan that will pull through.

3. Explain How The Departures Make Room For Growth

Sometimes fresh talent at a company's upper levels is exactly what's needed. A CEO may have insights into trends that others don't, and it's important to explain the plan for moving forward, not just in spite of, but also because of the turnover. In fast-moving tech industries, it's critical to continually reinvest in new opportunities. For example, Google may not succeed in balloons or driverless cars, but its leaders are constantly positioning themselves to be the innovators and leaders of the future—that's their job. So at times of major changes, there's an opportunity for leaders and company spokespeople to frame the departures as a chance to propel the company forward.

4. Hire The Right Replacements

Good leaders surround themselves with even better people when some of their executive staff leave. The most confident leaders are able to hire and develop competent teams, whereas the least confident leaders often try to make themselves look better by bringing in people who aren't as effective. Whether someone has left or was asked to leave doesn’t matter, just as long as the CEO replaces them with someone who's a better fit.

5. Put The Company's Mission First

Leaders are tasked with turning brand promises into a strategy for action. That's the only way to build trust, both with their own teams and customers. Twitter’s challenge these days is to shore up its promise to users and shareholders, then use that as criteria for reconstituting its leadership team in order to move forward with a clear sense of mission. After all, that's what should drive a company more than the individual persona of a CEO or other executive.

The fact is that leadership transitions happen, especially when a company enters a new strategic phase and the current executive team isn’t the right one to get it where it needs to go. But all too often, the transition focuses too much on the individual people involved, and not enough on the requirements and unique needs of the company. By keeping the focus where it always belongs—on how these developments can serve the greater business goals—a CEO can lead his or her company to an even stronger position.

Dave Ulrich is the Rensis Likert collegiate professor of business administration at the University of Michigan’s Ross School of Business and the author of The Leadership Capital Index.