What Happens to an Organization’s Culture & Strategy When Leadership Changes?

As I was planning a few summer date nights with my wife, I came across an email from one of the venues in my city advertising their summer lineup of concerts. As a lifelong music fan, it was exciting to see the names on the docket. There were several that piqued my interest. It wasn’t because I felt the need to buy their overpriced T-shirts, but rather because I was surprised they were still on tour (or even still in existence).

Let’s be honest: Some of my artists are closer to retirement than Coachella. After a little bit of research, I determined that several of these bands were in fact composed of entirely new members — or at a minimum, the only original member was the bassist. Before the bassists of the world feel slighted, I asked myself, “When does a band cease being ‘original’ and become a cover band that charges $100 a seat?” Then I started thinking about succession planning. Sure, this lane departure was one you could only expect from someone who spends so much time with construction organizations and his iTunes playlists.

Adding New Leaders to the Band

Here is my thinking. There comes a crossroads for many organizations as they navigate senior leaders becoming more senior and a need to install new leadership team. As the new leadership team ascends, they also install new managers, including their replacements, to move the organization forward. Early in the transition, the organization is more than likely “playing the same catalog of music.” Put another way, the new generation approaches the business with a certain level of diligence and care to “maintenance.” There is a level of cautiousness: “We don’t want to lose our audience, so we are going to play our proverbial greatest hits, keeping on with what got us to this point.”

However, there comes a point where that new leadership generation completely assimilates and Brand X Construction starts thinking about adding “new songs” to their setlist. One can only imagine the internal upheaval that might occur from the ranks of the loyal team members who straddled both generations: “We’ve never done that before,” or “You know, the other leadership team never wanted to go in that direction.”

Does the Song Remain the Same? 

What about the external market? “You are known for <INSERT NICHE TRADE HERE>, so why are you trying to do something new?” For example, how many contractors begin as a plan/specifications, low-bid contractor but stretch their thinking to be a design-builder? Ultimately, an existential crisis emerges. Leaders recognize that their businesses need to change — market conditions erode, customers go away, etc. — but if they change course, will the “band members” refuse to play? Will the audience revolt and go see another band?

There are no simple or right answers to this business conundrum. Every business is faced with evolutionary choices:

• What should we chase?
• Where should we operate?
• How should we deliver our services?
• Should we grow or contract?
• What new things should we integrate into our business?
• What roles do we need on the team?
• Who will fill those roles?

Even without a leadership succession, these same choices would be staring that group in the face. It is possible that new leadership groups find it easier to enact change, as they may see this as a natural order of things. This is not to say they are going to do something simply to be contrarian. However, many visionary leaders who are appointed to roles for at least two reasons:

1. They are in alignment with the company’s core values at a microscopic level. Put another way, these individuals bleed the company colors.
2. They are, in fact, visionary. They ideate and think about growing a fruitful business, which may be some degree different than the existing engine for the business’s revenues.

And there is the rub. Whether the successors are homegrown or brought in from outside of the business, they will hopefully check the box on Step 1. Step 2 is where the scrutiny commences, in that it may be viewed as a drastic departure what is perceived as “normal.” We all know everyone loves change — ahem — and this new leadership cohort is moving in a different direction rather than the tried and true “What-Got-Us-Here-Should-Be-a-Hit-Going-Forward” strategy.

New Leaders Won’t Be Flawless

This is not to say every idea that the new regime has will be correct. For instance, there are countless studies that show how some historically successful businesses failed abysmally as they transitioned from generation to generation. Was the failure rooted in bad strategy, bad execution or simply the inactivity to make a timely decision for fear of upsetting the organization?

Once again, the new generation or old generation can make the same mistakes, but there seems to be less tolerance of an error in judgment from the newer generation.

Every passionate music aficionado recalls that one bad album where the artists potentially tried something new stylistically. The fans gave the artist a “free pass” since they had a long history of successful hits.

However, when a reconstituted band decides to change direction, it is usually met with derision and vitriol: “Who are these guys? That’s not the band that I’ve listened to for years.” Of course not! Short of the logo behind the drummer, nothing about this band is the same, so why would they make the same music?

Knowing When & Why to Change 

Constructors should change and evolve. Does that mean they go from being a hard-bid roadbuilder to a design-build school-builder with self-performance capabilities? There should be a compelling reason why a firm makes that shift, which should be predicated by some fact-based analysis rather than a knee-jerk compulsion to install lockers in an elementary school.

More importantly, the new generation of leaders must navigate their strategic business journey with confidence, discipline, knowledge, passion, support and rigor.

Hopefully, the roadies will remember to pack the bass with care. And don’t forget my T-shirt.