Ch-Ch-Ch-changes: How Action Phase Functional Leadership, Team Human Capital, and Interim vs. Permanent Leader Status Impact Post-transition Team Performance

This study addresses the following: (1) does a team leader change along with the quality of the team’s human capital affect post-change team performance?; (2) is functional leadership of the team’s human capital a driver of post-change team performance?; and (3) should interim vs. permanent leaders manage the team’s human capital differently? We analyzed archival data from Major League Baseball teams who had undergone an in-season manager change (N = 129). Team performance improved after a leader change, and the quality of the team’s strategic and non-strategic core human capital were positively related to post-change performance. New leaders who engaged in more active functional leadership of the strategic core human capital enhanced the positive effects of human capital quality. Additionally, active functional leadership enhanced the positive effects of strategic core human capital for interim replacement leaders, but not for permanent replacement leaders. This study extends theory and practice on the importance of functional team leadership and human capital following a leader transition. As such, our results provide actionable knowledge for organizations and managers who are part of leadership transitions. This empirical study leverages a unique sample to provide insights into the implications of team leader transitions. The results of this study shed light on the impact that leader transitions which involve “interim” and “permanent” replacements may have on post-transition team performance and how these different types of leaders should leverage the inherent human capital that exists within the team.