A recent study suggests that burnout may be more closely tied to clinical depression than previously thought. The Wall Street Journal’s Ann Lukits reports that researchers from the City College of New York and the University of Neuchâtel, Switzerland, screened over 1,300 teachers of similar ages and work histories and found that those who suffered from burnout also showed signs of depression:
Of the subjects, 10% of women and 7% of men were classified as cases of burnout, while 10% of both sexes were considered probable cases of major depression. Among those with burnout, severe depressive symptoms were reported by 50% of men and 38.2% of women, and moderately severe by 22.7% and 36.3%, respectively. None of the subjects with burnout was free of depressive symptoms.
Here’s what I think is interesting about this: Burnout levels among employees are rising, and this research suggests that it takes a much greater toll on employees than we think, psychologically. I do think it’s something that heads of HR need to pay attention to in order to have a productive workforce that can effectively handle a more variable work environment.
Why is burnout rising? A couple of reasons:
Michael Horn, the president and CEO of Volkswagen’s US operations, abruptly resigned on Wednesday after two years in the post, the New York Times‘ Jad Mouawad reports. Hinrich J. Woebcken, recently appointed head of the North American region and chairman of Volkswagen Group of America, will take his place. Horn’s departure, on which the auto maker did not comment except to say that it was decided by “mutual agreement,” comes after months-long series of resignations and reorganizations in the wake of an emissions cheating scandal that has already cost the company billions.
The Times report notes that Horn had played a key role in managing Volkswagen’s relations with its American dealerships amid declining sales and increasing frustration with the company’s leadership in Germany. As Mouawad describes, his absence is already making dealers nervous:
In the course of my research on change management, I’ve had several conversations with executives recently in which the question of capacity has come up as a major impediment to implementing change plans. We’ve been hearing this more and more on calls: Leaders create these intricate change plans or design a change based on organizational strategy, but fail to actually take into account the capacity of their workforce. Leaders and change planners just give employees more things to do, but never tell them what tasks or behaviors to stop after a change.
In a recent call, one executive made an interesting point: When a change isn’t working, we often think it’s because of a process issue, but when you have employees repeatedly trying to implement a broken process or failing to adapt their behavior to a change, this actually becomes a capacity issue, too. By doing the same wrong thing over and over, you’re eating up capacity and adding to the problem.
So, one of the questions we need to ask in the midst of change is not only “Does my workforce understand this change?” but also “How can I free up capacity in my workforce for this change?” Some of the solutions we’re seeing are to tell employees explicitly what they need to stop doing, or to let them identify barriers to change themselves, rather than having managers or leaders do this.
An installment of our Executive Guidance series last year, Growth Unlocked: Closing the Strategy-to-Execution Gap, offers some tips for managing this sort of capacity challenge.
If you are a chief human resources officer (CHRO) vying for a seat on your organization’s board of directors, you would do well to look at companies going through a major transformation. That’s a key finding from an intriguing study of CHROs on boards, written by two executive and board search firm consultants, Robert Lambert and Jeff Hodge.
Lambert and Hodge interviewed a combination of HR executives and board members for their report, The Chief Human Resources Officer, An Underutilized Resource for Corporate Boards. It is worth reading for its summary of unfiltered advice from 51 HR executives and board members on getting into a board seat. Their findings about transformation are particularly salient: The authors posit that change favors CHROs because of the huge risks transformations pose to organizational culture.
That hypothesis aligns with our new research on major enterprise changes and how the CHRO role itself is evolving towards a “Chief Change Officer” role. We’ve found that 77 percent of the factors associated with successful changes are common across all types of change. Two-thirds of the differentiators of change fall squarely within the CHRO’s realm of influence. In other words, the head of HR should be more involved in change than other C-suite leaders and their insights are uniquely transferrable across companies. So it would make sense that shareholders should want that expertise on the board to provide the right oversight of management’s transformation strategies. With 70 percent of organizations expecting to go through more change in the next three years, the door seems to be opening wider for CHROs with board aspirations.
However, the report portrays CHROs as inadvertently pulling the boardroom door shut on themselves.
With the chief executives of two giant companies out of commission on medical leave, the challenges of a temporary, unexpected absence at the top of the corporate pyramid have come into sharp focus. In these situations, much depends on the acting leaders who step in to fill the shoes of out-of-commission CEOs. In the Wall Street Journal last week, reporters Rachel Feintzeig and Joann Lublin examined why “interim CEO” isn’t an enviable job title:
Interim leaders risk criticism for being too assertive or too docile, according to Jeffrey Cohn, managing director for global CEO succession planning at recruiters DHR International. Brash action can anger the company’s board of directors, but tepid leadership can hurt an executive’s chances for advancement after the permanent leader returns or arrives. Some interim chiefs plucked from senior management resume their prior role or take a different internal position, such as chief operating officer, Mr. Cohn says. Regardless, he added, “It is always a letdown. It’s hard to go back to hamburgers when you have had filet.”
About 29% of interim CEOs permanently end up with the top job, according to research by Gary Ballinger, an associate professor of commerce at University of Virginia’s McIntire School of Commerce, and a colleague. The analysis of 2,500 public companies found that those run by temporary chiefs logged lower net income and stock market performance than those that immediately replaced their CEO.
In our research, we’ve looked at leadership transitions and how organizations can navigate them successfully. CEB members can read our findings here.
The sudden departure of a CEO, even temporarily, can shake an organization to its core, as recent events at United Airlines and Valeant Pharmaceuticals have illustrated. But it’s not only crises that make investors jittery—Dale Buss at Chief Executive points to a recent study finding that “shareholders actually perceive seemingly normal succession in the corner office as a significant disruption to the viability of an organization”:
The researchers analyzed 572 CEO retirements and their effect on shareholder reactions at S&P 1500 firms from 2003 through 2012. The magnitude and direction of capital-market reactions to these events depended on the firm’s financial performance before the retirement, whether the successor came from within or outside the firm, whether the CEO was founder of the firm, and whether or not the retiring CEO was retained on the firm’s board of directors.
Even though these things are relatively anticipated, [management researcher Alan] Ellstrand said, “since we’ve kind of gotten away from 65 years old as the mandatory retirement age, there is still some question about when a viable and well-functioning CEO is going to retire.” So when it does happen, it can be seen as disruptive, particularly when that CEO has been performing well, he says, noting that investors don’t like uncertainty.
The Guardian’s Graham Ruddick reports that Volkswagen has radically reorganized its management team in the wake of the scandal over its emissions scandal, in an effort to detoxify the company’s culture and cut costs in the face of what could add up to tens of billions of euros in fines and customer compensation:
The German carmaker has almost halved the number of senior managers reporting directly to Matthias Müller, the chief executive, and brought in several new faces. Müller has pledged to transform the notoriously unwieldy structure of VW after the company admitted that the emissions scandal had occurred because of a “whole chain” of errors and a corporate mindset that tolerated rule-breaking. …