Organization Development Consulting Firm

This retail business with multiple profit centers is led by the middle child in the second generation. The business is very successful and the second generation leader is ready to move on at some point in the next three years with a desire to leave a legacy that (a) expands and grows the business, (b) evolves the organizational culture, (c) readies the third generations for leadership and (d) assures all employees are prepared to compete for opportunities. There are several third generation members working in the business; the time in the business ranged from 7 years to 15 years. None of the third generation has progressed beyond manager level in the organization.  The professional managers in the business are recognized in the industry as some of the best at what they do; those leaders are frequently the targets of industry headhunters who are filling key positions in leading companies across the country.

Discoveries

• The complexity of the business is calling for a different kind of business person with different preparation than previously required.
• The drivers for success vary from profit center to profit center.
• The plan for succession in the family is not understood within the family system.
• The plan and opportunities for succession in the ranks of the professional managers below profit center president are not clear
• There is not a common view of the capabilities of the third generation among the individual, the professional managers and the family leadership.
• Training events are the substitute for development and learning.
• Opportunities for promotion are availed to those who have experience in the industry.
• The industry experience of the third generation is not as valued as the industry experience of the professional managers.
• In the recent years the third generation compromised their credibility in the organization which is now nearly impossible to recover.
• Efforts to marshal the careers of the third generation were marginally successful; they were met with cynicism and a reluctance of the professional managers to be involved.
• Previous consultants were perceived to have taken advantage of the relationship and so trust of new consultants was very low.

Strategy

This is clearly a more complex challenge than the two previous cases. The development of all human resources in the organization lacked focus and structure. The previous experience of leadership transition in the family resulted in anxiety and uncertainty since the rationale for the transition was never shared. The solution focused on:

• Structure
• Access
• Clarity

Within that context several interventions were launched over several years. The following components were areas in which we were directly involved:

Structure: The executive team, which included the managing owner, agreed to implement two critical structures; a process for succession planning and a process to develop high potential employees. The family agreed to establish two structures to support their alignment and growth; a family council and a career development council.

Access: The design of the program for high potential employees included dialogue with the executive leadership on designated topics, on a project that is of strategic value to the organization and on a project that is of value to their specific profit centers. The family and career development councils gave family members access to business information and opportunities to become prepared for new challenges.

 
Results

• Leadership Development System including assessment, development, performance planning and rotational assignments designed and implemented.
• Succession Planning instituted as critical executive level talent management tool.
• More than 80% of the employees identified as high potential promoted within 12 months of participation in the program.
• The budget spend on recruiting to back-fill open positions was significantly reduced.
• Retention of institutional knowledge for the corporation was increased as key leadership roles were filled by those ‘raised in the culture’.
• Number of 3G in the business increased by 4.