August 12, 2016 By FTI Consulting
The breakneck and sometimes surprising developments that are playing out on the UK political stage in the wake of the EU referendum have underscored the truth in the oft repeated mantra: ‘change is the only constant’.
FTI Consulting takes a look at leading people through change and provides some top tips for leaders.
With the UK voting to leave the EU, a new Prime Minister taking office 21 days later, and the upcoming US presidential election looming, we are all too aware of how ferocious the winds of change can be. Business leaders need to strike a delicate balance with their people between the reality of the challenges they face and hope for the future. Yet collective wisdom accumulated through past moments of upheaval tells us that change can be managed successfully and can even present unforeseen opportunities for businesses and leaders to learn, grow and prosper.
For those that remember the property crash of the 80’s, the dotcom bubbles and the 2008 financial crisis, they know only one thing is certain: financial markets and employees don’t like uncertainty. And yet, they might have to get used to it. There’s more to come.
In a recent poll conducted by FTI’s Strategy Consulting & Research team, 85% of institutional investors surveyed thought it likely that a new quantitative easing programme would be introduced as a result of post Brexit events, and 55% felt it likely the EU would try to punish the UK to discourage others from following the same path. Nearly half (49%) felt it likely companies would relocate from the UK into the EU [see graph 1] and the large majority of those surveyed also felt that in the years following Brexit (and potentially up to 5 years afterwards) the UK would experience worsening economic conditions.
While the effects of the British EU referendum are only beginning, it will doubtless take years for governments to fully understand the implications. It is clear that strategy and scenario planning is already underway across numerous businesses as leadership teams start to prepare for the business and financial implications.
Alongside all this scenario planning, leaders have an opportunity to start equipping themselves to confidently and capably manage through this prolonged uncertainty. For example:
The lack of clarity on ‘what happens next’, either at national or corporate levels, doesn’t mean pulling down the shutters on employee comms. FTI has found that communicating with employees on an ongoing basis was the No. 1 factor (46%) in increasing employee confidence in leadership during a change [see graph 2]. 70% of employees were very concerned to hear about a major change for the first time via the media so don’t leave Twitter to do your job for you.
Organisations can undergo tremendous changes in a short time — to their leadership, their operations, or even their business strategy. And the uncertainty around a political or industry event can be equally unsettling. However, a company’s values should be a constant that helps ground your people by reminding them what is still expected in terms of their behaviours and actions.
If a skilled change practitioner isn’t already amongst your stable of trusted advisors, that’s your first move. You need a strategic thinker with strong communication and people skills and an eye for detail. Communication is one critical element of change management, but there’s a lot more to it. Planning the ‘people side’ of any change is critical, and it’s important to ensure you either have internal capability or enlist external support to help guide your organisation through the change.
After choosing which messages to share, remember to lead from the front and show enthusiasm for the decisions being made. If a political decision or industry event occurs that might negatively impact your business, get out early and explain to employees what you are doing to assess the impact; mitigate the effects and protect the organisation.
In eight longitudinal studies conducted over 16 years by Prosci®, a company that focuses on change management
research, products and services, a lack of active and visible leadership was cited as the No. 1 obstacle to a successful change. According to Prosci’s research, the biggest mistakes executives make are:
So this is the time to show your people and wider stakeholders you are up to the task of facing uncertainty head on.
Whilst it’s important to be visible and communicate regularly, it is also important to balance that instinct with awareness of what else your employees might be dealing with, especially if your organisation was already undergoing significant operational or leadership change.
Understanding how the cumulative changes might impact each other is important in planning your communications strategy, and while all of the steps above will be relevant to any change programme, this point takes on particular significance in light of events such as the UK’s recent referendum result. The velocity of information many employees encounter in their organisations often leads to the most important messages being lost. Simple, concise messaging that considers the industry or political context and provides clarity on how the business will cope – and what employees need to do – is best.
Whilst uncertainty is uncomfortable, it is possible to adapt your leadership style and approach so that your organisation not only weathers the storm but also recognises and harnesses opportunities that might appear on the horizon.
Being mindful of how you are approaching change and communicating with your employees can make a difference to their perception of you as an employer, their perception of you as a leader and their engagement and productivity.
As the winds of change continue to blow, having a considered approach to managing and communicating change provides an important opportunity for your organisation to evolve. As Winston Churchill famously said, ‘never waste a crisis.’ Moments like these can be opportunities to equip your workforce to better withstand the next wave of uncertainty.
Global Institutional Investors: A total of n=100 global institutional investors with $8+ trillion assets under management. Research was conducted from 27th to 29th June 2016.
Global full time employees: A total of n=7,751 full-time employees globally, broken down as follows: UK (n=1,132), Germany (n=1,105), France (n=1,125), USA (n=1,105), Canada
(n=1,117), Belgium (n=1,033) and Australia (n=1,134). Research was conducted from 13th – 15th January 2016
All research was conducted online by FTI Consulting’s Strategy Consulting & Research team. Further information can be obtained by emailing Alison Minns.