They say change is as good as a holiday. I don’t know about you, but I’d take the holiday over change every single day of the week. Especially in 2020.
One organisation that’s doubling down on change at the moment is Lloyds Banking Group. News broke Monday that its long-standing chief exec António Horta-Osório and chair Lord Blackwell will be leaving the business next year.
Horta- Osório has transformed Lloyds over his almost 10-year stint. Joining in 2011 he walked into an organisation in a difficult financial position following the banking crash in 2008. His achievements include returning Lloyds to profitable operations by 2014, paying back the £21bn government bailout from the financial crisis and then returning the bank to private ownership.
Clearly, the incoming CEO will have rather large shoes to fill, which is one reason why Lloyds created a rather long transition period. While the exact date of the departures is not yet known, Lloyds says it wants the new leadership team to get as much time as possible to ‘bed in’ under stewardship of Lord Blackwell and Horta-Osório.
Such change of senior leadership creates significant communications challenges. While a long transition period has its advantages, it also creates its own challenges before a job advert has even been posted.
Stock markets thrive on stability. Poorly managing the departure of senior leadership team can have a significant impact on a public company’s share price. Lloyds’s shares rose upon the news breaking, but with such a long transition period there are opportunities for things to go awry, quickly. Especially in the context of Coronavirus, which has already forced Lloyds to pause dividends and seen its share price tumble to lows not seen since 2012. How it manages the search and selection, appointment and introduction of two very senior leaders will be critical.
Horta-Osório has spent the last 10 years making structural and operational changes to the Lloyds business to help improve its balance sheet. The next leader will undoubtedly have new ideas on how to take the business forward – some suggest it should focus on digital services to compete with challengers such as Monzo or Starling.
Whatever the way forward, incoming leaders looking to implement a new vision for an organisation tend to try to surround themselves with people they have worked with before and trust to perform certain roles. These organisational challenges can create a sense of uncertainty amongst staff and can generate a culture of fear.
Organisations undergoing a leadership change need a very clear internal communications strategy to keep staff engaged and motivated. In the case of Lloyds, this strategy should include the organisation’s vision for extended transition period. The big challenge of the moment will be incorporating this vision with internal communications strategy around Coronavirus and the safe return to work.
With the chair and chief executive departing either at the same time or within close succession, regulators and stakeholders will be watching very closely to ensure compliance and good governance practices remain. The communication throughout the appointment process of these crucial positions will need to reassure and provide confidence to these key stakeholders.
The long transition period also poses a unique communications challenge to recruit the new chair and CEO. While the roles will no doubt have a long list of highly qualified applicants – they are after all two of the most prestigious roles in the UK – the lengthy transition period may send a message to candidates: ‘we don’t want new ideas, just do what the incumbents would have done’. Unless carefully managed and communicated, it creates a very challenging environment for successful applicants – particularly for the incoming CEO. It relies on trust that the board will buy into your vision, but with the chair also heading for the door, this footing could be a little precarious.
Moments such as these can define the future of a business. While the long transition period does create challenges, the biggest advantage is that it gives the organisation time to prepare. I’d take that every day of the week.
A change management communications strategy must be rooted in a deep understanding of the business’s challenges and objectives. It needs to include comprehensive stakeholder mapping and audience audit, clear messaging and narrative, a communications plan for all audiences and an engagement programme to help bring all stakeholders together towards success.
Written by Mitchell Fox, Associate Director Corporate & Business
To learn more about Brands2Life’s Step Change programme and how it helps organisations of all shapes and sizes manage communications during these business defining moments, don’t hesitate to get in touch here.