Why Leadership Changes Often Backfire

Dan Loney: In the corporate world, it's always an interesting transition period when one leader decides to step aside and another one decides to take over. Most recently, we heard the announcement that Apple CEO Tim Cook was leaving that role. And John Ternus, who is the company's senior vice president for hardware engineering, was going to take over that role. But what are the challenges for Ternus and other leaders as they take over a new role in leading a company? A new paper looks at those elements. Katherine Klein is a professor of management here at the Wharton School, and she is lead on this new research, which is published in the Journal of Applied Psychology. Katherine, great to talk to you again. Take us behind the scenes into why this topic was so important.

Katherine Klein: I'm an organizational psychologist, and as an organizational psychologist, I'm really interested in how leaders change organizations, how they motivate people. We believe that better leaders make their organizations better through their leadership, through their leadership style. But it turns out that we have very little research in my field looking at what happens when there's a change at the top, when a new leader takes over, and how employees respond collectively. That's a topic I've been long interested in: how organizational leaders change, how motivated employees are, and how well the company or organization performs. I specifically wanted to look at this in the context of succession.

Loney: For this research, you used public schools as the vehicle.

Klein: Yeah. I think one of the reasons we have so little research on how employees respond to a change at the top, to a successor coming in, is it's really hard to get into a lot of organizations before there's a CEO change and say, what's the culture here? What's the climate? And then track it over time following that change. In a rigorous study, you want to study this in a large number of organizations, and you'd actually like to compare organizations that don't have a succession event. So, it's like, “Oh my God, how can we do this? I like to do large scale research, but where on earth can we do this?”

At some point the light bulb went off and I [thought] we can do this in public schools. Because public schools get new principals in the summer, and school districts know ahead of time when a new leader is coming in. We can look at schools and survey teachers before and after a principal change, and we can compare them to schools after a principal change.

I'm also fascinated by public schools. I believe they're super important in this country. Ninety percent of school children go to public schools, and the vast majority of employers are actually the size of a public school.

Loney: How frequently is the vision of the person coming into the role similar to the person leaving the role, or is there a bit of consciousness that they want to be different?

Klein: I think a lot of new leaders come in thinking, “I've got to change this organization. I've got to raise performance. I really need to make sure employees are highly motivated. I've got to make my mark.” A lot of them come in with that sense of, “I want to make things different.” Though, interestingly, we'll get into this in my research, not all of them do. Sometimes they mismatch with where employees are, and that turns out to be really important.

Loney: That was one of the things I wanted to talk about is the fact that the employee -- what their expectation is and what their vision is of what they want to see come in with the new leader.

Klein: I'm glad you're honing in on this. I'm really glad we studied this because it turned out to be absolutely key. We asked teachers before the new leaders were coming in, before succession, how much does this school need to change? Is this school performing well or do we really need changes around here? And it turns out that that's really important. When the leaders don't align their leadership with employees' sense of the need for change, you run into problems. When successors come in pushing change and employees collectively are saying,
“You know, we're good here. We actually don't need a lot of change.” Then that backfires.

It also backfires when employees are feeling like, “We really need help performing better. This school needs to change. And the leader's not helping us.” What we find is that successors really need to read the room. They really need to understand where employees are coming from.

Loney: That puts even more focus on the behaviors and the tactics that a successor brings to the table.

Klein: Yeah, absolutely. And what's interesting is we measure visionary leadership. Are you inspired by the leader's vision? That has no impact. None. Doesn't change anything for anybody. What matters is this: What we study is leader coaching, and leaders who are high in coaching are really focused on improving employee performance. They're giving feedback. They're giving suggestions of how to perform better. They're monitoring and supporting employees like an athletic coach, in a lot of ways. And that coaching has ripple effects throughout the organization. Teachers notice what the principal is doing with other teachers. They see what the leader's doing. Coaching is great when employees feel like we need to improve our performance. We need to change. Coaching backfires and hurts motivation, hurts performance when teachers are saying, “We're good here. We don't need this.”

Loney: What did you see in the research about how these schools changed, adapted when there was a shift of leadership and whether or not there was that component of working closely with the new leader or not?

Klein: Yeah, it's really striking. You know, when we study public schools, people care a whole lot about test scores. Are kids reading? Are kids up [in] math? All parents want it as a society. We want schools to perform well. So, what we measure is collective engagement. How focused teachers are on doing their work, how energized they are. And that engagement drives performance change. Leadership makes a real difference in making strong changes in long-term performance. We see test scores shift, and sometimes they rise and sometimes they fall. What's key is how successors are coming in and leading is making these changes.

I should say also that this is really the first research we have that shows how successors' leadership behavior really changes how motivated employees are collectively and how organizational performance then changes.

Loney: Can you correlate then what you found in this research with what you expect in the corporate landscape when you have a switch like this?

Klein: I think a key message, and we have a lot of them in this study, is successors really need to read the room. There's a lot of rhetoric in the leadership literature that leaders need to convince employees of the need for change. That's not what we're seeing. In the companies, in the schools we're seeing, a lot of times the teachers really believe there's a need for change before the successor comes in, and the successors get it wrong. They don't coach, they don't help, and that's a problem. I think the same message applies for corporations and businesses of all types. You've got to read the room. You've got to know what employees' appetite for change is before you enter, because they're thinking about this. They're thinking, “I'm getting a new leader. How's this going to change?”

Loney: You mentioned about how important schools are to you. I was just thinking, not only does this most likely have an impact on the relationship between the teachers and the leader at the school, but does this have an impact on how a school district thinks about leadership and who they want to have and how they want to run their operations?

Klein: Absolutely. Coaching and the style of leadership — sometimes in the school literature, it's referred to as instructional leadership. This kind of hands-on coaching is not a universal good thing. It can really backfire. The other thing that's really striking about our results is that successors' leadership behavior, successors' coaching really matters and changes things. When we compare that to incumbents — leaders who haven't changed, who've been there all along — their coaching doesn't have much impact. What that’s saying to us is when you enter an organization as a leader, when you start as a successor, your actions have a whole lot of impact. People are really paying attention to how you lead, and you have a window of opportunity. You can make things better. You can make things worse. When you're established as an ongoing leader, it's hard to move the needle with your coaching, with how you interact with employees.

Bringing it back to your question of how should school districts be thinking about it? When a school is really stagnant and the existing leader is having a hard time motivating people, getting improvements in test scores and performance, it's time to think maybe we really need a successor to do this. Maybe an incumbent just can't move the needle.

Loney: I mentioned the change at the top coming later this year with Apple. This is such a new element to the story and ironic that we're talking about this as your research is coming out. What are some of the things that you would be looking at as this change takes place at one of the most well-known companies in the world?

Klein: It is interesting that it's happening as this research is coming out. John Ternus, he's an insider. He's been there for a long time. He knows this organization. My guess is he doesn't need a lot of help reading the room. He understands what the organization's challenges are, what Apple's challenges are, and he understands Apple's employees' appetite for change. So, I think he's likely to do quite well along the vector and the dynamics I've been describing.

It's also striking that Tim Cook is staying on as executive chair. It's a signal that things are probably not going to change radically around here. My intuition is that's probably where employees are. It'll probably be slow and steady change, and that's probably appropriate for the culture and the performance of Apple. So, I think this is a good call. In general, we know insiders do better. I think one of the reasons insiders do better is they do understand the organization.

Loney: Is there a follow-up off this research that you want to look at next?

Klein: This was a monumental effort to study this many schools, more than 100 schools over time, seven of the largest school districts in the country. But there's a lot we'd like to know. I'm particularly fascinated by this notion of the difference between successors and incumbents, that once you're established as an incumbent and you're in a good groove, you're probably going to stay in a good groove. If you're established and you're in a bad groove, you're probably going to stay in a bad groove. And this notion that when a successor comes in, their actions land differently. you could be a successor; I'm an incumbent. You come in, people are paying more attention to you than they pay attention to me. So, I'm really interested. That's a new thing in leadership research.

Loney: It’s an interesting element that you bring up because when you're talking about the framework of a school district, I would think in many cases, the incumbent could be somebody who was in another school as the leader and is making that shift and probably already has a framework of how they run. And teachers would know what to expect with this person coming on board.

Klein: Yes. Successors will often transfer. I think [employees] know that they know something, right. They know something, but they haven't experienced the successor, and still all eyes are looking like, “Well, what is this new leader going to meet for us?” Succession creates a lot of uncertainty. We're getting a new boss, how are things going to change? So even if we know something, they're paying attention. People are going to be paying attention to John Ternus. They're going to be like, “OK, he's probably not too radical. We know the guy. We like the guy. He has a very positive reputation.” They're still going to be paying a lot of attention to what he does.