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2 Big Mistakes to Avoid When Dealing with Transitions


Poor planning and lack of communication are the biggest mistakes business leaders make during a change. Here's what the best-run organizations are doing instead.

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For most, uncertainty and the psychological transitions experienced with change are very stressful. FEI Daily spoke with Bernie Brown, a discussion leader for Loscalzo Institute and currently serving as CFO at Gro-Well Brands, about the methods leaders rely on to help employees embrace new situations.

FEI Daily: When it comes to changes like mergers, restructures, or rapid growth – what are the psychological effects felt by employees?

Bernie Brown: What I find is that change is very difficult for people, and that one of the biggest challenges people have in a rapid change is lack of information. It feeds their fear. In a lot of cases, senior management may not have thought out all of the, ‘What are we going to do once that happens?’ which feeds into lack of information, and it kind of cycles on itself.

The organizations that have the hardest time with it really didn't plan and they don't have answers day one, day 10, day 15, day 20, and maybe they get around to answers day 30, day 40, day 50. And now only because the environment got nervous.

I find the number one thing people do a really bad job of is pre-planning, following by communicating. We tend to just think about ourselves. Your company gets bought: What does it mean to me? If [the organization] doesn’t come out with an announcement for four days, if they don't sit down with me for two weeks, ‘Well, that doesn't help me.’ And I would say that happens 80% of the time.

I've seen very big companies do a nice job of it. When I was with Tyco, we would buy companies. I bought nine companies in four years. We had a whole plan. ‘Here's how we're doing the actual transactions. Here's the checklist. Here are the people meetings, here's this, here's that.’

Now, that was in my division, and if you think about smaller companies and midsize companies, $50 million, $100 million… I just started with a company nine months ago, and we did an acquisition in Ontario, California, and we didn't show up on site for seven days. I was like, ‘Really? What are the people over there thinking?’

I would say the number one and number two things that I noticed in all of those changes are, there is no plan, and people communicate poorly.

FEI Daily: Are employees more likely to leave a company if they feel out of the loop or as if they're not a priority?

Brown: Best run organizations know what's expected of them. If you were to acquire a company, you might've been the ‘A player’ and your owner just sold, and now you're not in-the-know. A players are people who can go anywhere, and they tend to look. Those people, when faced with lack of information, a lack of knowledge, or lack of involvement, are very open to leaving. Because think, ‘It’s changing, I used to know everything, I used to be involved, I used to be part of the decision-making process. Now I don't even know what's going on.’ They are highly likely to leave in that situation, and that is really devastating to an organization, because they tend to be the people who get everything done.

With restructuring events, there's not a soul on the planet who is happy. Not the senior management, not the middle management, not the people getting restructured. In some cases, people who are restructured end up with twice as much work. Now, in some situations, like if you're a company that's losing money, and you're restructuring to save money, there aren't a lot of answers and nobody wants to say that, right? The honesty, it's kind of glossed over, and employees, they can pick up on it like a radar. They know exactly what's going on. In that situation, the employees’ fears are being fed, and it may not be the truth. You have to really over-communicate to deal with that. And yes, all the employees, lack of information, nervousness and better employees, they can leave.

You have to always be worried about this, especially in today's market.

FEI Daily: You mentioned over-communication, but what are some of the other ways that companies can help their employees during a transition?

Brown: One of the ways is talking to an employee about how their role changes, what's going to be expected of them, what the new tasks are going to be.

Cost savings, at its root, is taking out non value added work. And there is no greater time than in these types of transition times, to take out non value added work, because, oftentimes, you have one person doing two jobs. And so to engage with your staff and engage with the people on trying to identify that and stop doing that non value added work is a definite way to get them engaged in the positive as opposed to the worry.

To learn more from Bernie Brown and discover methods to lead successful transitions so your employees can embrace a new situation and carry out the corresponding change, register for FEI's 2019 Financial Leadership Summit.