Half a century of founding family leadership leaves sizeable CEO shoes to fill.
As one of the largest independent infrastructure contractors prepared for a long-tenured CEO to retire, supporting internal succession was top of mind for the PE sponsor. Ampersand was engaged to help our client gain a clear understanding of the strengths and weaknesses of the management team in order to best support growth over the hold period. They wanted to pressure-test whether the CEO successor apparent was truly the leader for the future, and then ensure the right scaffolding was built to make a smooth handoff.
CONFRONTING THE CHALLENGE: WHAT WE KNEW
With multiple acquisitions and contractual wins, the business had recently doubled in size and complexity, and after an impressive 50 years of family ownership and with decades in role, the CEO planned to transition to the board. With a significant influx of government contracts, a growing national footprint, and an impending shift in leadership, gaining a thorough understanding of current state was imperative for the investors to set the foundation for stable leadership and a successful exit. More importantly, they needed clarity on how future organizational structure would be influenced in a world without the charismatic, highly respected, and industry leading CEO.
AMPERSAND’S APPROACH
Organizational Diligence as a first step provided a temperature check on current organizational structure, dynamics, capabilities, and culture. Ampersand’s approach integrated 1:1 interviews and light-touch 360 to identify the strengths of the organization and the functional gaps to fill. The most pressing questions to answer included: “Is the CEO heir apparent a ready-now successor? Does he have the team around him to augment him? What does this team need to support the leadership transition and steady growth ahead?”
With answers in hand, Feedback was provided to each participant and customized Team Alignment sessions facilitated constructive dialogue and action planning to support a successful transition.
Executive Coaching for the CEO successor leveraged the findings gathered from organizational work to create a focused action plan to shore up skill gaps, refine leadership skills, confront opportunity areas candidly and supportively, and accomplish specific development goals.
DISCOVERY AND FINDINGS
The long-tenured CEO had been instrumental to the company’s success to date and seen as the true heart and soul of the business. Deep industry connections, off-the-charts charisma, and historic relevance to the organizational culture created an exceptionally tough act to follow. And the long shadow he cast also masked an autocratic and disempowering leadership style.
While the current President was highly respected and seen by all as the CEO heir apparent, there were doubts as to whether he was truly a ready-now candidate. Ampersand’s process revealed blind spots and gaps in the President’s ability to assess talent; hold others accountable for performance; accept constructive feedback; and establish meaningful relationships at all levels within the business.
Further complicating the succession plan was an underpowered leadership team that was struggling to scale (and viewed the CEO as the backstop on decision making throughout the business). A well-defined strategy for the business and the brand, clearer accountabilities, greater alignment for the team, and more discipline in operating the business were necessary to build the scaffolding for growth.
OUTCOMES AND CONTRIBUTIONS
- Creation of a Role-Specific Scorecard clearly defined expectations and deliverables for the CEO role. Not only did this minimize the impact of personalities in decision making, but it also gave the newly promoted CEO permission to lead when his predecessor was tempted to overstep.
- Executive Coaching for the new CEO developed critical leadership skills and set the stage for productive, collaborative, accountable performance.
- Ampersand-led alignment sessions established the foundation for a newly cohesive leadership team to navigate the pandemic and realize a highly successful exit.
- With strong leadership at the helm, the business achieved over $110M in EBITDA at exit in 2023 (compared to $44M in 2019).
“Your engagement with the leadership team proved instrumental in a positive CEO transition. More importantly, your work established the foundation for a cohesive leadership team to navigate a pandemic and realize a successful exit.”
“The strategy sessions, organizational alignment, and challenge process that you and the Ampersand team facilitated in 2019 set the course toward our success. While our employees, culture, and teamwork represent the basis for our success, your leadership training resulted in my development and ability to create the conditions for their achievement.”
Our commitment to confidentiality prevents us from disclosing the identity of our clients and other confidential information. The information contained in this case study is not intended to serve as advice.
