When Boards hire and induct new leaders to head organizations,all stakeholders are clear about the expectations from the new leaders and vice versa. Most modern Corporates spend considerable time to select a leader and usually the leaders do what is needed to take the organization to the next level.


While the new leader now can go ahead on full throttle and do what is needed,at times, they hit a patch of quicksand and before they realize, the decay sets in and gradually erodes the efforts taken to achieve business results.


This article explores one such inclination of new leaders that may slide the organization back to where it started from, despite the good intentions they envision!!!


Yes, we are going to talk about the brave notion of the new leaders trying to build their(own!!)teamsin the new environment and its various upsides, undertones and unintended consequences.


There are obvious merits in leaders going about setting up their own teams as they take up new assignments, especially under trying industry conditions or troublesome organizational context. 


A few are listed below:


1. Great Leaders are brands by themselves:


Great brands attract great talent and hence it’s no wonder that there are some real rock stars who want to be associated with the leader for the sheer joy of learning and working with them. For a new leader,it’s easy to get the best and tested talent without much scan and search time. If the organization is clearly on a turnaround strategy, including an overhaul of the culture, obviously this could be best approach to take and those feeble murmurs will go on mute more sooner than later.


At times when the brand is not so well known and not a “company to work for” in its line of business, an outstanding leader from a reputed brand can considerably ease the hiring challenges the company may otherwise face. Such leaders enjoy great referral power and evoke trust in the new hires instantly. The ability of a few start-ups to attract top order talent from big brands is a testimony to this aspect.


2. Shorter peaking time:


Since the key hires have already worked with the new leader in the past, the time taken to sync with the overall flow and speed can be much shorter. And in an era of hyper -competition, consolidation and M&A, speed does matter and the factor of “already worked with the leader” adds greatly to the aspect of speed in organization decision process. The strong positive emotional bank account the leader enjoys with the new arrivals swells the trust account and can also be great value to the Organization. It’s likely that the unit may now take some bold and risky calls on all fronts,which it desisted for long. 


3. Ushers in greater accountability:


Since the leaders are given total autonomy to build their teams, it clearly adds greater accountability on their shoulders to own up and achieve the tasks set out. In many ways the leaders are putting themselves to a great reputational risk if they fail to deliver as a new team!! The point here is also about the moral obligation to deliver as a new team when no questions were asked during the process of building the team.


If this tactic seems to favour an organization so much, what is the debate around this practice?


While at a cursory level, this practice appears to be “all good”, in reality, it does have its“not so good” aspects!!!The fact is that, at times when not handled well, it can set off the beginning of decay in organizational cohesion and levels of trust.


Building an able teamunarguably is one of the important tasks of any leader in the normal course of an organization’s routines.  But this “one among many tasks of a leader” may raise difficult questions when a new leader goes about building most of his new team from his own sources or from his immediate previous assignments.


Here are a few points that explain the” not so good aspects”:


1. Contextual Challenge:


Nothing in any space or life is done or to be seen in isolation;for everything, there is a foreground and a background and this context gives the needed meaning and richness or otherwise to the happenings and actions.               


The context of entry of the new leader actually sets the tone for the whole host of views and counter views that getdebated on each of the actions of the leader. For e.g., if the arrival of the new leader is well thought-out, socialized and shared ahead of time of taking the mantle, then the chances of mis-reading the intention of the new leader can be low.(E.g. Nayak’s successor at L&T was announced almost a year ahead!!) Similarly when the transition occurs at a time when the Unit has been doing well financially and has been hitting the QOQ numbers regularly, then chances for any such gap  can be low.


On the other hand, when the transition comes up abruptly on the back of a leader’s sudden exit, when there is sluggishness in the industry resulting in muted growth or when the Organization is struggling to break into newer frontiers due to their own weight and size (which was a strength earlier), then the pitch may carry more demons than what one would expect at such transitions.


Adding to these contextual challenges /realities is the pertinent question, often felt,but seldom discussed in open,as to whether the leader is from within the existing system or an outsider!!


2. Team Dynamics :


Organizations at one level can also be described as “urbane political entities” with various work groups trying to figure out ways to achieve their own agenda even as they profess a common façade of cohesiveness and alignment. Hence, when a straight thinking or a pragmatic new leader takes a call to hire someone to fit into the teams, especially in leadership roles, a sense of heaviness engulf the psyche of the existing members and the decay sets in!! Call it the fear of the less known (the new leader) or the fear of the unknown (the new arrivals), it surges the anxiety quotient in most cases.


3. Wherethey come from matters?


There can be hardly any doubt about the new leader’s capability or intent when they decide to fetch a few from their previous stint to drive the new agenda. But why then is there a cloud of circumspection and tightness in the air around the organization?


This is so because the leader’s actions seem to convey a different message! Imagine a situation where a new leader keeps handpicking a select bunch of people from his or her last assignment.  The situation may get even worse,when there is a general feel to suggest that Mr X or Ms Y of the existing organization was tipped to don the role a few months before the new leader took charge!! Here is when an covert irritation talked and shared in hush- hush tones snowballs into an open resentment and apathy(e.g. Vishal Sikka hired as many as 15 senior leaders from SAP in as many months for roles in Infosys and quite a few left no sooner had Sikka announced his decision to exit Infosys .  What do such actions / occurrences convey to the rest of the organization?


While professionally a leader can argue his or her way out defending the decisions to hire from the previous entity,such decisions do impact the flow in the organization. Grapevine begins to flow, aided by quiet chats at lunch rooms. Game of guess as to “who comes in next?” follows and for sure,these things dissipate Organizational focus.


4. Where does the buckstop?


It’s one thing that the new leader gets a sizeable number of the leadership team from the previous organization where he worked.  But the actual damage can occur when each of the managers who were fetchedin by the leader start following the same practice!!  The fall-outs can be drastic since the transition now starts tampering with the prevailing culture of the organization. And if more and more executives are hired on this basis, it may lead to a demi cultural divide within the organization and bound to exert considerable stress on the team members who will now be grappling as to “what is in and what is out?”This situation is tenable, if change of culture itself was given as a remit to the new leader. Else,such actions can trigger needless exit of key talent from the organization. Besides, the new leader will also have no moral ground to stall the damage since it was his or her Frankenstein!!!!


5. Groupthink :


“A false sense of cohesiveness leading to an ‘illusion of invulnerability’ that sets in a Group,thereby killing any possible discussions on alternative and contradictory views.  The Group, under the garb of reaching consensus,settles down for decisions too soon and  feels proud about it”


Irving Janis, in 1972, after a research on how people make decisions coined the idea of Groupthink, a socio-psychological phenomenon and related it to the Bay of Pigs misadventure by the US Army in 1961 and the sinking of the US warships at Pearl Harbour by the Japanese in 1941. On both occasions the leaders of the US armed forces either over estimated their strength or under estimated the enemy’s capabilities!! The number of fatalities was a clear indication of their total unpreparedness for the disasters since they felt that the “mighty US army” can never fail!!! Most of us would have seen the famous case study of the 1st Feb 2003 disaster of the Space Shuttle Columbia which killed seven including Kalpana Chawla, where investigations point to the play of Groupthink amongst the Mission Control Team.


Similarly, back in Corporates, when leaders choose to surround themselves with people with whom they have worked in the past, there is a potential seeding for the Groupthink syndrome and may lead to formation of “in group” and “out group “. The new hires from theleader’s previous organization will seldom differ with the views of the leader since such actions will be seen as disloyal. At times we have seen leaders addressing a specific set of members in a groupmost of the times and the members   almost accept anything said readily by him!!


The unfortunate part of this syndrome is that,it takes a while to figure out that the organization operates on this mode since there will be apparent harmony in decision making and each member will appreciate the other in good measure till such a time a disaster strikes.


Wait, am I saying that this practice is such a blasphemy that leaders should not do?


No, the point I make is about being responsible, transparent and inclusive enough to understand the above minefields and moderate interventions so as to meet the objectives.


Need for balance:

Given the obvious merits and demerits of above intervention,it’s important that the leader handles it with a certain degree of sensitivity and balance. If the leader decides to dump the process as a whole since it is likely to warrant criticisms, then the Organization may lose the opportunity to get the best of managers on board. On the other hand if the leader takes this route to fill almost  all positions by “his/her disciples “, then it may lead to a few unintended consequences which may push the organization back to square one !


Some of the aspects a leader may consider while deciding to handpick the immediate leadership team through his/her own sources are listed below. The experiences of working with many leaders with reference to this topic also helped me to glean a few newer insights.  These are recorded below for consideration:


1. No hiring from my previous company!!


One leader, who was always sensitive as to how employees may perceive his actions, took a position that, during the first year, he shall not refer any from his previous company for roles in the new entity.  Not only that, he also insisted that, any applications received from the previous organization must be referred to him before we even call the candidate for a discussion. His open declaration of the intent in important forums in his early days, gave great amount of security to the employees. It also conveyed to the organization that the leader is not coming with a pre-conceived notion on people and is open to work with the existing team. It greatly enhanced the trust in the leader’s action and employees really rallied around when faced a difficult environment.Infact, when one very good candidate was later recruited from the leader’s previous organization,after the embargo period, hardly any comments were passed.


2. More rounds of interviews:


This measure is more tactical but important to manage the perception of being fair and walking the talk. In order to usher in greater degree of transparency, it may be a good idea to form a senior level neutral panel to meet the candidate from the earlier organization in the event of his /her clearing the functional level interviews. Besides acting as one more tool for evaluation in the recruitment process, it also helps to drive more candour to the process and since senior leaders of the earlier time are also involved, the possibility of the stigma of “being the boss’s previous company guy” gets somewhat diminished for the new hire.


3. Leader’s role model behaviour :


While we look at the root of this issue, we can also figure out,thatit’s not just about the few candidates the leader has chosen to hire from his previous organization.  The worry is also about the clout these new managers may exert over the leader given their history of working together in the past. Equally bothersome will be the leader’s way of treating them in many forums /situations etc. At times, leaders are perceived to be “be soft and gentle” with those they have had earlier association and more direct and harsh with the old timers!! Spending disproportionate time with “his/her own people” is another blunder leaders make and the damage it can cause can be huge to the unit’s emotional well-being.  When leaders are ignorant or blind to this folly of theirs, even a legitimate and professional feedback to the old timers runs the risk of being misread completely thus sapping the morale and rhythm of the organization.



Among many practical solutions that could be designed to draw the best of this situation, in my view, listening to the voice of employees at all levelscan actually provide the answers to this important aspect of building the leadership team.


When the leaders have gained credibility and respect in the organization by many of their other interventions on the business and people side, thentheir act of hiring Managers from their previous organizations will be seen as enabling and supportive and less threatening.


Leaders maintaining a dignified distance from those hired from their previous organization, while being inclusive and also talking about the rationale to hire with key organizational leaders can also mitigate the negative impact of “familiarity bias“!!!


After all, a leader is just not only responsible to the Board and profits, he or she is also answerable to the inner voice of conscience that represents fairness and transparency!!


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