Family Owned Business Succession – Building on a Legacy
Approach, Case Study, and Results
by Maureen Metcalf and Carl Fernyak

This article looks at the topic of using integral tools to help a family owned business transition ownership and operation from father to son.

The son, Carl, purchased the 91 year old business from his father after working for the company for 14 years. He is now faced with the challenge of carrying on the legacy of success in a changing economic time while navigating the dynamics associated with family and long tenure leadership that helped build the company well before the son was working.

This article is co-authored by Maureen Metcalf, the consultant and coach whose work is informed by integral theory and developmental theory. The other co-author is Carl Fernyak, the son and now CEO of MT Business Technologies. We, the authors would like to tell the story of our work over the last year. We will discuss our approach, our experiences, and our learning through the process.

Our objective in writing this article is to contribute to the literature of applied integral theory and family business transitions while sharing our learning. These theories are a work in process as is the client transformation. We have planned the transformation work for an additional year and expect the bulk of the transformation to be well in place by that time. We hope that others can learn from our experience as we continue to gain knowledge ourselves through this process.

The Client

Background

Maureen: I met Carl at a class I taught on Building Transformational Leadership that explored leadership through the lens of developmental theory, specifically using the Mature Adult Profile (MAP), created by Susann Cook-Greuter. We scheduled an initial call where we agreed to start a small project where Carl would take the MAP assessment, a second test called the 360° assessment, (The Leadership Circle Profile) and engage in coaching.

Carl: Coincidentally, I had been interviewing candidates who would help me develop a vision, mission and business plan. I had attended a COSE (Council of Small Enterprise) strategic planning course at Cleveland State University but still wanted someone with experience to walk me through the process. After attending Maureen’s seminar, I realized that she was promoting more than just a vision, mission and business plan, but rather an organizational transformation through leadership development. The vision, mission and business plan were part of the package, but not the driving factor. When working with someone at this level, it is critical to have the right “energy” between the teacher and the student. Luckily for me, we were a match. While the other candidates brought their skills to the table, I wasn’t overly enthused about the possibility of working with them.

So that the reader can gain perspective from my comments, I will offer a brief corporate history and my involvement with the company. Mansfield Typewriter (MT) was founded in 1918 as a typewriter repair company. In the late 1920’s, my grandfather started an office supply and furniture company which merged with MT in 1932, and the company became The Mansfield Typewriter and Office Supply Company. In the late 1950’s, my father, John, joined the organization as a sales representative. In the early 1970’s, MT began selling copier equipment. We also opened our second location in Elyria Ohio, which was then moved to Avon Lake, Ohio. The organization continued to grow and in 1988 we opened our third location in Toledo, Ohio. In 1992, I joined MT with the goal of learning the organization from the ground up. My employment began in the warehouse: stocking shelves, pulling orders and delivering office supplies.

After several years of warehouse and distribution work, I moved to the furniture division where I was responsible for furniture installations and repairs. Following that, I spent time on the copier delivery team, delivering and installing copy machines. In 1997, I transferred to our Toledo location where I resided for two years managing the warehouse, distribution team, administrative staff, lease administration, human resources and building maintenance issues. In 1998 we started our Cleveland location. I returned to Mansfield in 1999 and started MT Business Leasing, Inc. to create an alternative financial option for our customers, as the big leasing companies we had partnered with were becoming less friendly. In 2002, we opened our Columbus location and in 2004, I took over the Mansfield operations. At the end of 2005, I finalized the purchase of the remaining shares of all MT corporations, thus ending a 14 year acquisition process. In 2009, we started our Akron location and opened a second location in Columbus called Meridian Managed Technologies. MT currently employs approximately 300 employees.

Challenge and Vision

Maureen: Shortly after we started the coaching, Carl began to see the importance in not only his development but also how others could join in this process to support the business transformation he began three years prior when he purchased the company from his father. The transformation journey was one of individual leadership transformation for Carl and also organizational transformation for MTBT. Like traditional business transformations, this included a great deal of complexity but was complicated by the nature of transforming a business that is family owned. After one year into the process, we are seeing significant positive results.

My experience of this transition as the consultant is that all of the participants genuinely wanted what was best for the company and for the family. They were able to stay actively engaged and work toward positive outcome even when their beliefs about what should be done or how it should be done differed. I make this comment about not only the family members but also other members of the senior leadership team.

Carl: When I started working with Maureen and identified areas of change, there were three succession challenges that I faced: Respect of History, Habit and Culture. “Respect of History” revolved around our top five leaders, each who have each been with the company for a minimum 35 years. It is wonderful to draw from such a vast array of experience they bring to the table, however it presented a challenge. How could I respect their contributions to the company but move towards a more competitive business model that conflicted with some of their methodologies? “Habit” was a problem because these managers were used to working directly with my father and not me. Being the new guy on the team (only 17 years with the company), my involvement was often an after thought to them. I would hear “Oh yeah, has anybody asked Carl about this?”

The third issue was a difference in “Culture” My father’s team had molded their actions to my father’s expectations, and now I had taken over with a different set of expectations. I was working towards a culture of higher accountability and standardization while his culture was more relaxed and autonomous. His model worked fine, but as we continued to grow and the economy began to weaken, the shortcomings of his culture became apparent to me. One example is that certain managers felt their style was being cramped when I had requested that all locations use the same sales order form, same delivery form, etc. I didn’t care who put it together or what it looked like, I just wanted all six locations using the same form. I quickly figured out that getting the paperwork to match was not the real issue, but rather it was getting the managers to accept the benefits of standardization and giving up “control.” It took nearly a year before the pushback subsided.

Process

Maureen: The processes we used for the individual and organizational change were similar and interconnected with how the individual would lead the organizational shift.

While the image of the process appears linear, the actual process involved an approach that would more closely resemble a spiral, circling back and around. Additionally, the individual and organizational processes followed their own paces depending on the needs of the leader, the organization and outside conditions.

Define Vision

Maureen: Carl and I initially focused on his personal vision both for himself and for his company. This allowed him to identify where we would go with our work; his vision has served as the foundation for our work. We used a structured approach to defining his vision that involved several exercises directed toward vision along with a series of questions aligned with the integral quadrants but the order of the quadrants were shifted to put the visible (outside me) quadrants on the top and the inside quadrants on the bottom.

The integral nature of the questions lend themselves well to organizational transformation in that they addressed Carl’s personal vision in the context of his role as CEO as well as his role as husband and family member. He took all of these into account when he established his personal vision. Carl actually completed the exercises on paper and reviewed them with me weekly. He answered all of the questions to enable him to clarify his vision.

After he defined his personal vision and started the organizational transformation process, he worked with his Company President and then his leadership team to define a company mission and vision.

This process was very iterative and took about 6 months from Carl’s initial vision until the leadership team was chartered and that team agreed to the wording of the Vision and Mission. I believe this was influenced in part by the fact that the company had functioned very successfully without a formal mission and vision. The leadership was focused on getting results and this type of discussion appeared to them to be taking time away from doing the work of running the business.

Assess Strengths

Maureen: The assessment process involved both Carl as an individual as well as MT. We started with an assessment of Carl’s leadership using the Mature Adult Profile (MAP) created by Susann Cook Greuter and the 360° assessment of leadership behaviors using The Leadership Circle Profile (TLCP). Carl tested as post conventional on the MAP and had many leadership strengths to build on along with some areas for improvement. Part of the assessment process involved sorting out what the scores actually meant. Carl has many strengths that were not leveraged by MT as a conventional organization. Add that to the complexity of being the son of a highly respected and liked leader. The assessment results to help identify where he could make the biggest impact with his change efforts.

Along with the assessments, he also continued the quadrant questions exercises tailored to self assessment and he completed a Strengths, Weaknesses, Opportunities and Strengths (SWOT) assessment.

Carl answered these and other questions to create a clear picture of his current strengths and weaknesses. At this point, he had clarity around his personal direction and capabilities and was ready to create a development plan.

The organizational assessment activities took place after Carl’s individual assessment process. The timing varied as he engaged people in phases so it has taken much of the year to evaluate key leaders and create their development plans. In addition to leadership assessments, we looked at several areas of organizational effectiveness.

During this phase, one of the key activities was working with Carl and his Company President, John H., to define the guiding principles which serve as the initial roadmap for change in culture and processes. We used a series of 20 continua that describe many of the key factors associated with culture.

An example was that each of the 5 locations operated as separate businesses with different processes – highly decentralized. While that model worked very well to get MT to its current level, moving toward a model of consistent processes and shared services located at corporate would reduce cost, increase process efficiency, and reduce the risk associated with turnover and unplanned absences. This change required a shift in culture, systems, processes, and staffing levels at the locations. This is one example of a guiding principle that drove concrete actions in the initial work plan. The template we used is included below:

We conducted other types of assessments as we went through the process. Some of the assessments were rather informal based on input from Carl and John H. while others were more standardized including the MAP and The Leadership Circle Profile.

One other significant project we started during this time was a succession assessment. We wanted to understand which key roles were covered and what training was required to develop the next level of leadership. We also launched a financial wellness check up to consider how the accounting and finance function was positioned to support the business as the complexity increased with the expanding corporate strategy.

Carl: The great thing about the “Guiding Principles” assessment was that John and I took it independently from each other, yet our responses were closely aligned. This meant we had cleared the first hurdle of not being on the same page. Secondly, it started the process of getting our thoughts on paper. Sure, they had been rattling around our heads for years, but that was of little use when the team could not read our thoughts and everyone was headed in a different strategic direction. Since our management team had historically operated in a reactionary mode, these exercises were viewed as “spending unnecessary resources that did not provide any real value other than to pad the pockets of the consultants who provided them.” They believed we were creating more bureaucracy and wasting their time when they could be out selling instead! I saw things differently and felt that we had become inefficient and had lost accountability to ourselves. Sure, we were busy but not as effective as we could be. It was similar to the old saying, “Selling without profit is like eating soup with a fork. You stay busy, but in the end you starve.” I came to realize that this process was not exciting for the people who would rather spend their time in drama-land, but I had become really tired of cleaning up messes caused by poor planning or lousy processes. I was no longer entertained by the Superman role of saving the day, and I wanted to get it right the first time in order to spare the excitement.

Before this process, I did not believe that the senior management team was aligned with our strategic direction. Up until 2009, we had always been in a double digit growth mode. When your company is growing, it often feels like you are doing your best just to keep up. 2009 was the first year we had flat growth and our management team started to see the value of this process. Since we could not generate additional profits by selling more, we would need to spend less. This meant that additional profits were hidden in the inefficiencies of poor systems. Suddenly they were more willing to listen to any ideas that would drive down expenses, which eventually put more money in their pockets. They had become willing to accept a change of culture. Given the choice, they were more interested in profit through process standardization, project management, budgeting and forecasting, leadership development and strategic planning rather than receiving less profit by adhering to their competitively substandard methods.

Plan

Maureen: Carl’s development plan was significantly influenced by his goals for MT. His plan involved working on and in the business. In addition, he continues to maintain his involvement in other organizations such as Young Presidents Organization (YPO). He remains very committed to work and family balance and has a strong health oriented regimen that includes: regular exercise, triathlons, healthy diet and regular sleep habits. He also has a very strong marriage with a wife who encourages him to maintain his focus on himself as a whole person. His goals were to move to the next developmental level and also to develop additional business acumen.

Our individual leadership development work focused on his setting intentions, taking action and reflecting on his results as well as his approach. We worked together closely during this time. This process was based on the principles laid out in the book Action Inquiry by Torbert & Associates. The plan involved establishing weekly sessions where we would work together and implement changes within the company and discuss how effective the changes and the leadership behaviors were in accomplishing goals.

Action inquiry works primarily from the inside-out (although it recognizes the presence and influence of outside-in perspectives as well). Action inquiry begins because we (any one of us, or any family, or organization) experience some sort of gap between what we wish to do and what we are able to do. The awareness of this gap can lead to the development of a clear intent to accomplish something beyond our own current capacity. In such a case, the very intent to act includes two elements: (1) the intent to do the inquiry necessary to learn how to do this new thing and (2) the inquiry necessary to learn whether we really have accomplished it. So, action inquiry begins with inner experiences of gaps and intents…If our intent is clear and strong, we will wish to learn the truth as soon as possible about whether our strategies, tactics (e.g., our use of the hammer), and outcomes are accomplishing the intent or not. If our intent has not been accomplished, the sooner we learn this, the sooner we may correct the course of action in order to move closer to our intent. From this point of view, a method that can correct error in the midst of ongoing action is qualitatively more useful to us, more beneficial for others, and more powerful in a scientific sense than methods that alternate action and inquiry. Action inquiry interweaves research and practice in the present.

From Action Inquiry by Torbert & Associates

Carl: I would guess that many people perceive “leadership development” is achieved by reading another business book or attending more seminars. My experience is that leadership development is about changing the way one thinks which determines how they view the world. It isn’t necessarily about knowledge or data but about perception and process. For me it was about the interconnectedness between our customers, our employees, the marketplace and the economy; not just about selling copiers but who were we to the marketplace – how MT fit into the big picture. We would examine how other leaders viewed the world and compare that to my thought process. My perceptions and positions would be challenged again and again, but I grew tremendously from the experience, and still continue to do so. Again, I was occasionally criticized because we spent time understanding how I thought rather than doing more “organizationally visible” things such as creating another new process. Leadership is a combination of “Being” and “Doing”. Working on how to “be” a better leader does not hit the value radar of conventional thinking when there are tasks to be completed.

Maureen: On the organizational side, the initial plan was shaped by the guiding principle assessment. From the 20 continua and the gaps between current and goal state in each, we identified the actions that needed to take place to close the gaps. We created a scorecard to define and track these actions. The order and timing was driven mainly by the priorities of the business. Following is a small excerpt from the scorecard that was used for the first year to plan and monitor the organizational transformation process. This addressed the culture and the system and process changes.

Carl: The “Scorecard” is basically our corporate “To Do This Year” list. We use it as a high level communication device so everyone clearly understands where we are to focus our efforts. It identifies our specific goals, how we measure success or failure, gives a current status indicator (red, yellow, green) and provides specific and measurable tasks.

This may appear to be similar to project management, but it is not at the granular level PM is. If done correctly, the items in PM are prioritized according to the initiatives on the Scorecard list. Our company just began using project management two and half years ago. This year we created a project management office. This was essential because we had 49 projects and no central point of organization. Initially project management was not well received because our culture perceived it to be cumbersome and bureaucratic. In the beginning, PM seemed very time consuming since we had to learn the processes and enter the data. Things began to smooth out after our 3rd or 4th meeting, (one per month), as we were becoming familiar with the process. Today it provides a great structure for our management team to view how we are prioritizing projects and utilizing resources. It also puts an end to associates being pulled from one job to another without completing anything.

Identify Team and Communicate

Maureen: During this process, Carl started to consider who he needed on his go-forward team from a personal and professional perspective. We continued to use some key questions to guide his decisions.

On the personal side, Carl and his wife both worked with me as a coach. They are fortunate to have a very strong and supportive relationship so he started his development process with a solid foundation for development and a wife who supports and encourags him. Additionally, he was meeting others who were working at a similar developmental level. During the organizational transition process, he learned that he had other leaders within MT who were working at a post conventional level so he had support inside his company to help him meet his developmental goals.

To address the business acumen goals, Carl was beginning to work with additional consultants to provide specific areas of expertise. One such consultant was a part time CFO to help create more sophisticated financial processes and conduct some analysis needed to launch the new company and move part of the existing company into a new subsidiary. He also continued to communicate with his YPO forum group who helps him meet his business acumen goals. Carl is seeing how his development is helping his YPO Forum group members.

As for the organizational side, this is still a work in process. Carl restructured the organization after he determined he needed to change some of the key participants, alter the roles of others, and modify the way they interacted given the refined organizational direction. He announced the subsidiary company last month and published a new organization chart. While the chart has new titles, the organization is now adjusting to how the work of each executive will change on a daily basis.

Carl chartered a leadership team to make decisions across the enterprise and also put the program management office in place to manage both enterprise level and shared services resources. This will allow everyone to focus on key projects that deliver results against the highest priority goals. This level of structure was new for MT. In the past, they managed the business less formally and while this worked in some ways, the increased need for automation was putting significant stress on the IT organization. This is one part of the business that has expanded during the past year including hiring a full time person to run the PMO and focusing on process improvement of critical business processes.

Communication is an interesting challenge. Until the leadership team was in agreement, it was not appropriate to communicate much of the efforts going on. This created some concerns as people were seeing changes. Carl began sending a monthly newsletter, having one-on-one meetings with his direct reports weekly, and going to the various locations to meet with their leadership teams monthly. He is spending a much greater part of his time communicating and people still want to know more. We are continuing to look for additional ways to keep people informed and involved while balancing their need to focus on their work.

Take action:

Maureen: While we have a step called Take Action, Carl was taking action during the entire process. At some point his primary focus did shift from planning to implementation – that was a fairly recent change. On the personal side he had been practicing Action Inquiry concepts for several months while he was putting a plan in place for the organization.

While we had a work plan going into the process, our approach was to focus our energies where people were willing to change and take advantage of situations as they arose to serve as the platform for change. While this may have appeared less structured than a traditional change, it allowed Carl to address much of the individual and organizational resistance that was emerging. Like tai chi, it allowed him to use the energy of the leaders of MT to set the course. When barriers arose, we acknowledged them and made conscious decisions for how to deal with them.

Since there was no strong pull to create a vision initially, Carl focused on creating processes in key areas such as accounting and implementing the PMO. When the new company was launched, it became clearer that the leaders of the organization needed to work together differently than they had before. One other catalyst was the promotion of a short tenure leader to run the new company. This event raised the focus of the existing General Managers on the need for leadership development in addition to exceptional business performance.

Following is a worksheet that represents the type of analysis we considered when deciding how to proceed during key challenges. The biggest challenge I saw was getting support for the new direction from the leaders of the core business. They did not have the same sense of urgency and vision for the future as Carl. The decision to launch a new company came primarily as a result of Carl’s response to some significant barriers he faced in trying to both run the core business and launch a new set of services.

This is one place where the family business issues arose. The President of MT had been working for the company since Carl was 6 years old. He is a very competent and committed man and his skills are a significant reason MT became such a successful company. Yet, now, the son had purchased the company and he had a very different approach. One challenge I observed was because Carl grew up with MT, many of the senior leaders saw him as he developed over his life. They remembered some of his youthful mistakes and I believe that impacted his credibility a bit. In addition, after he purchased the company, he agreed that to make the transition easier, his dad would continue to run the company for 2 years. Thus, when Carl started to take control, many people had 30 years of history in going to his dad as the owner and a lack of clear definition about who was actually in power. Carl needed to establish himself as the leader and manage a respectful transition while his dad continued to work at the company. This transition is still taking place. There appears to be a delicate balance required to honor the people who built the company and at the same time make changes to how the company is run.

Carl: As I mentioned earlier, one of my greatest challenges was trying to lead an organization that had not accepted that I was now in charge. Since my father still works at the company, people naturally gravitate towards him about all issues regarding the company, including “concerns” about the direction I was taking the company. This quickly became a no-win proposition, as it was impossible for me to stay informed if managers just engaged him. Further, this mindset created confusion of who was running the company which further eroded my ability to lead. We were slogging through management “no man’s land” as people would oscillate between whichever style they liked that day, mine or his. After he realized how this was disruptive to the company and undermined my ability to lead the organization, he began sending people directly to me rather than tackling the issues himself.

I also received tremendous pressure from my senior leadership team about rocking the boat. These guys had been part of the company since I was in first grade. They are the ones who made this company successful, by selling and servicing everything from the liquid toner copiers of the early 1970’s to the high tech networks and connected devices we handle today. They had helped us grow from one location to seven locations. They moved themselves and their families from city to city because they were needed there. They have literally increased the annual revenue 100 times in 35 years. Their loyalty to the company is of heroic proportion. Who was I to question them? Not that they were arrogant, just highly experienced in our industry. So, who was I supposed to believe? One of my most difficult choices was deciding between “theory” and “proven history”. My gut told me the theory made good sense, and I believed it to be a well thought out plan. It promised to deliver results. “Salvation is in the future”, the plan beckoned. Essentially, I had to choose between the experience of Senior Leadership, which said “Don’t change because you have a good thing going” and the theory which suggested “If you don’t apply this theory and change, your company will be gone in five years.” On one hand, I wanted to respect the history, but on the other hand I knew these were different times. The game had changed and we were starting to slide.

2009 was the wake-up call. For the first time in 15 years, we were not experiencing double-digit growth. 99% of our customers finance their technology, and the credit market was getting ridiculous. It became harder to get “lease approvals” for our customers. I was told more than once per day, “This leadership stuff is time consuming, expensive and disruptive, especially in economic times like these. If you want to increase profits around here, try focusing on increased sales and cut our costs by getting rid of those expensive consultants.” To me, that has the same logic as turning off the heat in the house this winter. Sure, we will save a few bucks on gas, but next spring we will be dealing with peeling paint, crumbling plaster, cracked pipes and warped woodwork, not to mention cold living conditions all winter long. Short term, money is saved by cutting the consultants, however management could not account for why margins and profits were slipping long before the consultants arrived. Worse, there was no plan to right the ship – just keep doing what has worked in the past and work harder until this economic situation blows over. Hope is not a strategy I like to employ. What kept me in the “Theory” game was the realization that things were heading south and none of the senior managers had a viable plan. The exercises Maureen and I undertook continually revealed holes in the current “plan” or there lack of. It showed the weaknesses in our processes. It showed that we were not making decisions based on the data, but rather our flawed intuition. Our leadership team was not accustomed to using the data to make strategic decisions. When things were good, we smiled because we must be doing it right, and when things slipped, we just assured ourselves that next month would be better. Yes, I lost sleep wondering if I was just an ideological punk, intoxicated by the false promises of Theory Redemption or if I was actually creating long term sustainability and my efforts would be realized in the future.

Embed Change Systematically

Maureen: On the personal side, it is now time to revisit goals and make sure they are updated for the new year. This is happening as part of our beginning of year planning process. A subset of the questions we are using is included in the following table:

On the personal side, Carl and I are working more on his development again now that he has completed some major activities. He is currently focusing on improving and increasing his communication and determining how he should invest his time going forward. We are in the process of defining these changes now. One key element is sticking to the communication routine to ensure everyone is informed and involved. As the broader group of employees gets involved in the change, his communication role will increase.

Another area Carl is concentrating on is taking a more visible role in the community. Writing this paper is one example of this effort. This increased visibility is one example of a significant change for him as MT leadership was not visible in the community in a thought leadership role. Carl’s dad supported the community in several ways, more concrete ways including taking a significant role in renovating the downtown of Mansfield. The difference in actions is that Carl is stepping forward as the CEO of MT and speaking and writing to build the company image.

On the organizational side, we are still taking action, addressing barriers, and embedding change systematically at the end of year one. Carl decided one of the most efficient ways to move forward was to start a 12 month series of workshops. The leadership team will participate every other month to build skills and set direction. On alternating months, selected members of this team will roll out the changes to the next level of leadership. This workshop series started with performance management; we launched a class where we rolled out the new performance appraisal forms that focus on both results and behaviors rooted in the culture.

Each leader defined their objectives for the year, using the results of their MAP and 360° assessment to identify key behaviors necessary to accomplish these results, then they created a development plan. This process will happen annually to reinforce the increased focus on accountability and development. The senior leaders participated in the workshop with the next level leaders to reinforce the importance of this process and their expectation that the culture and processes are changing and each leader is expected to carry these changes back to their locations. These workshops are also the time for the two groups to identify barriers to the new processes and refine the processes.

Upcoming sessions will include:

➢ Defining Changes and Building a Scorecard
➢ Coaching and Conversations for Results – Aligning Behavior with the Scorecard
➢ Build Change Plans Using Computer Based Simulation
➢ Enhancing Strategic Thinking – Decision Making And Problem Solving
➢ Building Team Alignment Including Accelerating Trust Building
➢ Enhancing Situational Leadership
➢ Building Resilience – Building the Personal Qualities that Promote Personal and team Capacity Building

While these workshops will be only a part of the process to embed change systematically, they are an important way to expand the change to a broader group of participants in a planned and organized manner.

Results

The changes were focused on both leadership development and organizational transformation. Carl understood that he needed to enhance his skills to enable him to succeed his father in running the company and to transform the successful company to meet the needs of the next generation of clients. His personal insight led him to select a consultant and coach that used the integral approach to business transformation. Specifically, Carl understood that business and personal change must be addressed concurrently to increase the speed of the transformation.

As of this writing, the project has been going for one year. The findings are preliminary but as of this time, we are seeing strong indicators of success that include:

• Defined organization mission and vision.
• Defined organizational guiding principles as the foundation for the culture.
• Defined a scorecard to track results aligned with the vision, mission and guiding principles.
• Reduced the number of employees in 3 key functions based on industry benchmarks to maintain profitability during a down economy.
• Assessed key leaders and began a coaching and development program.
• Successful launch of a wholly owned subsidiary to respond to the needs of the technology market. Separating the businesses will allow the leadership of the core business to focus on delivering results to current clients while the new business is able to focus on a very different life-cyle phase of launching a new company.
• Successful reorganization of leadership roles in conjunction with the new business launch.
• Improving all key organizational functions to support the increased business complexity.
• Launched a Project Management Office (PMO) to oversee the large volume of projects to ensure all investments in projects are aligned with the strategy and effectively use resources.
• Launched new performance management system to set goals and reward accomplishments aligned with the vision, mission and guiding principles.
• Defined and launched a 12 month leadership development and organizational transformation program that will build additional skills, reinforce culture changes and develop leaders deeper in the organization.
• Buy-in from key leaders in support of significant changes and support for the overall direction of the company going forward.

This has been a very challenging year. While the results are good, getting here was a challenging process that required strong resolve and courage. I mentioned earlier in the article that everyone acted with commitment to the company and a high level of integrity. This commitment to doing the right thing made a huge impact on the overall success. Many people would have given up when faced with the difficulties of this process. I have a deep appreciation for all of the members of the leadership team and feel quite honored to be involved in this process. I believe I have learned a great deal from them and continue this project into year two as a better person.
Carl: We accomplished a tremendous amount of improvement this year. Not only in doing things differently but thinking differently as a group. At times, the process seemed slow but in retrospect it was impressive as to the amount of ground we covered. We are very fortunate that we have a management team that wants the best for the company. As they began to understand the value of these exercises, buy-in and participation increased. While it is never perfect, it is certainly much better than it was last year.

This is what I can report after my 12th month of this project.:

➢ First, there is a clearly articulated and written plan; we are all marching in the same relative direction. No longer do we have 7 lone wolves running their locations with no standardized processes or procedures.
➢ Second, we are addressing the sacred cows (people and processes) that have held us hostage for many years; they are being identified and eliminated. Because of this, our expenses are dropping while productivity is increasing – imagine that!
➢ Third, our decisions are more aligned with data and industry benchmarks rather than intuition or politics. Now if a project is dying, we know sooner than later and either modify the resources or pull the plug. It no longer hovers in project limbo.
➢ Fourth, there is better utilization of resources due to organizational changes and the establishment of a Project Management Office. Roles are better clarified, money is better spent.
➢ Fifth, there is less drama. While this seems minor at first blush, it is huge. We are now focused on the issues rather than the personalities.

These are just five results out of many which we have experienced, but it should give you a small sense of what is possible. For the next twelve months, I am focusing on improving the processes, and will be spending considerable time developing our team. I am also pleased to report that after 11 months of resistance, these same senior leaders are now seeking out Maureen to discuss issues rather than ducking down the hall when they see her coming their way. Maybe they are catching on.

What worked?

Maureen: This experience has reinforced for me how critical an integral approach is to organizational transformation. Carl is a strong leader who wanted to make significant changes to his organization. I think this process was significantly more effective because he started with his own personal changes then moved to organizational change.

In this case, having an outside consultant who was not part of the family or the organization was of benefit. I have no interest other than my client’s success. I gained some level of credibility because of my experience doing this type of transition as well as a strong set of tools. I also tried to remain impartial during the process, though I wonder if others would see that.

Carl invested as much as 20% of his time in working with me. This significant commitment accelerated the process significantly. The investment allowed him to both develop his personal leadership skills and plan the desired change. Beyond the time we spent together, he spent a great deal of office and personal time in implementing the changes. His unwavering commitment to transforming himself and MT kept us on track and allowed us to maintain momentum and credibility. While at times it seemed we were not moving – in retrospect, we made significant changes in a very short time without major disruption to the company. Additionally, all of the senior leaders remain with the company as of this writing.

The commitment of the senior leaders to MT was nothing short of amazing. There were times of significant frustration and difference of perspective. These men chose to stick together and work through the differences, putting the company before their egos and self interest. Because of this, they remain intact and stronger than before. While I cannot speak for what they experienced, I can say with certainty that I have very high regard for every one of them for what they have accomplished; who they were as people and the integrity they demonstrated during the challenging times.

Carl: Part of our culture involved the mind set that each location was autonomous and each manager did what he wanted. Our belief was that we wanted each General Manager to be an entrepreneur. While this belief still holds true today, we now have a unified vision, mission and standardized processes. Process standardization was probably one of the hardest culture changes we encountered.

What would we change?

Maureen: I did not emphasize communication with the broader organization enough. Because of what I perceived as a lack of shared vision, I focused on working with the leaders I thought were on board and interested in moving forward. I think I would have tried harder to build bridges and build support with key stakeholders if I could have reconciled the differences more quickly. While in the end the result has been positive, I wonder if more communication earlier in the process might have reduced the organizational stress.

Carl: One of my challenges has been to provide meaningful communication. Some managers wanted to be involved daily, while others prefer month-to-month meetings. I have now taken the path of over communication, and I occasionally receive complaints today that we have too many meetings, but interestingly enough, no complaints that they would rather be a bit more in the dark. Moving forward, we will be able to reduce the number of meetings as we become more organized by using tools like the Scorecard and Project Management Office.

Limitations of the Research:

This case study reflects the progress of one individual client and company experience. It does not offer trends or a sample size sufficient to expand to a larger population. It does, however, provide early support of an overall hypothesis that the combination of leadership coaching and organizational transformation that draws on integrally informed tools has the capacity to improve both the organizational transformation and also the leader’s performance as determined by overall business performance measures.

Reference

Bill Torbert & Associates (2004). Action Inquiry: The Secret of Timely and Transforming Leadership. San Francisco, California: Berrett-Koehler Publishers

About the Authors

Maureen Metcalf, the President of Metcalf & Associates, Inc., brings 25 years of business experience as an effective leader who demonstrates operational skills coupled with the ability to analyze, develop, and implement successful strategies for profitability, growth and sustainability. As a Management Consultant with two “Big Four” Management consulting firms for 12 years, Maureen managed and contributed to successful completion of a wide array of projects from strategy development and organizational design for start-up firms to large system change for well established firms. She has worked with a number of Fortune 50 clients delivering a wide range of significant business results such as: increased profitability, cycle time reduction, increased productivity, and improved quality. Contact: maureen@metcalf-associates.com

Carl Fernyak is the CEO of MT Business Technology. He has over 18 years of technology industry experience; he started and successfully scaled 6 companies prior to acquiring MT Business Technologies in 2005. Carl brings significant experience with organizational transformation acquisitions as he has integrated 4 additional companies into the current MT businesses within the past 3 years. He is a strategic thinker who has demonstrated significant business acumen in running and transforming technology related companies.