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11 Apr 2013

Change Management Strategy #4: Change Jobs, Reduce Tenure

This entry is part 4 of 8 in the series Change Management Strategy

Change Management Strategy 02As we acquire knowledge and experience, we tend to become wedded to the status quo. Tenure compounds this effect as Xueming Luo, Vamsi Kanuri, and Michelle Andrews report in their article, “Long CEO Tenure Can Hurt Performance” (Harvard Business Review, March 2013 edition). While they focus on CEO’s, their reasoning applies to other jobs within the organization. In short, some of the employees most resistant to change will be those who have been in their jobs for a long time.

Thus, a change management strategy could entail moving people to other parts of the organization. This could dovetail nicely into the firm’s leadership development program and into consolidating the 5% supporting change. These authors found that long CEO tenure yielded:

  • Less risk taking
  • Less adaptability to change
  • Increased reliance on existing networks and ideas
  • Less exposure to new contacts with new ideas
  • Less attunement to the marketplace
  • Increased preference for avoiding losses over pursuing gains
  • Increased personal stake in the success of existing strategies and projects even if they aren’t effective

The authors did find that long CEO tenure tended to yield stronger management-employee relationships. Yet, this could have the negative effect of unifying employees around failing strategies, thus making change even more difficult for successors. Again, while the authors focused on CEO’s, these tendencies hold true for executives and managers of all ranks.

Of course, we could easily abuse this strategy by removing older talent, but we should not underestimate how much a change in perspective influences people’s decisions and behaviors. Moreover, since the above tendencies are predictable, we can plan for them by altering incentives and managerial oversight (coaching) to avoid them.

Yes, changing jobs can be refreshing for managers and improve long-term standings of both companies and managers.

 

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