Keeping the faith: How companies can rebuild confidence after leadership change

Rebuilding confidence after leadership change is a difficult task that a number of Australian organisations go through. Here, Culture Amp offers some insight on how to navigate this strenuous task, writes Tony Tran.

Leadership transitions are never easy. Our Culture Amp research shows that following a change in senior leadership, employees’ confidence in the company often wavers. We see belief in innovation drop by 8 per cent and commitment to staying with the organisation fall by 7 per cent.

This shift in sentiment is deeper than just “resistance to change” – a term often thrown around to explain employees’ reactions to any organisational shifts. But is it truly about resistance to change, or is it more about what the change represents to people?

When a senior leader leaves, it doesn’t just create a vacancy in the hierarchy; it generates an emotional and psychological void. Whether the leader was widely respected or not, their departure signals uncertainty. The nature of that uncertainty varies, but it often boils down to one question: What comes next? Will the new leader be as good? Will they be better? Or are we headed for the same issues under new management? These are real concerns for employees, and how we manage these concerns is crucial to rebuilding trust.

Our data reveals that the situation is particularly delicate. With leadership change, we see a decline in employee happiness with their role relative to what was described to them. Furthermore, our data shows the drop in employee happiness is more significant when a new leader comes from outside the organisation.

This might indicate that changes in employee sentiment and engagement aren’t solely due to the leadership change itself but because of the broader organisational shifts that necessitated an external hire. A new leader may bring with them new strategies, priorities, or ways of working. A lot of unknowns can disrupt the comfort employees have built in their roles.

The truth is, people don’t fear change itself – they fear these unknowns. Leadership transitions represent the unknown in spades. Employees wonder how their work will be impacted, what direction the company will take, and, ultimately, what this means for their future with the organisation.

More specifically, an employee might be concerned that their work will no longer be valued in the same way, that the new leader may have a different set of expectations not aligned to their strengths, or that they won’t be as supportive of their preferred ways of working.

Managing this uncertainty, particularly the fear that comes with it, is paramount. This is where companies often falter. When employees are left in the dark, they are more likely to fill the void with rumours and speculation, driving their confidence further down, not up.

To successfully navigate these turbulent waters, companies must approach leadership change in the same way they would any other significant change initiative. Building awareness is key – employees should understand why this change is happening and what it means for them.

It’s equally important to highlight what won’t change. Consistent communication is crucial in maintaining morale. Employees need to feel that they are being kept in the loop, not left to wonder about the future. Leaders should be intentional about checking in with employees regularly, both formally and informally, to understand how the transition is affecting them.

Without a clear narrative, employees will create their own. Dr Bobby Melloy, Culture Amp’s regional director of people science, North America West, put it well when he questioned what the departure of a senior leader could signal to their team: What do they know that the rest of us don’t? This kind of thinking can take root quickly if the reasons for leadership changes are not clearly articulated.

Similarly, I’ve often reflected on the uncertainty that a new leader brings. Without early communication about their vision and direction, employees are left guessing. As an employee, if I don’t understand how the new leadership will affect my role or how I perform my job, I might decide it’s safer to leave and take control of my own career than stay and navigate the ambiguity.

This goes beyond just announcing a leadership change – it’s about ongoing, two-way communication that reassures employees and keeps them engaged. It’s also about recognising that leadership transitions can trigger bigger questions around company stability, strategy, and culture. Avoiding these conversations won’t help; embracing them will.

Leadership changes, whether planned or sudden, are part of the natural ebb and flow of business. However, to avoid losing top talent in the aftermath, companies must be prepared to actively rebuild confidence. By being transparent, prioritising communication, and taking the time to understand the concerns of their teams, organisations can move through these transitions without leaving fear and uncertainty in their wake.

Tony Tran is the lead people scientist at Culture Amp.