The Moment Most Organizations Miss: Defining Leadership in Strategy Change

Albert Einstein once said, “We cannot solve our problems with the same thinking we used when we created them.” In life and business, change is inevitable. What happens when strategy changes but leadership expectations do not?

In most organizations, the consequences of leadership misalignment are not immediate, but they are predictable. Execution slows. Priorities begin to compete. Tension builds between boards and executives, often framed as differences in ‘style,’ ‘approach,’ or even ‘personality’. Over time, performance begins to erode. 

What is less often recognized is that these outcomes are not necessarily the result of leadership failure. They often reflect a subtler but more fundamental issue: the organization has changed its strategy, but not its definition of what’s needed from leadership. 

“This is the leadership-defining moment most organizations miss,” explains Beatriz Bluhm, Principal at Signium in Lisbon.

“It’s the moment before a new strategy is even executed. Systems are being changed, and teams are being redirected. It’s just as important to hit the pause button here and assess the existing leadership dynamic. Many are surprised to discover large gaps between leadership roles and the new strategy.” 

How strategy reshapes the leadership role 

Strategic resets can be triggered by mergers and acquisitions, ownership change, market disruption, or internal repositioning. These moments are valuable because they provide renewed direction and clarity. 

However, strategy doesn’t unfold in isolation. It influences the whole operating model beneath it: how decisions are made, how risk is managed, where authority lies, and what trade-offs are prioritized.  

Ultimately, they alter the conditions under which leaders are expected to perform. 

• A shift toward growth often requires faster decision-making, confidence in the face of uncertainty, and greater delegation. Leaders who once succeeded through control may now need to move more quickly and give others more autonomy. 

• A shift toward consolidation or cost discipline calls for the opposite – tighter oversight, clearer priorities, and a more measured pace. Approaches that once supported expansion can begin to introduce risk. 

• In post-merger environments, this shift is often most visible. The focus moves from securing the deal to making it work, which calls for consistency, alignment, and disciplined execution. 

Bluhm comments, “You wouldn’t blindfold a ballerina and put her in a boxing ring. She must be explicitly briefed about the new sport and given the opportunity to train and learn the required skills. It’s the same for leadership, no matter how capable the leader – when strategy changes, leadership roles need to be proactively assessed and redefined according to new business objectives.” 

Three reasons organizations overlook this moment 

There are structural and psychological reasons why this critical moment is frequently missed. 

1. Strategy and leadership are often treated as separate domains 

Strategy discussions focus on markets, capital allocation, and competitive positioning. Leadership is assumed to be a constant – a capability that can be applied across contexts without redefinition.  

2. There is a strong bias toward continuity at senior levels 

Boards and executive teams rely on track record as a proxy for future performance. Proven leaders are expected to adapt, often without structured support or explicit guidance. 

Research suggests this expectation is misplaced. The McKinsey & Company concept of the “adaptability paradox” highlights a consistent pattern: under pressure, leaders tend to revert to familiar behaviors, even when those behaviors are no longer effective in the new context. What has worked before becomes the default response, precisely when a different approach is required. 

3. People are reluctant to question leadership during strategic change 

Revisiting leadership expectations at the moment of change can feel destabilizing, especially when confidence in the strategy is still being established.  

“Questioning leadership fit is already uncomfortable,” explains Bluhm. “It may be perceived as undermining ability or alignment. Yet, by not doing so, the organization adopts a new strategy with an unchanged understanding of leadership. It potentially creates a vast disconnect between the C-suite and the entire organization.” 

What misalignment looks like in practice 

When leadership expectations are not aligned with strategy, the effects are visible across the organization. They tend to show up as a pattern of signals: 

• Conflicting priorities 

Teams are asked to pursue a new strategic direction, but leadership attention and business focus remain split. What is communicated as important does not consistently match what is reinforced. 

• Inconsistent resource allocation 

Strategic initiatives may be underfunded or deprioritized, while legacy activities continue to receive investment. Over time, this creates doubt and confusion about which priorities truly matter. 

• Chaotic execution 

Different parts of the organization move in different directions. Teams operate with varying interpretations of the strategy, and coordination breaks down – the left hand no longer knows what the right hand is doing. 

• Cultural disengagement 

Teams begin to lose confidence in the strategy when there is a persistent gap between what is said and what is done. Effort feels misdirected, and momentum becomes difficult to sustain. 

• Slow or uneven execution 

Progress stalls as dependencies build and priorities compete. Some areas push forward while others lag, resulting in inconsistent delivery across the organization. 

• Performance drift 

Strategic objectives fail to translate into results. Financial or operational performance begins to fall short, not due to lack of effort, but due to lack of alignment.  

“These labels obscure the underlying issue,” explains Bluhm. “At face value, many might assume team or managerial failure. But, dig a little deeper, and one might find the problem lies higher up. The question is not whether the leader is capable, but whether their focus still aligns with the current strategic phase of the organization.” 

Why adaptation is more difficult at senior levels 

The Harvard Business Review framework on the “four organizational seasons” underscores a point: different phases of an organization’s evolution require fundamentally different leadership capabilities. What is effective in one phase may be ineffective – or even counterproductive – in another. 

Yet, leadership styles are not easily reconfigured, particularly under conditions of uncertainty or pressure. They’re shaped over time, reinforced by experience, and validated by past success. 

At senior levels, several additional constraints apply. 

• Feedback loops are weaker. Signals of misalignment are often delayed, indirect, or filtered through organizational layers. 

• The cost of experimentation is higher. Adjusting leadership approach carries reputational risk, particularly when outcomes are visible at scale. 

• Time horizons are compressed. Leaders are expected to deliver results while simultaneously adapting their operating model. 

How a strategic shift forced a leadership evolution at WeWork 

The trajectory of WeWork provides a useful lens for examining how leadership alignment can shift as strategy evolves – sometimes gradually, and sometimes under pressure. 

In its early phase, WeWork was built around a high-growth model. Under co-founder Adam Neumann, the company expanded rapidly across global markets, supported by substantial backing from investors including SoftBank. The leadership and strategic priorities were clear: scale quickly, establish market presence, and capture demand for flexible workspace. 

The inflection point came in 2019, during the company’s attempted public listing. The IPO process introduced a different set of expectations – not only greater financial transparency, but also increased scrutiny around governance, cost structures, and long-term sustainability. 

What had been a growth-led narrative was now assessed through a more disciplined lens: profitability, operational resilience, and financial control. While this shift was not framed as a formal strategic reset, it had the same effect. The organization was being asked to operate differently. 

The IPO was withdrawn, and a period of visible strain followed. As external scrutiny increased, differences between the organization’s original operating model and its emerging requirements became more pronounced. Leadership, still aligned to the earlier phase of growth, faced a context that demanded a different emphasis: greater attention to governance, cost management, and operational discipline. 

In the years that followed, WeWork continued to evolve in response to both internal and external pressures. In 2023, the company underwent a significant restructuring process. By mid-2024, WeWork emerged as a leaner organization under new ownership. The company continues to operate hundreds of locations globally, albeit at a smaller scale than its peak, with a clearer emphasis on financial discipline and operational viability. 

The WeWork case highlights several lessons that apply more broadly to organizations navigating strategic change: 

• Strategy evolves over time, and leadership requirements evolve with it. 

• What drives success in one phase of the business may not work in the next. 

• Leadership expectations do not automatically change when strategy does. They must be actively redefined.  

• Alignment between leadership approach and business context drives performance.  

• Misalignment often builds gradually before becoming visible under pressure.  

• Fixing misalignment requires changes to role expectations, not just swapping out leadership. 

What effective organizations do differently 

Organizations that navigate strategy shifts more successfully tend to treat strategic change as a reminder to reassess what leadership now requires – and they do so early, before execution challenges emerge. 

This begins with making expectations explicit. 

• What decision rights need to change? 

• Where should authority be concentrated or distributed? 

• What level of risk is now acceptable? 

• What time horizons define success? 

Being clear about what leadership now requires makes it easier for leaders to adjust. It also ensures the organization supports that shift through how decisions are made, how performance is measured, and what is rewarded. 

Bluhm adds, “This does not always mean replacing leaders. Establishing clarity around expectations creates a clearer basis for evaluation. This makes it easier to see whether the issue is a matter of capability or of actual fit with the current context. In most cases, capable leaders can adapt successfully to clearly defined expectations. That’s a huge win.” 

This has direct implications for boards and executive teams. Leadership roles need to be defined in relation to future strategy, not past performance. In practice, this means looking beyond track record to assess adaptability, judgment, and alignment with what the business needs. It also means revisiting these expectations at each strategic inflection point, rather than assuming they remain constant. 

Matching capability to context equips leaders for change 

As Charles Darwin observed, “It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change.” 

When organizations fail to include leadership dynamics in strategic change, their leaders are left operating in ways that no longer reflect the reality of the business. The resulting friction is often interpreted as underperformance, when it is, in fact, misalignment. 

Organizations must recognize that capability alone is not enough – it must be matched to context. It’s not always about having the strongest or most experienced leaders, but rather those who can realign to leadership expectations as the business evolves.  

“Leadership roles aren’t fixed,” concludes Bluhm. “They’re shaped by what the organization needs at a given point in time – and by how clearly leaders understand what is expected of them.”