New CEOs: Lessons for Communicating Change

A Wall Street Journal article describes expectations for new CEOs at Boeing and Starbucks: communicating early and often. The article raises questions about communicating change.

Early communication represents a shift from the “listening tours” and roundtables CEOs held in the past. We seemed to expect a leader to hear from employees and learn the business before taking action. But now, maybe particularly for Boeing and Starbucks leaders, who are facing critical tests, people have little patience for the learning curve.

Boeing faces challenges of safety issues and labor strikes. Starbucks faces staffing issues and declining sales. But the CEOs have a similar message, as the WSJ reports:

“First, we need a fundamental culture change in the company,” Ortberg wrote to Boeing staff on Wednesday. A day earlier, as Starbucks suspended its financial guidance and disclosed weak results for its fourth quarter, Niccol said in a video message: “We need to fundamentally change our recent strategy.” 

Students might discuss the implications of these recent leaders determining a new direction or making promises before more investigation. Some questions are, how do they build trust and buy-in quickly, what is enough information, and how do they take decisive action while allowing for revision if a strategy fails?

This Change Management Toolkit from Berkeley staff shows how communication is too often an afterthought, is only in service of the project as already defined, and considers little of what we know about emotional reactions to change. The chart mentions communication during the first stage, Pre-Implementation: “Communicate expected project benefits to impacted stakeholders.” But who determined the benefits? Were stakeholders involved in the goal setting and planning? During the second stage, Implementation, again, the communication seems to be about telling people and getting input on what was already done. Post-Implementation, once again, “celebrate[s]” benefits.

Where are those affected by change? What about their ideas about changes and their potential reactions? Without addressing employees’ fears and concerns about change, leaders might not get the buy-in they desire.

The toolkit does include a “Change Communications Plan Overview,” starting on page 41 of the 50-page document, but it feels like an afterthought, as communication often does during organizational change. In fairness, a section before this offers suggestions for getting feedback, but still, this is all after the change is implemented.

Students might discuss their own experiences of a new manager and an organizational change. They also might consider what the new Boeing and Starbucks CEOs should communicate—before they implement initiatives to “fundamentally change” anything.