It Was the Best of Times …and Maybe the Worst
Issue 86, December 15, 2022
It’s that time of year for stories. We’ve all got them: holiday merriment, missteps, and mayhem. All the stories that we remember and pass on from our portfolio of family and personal legends.
We have a few stories as well. In our new book, The Truth About Transformation, we have an entire section devoted to dispatches (aka case studies) that are some of the most provocative stories we know – and they are all based on different real-life dysfunctional situations we have encountered over a career of consulting and working in organizations, both large and small. They are relatable – and not uncommon. And they include you as the reader to use your own experiences and learnings to figure out what to do,
So, here goes with our cautionary tale about cultural dysfunction and leadership myopia … to whet your appetite for the best and worst of times in an organization.
A B2B startup providing innovative business décor solutions online has received two waves of funding totaling $12 million. Although currently private, the company has an investor board that was attracted to the novel premise of the company and stands ready to grow the company as quickly as possible.
The first-time CEO, Hillary is charismatic and was highly successful in getting investors engaged and committed. She has used her attributes to attract a small staff of talented, capable professionals to the company. However, she has no prior experience in managing organizations—or even teams of individuals. She recruited a team of 18 experts across marketing, sales, and creative product development who have well-honed skills, having worked for successful companies with solid leaders. Each manager was enticed by Hillary with the promise of building a business from the ground up. They, too, are excited about the business proposition she has articulated.
The managers anticipated high-stress levels with long days the norm in the startup world. The hope was that Hillary’s charisma would translate to her competencies as a leader and manager. Building a business in this way was new to them and they were excited to learn from her. Little did they know they were acting as children following the Pied Piper, and what they imagined their roles would be are very far from the truth.
In the early days, Hillary’s lack of leadership and management skills came into focus as the team members sought her direction and/or input as they put their plans together while managing day-to-day operations.
Personality quirks in informal settings also started to emerge. The CEO they were getting to know better remained charismatic when interacting with the board members or potential customers but seemed to turn on a dime into someone else when the public show was over. The team was seeing a different person than the one that sold them on the company in their interviews and discussions before they joined. Still captivated by the promise of learning and being a part of something exciting, the team members started to talk among themselves and decided to continue in hopes of seeing improvement. They rationalize that perhaps Hillary is just overly stressed as she has a lot going on.
Hillary is stressed. Her ideas and ability to sell and convince others have now placed an incredible amount of responsibility on her shoulders to bring the company to life and create success. She has always felt she was entrepreneurial, but now realizes she doesn’t know what she needs to know to lead and operate the company. She also doesn’t know how to lead her team or how to trust them to do their jobs. As a result, she is often defensive and operates in her own unstated power structure where she believes that only she knows what to do. Therefore, she micromanages everything and reviews everything the team members put in front of her. Her behavior is creating serious consequences that may prevent the company from meeting the investors’ goals. To her team members, Hillary is increasingly seen as sinister because she truly believes she is empathetic and employee centric. In truth, she is becoming more and more manipulative, driven by her own personal goals, and is largely unaware of her effect on her team.
Subversive Power Manipulation
Team members are forced to respond to her mercurial whims and moods, seeing no other alternative than appeasing her despite often believing that what she has demanded or decided is not useful. Hillary is not only unaware of her behavior but is also oblivious to the psychological and emotional effects she has on her team. She maintains double standards, takes no responsibility, and chastises individual team members for their work without setting any clear expectations. She never deviates from her own narrative, believing herself to be the smartest person in the room and dismisses the advice and recommendations of her experienced staff. Much of this behavior can be attributed to a sense of power position infallibility, never admitting that she could be wrong, being defensive but trying to present a strong front, and hiding behind that power to insulate her from the true reality. The behavior may also be manifesting as she is a highly insecure person.
The team members, as well as the investors, have a stake in ensuring the company’s success. The investor board shares a fiduciary responsibility for the company. It is clear to the individual team members that some action must be taken, but they aren’t sure who bears the responsibility or whom they should talk to first.
So. what would you do? There are no easy answers, but solving the problems is a fascinating litmus test on how you think. Read on to deal with the issues in this real-life drama and strike up a conversation with colleagues about how they think this mess should be resolved.
- Would you, and if so, how would you, make the investor board aware of the CEO’s behavior?
- As a dedicated team member who believes in the promise of the company, how would you work within the CEO’s subversive power structure? Are there tactics or approaches that you might use to create awareness and alter the CEO’s behavior indirectly?
- If you were on the executive management team, how would you balance protecting your team and managing up to the CEO to protect your own job and those on your team?
- Is this a no-win situation where a single personality will continue to set and influence the organization’s culture? If so, can the team members ever be successful?
The startup, flailing under its compromised leadership, pivoted from B2B to B2C with a new business model to rent home furnishings to any consumer. The ongoing decision-making of the CEO did not yield the results the team members or the investors hoped for. Therefore, given the infrastructure built for a B2B focus, the investors decided a focus on the consumer market may lead to more success. They don’t want to give up on the B2B market but recognize additional market analysis is needed before spending more time and money marketing the offering to businesses.
With word spreading about the new innovative rental offering, the CEO is frequently interviewed and shares her passion and vision for a novel way to connect young, impressionable consumers with products they cannot yet afford. The CEO acquiesced to her investors and promises to be more accountable to them. She is considering scaling the business to offer the rental service nationally to designers, real estate developers, and theater and movie set designers, retooling, and refocusing her initial B2B focus.
The marketing director on the team has experience in B2B marketing but limited B2C experience. After six months, it has become apparent that the change in focus came with no business strategy. The CEO continues with her behavior and micromanages the small details, constantly ignoring the big picture. The marketing director, despite considerable effort, is not getting the hoped-for results. There have been a few wins in certain regions of the country, but those wins have come because of a hefty spend of the marketing budget. The marketing director is frustrated as the CEO doesn’t want to increase the marketing budget and is expecting the marketing director to pull the proverbial rabbit out of a hat. To make matters worse, the CEO in reporting to the board has inflated the revenue value of the few wins the company had to date.
- As the company pivots, what information, data, and/or analysis is needed to clearly understand the new market potential?
- Is the new B2C focus a ruse to keep the business alive? Are there fundamental and foundational issues that are preventing any success for the company?
- How would you develop and define the company’s shared purpose and true market orientation when the CEO is unable to?
- What business strategy, development, and planning need to occur?
- Does the company have the right workforce to make the pivot to a new business strategy?
- Does the company have the right CEO?
Are you intrigued by this story? Order The Truth About Transformation and you’ll find four more tales of dysfunction and confusion. They are as entertaining as they are enlightening!
Get “The Truth about Transformation”
The 2040 construct to change and transformation. What’s the biggest reason organizations fail? They don’t honor, respect, and acknowledge the human factor. We have compiled a playbook for organizations of all sizes to consider all the elements that comprise change and we have included some provocative case studies that illustrate how transformation can quickly derail.