New CEO? Keep Communication Lines Open

April 25, 2007

When a company names a new chief, more heads roll, especially among senior managers, according to a study cited in Tuesday’s Wall Street Journal.

The Harvard Business Review study says turnover jumps after a new CEO climbs aboard, whether from inside or outside the company.

According to the Wall Street Journal article:

At 1,000 large companies, annual turnover among executives listed in proxy statements between 2002 and 2004 was 17% at companies with no change in CEO, the study found. When a CEO was promoted from within, turnover rose to 22%. With a CEO from outside, turnover increased to 33%. The study was conducted by Kevin P. Coyne, who teaches strategy at

Do You Know What You're Worth?

Harvard Business School, and his father, Edward J. Coyne Sr., an assistant professor at Samford University’s School of Business in Alabama.

Looking just at “involuntary turnover,” the changes after appointment of a CEO were even more dramatic. At companies with a stable CEO, involuntary turnover–which excludes departures for reasons such as planned retirements and family or health issues–totaled 7.5%. With a new CEO from inside, turnover rose to 12.5%. With a new outside CEO, it hit 26%.

“The turnover rate jumps as alarmingly as you might be afraid it was going to,” Kevin Coyne said.

What to do if you’re a senior manager?

The article offers a few tips, such as deciding right away whether you’ll stay, and if you do, you should tell the new CEo he has your full support. The rules don’t just apply to the CEO and senior managers, the story says:

Many of these lessons apply lower down the corporate food chain as well, to anyone who gets a new boss, Ms. Davila said. Bosses coming into a new role generally appreciate a subordinate who voices support for the new manager’s goals and offers to help.

Communication Beats All

I gleaned a clear, one-word answer from the story, one I’ve heard many managers and workers bemoan: Communication.

Whether you’re a CEO, senior manager or mid-level worker bee, communication always is the key to job success. Communication with yourself–be honest about what you want–and with your boss.

Most trouble I’ve seen in the workplace has been due to a breakdown in communication or a glaring lack of communication.