← Build with Leila Hormozi
Build with Leila Hormozi
Throwback: Keys to Successful Leadership Transitions In Your Business | Ep 314
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What's up, guys? Welcome back to Build Today. What I want to talk about is something that's super top of mind for me, which is managing leadership transitions. Now, what I mean by that is, say you are running marketing, running sales, running customer success, and you are trying to bring in a new leader to take it over from you. This could apply to you as a founder, and this can also apply to people on your team who are moving up in the company and needing to bring in management and leadership underneath them. And so what I want to talk about today is why this normally fails and how to make sure it doesn't fail. This is something that is super top of mind for me because right now we are really forming two completely new layers of leadership. And I feel like most of the conversations I'm having both with my portfolio CEOs and within my team are about this. So the first time that I really had to deal with this was when I was growing my company, and when I was growing the company, there was so much growth so quickly. And I at first was the person that oversaw everything, right? So I wore every hat. I basically was chief everything officer. I was supposed to be CEO, but I was also running it. I was running customer success, I was running sales, I was running marketing. I was like the direct manager of every department that we had. And so it ended up getting to a point where I recognized, okay, I cannot do this anymore, and I need to bring in people underneath of me and I need to set them up for success. Because at the end of the day, even if I'm really good at these things, and even if I'm better than these people, I'm bringing in 10% of my time is not going to beat 100% of their time. And so I recognized that it was time to bring in people who could really help level up the departments. But what I didn't expect is I didn't expect all the freaking drama that was going to come with it. I had no idea how teams could just revolt against new people. I had no idea how upset people could get, and I had no idea how much of a toll it could take on a team just to bring in a new leader. And here's the thing, it's not like I brought in shitty people. And if you're listening to this, you're probably thinking to yourself, well, you know, I brought in these new people, but they're great. And so I don't understand. And that's the thing, is that most of the time when you bring in new people, they're not shitty, right? Because you've gone through the process, you've hired people, but it's still a change for the team. And I think this is what I really didn't understand when I was a new leader and when I was really rapidly growing a company for the first time, is how much success in a company relies on how you manage change. And so I just want to walk you guys through what I learned in transitioning out on my own and what I have taught my portfolio, CEOs and the leaders in my team so that you can set yourself up for success. Because here's the thing, I look back on it, and there are so many times, not so many, but, like, I can count on one hand the amount of times I have put somebody in a role and I set them up for failure. I set them up for failure because I didn't properly set expectations with the team. I didn't properly make a transition, and I didn't properly set expectations with them for how hard it was going to be to step into a team who had an existing leader. And here's the thing. If you're a founder, if you're an entrepreneur, the cool thing for us is that we get to just build it from the ground up. When we, quote, step into it, we don't step into a team. It's our team. We build it from the ground up. But for any time after that that you're trying to bring somebody in, and for every person you hire, they're stepping into something that somebody else has already been, and so they're really trying to fill somebody else's shoes. And that's not something that a lot of us have to deal with. And I will say it is much harder stepping into somebody's shoes than it is just creating it from scratch. And so what I want to talk about is basically what I realized in making that transition and ultimately making the transition where I really put in a CEO to take over my last company so I could step out. The first thing that I've noticed is that a lot of times when we talk about change, we're so focused on how it's going to be better that we actually oversell our teams, right? And so a lot of the times what we don't think about is we're like, we're sitting here and we're like, it's going to be so much better. And of course we're thinking that because we're like, holy shit, I am so overwhelmed. I need to get out of this. Like, it is going to be better. Like, I'm barely using half my brain to run this department. Like, you're going to have somebody that has their full brain on this department. But listen, the thing is, is that that is us using logic. We're not tuning into the emotions that people have when they're going through this and when they're on the other side, okay? People don't care if you know what they think. They care if you know how they feel. Which is tough because sometimes they don't even know what they're feeling. Right? But here's the thing. When you're making a change like this, what you have to understand is, is that you don't lead a process. You lead people through a process. You lead people through a process. You don't lead a process, you lead people through a process. Okay? And so I wanna outline that process and what I've learned over the years to really lead people through a change in a way that sets the new leader up for success and the team. The first piece is understanding that right now, currently, if you are overseeing the team, right, or the team is, the team hasn't had any change. They are in a state of comfort. They are in a state of homeostasis. Okay? People are creatures of comfort. The moment that you enact change, you create the opposite of what they want, right? You disrupt homeostasis. And here's the thing. Sometimes predictable bad is better than possible. Better. Okay? I know that sounds crazy, but think about how many people stay in a relationship, how many people stay in a job, how many people stay with the same workout routine when it's not working? Why is that? Because often the not so great known is better in our minds than the unpredictable unknown. Okay? We are creatures of comfort. So our natural inclination is to want what is known and not seek out what is unknown. So when you tell your team, you come to them and you're like, guess what? We're getting a new leader. What I want you to understand is put yourself in their shoes. They don't know. Is that person going to come in and fire everybody? Are they going to change everything that's working? Are they going to change my day to day? Are they going to change the teammates? Are they going to never let me get promoted? Is there still going to be opportunity? Do I ever get to talk to my boss? Make it personal. Think about how it's personal to each person on your team. And that's something that I have learned, which is the skill of perspective taking. Understand the things that are going to go through the mind of each person on your teams, make it personal to them. And so then what you can do once you understand that, one, not everyone's as crazy as us and wants to change all the time, okay? Otherwise everyone would have a business. And two, people are going to have their own objections in their mind, and they're all unique to them and their own fears and past experiences. So then if you know these things and you walk through, okay, I get it, no matter what I have to confront, that this is in many ways a bad thing in their mind, right? No matter how good it is for me, no matter how good it is for the company, for them, it is not a great thing. And so then I have to confront and address that elephant in the room. How does it affect the whole team and how does it affect each individual? And then what my job to do is, my job is to tell them this shit is normal. It's gonna suck, okay? You're going to be in pain and you're not going to feel great. You're going to feel unsure, you're going to feel uncertain. You're going to feel like you're trying to find your grounding. You're going to lose things you like. But it's your job as a leader to make people aware of this and set those expectations right? Imagine, you know, when a kid falls down and there's two kinds of parents. There's the type of parent that when the kid falls, I'm like, oh, my God, baby, are you okay? Oh, it's a little scary. It's okay. You know what? We're going to take you. We're in your bed. You don't need to play outside anymore. We're going to go home, blah, blah. It's like the kid got a scratch on his knee. Like, he's gonna be fine in five minutes. But we like taking him off the playground. We're taking him home, right? We're like putting a freaking cast on it. And then there's the parent who sees that the kid falls, sees the scrape on the knee, and they say, oh, sweetie, does it hurt? And he's like, yeah, mom, it hurts. She's like, that's okay. It's supposed to hurt, but you're gonna be okay. That's the parent you want to be. And that's how I see leadership with your team, which is they say they're in pain and you're not sitting there saying, you know it's going to go away. You know what it's. You say, yeah, that's to be Expected and it's normal. That makes a lot of sense. You know why? Because you got used to me or to this other leader. You have a great relationship. You've got a great thing going. And so we don't. We're not able to quantify what we have to gain. We're only able to quantify what we have to lose. So it makes sense that you're scared, it makes sense that you're frustrated, makes sense that you feel uncertain, and that's okay. Make people aware of this and set the expectations. Talk to them about it. Talk to them about the fact that change is always inevitable. And change, right, is really linked to loss. Which brings me to the second piece of this. A lot of people say my team resists change. Your team doesn't resist change. People don't resist change. They resist the loss that comes with change. So you're not feeling resistance of change. You're feeling resistance because they don't want to lose something. And so understand that the second piece of this is if you don't address what is being lost, then people will not feel heard and they won't be open to what they have to gain. Many people, and if you really zoom out of this, people are losing the known for the unknown unknown. And so even if they think it could be better, even if things aren't perfect today, they at least know what they're going to step into tomorrow. And so what I have found to be the best way to manage this is one. Just like I said, address it. You always want to address this. But the second thing that I've done, in every instance where I'm outsourcing myself, I did it recently. I had a teammate who was reporting to me and I said, you know what? I don't actually think I can keep having you report to me. I've got, you know, 11 direct reports and I really should only have people on the executive team reporting to me. This is an opportunity for growth for this other executive and for you. And I had that conversation with that person and I explained all the reasons why it was going to be beneficial. But I also acknowledged the fact that they were going to be losing something. They lost access to me, they lost all the things that we had talked about, all the history we had of our relationship. They lost the predictability of knowing how I was going to show up to meetings and one on ones. And so what I did to ease that loss and to make it a transition rather than an overnight change is I said, great. So instead of having a one on One every week. We're going to have a one on one every other week. And instead of slacking every day, we're still going to slack. It's just going to be ad hoc. And instead of having more formal meetings, I'm going to try and go on a walk with them every three to four weeks. And what I can tell you is that the relationship has maintained itself, right? And so though it's maybe not getting so though it may not be multiplying like it is when you have someone's direct report, I haven't allowed it to die. And what a lot of leaders do is they feel so much stress. And I get it, guys, I've been there. Like, I'm like, oh my God, get me out of this. I just need relief. And we're so excited when we get the relief. We're like, oh my gosh, somebody's here. Give me relief. Like, I'm so excited. Like, I have so much on my plate. I need to get this off of my plate. And what they do is they just literally throw everything off their plate overnight, including the people that love them and follow them. And that is not what you want to do. So instead what you want to do is you want to make it a transition. You don't want to completely take away everything all at once. You want to make it a transition. You slowly transition things out. So how I've done this and how I'll do this with this person I just mentioned is I'm going to slowly transition. We meet every two weeks, then we'll meet every month, then it'll be every few months, and then it will all just be ad hoc. You know, when we see each other in the office, when we have time to go on a walk or maybe we get a workout in whatever it may be. But I'm not going to overnight completely disappear because what I want to do is I want that person to build up that sense of comfort and that sense of normalcy with the new leader coming in before I completely let go. And so I want them to feel completely supported the entire way through. And so what, what is the cool thing is that if somebody, if you tell them that and you tell them how you're going to help the transition and they understand that they're not losing you completely, they're going to have a little less frequency, but you're going to be super tuned into what's going on and you're going to make it a smooth transition. They are going to be so much more excited about the change. Because it almost feels, in a way, if you position it right, like they're getting something else. Like they're getting more on top of what they already get. And I can tell you that some. And I can tell you that one of the best questions I ask people is, what's your favorite part about reporting? To me, like, it's kind of like the. The philosophy of, like, throw the baby out with the bath water. It's like, let's just keep the baby and throw out the bathwater. Like, let's keep the one thing that you love about our conversations and love about reporting to me, and we can throw at everything else. And what I found for myself is it's often the relationship or it's often my ability to speak encouragement into them. And I can still do that when they don't report to me. And so it's a great question to ask, which is, what's the thing that you're most scared of losing? What's the one thing that you love about reporting to me? Those are two great questions to ask people, because then you can work those into your transition plan, and you can make sure they still get their favorite thing so it doesn't feel like this overnight, complete shift. Now, I will say that even though you do these things, people are still going to feel a sense of loss. I mean, think about. You break up with somebody, right? And I know, I've been there, where you break up with someone, and then a few months later, you're dating someone new. In the beginning, it's like, almost all you can see is you start thinking of the discrepancies. You're like, oh, that person used to, like, make me coffee in the morning. This person is making me coffee. Okay, interesting. Oh, this person used to kiss me like this. Now this person kissed me like this. Oh, that person used to dress like this. And now this person dressed like. Like, you start seeing all these discrepancies. It doesn't mean they're bad, but you do notice the differences. And so that is something that you want to make sure your team understands. Hey, you guys are gonna see all the differences. They're gonna be great at some things that I suck at, and they're gonna suck at some things that I'm great at. And that's okay. That's part of change. And we're gonna do our best to manage that and be the vocal about it. Because, guys, the biggest mistake that I've ever made is not addressing it, bringing somebody new in and not addressing the fact that this is a Change. And I know it's hard for people, and just because it's not hard for me, because I need relief and I'm excited to have less on my plate doesn't mean it's exciting for them. Now, once you've confronted the fact that this is a change, you've talked about the fact that it's normal to feel bad, and you've put in place a transition plan, the next piece you want to see, you want to understand that happens, is that people reorient themselves. Okay? So when I say they reorient themselves, what happens when you make the official transition? This person comes in is oftentimes there's this weird tension, right? And it's not a bad thing. It's not something we should get rid of, but there's a tension between the old and the new, right? And it feels uncomfortable at first, right? Because what's happening is the team doesn't want to let go of what was, but at the same time, if they don't let go of what was, they can never grab on to what could be. And so in those moments, what you want to understand is like, this is the precipice. You're on the precipice of getting the team used to this new person. But they're trying to gain their boundings. They're trying to understand how does this person like to be talked to? How do they talk to me? How do we run one on ones, how do we do meetings? What do they think is the standard? What kind of KPIs are they measuring? They are basically reorienting how they exist, how the culture works, and how they interact with their boss. And I think often we're taught that's a bad thing. We're taught it's bad to be in a place of uncertainty. And for the most part, I think certainty is good. But the only way you get to certainty is by being uncertain. And the thing is, is that uncertainty means that we're trying new things and we're figuring out new ways of doing things. We are learning new things and deciding the new norms that we operate from here on out. And if we don't go through this phase of reorientation and uncertainty, we never get to the other side, which guess what that side is. That side is innovation. And innovation is where we grow. And if we can maintain clarity about our vision and our mission, then we're positioned amazingly well to innovate and create something better and new. And so the best thing you can do during this time is make your teammates Aware of this, things are going to be different. But guess what? When we're in a state of change, you have to think about this, right? Sell them, don't tell them. What's the benefit to them? Think about it. What's the benefit to them? The benefit to them is that they get to have influence over the new, they get to have influence over the innovation and they get to have a say in what happens next. And so maybe they weren't here when you first came in and built it apart department, but they are here now when somebody's changing it. And so now what they get to do is they get to be a part of that new change. And so the most important thing that we can do is encourage the new leader to have those people advocate for the changes they think would be positive and include them in the decision making process. You want to get their buy in. And the way that you get buy in is by eliciting, is by eliciting opinions from everybody and then asking them to share their opinions and then explaining why or why not. We're going to take those opinions into consideration and act or not act on them. And I will say this is probably the best thing a new leader can do is make sure that they are constantly eliciting feedback from the team, constantly asking the team what was done here, what was working, what wasn't working, would we stop, start, continue. And that is a fantastic way for that person to not only capitalize on all the good things that they were doing, but also find out the things that we were doing that maybe weren't so good that we can make better. And so we understand that we have disrupted homeostasis, right? And we're going to make people aware of that. We have then transitioned people through the feeling of loss. We've made them aware of it and we've made the transition easier by not just ripping the rug from under them all at once. And now we're in a state of creating the new, the new culture, the new department, the new way of doing things. What happens after that? They get fucking used to it. I know it sounds crazy, but kind of like a new habit takes 60 days to build. It takes about two months for people to get used to the way that the new team works. And so what I have seen is that it takes about four to five months in total for this transition to occur. We don't want to rush it, but we also don't want to passively let it pass us by because there's so much opportunity in this to set Our teams up for success. And so what I have noticed is that through all of this, what I want to remind you of is maybe you're going through this right now. Maybe you are watching your leaders go through it, and you're thinking, God, when does it end? Everyone's complaining. People are feeling like. People are feeling like they're not. People are feeling like there's a sense of loss. People are feeling like, oh, my gosh, I wish I had the old leader. Here's the thing. It comes to an end, people get used to it. And that is what you have to keep in mind. But what I can tell you is the best thing that I ever did for my organization, the best absolute thing, was vocalize these steps. I make my team aware. You want to know why I like making this podcast right now? Because I get to go share this with my team. I get to share it with my portfolio CEOs, and it is a resource for them. So if you're going through this right now and you're thinking to yourself, wow, one, shit, I have not managed these transitions well, that's okay. Sometimes I don't either. I, uh. And I talk about this stuff on my podcast. I talk about on my YouTube and I still fuck it up sometimes. Cause I'm busy and I'm forgetting. And then I'm like, shit, I missed the basics here. Right? The second thing is, there's no reason you need to withhold this information from your team. Like, you only need to be one step ahead of your team, and you're that step ahead so that you can get this information, to share it with them. You don't need to hold the information as much as you can. Share the information with them, share what you're learning with them, share this podcast with them, tell them what you learned and. And ask them, what can you do better? How did you manage a recent transition? Or how can you manage a future transition? And how can they manage it too? So overall, remember, these things are normal. It's normal to feel uncomfortable. It's normal to feel a sense of loss. It's normal for people to feel uncertain and to not like transitions and change, and that's okay. And to be expected. Trying to buffer it, trying to avoid it, trying to paint this beautiful vision that it's going to be this amazing thing and there's going to be no hard parts to it. It's just the opposite of reality. And so set proper expectations, address it with your team, address their fears and objections, and lead the way for them.