The recent drama surrounding Sam Altman’s departure and return as CEO of OpenAI offers an illuminating case study in change management gone wrong.
As an experienced change manager, I see several issues that could have been avoided with proper planning and communication.
What Happened to Sam Altman?
First, let’s recap the situation. On Friday, November 18th, it was announced that Altman had been removed from his position as CEO of the high-profile AI startup behind ChatGPT and other viral AI products.
This move came as a shock, both internally and to the tech community. Altman’s removal was followed by additional turmoil, including the resignation of OpenAI’s president Greg Brockman and three senior researchers.
Mistakes Made
Clearly, Altman’s firing was mishandled from a change management perspective. Removing a founding CEO, especially one as prominent as Altman, is an enormously impactful change that requires meticulous planning and communication. Based on the fallout, it seems the board did not adequately prepare for the implications of this transition.
A key mistake was likely the lack of transparency around the reasoning for Altman’s removal. With no context provided, employees and the public were left confused, causing rumors and speculation to run rampant.
Effective change management requires clearly articulating the rationale for major changes. Failing to do so breeds uncertainty and mistrust, as evidenced by the additional high-profile resignations at OpenAI.
The board also does not appear to have considered the potential backlash and loss of key personnel.
Ousting a well-liked, founding CEO was always going to be controversial, but the board seemed to underestimate the potential for collateral damage. Had they anticipated the resignations and damage to company culture, they likely would have taken a more measured approach.
Additionally, the rushed nature of the transition suggests inadequate planning. Altman was removed on a Friday, with no replacement or transition plan announced.
Such an abrupt change, without a roadmap for the path forward, can leave employees feeling directionless and anxious. A more gradual timeline, with a named interim CEO and concrete next steps, could have eased uncertainty.
What Lessons Can OpenAI Learn from the Sam Altman Incident in Developing a Change Management Strategy?
In light of the Sam Altman incident, OpenAI can learn valuable lessons when it comes to developing a change management strategy. Clear communication, employee involvement, and a thoughtful approach to transition are crucial components to successfully implementing a developing change management strategy within the organization.
How Change Management Could Help
From a change management perspective, there are several steps OpenAI could have taken to make this transition successful:
1. Build internal support amongst key stakeholders before acting. Sudden, unilateral changes often face resistance. The board should have discussed the move with senior leaders beforehand to address concerns. Getting buy-in would have prevented the mass resignations.
2. Communicate context and vision for the change. Explaining the business rationale in depth would have helped employees understand the reasoning, even if they didn’t agree. Articulating the future vision would have inspired confidence.
3. Plan extensively for the transition. Developing a detailed roadmap naming an interim CEO, outlining next steps, and addressing employee concerns would have smoothed the way forward.
4. Roll out messaging thoughtfully. Announcing such a major change on a Friday afternoon suggests the board hoped it would go unnoticed. Releasing the news earlier, with media talking points prepared, could have gotten ahead of the story.
5. Consider broader cultural impact. Removing a founding CEO changes a company’s culture overnight. The board needed to appreciate that impact and take steps to maintain morale and productivity through the disruption.
6. Involve change management experts. Specialized consultants could have advised the board on pitfalls and best practices for navigating risky transitions. Relying on change management expertise could have prevented missteps.
7. Plan for all potential scenarios. While the board may not have anticipated the resignations, scenario planning could have prepared them to manage backlash. Having contingency plans in place allows for more agility in volatile situations.
8. Prioritize clear, compassionate communication. The lack of transparency around Altman’s removal bred mistrust and uncertainty. Communicating with compassion and humility could have built goodwill despite the difficult change.
In the end, the OpenAI board seems to have recognized their missteps, as evidenced by their quick reversal to bring Altman back just days after firing him.
While the damage cannot be fully undone, the board now has an opportunity to rebuild trust and morale by applying change management best practices. Hopefully this tumultuous episode will be a teaching moment on the importance of thoughtful, strategic leadership through periods of transition.
For any organization navigating major changes, the lessons from this situation are worth learning from.
Sources
https://techcrunch.com/2023/11/29/a-timeline-of-sam-altmans-firing-from-openai-and-the-fallout/
https://www.theverge.com/2023/11/29/23982046/sam-altman-interview-openai-ceo-rehired
