Managing Former Peers

Sometimes a promotion can suddenly change your relationship with co-workers from "peer" to "boss." It's not an uncommon scenario, particularly in companies with strong succession plans. However when this happens it often creates an awkward and uncomfortable set of dynamics, and there's no blueprint for how to manage them.

Here's an example*: Peter was the divisional CFO for the consumer unit of a global products company. Although he was a relative newcomer to the firm (hired three years earlier), he was considered a potential successor to the divisional president. Two other members of the management team also had aspirations for the top job: Sarah who headed operations and had been with the company her whole career; and Stan, the SVP of sales, a veteran sales guy who was widely considered the driver behind the firm's current success. As members of the senior leadership team, these three managers worked well together on business issues although they were not personal friends. When the Board surprised everyone by promoting Peter to the top job, Stan immediately decided to take early retirement while Sarah agreed to stay on for the next year.

Peter's appointment as president triggered two common challenges with peer promotions: rapid re-contracting followed by rapid restructuring. Re-contracting relationship ground rules is necessary, because in the aftermath of a promotion social and hierarchical relationship dynamics will inevitably shift. Peers can joke around, gossip, gripe, and poke fun at each other. But when one of those peers is promoted, these behaviors need to be tempered. The former peer is now responsible for setting direction, handing out assignments, holding people to deadlines, assessing performance, and determining pay. Yes, she can still be friendly with these subordinates, but only to a point. Some amount of distance needs to be created so that the new boss can give feedback and make decisions that the former peers might not agree with. To do this, the new boss needs to re-contract the rules of her relationships with each member of the team; and if anyone cannot accept the new contract, then they will need to go elsewhere.

In Peter's case, the process of re-contracting was made difficult by Sarah, who was both a peer and a competitor. She had different views on how to lead the division and was disappointed that she didn't get the job, for which she thought she was more qualified. So their relationship needed to change even more than others, both intellectually and emotionally. This required Peter to spend considerable time with Sarah talking through their concerns. As it turned out, Sarah worked very hard initially to support and help Peter in his new role — but after a few months concluded that she could not report to someone whom she felt was less qualified, and took a package to leave. Two other members of the leadership team — who had wanted Stan to be their boss — also left within the first few months.

Evidently, an obvious outcome of re-contracting is the need — or the opportunity — to bring in some different people and/or redistribute responsibilities. One replacement that is always needed is for the person who is promoted, or Peter in our case. Other open positions come from people who leave as a result of the re-contracting, such as Stan and Sarah. The challenge here is to not necessarily replace each position individually, but rather to look holistically at the work to be done, figure out the best way to match it with the skills of the remaining team members, and then see what gaps are left. Restructuring in this way brings people into the team who were not part of the old relationship patterns. More importantly, it provides promotions for the veterans on the team, if not to new titles then at least to new responsibilities or challenges. This too will create new relationship patterns that make it easier to let go of the past.

In our case, Peter promoted one of his people to be the CFO, but reassigned some of his previous responsibilities to others. He also divided Stan's sales job so that one person led "direct" and one led "indirect" sales. When Sarah left, Operations also was reconfigured. The end result was that Peter and the team were able to function effectively without being dragged down by bad feelings, jealousy, and awkward relationships.

It's not easy to make the transition from peer to boss. But going through the process of re-contracting and then restructuring can improve the odds of success.

What's your experience with the dynamics of peer promotions?

*Names have been changed.

Ron Ashkenas is a managing partner of Schaffer Consulting and a co-author of The GE Work-Out and The Boundaryless Organization. His latest book is Simply Effective.

Thanks to Ron Ashkenas / Blogs HBR / Harvard Business School Publishing
http://blogs.hbr.org/ashkenas/2011/11/managing-former-peers.html