To what extent is new external leadership essential in order for a business to achieve successful change?

To what extent is new external leadership essential in order for a business to achieve successful change?

One reason why new external leadership is essential in order for a business to achieve successful change is that the change required is likely to have arisen because of an inappropriate strategy by the previous leader, indicating that a new direction is required. This line of analysis can be explained as follows. Businesses, in particular large ones, often suffer from strategic drift – which means their strategy becomes disconnected from a changing external environment.

Sometimes this is because the leadership becomes complacent and assumes that previous business success will continue despite changes to the nature of competition. As a consequence of this complacency, a business may lack investment in innovation or the firm becomes too bureaucratic in terms of decision-making.

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This can then lead to a business losing its competitive edge, either because its costs are too high or it lacks the innovation required to keep up with more agile competitors. In this situation it is the existing leadership that needs replacing, ideally by leaders who have not allowed the business to drift off course. Put simply, a new strategy needs a new perspective which is most likely to come from a new external leader.

Two examples help illustrate this line of analysis. When Howard Schultz returned as CEO of Starbucks he found a business that had suffered from strategic drift: it had over-expanded in the US and had lost much of the focus on customer experience that had previously made it successful. Schultz quickly spot