The Client Situation

An engineering firm in the U.S. had been grappling with a problem for several years. Although the firm was financially successful and had long-standing and prosperous client relationships, they were challenged with a leadership stalemate. The founders had hired a consultant to help them establish a new leadership team because the founders were near retirement. Yet, there were numerous indicators that the new leadership team was not working out. The founders were reticent to make major changes because they didn’t want to lose employees whom they believed were loyal to the new leaders, most of whom were long-term employees.

But the problems were undeniable. Morale was low. Staff conflicts were persistent. Teamwork was in the tank as team leaders rarely supported each other and often directly contradicted each other in front of staff, which created confusion. Inappropriate behavior, which should have been quickly addressed, festered for months. While the leaders kept internal conflicts out of view from clients, productivity was down, deadlines were in danger of being missed and clients could sense something was wrong.

The Shattuck Group’s Recommendations 

As we began speaking with the founders of this firm, it was clear that they had made many very good decisions in the past. The founders had adopted a certain leadership style that had worked very well for them, empowering the company to grow from nothing to several million dollars in revenue every year. For nearly two decades, they had grown steadily with consistent profitability and effective governance.

But as the founders began to cede control of the business to the new leaders, trust fissures opened up between these leaders and between the leaders and the founders. To help us understand the complexity of the issues at hand, we interviewed everyone on the leadership team and several influential employees in different departments. We concluded that no one was acting in bad faith. The new leaders sincerely believed that they were acting in the best interest of their team and of the company. They all felt that the positions they advocated for and the objectives they were trying to achieve would advance the company. It was quite a conundrum.

While we knew the stalemate had to be broken, we also recognized the very fragile nature of the alliances that had formed. If the founders took action that the leaders deemed to be aggressive, a mass exodus could ensue, leading to an outright implosion of the business. The stakes were very high. After careful analysis of the entire situation, we recommended the following services:

Principal Coaching—to guide the founders through this challenging situation.

Organizational Health—to address cultural and behavioral issues while enhancing collaboration.

Leadership Council—to serve as a ballast and guide for the business going forward.

Leadership Alignment—to get clarity about where the business was heading.

Mentorship Coaching—to cross-pollinate bonds between members of differing teams.

The Service Package

Our engagement began with Principal Coaching, holding numerous in-depth conversations with the founders to understand why they believed the new leadership model had not worked out. What became very clear, after just a couple of conversations, is that the founders and the new leaders shared very different risk profiles, which meant they also had very different priorities.

While the new leaders faced risks to their careers—if the business failed—they were young enough and talented enough that they could find new jobs. They had little to lose compared to the founders who were late in their careers or already retired. This may, in part, explain why the leaders had been so entrenched in their positions and often unwilling to compromise. Our assessment was that these younger leaders, as well-intentioned as they might have been, prized being right over being effective. The founders agreed with our analysis and were emboldened to take action.

One of our first initiatives was to introduce Organizational Health to the entire company. We highlighted the concept of Servant Leadership as the only real form of leadership. We provided everyone in the company with reading materials to support these ideas. We were surprised at how quickly staff read the materials and began to discuss the ideas.

We leveraged these ideas to help form a new Leadership Council. This council took immediate action on defining the values of the organization, particularly their minimum standard values. This made it clear that certain behaviors which had been endemic to the culture were no longer allowed. Because the Leadership Council owned the definition and explanation of these values for others in the firm, there was no radical upheaval. There was no mass exodus even as problematic behaviors, one-by-one, began to disappear. Self-governance took hold. 

We also led a Leadership Alignment initiative to break through some of the conflicts that had held the organization back. As we got the founders and leaders talking about the future, it became clear that certain leaders had very different notions of where the business should be headed than did the founders. This moment of clarity emboldened the founders to ask certain leaders to sit in different seats on the bus. Eventually, some of these leaders left the organization. But most of the people on their teams did not leave because they were regaining confidence that the business could thrive under the Servant Leadership model.

One of the reasons this happened is because we led a Mentorship Coaching initiative to cross-pollinate people of influence on differing teams. We sought to define who was influential within the company and which departments they were assigned to. We intentionally setup circle of 7 mentorship teams with people from different departments. This cross-pollination broke down silos, got people from different departments talking to each other on a daily basis and substantially improved teamwork.

The Client Results

Within a year of these initiatives being complete, this organization was radically improved. The leadership stalemate was over. The financial interests of the founders were protected and secured. The new Leadership Council took responsibility for defending the values of the firm and for quickly addressing situations that had once lingered. Client relationships were preserved and client concerns were fully addressed.

Teamwork and morale improved substantially even as the mentorship program gave people hope for more opportunities within the business. Long-term employees remained committed to the business and focused on their clients. Younger employees looked forward to the future. Maybe most importantly, the founders conducted a search for a new CEO and found a great person for the role. This person stepped into a very different situation than had been present the year before, empowering the new CEO to chart a course to even more future success.