When the game is changing, CEOs need to lead the team

We’ve all been saying this for years now: the only constant in the world today – and in business – is change. In these turbulent times, CEOs in particular find themselves caught in unfamiliar territory, trying to balance cost-effective workforce transformations in response to economic uncertainty, with a systemic labor shortage and with workers increasingly retaining more power at the negotiating table.  

But the answer to this conundrum goes beyond finding or replacing workers while managing costs. It’s about cultivating the right team of values-driven people working toward a common goal, incorporating the emotional journey of a more discerning workforce into a strategy that will truly transform an organization.  

And within this context, leadership is essential.  

Uniting the practice and potential of transformation 

Historically, leaders have focused on the rational, tangible elements of workforce transformation – compensation and benefits, hybrid work models, improved work technology experiences, and a reinvention of the physical workspace.  

These remain important.  

In the EY 2022 Work Reimagined survey, 79% of employees said they put a premium on total pay and other tangible benefits, while 83% of employers agreed that the pandemic accelerated a need for extensive changes to a rewards policy encompassing compensation, wellbeing, flexible benefits, time-off and more. 

These insights alone don’t present a complete picture of the challenge before us though.  

The results of a research collaboration between EY and the University of Oxford’s Saïd Business School suggest that the leaders need to pay equal attention to the emotional journey of the workforce during a transformation. CEOs will be more empowered to help their people manage stress and uncertainty around change when they consider the whole human experience, both rational and emotional. More than half (52%) of workers in high-performing transformations said leaders understood the needs of their workforce versus 31% of workers in low-performing transformations. 

5 actions CEOs can take to more effectively lead their people through constant change 

How leaders manage the emotional journey of their people will be critical either to finding the right path to a successful transformation or contributing to misdirection and failure. To improve the odds of success, CEOs will want to consider taking the following five actions: 

1. Show that you care: CEOs need to listen intently and show empathy when negative emotions inevitably surface. These actions must be genuine. In a recent survey, 87% of US workers said empathy leads to better leadership, yet more than half (52%) of those surveyed thought corporate attempts at empathy were inauthentic. 
2.  Collaborate on a compelling reason for change: More than simply receiving a paycheck, workers want to believe that they are part of something bigger than themselves. Leaders need to be transparent about why change is needed and engage in two-way dialogue so that everyone feels part of a shared belief. This requires, in part, letting go of a hierarchical top-down, command-and-control culture in favor of embracing a culture of collaboration and empowerment. The role of the leadership team is still to provide guidance and direction, but it’s the engagement and energy of your people that will drive transformation. 
3. Ask for their opinion: Even when you build trust and engagement, there will be those who resist change. Rather than dismissing their perspective, it’s important to be respectful and to use their resistance as a source of learning. As a leader, there is greater benefit in proactively seeking out those who disagree with the vision and then listening to and understanding their concerns rather than waiting for them to come to you.  
4. Develop skill sets and mindsets in tandem: Throughout a transformation, roles change and so too do the skills needed to perform them. This is a particularly important factor as you not only resize, but also reshape your workforce. As a leader, you need to identify the skills gap and provide programs for your people to reskill or upskill for their new roles, along with any evolution of that role. Workers are more engaged when they feel confident in their role and that they have the right skills to do their job. At the same time, you will want to focus on developing the mindsets. A growth mindset can help build the skills, agility and emotional resilience needed to transform successfully. 
5. Create a culture of collaboration and co-creation: Throughout the COVID-19 pandemic, organizations shifted and adapted to new ways of working, literally overnight. CEOs took risks, innovated and co-created new ways of collaborating and working, constantly talking and listening to their workforce as they did it. This is vital to human-centered transformation. As CEO, you will want to foster a climate of connectivity, collaboration and creativity to support the vision.                 

CEOs need to have a full view of the playing field to see how their organization is faring in a state of constant change, including how their people are feeling, whether they understand why change is needed, ensuring that they are gaining the skills they need and providing the space to co-create the future organization. When considering digital, organizational, or strategic investments, CEOs must factor in the intangible desires of employees who are driving labor market churn.  

CEOs who find a way to keep humans at the center of each strategic decision will be able to build a strong team while dealing with the increasing pressures of cost reduction.

Norman Lonergan is EY Global People Advisory Services Leader. 

The views reflected in this article are the views of the author and do not necessarily reflect the views of the global EY organization or its member firms.