For the past 90 days and counting, we knew this day was coming.
You didn’t need an Irish bookmaker to tell you that Tony Hayward’s tenure as CEO of BP was coming to a close. Any organization facing a crisis like the BP Oil Spill would be likely to replace the guy at the helm.
While it’s common for corporate boards to respond to a crisis by replacing the CEO, this is often a meaningless action. Investors may feel a pump of optimism, the relieved CEO may feel some relief, and the new CEO may feel hopeful, but the leadership change at the top often leads to very little change at all.
Why CEO Change Doesn’t Make a Difference
A change at the top doesn’t indicate a change inside.
While it’s true that the CEO is ultimately responsible for the actions and outcomes of the organization, the CEO alone has limited influence. What really drives the actions and outcomes of an organizations are the systems and processes that operate across the organization.
For example, it’s not the CEO’s expressed interest in green fuel alternatives, but whether with his leadership the corporate investment priorities are changed and corporate achievements are tracked, celebrated, rewarded and reinforced through business systems and HR processes.
In order to make a change that matters, the new CEO has to have more than different values, different skills and different priorities. The new CEO has to institutionalize these priorities by innovating within the organization’s design and systems.
Without system change, there can be no material, substantial change improvement in the organization.
Why CEO Change Does Make a Difference
While firing the CEO and replacing him with someone else doesn’t often matter in a material way, it can matter in a more symbolic way.
A change at the top creates a chance to change the organization’s story.
Removing Tony Hayward creates a break in BP’s Disaster Story. With the new CEO Bob Dudley taking over, everyone needs to make sense of the change.
Instead of the story continuing to be “the CEO makes one misstep after another, demonstrating each time that BP is inept and uncaring”, the story becomes “BP has a new CEO. How will he be different?”
Having a break in the story, even if there is really nothing different beyond the name and the face of the CEO, invites us to reconsider what’s happening at BP.
The story has a chance to shift from being more of the same to being about change.
If BP can get us to consider the mere possibility that things are changing at BP, this can help us change our perceptions of BP. When we change our perceptions of BP, we give them a chance to change for real.
- A change story can help the people within the organization focus on a different set of actions and interpretations, and help them feel hopeful about their collective future.
- A change story can pump up institutional investor, leading to an uptick in share price and a sense of rebound.
- A change story will get the media to portray BP in a questioning way, rather than reinforcing same conclusions. Things are now ‘open’ to reinterpretation.
Don’t be fooled, though. Real change only happens when systems change, so that actions change, so that values are changed.
Still, a change in the story, a kind of change that can seem fake, can actually lead to some real change. Not to sound schmaltzy, but fake change can lead to real hope.
The takeaway for BP: Real change must be designed in
If Dudley is something different, he could help BP revise its approach to the spill and change its strategy and future outcomes. But, this will only happen if Dudley is able to lead BP employees to innovate and change systems, and to innovate and change their own behaviors.
Will a change in CEOs really make a difference?
It all depend on whether the new CEO can take the opportunity offered by a change story, and design it into a story of real change.
See also:
BP’s Beyond Petroleum: Hypocrisy, or caught in the act of learning?
Organizational Change Using Authentic Attributes
Is Twitter is Really Changing Comcast’s Culture?: 7 Signs to Look For
3 Things the New York Jets Can Teach You About Authenticity
Images: Robert Dudley from OffShoreInjuries.com Tony Hayward from INN World Report
I am an organizational consultant, change advocate, and organizational identity/reputation scholar with a PhD in leadership & organizations. I research, write about, and consult with organizations on the relationships between organizational identity, actions, and purpose. I teach Technology Management, part-time, at Stevens Institute of Technology.
My current research focuses on how social technologies in the workplace can drive organizational change, generate meaning, and catalyze purpose. See the 
{ 3 comments }
This would be an excellent fit for Hayward
This is a brilliant exploration of the potential difference a change at the top can make and why it might make no difference at all.
Perhaps the phenomena of “fake change can lead to new hope” will work in this CEO’s favor because I have to believe the employees are ready for a whole new story. The world certainly is!
How much power do you think the individual employees have at this moment in time to influence the story for the future? I am wondering if the changing of the guard creates a unique window of opportunity for grass roots leadership to emerge and make a positive difference in the future of the company. Your thoughts?
Hi Susan,
I think that this is quite a ripe time for employees to ‘stand up, peak up, and start up’ (though I know those aren’t your actual words… One thing I’ve noticed is that some good ideas can get legitimated by a change in the story, even when the situation isn’t authentically different… So if the organization “says” they want to be green but they are doing nothing, the employee/advocate can start something in her own department, knowing that if anyone resisted, she could say “The organization told us that getting green was important”. The words, however hollow, do create a hook for people to hang actions on.
I am longing to hear some stories about what’s going on inside BP– I hope that employees are finding ways to act differently. I’d love to hear about some responses from within… I was news of some random acts of leadership over there at BP!
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