Organizational leadership has more influence on corporate culture than any other single factor.

Quality leadership and quality culture go hand in hand.

When leadership changes, culture always changes to some extent, and for the most part, this is a positive evolution. But when companies think of leadership succession planning and corporate culture as compartmentalized and separate, leadership changes can affect culture in unpredictable ways.

Companies that invest in leaders and invest in culture, knowing how closely the two are interconnected, will experience less upheaval during leadership changes – particularly during unexpected leadership changes. Smart leadership succession planning considers the effect of leadership on corporate culture and plans for it accordingly. Succession planning without regard to culture, on the other hand, can lead to serious problems.

Leadership Transitions That Strengthen Culture

Leadership transitions that:

• Articulate current and future roles
• Continue to develop a “deep bench” of leadership within the organization
• Recognize skills gaps and plan for leadership development
• Plan for ways to retain institutional knowledge
• Plan for replacing unique or highly specialized competencies

are the kinds of transitions that strengthen corporate culture. If it looks like hard work, it is. It can be especially challenging in companies where the personality of the person at the top is very closely associated with the company identity (like the late Steve Jobs). But it can be done and done well.

This is not to say there won’t be any disruption associated with leadership change, because some disruption is inevitable. But this disruption won’t feel calamitous, and people’s confidence in the organization won’t waver. Succession planning and cultural planning must be considered almost as two sides of the same coin.

Common Mistakes in Leadership Transitions That Can Damage Culture

The biggest mistake that damages culture during leadership transitions is the lack of a plan. Reasons that companies fail to develop strong leadership succession plans include:

• Not knowing how to do so
• Thinking that it’s unnecessary
• Overconfidence that the leader will be around indefinitely

Succession planning is hard. It’s also necessary for long-term success. 

Another mistake is leaving lower-level managers and front-line employees out of the loop. When a major leadership change is announced out of the blue, people’s confidence is naturally shaken. While companies can’t know when a true crisis or tragedy will force a sudden leadership change, they can prepare for such an eventuality through strong leadership development programs, a clear succession plan, and transparency of communication with all employees.

The Opportunity for Corporate Culture to Evolve

Planned leadership changes are natural transitions where cultural change can feel well-timed and prudent. Typically, these cultural changes are more evolutionary than revolutionary. A new CEO may have a different approach to company-wide communication, for example. Or if reorganizational steps have been planned for a long time, a leadership change makes a good starting point for implementing those changes.

The keys to making positive cultural changes during leadership transitions are honesty, transparency, and communication. Knowing that top leadership is changing can be stressful enough but being kept in the dark about it can needlessly amplify the stress of employees.

It may seem trite to say that “failing to plan is planning to fail,” but it applies when it comes to leadership succession planning. Changes at the top of the organizational chart are felt throughout the organization, especially if those changes come as a surprise or if there doesn’t seem to be an explanation for them.

Succession planning can have a “morbid” aspect to it, but leaders’ responsibility to the good of the organization demands it. Having a plan for the future helps make the present more stable. And leadership succession planning that respects the importance of the organizational culture and accounts for it adds additional stability. Changes in top leadership don’t have to adversely affect organizational culture. They can be a great starting point for positive cultural changes.

If you would like to learn more about leadership, succession planning, and the tremendous importance of organizational culture, I encourage you to check out my books, including my latest book The Intelligent Leader.

Back to blog