Leading when change feels threatening

Leaders love to talk about resistance to change, but, as McKinsey research shows, resistance isn’t the full story. Fear of loss is a huge part of transformation, too, when roles, routines, and relationships are meaningfully redefined. On this episode of McKinsey Talks Talent, McKinsey Partner Johanne Lavoie shares her latest research on on how leaders can support their teams through times of strain with Senior Partner Brooke Weddle, Partner Bryan Hancock, and Global Editorial Director Lucia Rahilly. They discuss why leaders who understand fear, rather than punish it, end up with more resilient teams that make sharper decisions and exhibit stronger performance under pressure.

To watch the full-length video of this interview, visit McKinsey’s YouTube channel.

The following transcript has been edited for clarity and length.

How leaders can metabolize strain

Lucia Rahilly: We’re discussing performance under pressure and how to handle the rising stress that has become a sustained feature of our disrupted world. Organizational stress can mean very different things to different people. Let’s begin by level-setting.

Johanne Lavoie: I will start with an example. You’ll often have a leadership team trying to make high-stakes decisions together, and suddenly you can feel a shift in energy. The tension rises because there’s no easy answer, and you start noticing that people are going into what we call reactive patterns. That strain isn’t necessarily a problem; the question is whether the team can stay adaptive while experiencing it. Some people will become more aggressive or interrupt. They’ll physically lean in and ask for boldness, or maybe they’ll oppose each other. Some people retreat, withdraw, or focus their attention on something like a spreadsheet to hide in the safety of the numbers. And some people will try to be a bridge. In this moment, even though it’s a financial problem being discussed, they’re having a psychological response. Their brains and nervous systems may be scanning for threats. It’s not a threat to physical survival. It’s perceived as a threat to status, credibility, belonging, and competence. In that moment, people can get triggered, and their reaction may be shaped in part by their history.

In the moment, we tend to judge or blame the reactivity instead of asking, “What’s at stake for you right now? What are you concerned about?” If I can get curious and meet people in their fear instead of judging their behavior, we’ll have the right conversation.

Brooke Weddle: One of the most interesting parts of the piece is your claim that what we label as resistance to change is often a response to anticipated loss. How do you identify that difference in the moment? How do you take a mental step back as a leader to set the conditions for others to identify loss and have a more productive conversation that’s focused on the decision at hand?

Johanne Lavoie: As a leader, if I claim that I cannot enact change because people are resisting it, I’m effectively blaming them. I’m putting the accountability on them, as if to say, “They’re resisting. It’s not my fault.” Instead, reframe the question and ask, “What’s the fear? What is the concern? I wonder what’s underneath that response?” There are two things I can address with people. First, before I announce changes, I can clarify what will remain the same and how the change will reinforce what we value and what’s important to us. Second, I can admit that as we change as an organization, it will bring some risk and some unsettling moments. I will encourage us to talk about it and discuss what we must be willing to let go of.

I was once talking about this with an executive team in a hospital system, and we were working through their fears. At some point, we talked about how important it is to create space for the fear of loss that comes with change. One of the executives, a nurse by training, told us that every month she holds what she calls a “funeral meeting.” A funeral meeting is when a team talks about projects that are ending, which work teams are stopping, what is being deprioritized, and the things that will no longer be approved. In these meetings, she discusses what the team learned from each project, what everyone liked about them, and what they will continue to implement going forward. For her, it was obvious that fear needed to be processed. If you don’t create space for fear, it can show up as resistance. The funeral meeting was a place where they could process that loss together and harvest something to carry forward.

Bryan Hancock: How do you see the link between that broader psychological safety on a team and a leader’s ability to help the team metabolize a particular strain, like the one in your funeral meeting example?

Johanne Lavoie: What is psychological safety, really? It’s the ability to take interpersonal risks on a team without fear of negative consequences. Anything you can do to create more safety, but what is safety? It is addressing a component of human fear. We want to process pressure and recover from it rather than allowing it to accumulate in the system. Creating psychological safety also means taking steps within your team to create an environment where people can show up fully and know that who they are is OK, even when there are disagreements on timelines, deliverables, or accountability.

Navigating a different future

Lucia Rahilly: Johanne, it strikes me that we’re talking about fear of loss. Restructurings and layoffs are everywhere in the headlines right now. In many cases, leaders aren’t just confronting the anxiety of anticipating loss but also actual loss itself. You alluded to belonging in response to Bryan’s question, and you mention in the piece that belonging reduces our need to gird ourselves so reflexively. How do you suggest creating a sense of belonging after a big restructuring?

Johanne Lavoie: The way you navigate restructuring matters enormously for both the people leaving and those who remain on the team. You must handle that conversation in a way that preserves the team’s sense of worth in the process. You must listen to them and make them feel valued. It’s important to work with these people who are left behind, have just lost their colleagues, and now face heightened fears about their roles. Taking the time to simply listen by creating space where it’s OK to talk about sadness, loss, and fear without trying to fix or problem-solve is so important. Strong emotions like fear, loss, and grief heal in connection with others. When I can connect with you in your fear, grief, or loss, and be there with you, the stagnant energy moves. Recently, I got some really bad news, and I was so upset. I had two very different reactions from senior leaders. One met me by just listening. She listened for 20 minutes and said, “I hear you. I know it’s hard.” She didn’t invalidate my feelings; she just listened. Then she said, “When it’s a good time, let’s talk more about it.” That’s it.

The other person told me, “Oh no, you shouldn’t be disappointed about this. Let me explain . . .” The first response helped me the most, because she allowed my emotions to move. Her validation in that moment made me feel that I belonged. The second response created more isolation and invalidated my experience.

Bryan Hancock: This sounds like parenting advice. When a bad grade comes home and you instantly launch into problem-solving mode by offering to help them study, your child may not feel met in the same way as if you had just listened and affirmed their disappointment. This has a much broader application than just a corporate one.

Brooke Weddle: This focus on listening resonates. At the same time, restructuring today is more dynamic than it’s ever been because of AI. Many organizations are grappling with how to craft a narrative of change that balances the notion of abundance and growth with the real fears people have about what AI could do to their jobs, livelihoods, and value. How do we scale listening? How can we listen in ways that meet the intensity of the moment we’re living in?

Johanne Lavoie: There are several elements here. In the article, I explore the self, the relationship, and the system: How we can create an environment where people can metabolize strain and be more adaptable under stress. Two pieces are especially important. One is creating a shared narrative that gives people context and meaning about the change.

The other is creating what I call a “nest,” a place where people feel they belong and can return to recharge. The nest isn’t an escape from performance; it creates the recovery capacity that sustains performance under strain.

You need both because change is not episodic. In the past, we used to experience a change, a period of stability, and then another change. We could manage it more easily. You can’t manage change like that today, when it is constantly occurring. We need new competencies. Listening doesn’t need to take a long time. And it isn’t just about making someone feel better. It helps surface information that otherwise remains hidden in the system. Listening is my ability to meet you in your stress, perceive your stress, regulate my own nervous system, and then meet you in a more regulated way. For example, I can say, “Brooke, I hear you, and I know you’re concerned about this. What do we need to solve for?” I’ve acknowledged the fear, then reframed it around what we need to solve for. That can be quick. But if I can’t regulate myself and I’m highly activated as well, we’ll just accumulate strain because there’s no recovery between changes that are compounding on each other. And when strain accumulates faster than a system can process it, adaptability starts to decline. We need to fundamentally rethink leadership competencies.

That’s why leaders today need to be storytellers. They also need to recognize patterns. I’m an electrical engineer by training, and my background is in systems. When you look at a complex system and a piece isn’t working or a decision isn’t happening, it’s usually not because of the person or the element. It is because of the relationship between them, alongside a dynamic in the system that is creating the problem. You need to broaden your perspective and ask, “How have we created the conditions where we can’t make decisions? What’s the meeting agenda? How did you frame decisions? What’s the system creating the results we’re seeing right now, and how do I, as a leader, become the system designer?” It’s not only about fixing the immediate problem but about designing the conditions that make the outcome you want more likely.

If you want a resilient, learning system, you need team rituals like premortems and postmortems. You need to learn how to create conditions that help people regulate and recover from stress. You need nests where teams can come back and process things together. You need storytelling. That’s why we say leaders need more emotional intelligence, pattern recognition, systems thinking, and storytelling in a world of AI. AI isn’t going to do that work for you.

Why your ‘most difficult’ colleague may be your most valuable

Lucia Rahilly: You’re talking about vital competencies that leaders need at a high level. But you’re also saying there’s a “physician, heal thyself” element to leadership because of ongoing unpredictability. Suppose I’m a leader confronting conflict on my team. What should I be thinking about in the moment, vis-à-vis self-regulation?

Johanne Lavoie: One of the most important things you can do is to ask great questions. I could blame my team and ask myself what needs to be addressed with them first. What you actually need to do is start with yourself. What stories am I telling myself about my team right now? When you form judgments, those judgments can trap you. Here’s an example. A leader once explained, “That person is creating too much tension on the team. She’s advocating, being too aggressive, and resisting change.” They framed the issue as if it were all about that one person. I helped her pause and regulate and consider what part she might be playing in the dynamic. Then I asked, “Do you know that team member’s backstory? Do you know how she grew up?” The leader said she only knew that the woman had children, was married, and what activities she did, but did not know anything about her story.

We did an activity I do with every team I work with. We had a storytelling dinner where we shared childhood stories about how we grew up and the events that shaped us. I’ve always seen life as something that apprentices us. Each of us has been shaped by the events in our lives that formed our strength, resilience, and patterns.

At the storytelling dinner, it became obvious that the so-called “bad apple” on the team had grown up in a culture where women were discouraged from going to school. In her family, there was a traditional expectation that she broke because she wanted to pursue an education. She attended school, broke the rules of her family, and faced her parents’ authority over her choice. She was shamed for attending school and was reminded again and again how much shame she was bringing to her family because of how far she’d strayed from tradition. The team leader, by contrast, grew up in a very English background focused on nobility, Victorian values, and a culture where people follow convention and revere the past. This was a fast-growth company, and the team member wanted to change the systems and processes. The team leader kept responding, “You need to understand why we do things this way,” and explaining why they couldn’t change the rules. I pointed this out, saying, “Knowing more of her story gives you another way to interpret what you had previously seen simply as resistance.” The team leader realized that this woman, who had the most will and drive on the team, could be her best change agent. If you make her the bad person, you’ll never be able to lead her. If you understand more of her story, you honor her as a person first before telling her where her ideas fall short. Only then can you bring her into a coaching mode and ask, “What do we need to solve for? How do we do this?” You engage her will and her drive. That’s what the team leader did, and the relationship shifted. If she hadn’t understood her colleague’s story, she would have just labeled that person as “bad.” That’s why being informed as a leader helps you see differently. You react differently to what we call “bad behavior.”

Psychological safety and accountability are the same thing

Lucia Rahilly: There’s probably a confluence of factors that keep us from knowing each other’s stories. A high-growth environment like the one you described could be one. Another reason might be that a lot of us interact virtually, rather than in person. Do you think virtual interaction makes it harder for leaders to read the semiotics of stress?

Johanne Lavoie: If you’re leading teams in a virtual environment, it’s even more important to have team rituals and check-ins. You can use all kinds of things, like starting a meeting with a quick check-in. Ask your team, “Where am I finding you right now?”

Brooke Weddle: You’ve described nesting as a performance infrastructure. How do you approach the potential tension between creating nesting grounds, which sound quite accepting and inclusive, and holding people accountable? Is there a real tension there? How do you balance the two as a leader?

Johanne Lavoie: To me, that is a false tension. The more psychological safety you have, the more effectively you can hold someone accountable in a way that leads to learning and performance rather than anxiety. Psychological safety doesn’t mean making people comfortable or removing strain. It means creating enough trust for people to stay engaged when the work becomes difficult. It’s like building a muscle. At the gym, you put strain on the muscle, and then you let it recover. If you only apply strain without recovery, you eventually undermine performance. It’s the polarity that leadership needs to hold: strain and recovery, challenge and safety, accountability and trust. The more you turn up the heat, the more capacity for recovery and psychological safety you need.

One of the CEOs I work with put it as, “If you want really high aspiration, you need a depth of trust that can hold the height of that aspiration.” I love that.

Bryan Hancock: You are describing moments of intense practicality. There’s a team going through something challenging, so you suggest a dinner where you tell childhood stories. Or your recommendation of starting with a check-in or going around and talking about appreciation. These are very tactical ways to bring these concepts to life. If someone’s listening and thinks this sounds interesting but is unsure how it fits within their own organization, how can they practically apply this theory and these examples to any organization going through significant change?

Johanne Lavoie: I’m not a big fan of team building for the sake of team building. Often, there is team building, and then you work together, where the two are separate. For me, you build the team as you work together. When I’m working with a team, there are three things I think about. The first is asking ourselves whether we have a shared understanding of our current reality. Take any team diagnostic where you ask, “What are our top three strengths as a team? What three things hold us back? Do we have the same version of that reality?” That conversation helps us gain focus. You must set a baseline understanding of whether the whole team experiences work the same way, or if certain people feel tension that others don’t.

The second is creating a shared narrative. Often, executives tell me, “My team is very aligned on our goals, metrics, all of those other data points.” When I ask them to describe their vision of success from the perspective of the stakeholders they create value for, I often hear very different views. Don’t tell me you’re aligned when you are only aligned on the numbers and not on how you need to get there. Having these conversations with your team is the storytelling part of this leadership exercise. What’s the story? What are we writing as a team right now? What chapter are we in? These questions create a shared narrative and bring real alignment around how you achieve your goals together and how you work, not just on the numbers. That’s critical both strategically and in terms of performance.

The third is doing things that build psychological safety and trust. Say you’re in the middle of making a decision, and you feel the tension rise or you see reactivity. You can pause and say, “What feels at stake in this decision? Let’s talk about our concerns.” That kind of question can build trust by creating more openness and bringing the conversation that’s happening internally to light. When people can name their concerns openly, psychological safety gets built. The more you incorporate this, the more common it becomes. If there’s tension in a room, you must name it. Because when you name it, you can tame it. Take a breath, feel your feet on the ground, regulate yourself, and say, “Let’s do a check-in. Am I the only one feeling tension right now? What aren’t we talking about that’s important?” Then go around the room. It’s simple, but it leads to much higher performance, because the real problem surfaces, and often it’s not a number. It’s a relational dynamic. “If we make this decision, what does that mean for my P&L?”

The CEO’s role in mitigating transformation strain

Brooke Weddle: What is the role of the CEO in creating the conditions for an organization that metabolizes strain at scale?

Johanne Lavoie: I was talking to a CEO about how the role is evolving from driving results and ensuring accountability to creating an environment that will deliver those results. CEOs need to spend more time asking what, in their current system, creates the results they’re achieving, and engaging their executive team on that question. That’s how we make decisions and create accountability systems around what needs to evolve. If the current system is creating more stress and more resistance, and that’s not what we want as a team, we need to pay attention to the system first. The CEO’s job is to create the conditions in which the organization can absorb, process, and learn from strain. CEOs also need to be the master storytellers.

Brooke Weddle: You and I worked with another CEO, and one of the most powerful things we saw him do was share his change narrative with his top leaders and then pause to ask for feedback. He got some challenging feedback from people in the room, and the way he internalized it and looped back to it afterward was a huge unlock for the dynamics of that group.

Johanne Lavoie: I call that disciplined humility. CEOs have strong egos. They need to have strong egos to hold that position. But a strong, well-shaped ego goes together with disciplined humility. What happened with the CEO we mentioned was that he answered a question from a person of color in a suboptimal way. He came back the next day and publicly apologized. That’s disciplined humility. He earned so much loyalty from both his executive team and from the larger team at the organization. Self-awareness, self-regulation, and the ability to hold disciplined humility in an environment where nobody has the answer written in a playbook are increasingly important. Unfortunately, many of us, as busy executives, don’t take the time to get to know ourselves. That’s why I do the work I do. Not everyone can take the time to go on retreat and do self-development work, so we do it in the context of the team and decision-making. We bring the inner game to the table.

We live in an unpredictable, brittle, and disorienting world that triggers human emotion. AI isn’t going to solve that for us. We need to work intelligently with emotion rather than treating it as noise in the system. The decisions that matter most often involve uncertainty, risk, and therefore emotion. Yet we tend to talk about the data as though the data alone will make the decision for us. Data is essential, but it rarely eliminates the uncertainty leaders have to hold.

Bryan Hancock: One of the things that struck me while reading the article is that the military is the source of some of our best practices here. You quote someone from the US Navy, among other places. When people think about the military, they don’t necessarily think of leaders going on retreat to work on their inner selves. What can we learn from the dynamics within the military and how they’ve brought these concepts to life? How might it translate to organizations where language like “trauma informed” may not resonate, even though the underlying concepts are still needed?

Johanne Lavoie: For the research, we spoke with two of the most senior former leaders in US Navy SEAL history. They work in a high-stakes environment where they push themselves to the extreme. They also have a whole slew of resources for spiritual, mental, and emotional support for both individual service members as well as their families. Both leaders told me the same thing. If you want these people to perform at their best, you need to invest in their mental, physical, emotional, and spiritual health, and that includes their families. That’s integral and embedded in their training. I asked one of them, “How do you communicate when you want a Special Forces team to go into a mission that’s high stakes, with nonlinear outcomes?” He answered, “You don’t communicate. My job is to enroll them in the mission, and that is different. I have to capture their hearts so they have the confidence to go into a mission with nonlinear outcomes.”

The impact of AI is nonlinear and uncertain right now, too. How do we enroll people? How do we create psychological safety to turn up the heat without creating a brittle environment that breaks? To me, that’s the leadership superpower. It’s not team building. It’s building the everyday leadership practices that allow people and organizations to experience strain without becoming brittle—to process it, recover, learn, and keep adapting.