Case Study: Letting Go of Attachment to the Outcome
Creating structure in an entrepreneurial company
Small (Under $10,000,000 annual revenue)
Note: In consulting, sometimes your best efforts fail to make the intended difference. In this case, the consulting engagement was completed to the specifications of the contract. Ultimately, however, the founder was not prepared to implement the recommended changes.
Situation: A consulting firm had grown from just the individual founder to a small yet very profitable enterprise. The growth was primarily attributed to the charisma of the founder, who had been opportunistic, rather than intentional, in developing new business. As a result, few repeatable processes had been created or documented, and there was significant confusion about reporting relationships, perceived favoritism, lines of authority, and decision-making. The founder of the firm contracted with MBEC to help understand what was necessary to bring a greater level of structure and professionalism to the business. At that time, the founder had just hired an outside professional to serve under her as the firm’s first president. The founder stated her desire to ensure that the newly hired president would be successful in this new position.
Sometimes your best efforts fail to make the intended difference when those involved are not prepared to implement the recommended changes.
- Founder Interview: Extensive time was spent with the founder to understand the history of and vision for the company in the future. The founder had just experienced significant disappointment because another firm had been in the process of evaluating the company as an acquisition but had backed away at the eleventh hour. The founder acknowledged that the experience and outcome caused her to lose energy and focus. Nevertheless, she knew that the company was in need of a greater level of structure and wanted to proceed with the consulting assignment.
- Presidential Coaching: At the request of the founder, a full assessment of the newly hired president was conducted in order to help him better understand his strengths and weaknesses and to coach him on how to be most effective in his new role. In addition, a three-way review was held to help the founder understand how to best support and ensure the success of the new president.
- Employee Interviews: Confidential interviews were conducted with all full-time employees, two part-time employees, and two external consultants who also had a history with the firm. Each individual was asked about the culture of the organization, what was going well, what was not going well, and what could be done to make the organization even better.
- Organizational Analysis: As a result of the interviews and assessments, MBEC provided a comprehensive organizational analysis. The founder was not surprised to learn that there was much confusion in the organization regarding roles, responsibilities, internal parity, favoritism, the future of the organization, and the real role of the new president. Also, there was a strong feeling of mistrust between many of the employees and the founder. MBEC privately reviewed the findings with the founder and president, followed by a review of the analysis with the entire organization. MBEC also provided new organizational charts for the founder that clarified reporting relationships to be phased in over time as the organization grew.
- MBEC Recommendations: MBEC made the following recommendations to the founder and president privately, followed by a public meeting with all employees. The president agreed to implement all of the recommendations.
- Mission/Vision/Values/Strategies: Conduct facilitated meetings with employees and management to create a clearer direction for the company that everyone can embrace.
- Culture: Create an employee-led task force to make recommendations for developing core values and creating an organizational climate of consistent treatment, rebuilding trust, integrity, and communication.
- Work Schedule: Create an employee-led task force to make recommendations regarding the current work schedule to ensure that it is fair, equitable, and conducive to company objectives.
- Compensation and Benefits: Hire an external compensation firm to review compensation, benefits, and bonus structure by position and/or level.
- HR Policies: Hire an external HR consulting firm to establish policies regarding paid time off, vacation, job descriptions, and performance management.
- Financial Transparency: Share financial information (e.g., invoices, training, etc.) more openly to help the new president and the employees better understand the company and its projects.
Outcome: While the founder agreed to all of the recommendations privately and publicly, she was not ready to follow through. Small changes were made, but major changes (e.g., contracting with a professional organization to put HR policies and job descriptions in place, developing parity of compensation, and creating a more inclusive planning and strategy development process with financial transparency) were largely ignored. The founder was not ready to make any changes that would involve her giving up some control of the organization. Her inaction quickly led to disgruntled employees and additional employee defection, including that of the newly hired president.