A Mini-Case Study

One of the best ways to see how an early-warning system might work is to consider the following case study from a national accounting firm in North America.  As with most professional services firms, this organization is structured as a partnership, so the partners truly own the business.  Leading the firm is a collection of Regional Managing Partners – each with a responsibility for a wide geographic region across the country.  Until very recently, this leadership team was a team in name only.  Decisions affecting the entire firm were typically made in the national corporate office.  Regions were granted wide latitude to make decisions on how best to serve their clients in their regions.  Compensation also encouraged a more regional than national view.  Getting these partners to truly interact as a team – fully participating in discussions and debating issues – was more difficult. 

In 2005, the partnership decided to take steps to create a true leadership team of Managing Partners, and to make sure that the organization as a whole was not facing significant risks that had gone undetected.  The firm’s CEO and COO decided that the top team should complete an early-warning system analysis to get a third-party perspective on how they compared to other longstanding successful organizations in their leadership, strategy, and internal processes.  Following the surveying of each Managing Partner, and briefing the CEO and COO on the results, we met with the entire leadership team at a recent strategic off-site.  What we found most surprising in the results was the wide variance in perceptions across the team.  On several questions, some team members scored a question “6” or “7” out of “7” – meaning they agreed with the statement (e.g., “The entire team is involved with addressing critical problems faced by the organization.”), while others scored it a “2” or “3.”  Who was right?  At the debrief session, when the results were presented, one of the most valuable parts of the entire exercise was the ensuing discussion on those issues where variance in viewpoints was the greatest.  Airing the different points of view helped the “new” team establish the norms that it would follow going-forward.

There were a number of extremely positive findings coming out of the early-warning system analysis that boded well for the firm’s continued success.  For example, the team’s results suggested the firm had an extremely engaged culture and there was tremendous loyalty to the firm among the Partners.  There was also a great deal of trust in the CEO and his style – who did very well on a sub-dimension we call “authentic leadership,” a more understated and steady leadership style common to all the longstanding successful organizations in our study.

However, there was work to do.  Although the team believed in the firm-wide strategy, and felt ownership as creators of it, they were concerned that the rest of the organization did not yet fully “buy-in” to it.  They felt they needed to more clearly define how to implement the strategy to provide guidance for others to properly execute on it.  The results also identified vulnerabilities in team process, and suggested the team needed to more actively participate and debate in team meetings and ensure that it didn’t “rubber-stamp” decisions.  They believed this was at least in part due to the fact that each Partner was overloaded with responsibilities and felt they had little prep time to think about key issues on the agenda before meetings.  They also believed they could do a better job analyzing key client losses, and define a clear succession and talent management plan for the firm.  Perhaps most interesting was the discussion around whether each Managing Partner should continue to have some limited contact with key clients (as our research suggested they should) or if their roles should only be internally focused (as had been the case).  Active debate on this issue, along with hearing that our research had found it was critically important for senior leaders to remain “plugged in” to their clients, led them to challenge their assumptions and change this policy.

It’s still early days since they received their survey results, but the team is pleased.  The COO said: “the process was really helpful in bringing our team together, in terms of where we’re at today and also where we want to go.  We liked the fact that the ways in which we want to develop our group are backed up by research into other successful organizations and seem to be a good fit with our culture.”  Plans are now afoot to complete the survey with the firm’s Policy Board (board of directors), and compare those results with the ones from the leadership team.

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