CEO succession: Avoiding the unanticipated Domino Effect
A large financial services company promoted a key leader into the position of CEO. Two of their peers were also vying for the top job. Almost immediately, the other two executives left the company. This created an unexpected leadership vacuum that cascaded within their respective departments, where no one on either team was able to step up into the suddenly vacant leadership spots. The lack of “ready now” successors required the company to look outside to replace those executive leadership roles, significantly disrupting their critical strategic transformation effort and creating additional chaos at the top of the company at a time when they could ill afford to slow momentum.
Similarly, a global manufacturing company promoted a key leader into the CEO role who lacked sales and marketing experience – an area where his predecessor had deep expertise. This expertise was a critical driver in the company’s success to date, and the gap at the top was stalling revenue growth and impeding the new CEO’s ability to deliver on the Board’s expectations. In order to fill the CEO’s knowledge gap, the company reorganized the head of sales and marketing role so that it was led by two executives instead of one. This unanticipated restructuring created confusion across the C-Suite and the rest of the sales and marketing organization regarding roles and responsibilities, which compounded their challenges in driving growth. The unexpected increased salary costs accompanying the additional executive role further impacted the bottom line, as well.
What these two examples illustrate is the Domino Effect. The Domino Effect occurs when a star performer is promoted, and there is no “ready now” successor to fill the role they are vacating. With so much attention placed on getting a new CEO into the role, the Domino Effect can cascade down through the organization and is an often hidden and unanticipated outcome that can hinder even the most capable chief executive from successfully taking the reins.
Assessing the impact of the Domino Effect
Conventional wisdom and the literature suggest that CEOs sourced internally outperform CEOs that are sourced externally. For example, in Harvard Business Review’s “Best CEOs of the World” top 100 list, 84% came from internal promotions1. The majority of leaders who ascend to the CEO role are COOs, CFOs, divisional CEOs, and some are “leapfrog” leaders identified below the C-Suite2. A question that has not been addressed is: what happens to the performance of the company when there are no internal candidates for the new CEO’s previous role? In other words, what is the impact of the Domino Effect on company performance?
To answer this question, we compared the S&P 500 twenty best performing companies3 with the twenty worst performing companies4 based upon percentage change in stock price.
What happened at the Best Performing companies?
Within the top 20 best performing companies, 75% of the CEOs were internal with 5 of the CEOs being founders of the company and 10 being promoted into the role. For their former positions, from which they were promoted, four were filled by internal candidates, and two were replaced with external candidates. Examining the leadership teams on the company’s websites, it appears that in three incidences, the role that the CEO vacated no longer exists. In one case the role was restructured and split into two different positions.
What happened at the Worst Performing companies?
70% of the CEOs at the worst performing companies came through promotions or being founder led (12 and 2 respectively), which is nearly identical to the best performing companies. All things being equal, one would expect a similar trend regarding the number of internal vs. external replacements for the CEOs’ previous roles from which they were promoted. However, we found that there were differences. Only three of the backfilled positions were placed by internal candidates and four were placed by external hires. In three of the companies, the position no longer exists, and two of the companies restructured the position.
Understanding the impact: disruption and worsening performance
The research shows little difference between the best and worst performing companies in relation to internal promotions and external hires for the CEO position. However, we do see more organizational disruptions in the replacement of the previous roles held by the CEO. A disruption is defined here as either the company was required to hire from the outside, restructure the role, or eliminate the role altogether. All of these create added turmoil and challenge for the new CEO as they try to move quickly to onboard and start delivering impact.
We found that disruptions were present in 60% of the top-performing companies, compared to 75% of the poorest performing companies. While more research is needed to uncover the nuances, our research suggests that companies with a stronger bench for newly promoted CEOs’ previous positions have less organizational disruption and outperform those who do not have a strong bench.
Tackling the Domino Effect before it falls
While CEO succession garners the greatest amount of the spotlight in the press, among board members, and in public sentiment of the health of a company, our research underscores the need for CEOs, CHROs, and Boards to focus on the Domino Effect as part of their C-Suite succession process. That is, creating a bench of potential successors targeted specifically for the CEO’s previous role, and the roles deeper within the organization that could replace those who are being elevated in the company at the time of the new CEO transition.
Consider these best practices to get ahead of the Domino Effect:
- Build the backfill into the identification process. When identifying potential candidates for the CEO, simultaneously consider who may replace that candidate for their current role.
- Focus on the role rather than the person. You may not be able to replace the next CEO’s position with one individual, but you may be able to replicate their skills with people who can excel in the role with complimentary skills.
- Expand the purview of success profiles. Create success profiles for the CEO and those roles that are likely feeder pools for CEO. Ensure that the success profiles are future focused rather than focused on what is important today. Business realities change over time. What makes someone successful today may be different than what is required in the next 3 to 5 years.
- Leverage the power of data for determining future success. As you look at your bench, use structured assessment processes to assess individuals against the success profile, reduce the risk of biases towards individuals, and determine their readiness to address the future business challenges that the organization will face.
- Comprehensively build the right bench. Look broad and deep within the organization when identifying potential successors. You may find those “leapfrog” leaders who would otherwise be overlooked.
- Continually refresh your succession slate. Given the cascading impacts of the Domino Effect, it is more important than ever to ensure your slate is up to date with viable candidates for higher level positions. Consider doing so on at least an annual basis.
- Ensure that succession is seen as a strategic imperative across the leadership of the organization rather than a single event of placing a new CEO. The CEO and the CHRO should own the succession process, the Board should be involved, and the focus should stay equally on the CEO role and the successor leadership roles throughout the organization.
Finding, placing, and ramping up a new CEO is a momentous decision with big outcomes at play – for the CEO’s own success and the viability of the organization. If you embrace the opportunity to turn the Domino Effect into a strategic gameplan, you will be positioned both for accelerated success and impact.
References
1 Harrell, E. Succession Planning: What the Research Says. Harvard Business Review December 2016
2 Harvard Business Review Staff. November 2009. The Best Performing CEOs in the World. Harvard Business Review 41-57.
3 https://www.fool.com/investing/2023/10/10/invest-sp-500-stocks-market-portfolio/
4 https://finance.yahoo.com/news/20-worst-performing-p-500-200036146.html
Related content
In a world where transformation often feels complex and distant, real progress is often sparked at the community level, through leaders who create change from within.
In Senegal, a partnership between BTS Spark and Tostan, a nonprofit dedicated to community-led development across Africa, is bringing this idea to life. It’s a reminder that sustainable leadership isn’t built by imposing new systems. It grows when people are equipped to lead themselves.
A ground-up approach to lasting change
Since 1991, Tostan—whose name means "breakthrough" in Wolof—has partnered with rural African communities to advance human rights, health, literacy, and economic development. Its Community Empowerment Program (CEP) weaves together practical knowledge and human rights education, enabling communities to define and pursue their own visions of progress.
Across eight countries and more than five million lives, Tostan’s approach has led to deep-rooted changes, including the voluntary abandonment of harmful traditional practices. Not by directive, but by choice.
It’s an approach that shows leadership capacity isn’t something to be delivered from outside. It’s something to be nurtured from within.
Meeting communities where they are
In 2024, BTS Spark deepened its collaboration with Tostan through an in-person leadership workshop, led by a BTS Spark consultant, following a year of virtual engagement.
The visit coincided with a leadership transition at the executive level—a pivotal moment requiring clarity, continuity, and resilience. Through targeted coaching and workshops, BTS Spark worked alongside Tostan’s leaders to support the transition and strengthen leadership capacity at every level of the organization.
The focus wasn’t on delivering a model. It was on listening, amplifying existing strengths, and equipping leaders to navigate complexity with confidence.
Practical tools for complex challenges
As part of the ongoing collaboration, BTS Spark also provided custom-designed micro-simulations focused on sectors vital to community sustainability: climate resilience, microfinance, and agriculture.
These micro-sims offer leaders a chance to engage with real-world decision-making challenges in a safe, practical environment—an approach that mirrors how leadership development increasingly happens: not through theory alone, but through repeated, real-world application.
It’s a reminder that growth is rarely linear. It’s built through practice, reflection, and adaptation over time.
Building leadership that endures
The work between BTS Spark and Tostan reflects a broader truth:
Leadership isn’t confined to titles, industries, or regions. It emerges where people are given the tools, trust, and space to act.
Sustainable change, whether in communities or organizations, happens when leadership capacity is strengthened closest to where challenges are lived every day.
The partnership also highlights the power of investing in local capability: focusing on what’s already working, building resilience from within, and preparing leaders not just to meet today’s challenges, but to shape tomorrow’s opportunities.
Moving forward: Scaling with purpose
The work in Senegal is continuing to evolve. BTS Spark and Tostan are exploring ways to extend leadership development to more communities, deepen their impact, and continue supporting transformation through shared expertise and partnership.
It’s a model rooted in respect, collaboration, and the belief that leadership is most powerful when it reflects the realities and aspirations of the people closest to the work.
The accelerating pace of change in the modern workplace has necessitated a proactive approach to envisioning the future and what will be required to support organizations as they evolve and adapt.
To advance the conversation, we recently facilitated a future-storming session to reimagine the future of work and talent strategy.
Future-storming is the process of identifying risks and trends that might affect your business or industry vertical, combining them in new ways, and thinking of solutions to mitigate these risks. The ambition? To break the chains of traditional thought, sparking insights into the evolving domain of talent strategy.
Here are five transformative themes that surfaced during the session:
1. Fluidity of talent:
Gone are the days when “talent” described a fixed set of competencies an individual brought to the table. In today’s world, talent is an amalgamation of adaptability, resilience, and the capability to evolve. AI and automation, while replacing routine tasks, can't replace the human capacity to grow, reimagine, and pivot.
The traditional talent pool, defined by rigid skill sets, is making way for a reservoir of potential. It's about harnessing the innate human ability to unlearn, relearn, and traverse uncharted territories. Recognizing this fluid nature of talent can redefine how organizations recruit, retain, and nurture their human capital. The future will prize the ability to learn and relearn, shifting from fixed competencies to a reservoir of ever-evolving potential.
2. Skill evolution, continuous, embedded learning:
The gig economy drives continuous learning, demanding flexibility and growth. The concept of learning in organizations is evolving beyond formal training modules. Today's employees are in a perpetual state of growth, thanks to digital platforms, cross-cultural collaborations, and the changing demands of their roles.
No longer can learning be a one-off event. It must be seen as a journey where every experience, every interaction, and even every failure is an opportunity to grow. This shift to continuous learning also means embracing failures as valuable lessons, promoting a culture of curiosity, and embedding learning in everyday tasks. Organizations that foster curiosity and value each failure as a learning opportunity will lead the way. The pathway to career progression is increasingly carved by demonstrable capabilities.
3. Culture, diversity, and the rich tapestry of learning:
Cultural diversity isn't just a buzzword; it's an untapped treasure for organizational growth. There is a burgeoning global talent landscape with increased cultural exposure which fosters innovation and holistic problem solving. Diverse teams, with their unique experiences and backgrounds, bring varied problem-solving methodologies, fresh perspectives, and richer insights, serving as an invaluable asset for organizational growth.
These multi-cultural interactions and experiences act as opportunities for informal learning, introducing employees to different ways of thinking and innovative solutions. Encouraging such interactions not only fosters a sense of inclusivity but also ensures a holistic organizational growth trajectory.
4. Embracing the tech-human synergy:
The technological renaissance envisages a world where computers and robots assume many of our current roles, from documentation to Q&A. The emerging synthesis of technology and biology, including embedded tech and wearables, offers insights, from employee well-being to real-time emotional feedback.
While technological advancements promise efficiency and scalability, the human element's value remains unmatched. The blend of technology with human intuition, creativity, and empathy is the key to future success. The ideal modern professional is one who not only leverages technology but also understands its boundaries, ensuring that technology serves humanity and not the other way around. While technology offers efficiency, the human touch provides empathy, intuition, and creativity.
With advancements come ethical considerations, especially with AI and machine learning. Balancing technological ability with an ethical foundation ensures that organizations remain not just profitable, but also principled.
5. The subtle art of leadership:
Work will undergo an existential reevaluation. The rise of decentralized leadership, the emphasis on enriching organizational culture, and a holistic approach to talent assessment will redefine organizations. With flattened organizational structures, fostering trust and embracing entrepreneurialism are necessities. Leaders will be more focused on collaboration, understanding, and guidance. In this landscape, leadership also means being tech-savvy, yet understanding the nuances of human emotion is also requisite. It's about removing barriers, and being a facilitator and mentor.
Furthermore, as work boundaries blur, leaders need to be agile, adaptive, and always ready to guide their teams through tumultuous waters. The responsibility is to create environments where employees feel empowered, engaged, and eager to contribute.
Reflections
The future-storming session offered a blueprint for navigating the complex terrains of the talent landscape of tomorrow. The future of talent and learning is unfolding, and through sessions like these, we aim to empower leaders to be the sculptors of that future.
Collins, L., Hartog, S., Werder, C. (2023). Future Storming: Reimagining Talent Strategy for Today. Delivered at the Conference for Society for Industrial/Organizational Psychology, Boston, MA.
Recently, while coaching a frustrated Chief People Officer, he vented to me about his company’s plan to bring back the workforce – 3 days in the office, two from home. The leadership team would prefer to have everyone in every day, but they know that will make it almost impossible to recruit new hires and could further damage their already falling engagement scores. And now, they are struggling with a whole set of new problems: how do they track who’s coming in and when, and what do they do about those who aren’t following the guidelines? Why don’t the employees appreciate that the “gift” of flexibility that is being bestowed upon them? It seems like whatever solution the company offers some portion of the work force is unhappy.In talking with executives, this story comes up over and over. The leaders want things to go back to “normal” – meaning pre-pandemic times – and employees want something else. And they are puzzled by how to respond. Yet when I ask if they are partnering with their employees to find solutions, I often get blank stares in return. The idea of asking employees what they want in this situation seems to horrify many leaders.
Missing a big opportunity for buy in and guidance
Based on my own days as a CHRO navigating this kind of challenge, I am struck by how much these leaders are missing by taking this view. There are clearly so many advantages to involving your workforce in their future workplace! We are all in this together after all – and designing the workplace of the future should be exciting and fun.Imagine the enthusiasm for the outcomes that will follow if representatives of all levels and departments contribute to the solution and the deeper understanding of business needs that would come from their involvement. And by pulling in key leaders, they will benefit as well, because they will develop better insights and respect for the challenges and constraints many employees are experiencing.
Why leaders are afraid
I realize leaders are afraid to involve their workforce when considering their workplace of the future and other changes. Why? I see 3 primary reasons:
- It takes too much time
- Employees may lack the critical business insights needed to make informed decisions
- Participation might lead employees to have unrealistic expectations for the outcome
It’s true, the planning and preparation can take longer, when getting more input and involving more people. And sometimes employees don’t have the “big picture” regarding the business needs. And, if you aren’t careful, participants in the change may have unrealistic expectations. But I can tell you, having had the pleasure to lead many corporate teams that had a balance of members from all parts/levels of the organization, these challenges are easily mitigated. And worth managing, because the outcome will lead to better business outcomes, provide sustainable solutions, and increase employee engagement and commitment.
Paving the way for a quantum give back
I’ve led and watched successful teams help their companies drastically change their performance management approach, implement department re-organizations, enhance their employer brand, and develop new sales strategies. In each case, the additional time upfront saved us time later when we avoided re-work and re-communication due to poorly conceived ideas. We carefully set the stage by explaining the challenges and needs and ensuring that the team consisted of individuals from a variety of levels throughout the organization to ensure a strong business focus.We also made it clear to the participants the criteria and boundaries that were involved, who needed to approve it, and how their recommendations would be managed. I have found time and time again, our employees are grown-ups and if treated that way, will behave that way. They can handle being told no if they understand the “why” behind the “what." In fact, I have had employees approach me after townhalls and other group meetings, where the leadership had to say no to some employee requests, with a handshake and a thank you for being transparent and trusting them to understand and support good business decisions.
Asking your employees for help gets you more than you can imagine
Perhaps my favorite example of a time when a team of employees and leaders worked together to improve the business was with an organization that was working on improving the employee perception of their Diversity, Equity, Inclusion, and Belonging (DEIB) efforts. The company was very committed and had implemented many solutions to ensure improved representation and inclusion for all, and especially for their women and people of color. And yet, they were confronted with a steady decline of employee perception of company commitment to DEIB. To change this perception and make things better, the organization spent months engaging over 100 of their employees and leaders in teams to find ways to improve.Within one year, the organization really moved the needle:
- Numerous organizational and programmatic changes were firmly in place based on the teams’ recommendations and employee perception rose from 78% favorable to 83%.
- Deep friendships and connections were made across those teams and leadership opportunities emerged for many of the employees that participated, an important goal of the initiative in the first place.
- The executives involved were surprised and delighted by the new insights and awareness they gained from the process, as well as the progress made on a complex challenge.
Was one year a long time to take to achieve all of that? I don’t think so.I have been afraid before, too, for the reasons mentioned here. But I promise you, if you take the time to do it right, you will soon forget your fears and find there’s a better way of operating: improving the future with your employees – not doing it for them or to them.
Related content
You’re buckling in for an overseas flight in a brand-new Boeing 777. The pilot comes on the PA: “Ah, ladies and gentlemen, our flight time today will be six and a half hours at a cruising altitude of 33,000 feet. And I should mention that this is the first time I have ever flown a 777. Wish me luck.”
Before setting foot in the real world, pilots, military personnel and disaster response teams use intense simulations to learn how to respond to high-intensity challenges.Why should we place corporate leaders and their teams in situations without first giving them a chance to try things out? The risks are huge — new strategy investments can run into the hundreds of millions of dollars. BTS offers a better way to turn strategy into action: customized business simulations.
‘Now I Know What it’s Like to be CEO’
A customized business simulation of your enterprise, business unit or process, using real-world competitive dynamics, places leaders in a context where they step out of their normal day-to-day roles and gain exposure to the big picture. Participants make decisions in a risk-free environment, allowing them to experience critical interdependencies, execution best practices and the levers they can use to optimize their company’s key performance indicators. It takes the concept of a strategy and makes it personal, giving each individual the chance to see the direct impacts of their actions and the role they play in strategy execution.
Leading corporations are increasingly turning to business simulations to help build strategic alignment and execution capability when faced with the following business challenges:
- Key performance objective and new strategy implementation.
- Accelerating strategy execution and innovation.
- Improving business acumen and financial decision making.
- Transforming sales programs into business results accelerators.
- Leadership development focused on front-line execution.
- Implementing culture change as tied to strategy alignment.
- Modeling complex value chains for collaborative cost elimination.
- Merger integration.
Within minutes of being placed in a business simulation, users are grappling with issues and decisions that they must make — now. A year gets compressed into a day or less. Competition among teams spurs engagement, invention and discovery.
The Business Simulation Continuum: Customize to Fit Your Needs
Simulations have a broad range of applications, from building deep strategic alignment to developing execution capability. The more customized the simulation, the more experience participants can bring back to the job in execution and results. Think about it: why design a learning experience around generic competency models or broad definitions of success when the point is to improve within your business context? When you instead simulate what “great” looks like for your organization, you exponentially increase the efficacy of your program.
10 Elements of Highly Effective Business Simulations
With 30 years of experience building and implementing highly customized simulations for Fortune 500 companies, BTS has developed the 10 critical elements of an effective business simulation:
- Highly realistic with points of realism targeted to drive experiential learning.
- Dynamically competitive with decisions and results impacted by peers’ decisions in an intense, yet fun, environment.
- Illustrative, not prescriptive or deterministic, with a focus on new ways of thinking.
- Catalyzes discussion of critical issues with learning coming from discussion within teams and among individuals.
- Business-relevant feedback, a mechanism to relate the simulation experience directly back to the company’s business and key strategic priorities.
- Delivered with excellence : High levels of quality and inclusion of such design elements as group discussion, humor, coaching and competition that make the experience highly interactive, intriguing, emotional, fun, and satisfying.
- User driven: Progress through the business simulation experience is controlled by participants and accommodates a variety of learning and work styles.
- Designed for a specific target audience, level and business need.
- Outcome focused , so that changes in mindset lead to concrete actions.
- Enables and builds community: Interpersonal networks are created and extended through chat rooms, threaded discussions and issue-focused e-mail groups; participants support and share with peers.
Better Results, Faster
Well-designed business simulations are proven to significantly accelerate the time to value of corporate initiatives. A new strategy can be delivered to a global workforce and execution capability can be developed quickly, consistently and cost-effectively. It’s made personal, so that back on the job, participants own the new strategy and share their enthusiasm and commitment. This in turn yields tangible results; according to a research report conducted by the Economist Intelligence Unit and sponsored by BTS, titled “Mindsets: Gaining Buy-In to Strategy,” the majority of firms struggle to achieve buy-in to strategy, but those that personalize strategy throughout their organization significantly outperform their peers in terms of profitability, revenue growth and market share.
Business Simulations: Even More Powerful in Combination
Comprehensive deployment of business simulation and experiential learning programs combines live and online experiences. The deepest alignment, mindset shift and capability building takes place over time through a series of well-designed activities. Maximize impact by linking engagement and skill building to organizational objectives and by involving leadership throughout the process.
Putting Business Simulations to Work
Simulations drive strategic alignment, sales force transformation, and business acumen, financial acumen and leadership development, among other areas. A successful experiential learning program cements strategic alignment and builds execution capability across the entire organization, turning strategy into action. Results can be measured in team effectiveness, company alignment, revenue growth and share price.
Learn more about business simulations
Learn how BTS Business Simulations can help with your initiatives.
Fill out the form below to have a BTS representative contact you.
I recently read an HBR article discussing why the traditional approach to leadership development doesn’t always work.
It stated that instead of traditional methods, the best way to identify, grow and retain leaders to meet today’s demands is to “Let them innovate, let them improvise and let them actually lead.”
Over the past 30 years, as we’ve partnered with clients facing a vast range of challenges, we’ve seen the truth behind this – that people learn best by actually doing. That’s why business simulations are such a powerful tool: they allow people to do and lead within a risk-free environment, and condense years of on-the-job learning experience into a few days, or even hours.
We also know that learning is not just a “one and done” situation – it is a continuous experience. In many cases, a learning journey, which blends a variety of learning methodologies and tools over time, is the most powerful means of shifting mindsets, building capabilities and driving sustained, effective results.What a learning journey looks like depends entirely on the context of your organization. What challenges are you addressing? What results are you driving for? What does great leadership look like for your organization?
To bring this to life, imagine the following approach to a blended learning journey for aligning and developing leaders – in this scenario, within a financial services firm: Financial technology has “transformed the way money is managed. It affects almost every financial activity, from banking to payments to wealth management. Startups are re-imagining financial services processes, while incumbent financial services firms are following suit with new products of their own.”
For a leading financial services company, this disruption has led to a massive technology transformation. With tens of thousands of employees in the current technology and operations group, the company will be making massive reductions to headcount over the next five years as a result of automation, robotics and other technology advances.
This personnel reduction and increased use of technology is both a massive shift for the business as well as a huge change in the scope of responsibility that the remaining leaders are being asked to take on moving forward. As such, the CEO of the business unit recognizes the need to align 175 senior leaders in the unit to the strategy and the future direction of the business, and give them the capabilities that they need to effectively execute moving forward.
To achieve these goals, BTS would build an innovative design for this initiative: a six-month blended experience, incorporating in-person events, individual and cohort-based coaching sessions, virtual assessments and more. Throughout the journey, data would be captured and analyzed to provide top leadership with information about the participants’ progress – and skill gaps – on both an individual and cohort level, thus setting up future development initiatives for optimal success.
The journey would begin with a two-day live conference event for the 175 person target audience, incorporating leader-led presentations about the strategy. The event would not just be talking heads and PowerPoint slides, but rather would leverage the BTS Pulse digital event technology to increase engagement and create a two-way, interactive dialogue that captures the participants’ ideas and suggestions. Participants also would use the technology to experience a moments-based leadership simulation that develops critical communications, innovation and change leadership capabilities, among other skills.
romAfter the event, participants would return to the job to apply their new learnings. On the job, each participant would continue their journey with four one-on-one performance coaching sessions, in addition to a series of peer coaching sessions shared with four to five colleagues. They also would use 60-90 minute virtual Practice with an Expert sessions to develop specific skill areas in short learning bursts, and then practice those skills with a live virtual coach. Throughout the journey, participants would access online, self-paced modules that contain “go-do activities” to reinforce and encourage application of the innovation leadership and other skills learned during the program.
As a capstone, six months after the journey has begun, every participant would go through a live, virtual assessment conducted via the BTS Pulse platform. In three to four hours, these virtual assessments allow live assessors to evaluate each leader’s learnings from the overall journey and identify any remaining skill gaps. The individual and cohort assessment data would then lead to and govern the design of future learning interventions that would continue to ensure the leaders are capable of implementing the strategy.
As you can see, this journey design leverages a range of tools and learning methodologies to create a holistic, impactful solution. It’s not just a standalone event – each step of the journey ties into the one before, and the data gathered throughout can be used well into the future in order to shape the next initiative .
Great journeys or experiences like this can take many forms. In addition to live classroom and virtual experiences, there is an ecosystem of activities, such as performance coaching, peer coaching, practice with an expert, go-dos, self-paced learning modules, and more, that truly engage leaders and ensure that the learnings are being reinforced, built upon, practiced and implemented back on the job. We find that these types of experience rarely look the same for every client. There are many factors that determine which configuration and progression will make the most sense. There is one common theme that we have found throughout these highly contextual experiences, however – that the participant feedback is outstanding and the business impact is profound.
Leading with Purpose, Part 1
Most CEOs I speak with are not 100% at peace with their company’s purpose. As the market, their people and their business evolve, so will their purpose. As some of the best companies of past and present show us, there is strength, and even magic, in a great company purpose. What is also clear, however, is that this magic does not come from just having a “purpose” or “vision,” but rather from how well a company is executing against their purpose.
When Southwest Airlines (which has been profitable for 45 consecutive years, and on FORTUNE’s list of World’s Most Admired Companies for 24 straight years) was first starting out, their mission was to make flying affordable.1 They rallied their people on the idea that a grandmother should be able to affordably buy a ticket, at the drop of a hat, to get on a flight to see her new grandchild. This simple mission led to the “Southwest Effect,” which transformed the airline industry, and continued to be a lens with which the Southwest leadership team made key decisions.
Today, Southwest’s vision has evolved: “To become the world’s most loved, most flown, and most profitable airline.” And they are executing on this vision. They continue to drive superior shareholder returns against all industries on the S&P 500 (as they have for the past 44 years), and in 2018 were named the top low-cost airline in JD Powers customer survey reports for the second year in a row.
As the Southwest example highlights, great company purpose combined with a leadership team who will build the work-flows, culture, processes and metrics to live up to it can be an enormous employee motivator. But we have also experienced, both at BTS and with our global clients, that a good company vision and purpose on their own are not sufficient – employees need them to be even more personal to them as an individual. I remember a lunch I had twelve years ago with a 24-year old new hire who was my direct report. After some small talk he looked at me and said, “Why are you here? Why have you spent seven years with the same company?”
I’ll never forget that lunch. It was the first time I had been asked the question, and it was the beginning of a new decade where our employees were much louder and more active about wanting to reflect and spend time on our mission and purpose, linking it to their personal values and the impact they strived to have in the world. Luke, that 24-year old new hire, has made me and our company better as a result of his question.
In the last decade, there has been a growing emphasis in the business world on finding a deeper motivation to unlock greater meaning at work. For some this may sound ‘fluffy,’ or as one executive we spoke to commented, “Is this just the next version of the pursuit of vision and values? It sounds great on paper but too often makes little real difference as it tends to stay on the wall, rather than live in your heart.”
Yet your people spend the majority of their life at work and with colleagues. At its best, a sense of purpose is a way of bringing meaning to their work and understanding the contributions they are making to the company, as well as greater society. It makes sense, then, that employees who are clear on their personal and professional purpose end their work day invigorated and proud of what they’re doing instead of exhausted by mindless work that is bereft of real meaning.
According to a recent PWC study, 79% of business leaders believe that purpose is central to business success – but only 34% use their organization’s purpose as a guidepost for their leadership team’s decision-making. Signs that your workplace may be lacking organizational purpose are distracted employees and a lack of comradery. These are significant factors – so why don’t more organizations devote time to developing clear purpose and values? Well, developing organizational purpose is no easy task, and much of it starts with your own personal purpose. If you’re unsure of what exactly your own personal purpose is, have no fear – in the next two installments of this blog series, we will offer simple steps to help you uncover your personal and organizational purposes and get closer to leading through the lens of purpose.