Seismic shifts

CEO’s out? Other big changes occurring? That may be a key time for leaders to focus on employee engagement, Korn Ferry Hay Group research finds.

Major organizational change, like earthquakes, can be hugely disruptive deep into a company’s core, disengaging employees and reducing their confidence in their employers at a critical time, new Korn Ferry Hay Group research finds.

The firm’s study says employees, in times of big change, may question if their company can retain top talent, encourage innovation, address poor performance, be organized and run effectively, and communicate well with the rank-and-file.

“Given that 2015 was a record year for corporate mergers and acquisitions, the issue of change at the top is a very real possibility for organizations,” said Mark Royal, a senior director for the firm. “And while no two changes are the same, many factors influence whether they succeed or fail. But we know from our work with clients across the globe that there are distinct ‘dos and don’ts’ to help leaders engage and enable their people.”

The firm recently analyzed information from its global employee-opinion database, which includes responses from more than six million employees, comparing results for organizations undergoing large-scale change with corresponding global averages. The data indicated that employees during major change develop doubts that their company:

  • Can retain high-quality employees—27% lower than global average
  • Encourages staff to take reasonable risks (trying new ideas or new ways of doing things)—18% lower
  • Organizes and structures itself effectively—13% lower
  • Addresses poor performance generally and effectively—16% lower
  • Manages itself effectively and is well run—11% lower
  • Keeps employees informed about the business’s performance—19% lower

Korn Ferry studies have shown how critical employee engagement can be for organizations’ success, with high levels potentially boosting revenue growth by up to two and a half times. The firm, with its new Superior Performance Model, seeks to assist organizations in addressing workers’ Commitment (including engagement), Clarity, and Capability, as well as companies’ Purpose and Vision, Choice and Focus, and Accountability and Fairness. Firm research shows these essential Organizational Enablers and People Drivers affect outcomes such as revenue growth, market share, level of service, and client impact.

Further, the firm and its Board and CEO Services practice, with deep experience in assisting organizations globally with talent issues at the top, long has emphasized the importance of forward-looking succession planning. Recent Korn Ferry research has shown the high value of boards and CEOs exercising robust processes, such as extensive and validated assessments, to scrutinize CEO candidates. That’s because assessments can help predict how CEOs, especially if they fit well and have longer tenures, affect businesses’ financial performance.

When organizations must make big shifts, the firm’s new report, One Definitive Guide to Engaging Through Change, urges leaders to:

  • Engage before the change. Work to develop strong engagement levels before change to help weather the storm.
  • Make communications crystal clear. Commit to working with leaders and the internal communications team from the start to create frequent, clear, and consistent communications.
  • Set leaders up for success. Coach and develop leaders, and help them understand their personal role in change.
  • Support and equip managers. Make sure they have the tools, skills, and ideas to engage teams.
  • Involve people. Change impacts the entire organization. Develop ways to retain the best and brightest.

“Change can make the future look less certain, which gives your competitors a great opportunity to try to snatch your best people,” Royal said. “Make sure you know who your high performers and high potentials are, then think about proactively engaging them. This is especially true for new hires, who may have signed up to work for a very different organization from the one it’s about to become.”