Is Leadership Team Alignment Helped or Hindered by Reshuffling?
Consider
The lesson isn’t to avoid team changes—it’s to manage them intentionally. A reshuffle without attention to team dynamics carries real danger. But a reshuffle paired with thoughtful integration can strengthen alignment and accelerate change in any onboarding scenario.
In 2016, McKinsey evaluated the strategic moves that nearly 600 CEOs from S&P 500 companies made when entering a new role. The most common action was centered around leadership team alignment, where the new executives would reshuffle their management teams—defined as replacing more than 50 percent of direct reports within two years. These CEOs did this at similar rates across contexts: 66% reshuffled in well-performing companies and 72% did so in poorly performing ones.
This instinct makes sense. A new leader’s direct reports shape strategy, drive execution, and influence early momentum. Building early leadership team alignment right feels foundational.
But the impact of reshuffling is not the same everywhere. McKinsey found that CEOs who reshuffled in poorly performing companies saw improved performance, while those who reshuffled in well-performing companies “destroyed value.” In other words, disruption helps when an organization is struggling but harms when the existing team is part of what’s working.
A second study by Georgakakis and colleagues (2024) offers a different pattern. Studying the impact of 110 CEO successions in the UK and three EU countries, they found that reshuffling the top team led to worse performance in companies already doing poorly but did not hurt companies that were performing well. They also found negative effects when reshuffling followed a dismissed CEO.
Although opposite in outcome, the Georgakakis study provides helpful nuance. They observed that when new executives enter struggling organizations, factional faultlines—a split between “new” and “old” members—are more likely to emerge. These fractures—not the reshuffle itself—generate negative dynamics and low performance.
This explains why reshuffling can fail, but not why the two studies diverge. McKinsey suggests reshuffling helps struggling firms and hurts strong ones; Georgakakis finds it hurts struggling firms but has little effect on strong ones. So what’s going on?
One factor is regional context. McKinsey’s sample is U.S.-based, while Georgakakis examines EU and UK firms. Management discretion tends to be higher in the U.S. than in the EU/UK—which may influence how expected or disruptive a reshuffle feels.
However, both studies examined large, complex, publicly traded firms with professionalized top teams. Despite regional differences, these teams face similar interpersonal and political dynamics, suggesting that faultline formation is a relevant risk in any setting—but opposite results suggest they may form under different circumstances.
Thus, Georgakakis provides insight into one mechanism that drives negative consequences: factional faultlines—offering a key lesson:
Reshuffling only helps leadership team alignment when it does not produce factional divides. When factionalism emerges, the potential gains evaporate—and performance worsens.
The key, then, for any leader is to pre-empt the occurrence of factional faultlines.
The lesson isn’t to avoid team changes—it’s to manage them intentionally. A reshuffle without attention to team dynamics carries real danger. But a reshuffle paired with thoughtful integration can strengthen alignment and accelerate change in any onboarding scenario.
Here are tips I often recommend to leaders entering a new high-stakes role to avoid factions:
Change members carefully by taking the time necessary to make an appropriate assessment
Prioritize clarity and connection when integrating new and old team members to foster empowerment and buy-in.
Create a regular cadence of check-ins to nurture team cohesion and surface issues early.
Address tensions quickly—don’t let misalignment linger.
Co-create working agreements and revisit them during team check-ins.
Leverage both sides of the table—draw on the knowledge of long-tenured leaders and the fresh perspective of new ones.
So, should a new CEO change the management team in those early moments of assuming their new role? Building and sustaining the right team at the top is undeniably critical to any new leader’s success. And with careful attention, leaders can reshape their teams in ways that strengthen trust, avoid fractures, and accelerate performance.
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