The importance of strong leadership when restructuring

The Institute of Executive Coaching and Leadership (IECL) has recently forged a new partnership with SHK Asia Pacific (SHK) as the firm’s global coach accreditation and training partner. SHK is a specialist people advisory firm with a strong reputation for providing high touch, highly personalised outplacement services.

We recently spoke with Pauline Nolte, Senior Partner and NSW/QLD Practice Lead for Outplacement and Career Management, to understand the important role leaders play during restructures and how coaching principles underpin smooth transitions.

Q: Why is leadership effectiveness so critical during a restructure?

Although supported by HR, it is typically the people leader who facilitates formal notification discussions and then guides their team through any ensuing ambiguity and uncertainty. The leader needs to leverage their relationship with and understanding of their direct reports to anticipate likely concerns and reactions and provide impacted employees with the support they need.

Q: Why is strong leadership during change so important to organisations?

Many organisations now recognise that redundancies and offboarding are pivotal aspects of the overall employee experience. In sectors facing skills shortages such as technology, construction, financial services, and mining, we're increasingly seeing the rise of the ‘boomerang workforce’, where former employees return to their previous employers. As a result, companies are placing greater emphasis on ensuring departing employees are treated with the same respect and care as during onboarding. For others, the priority is to maintain strong relationships so that former team members continue to act as brand ambassadors and trusted referral sources.

Q: How important is communication as a leadership skill?

Effective communication from leaders is absolutely vital. Organisations will often announce plans to conduct a strategic or operational review, and this gets the rumour mill grinding. As in any effective coaching conversation, the role of the leader is to deeply listen for emotions, meaning, what is not said, patterns and exceptions. The leader may not have visibility regarding the future state or process, but they can share the information they do have and commit to keeping their teams informed as information comes to hand.

Q: What can a leader do to ensure that initial consultation and follow-up meetings go smoothly?

Preparation is critical to ensuring notification discussions are conducted with clarity, respect and confidence. Drawing on SHK Asia Pacific’s experience, we recommend that leaders take the following steps in advance:

• Develop a solid understanding of the business rationale for the restructure or redundancy

• Familiarise themselves with all official internal communications related to the change

• Prepare a clear agenda and meeting structure to guide the conversation

• Be across next steps and timelines including any redeployment opportunities, expectations during the consultation or notice period, and logistical arrangements for the day of notification

• Anticipate the range of potential emotional responses from employees recognising that reactions can be unpredictable and may differ from what is expected

• Know when and how to offer counselling or wellbeing support services

• Be ready to provide information about redeployment and/or outplacement support, where available

• Understand the details of the separation package and be able to answer related questions with clarity and compassion

Q: What common mistakes do leaders make during a notification discussion?

Leaders often fall into the trap of trying to empathise with their employee and say things like “I know how you feel …”. The reality is, they don’t know how the person feels even if one of their roles was made redundant in the past – everyone experiences situations differently.

Sometimes leaders can become defensive, and they try to persuade their employee that the decision is justified. It’s best just to stick to the facts. Another potential pitfall is being dragged into a conversation about performance. Consultation and redundancy conversations are not a time for performance reviews.

Q: What is the biggest criticism you hear from impacted employees regarding their former leader?

Leaders can often drop the ball during the redeployment stage. I’ve heard instances of leaders ‘ghosting’ their employees and leaving all communications to HR. One senior executive shared with me recently that an external search consultant advised him that he was not being progressed to the final stage of a selection process, rather than his manager or HR.

Leaders need to take ownership of communications right up until their team member exits the organisation. Another person I spoke with recently was heartbroken that, after 10 years with the company, no farewell email was sent to her team or broader business unit. This left her feeling undervalued, confused and demoralised.

Q: How important is it for leaders to continue to coach and support team members who are not directly affected by the changes?

Supporting and communicating with employees who remain in the organisation is a critical part of any change management process.  Clear, timely communication helps reduce uncertainty and maintain trust.  Leaders should openly explain the business reasons behind the redundancies, outline next steps for impacted employees - including details of redeployment or outplacement support where relevant - and share how teams can best support their departing colleagues.  This communication should also cover handover plans and how remaining employees will work together to achieve team objectives with reduced resources.

Leading through change can be especially difficult when entire teams or divisions are impacted. In one recent example, a leader I worked with was managing the closure of an entire operation over a three-month period, her own role included.  Although she didn’t have all the answers, she showed strength by actively listening to her team’s concerns and responding with honesty, using phrases like, “This is all I know at this time” or “I’m not yet sure what the next steps will be”.

Strong leaders draw on their coaching skills by setting up 1:1 meeting with their retained team members to ensure their concerns are heard.

Strong leaders draw on their coaching skills during these times. They schedule regular one-on-one check-ins with retained team members, stay visible and approachable, and provide space for informal conversations. They help their teams reorient towards the future and they look after their own wellbeing, recognising that their emotional state influences those around them.

PAULINE NOLTE

Senior Partner, NSW/QLD Practice Lead Outplacement & Career Management - SHK Asia Pacific (SHK)