Finding the Courage to Set Direction and Move Your Business Forward

Strategy Case Study

Getting a business on course to grow and thrive, especially for lesser experienced executives, takes more than most imagine.

When family businesses change generational hands, they are notoriously vulnerable. When that transition happens much sooner than expected, the situation becomes that much more challenging. Due to a health crisis, the owners of a successful and well-regarded print production firm needed to hastily hand off the company to their children. While the siblings had grown up in the family business, their roles had never been well-defined. Indeed, they were focused on running an adjacent agency business they had started when they were called to step up and take charge of the entire organization.

Fortunately, both the production and agency businesses did great work and enjoyed strong customer relationships. The staff was passionate, dedicated, and fiercely loyal. But while money was coming in the door, nobody knew if the varying lines of business were actually profitable or who was really in charge. Balancing the needs of the more mature production business with the chaotic nature of a startup agency focused on creative and strategic work, all under the same roof, made for many interesting dynamics and organizational challenges.

Then the siblings received a letter of intent: Someone wanted to buy them out. They realized they had a tough choice to make. They could sell now. Or get serious about defining their leadership roles and setting a clear direction for the companies’ future. They turned to Navalent for help.

Choosing growth.

Even if the new owners eventually decided to sell business, they quickly realized they would be leaving a lot of money on the table if they took an offer now without first understanding and optimizing the company’s true worth and potential. The siblings collectively decided to embark on a strategy journey that would define the strengths and value of their businesses.

As a critical first step, each sibling committed to individual leadership roles. While there was a clear frontrunner to assume the position of CEO, he was deeply ambivalent about taking the job. But for the greater good, he stepped up. The two remaining siblings took other functional roles and they agreed that they would now be direct reports to their brother. They would remain equal owners, but organizationally, there was now hierarchy.

Determining where strengths—and struggles—exist.

With leadership hierarchy established, the team realized it needed to get a handle on the current state of the businesses before making hard decisions about the future. With Navalent’s help, they launched an in-depth diagnostic study to explore perceptions in the industry and among current employees.

The news was both good and bad. First, both the production company and the new creative services agency were highly regarded in the industry for exceptional work and excellent service. Indeed, the industry welcomed the idea of a one-stop shop and would support a combined company capable of delivering end-to-end production and higher-level, more strategic creative services. But the companies themselves had a lot of growing up to do in order to migrate to the next level. Essentially, the business was a $70 million organization stuck in the body of a $20 million company, without the structures in place to enable scalable growth.

Employees, for their part, loved their jobs. But they were feeling the stress of the lack of direction and not knowing what the future held. While they cared deeply and personally about the company and its leaders—some employees recalled babysitting for the three siblings when they were young—employees, too, needed organizational direction and a sense of how their work and roles fit into the bigger picture.

Ten cases. Three days. Several tough decisions.

Armed with the knowledge from the diagnostic exercise, the three leaders now had to decide how to structure their businesses to take advantage of opportunities. The first challenge was recognizing that they couldn’t do this alone. For the CEO specifically, understanding that he did not have all the answers and needed to look to his people for support was a leap of faith. But once he decided to let his people in, he was amazed at their enthusiasm, passion, and commitment to contributing to shaping the company’s future.

The owners enlisted a group of 40+ employees to rigorously explore 10 different cases or potential market opportunities that could become the cornerstone for the organization’s future. Like all companies, they had only so many resources to invest. While in the past, especially with their start up agency, they had said, “Yes,” to any and every opportunity that came knocking, they understood that now was the time to strategically decide which opportunities to pursue, which to sunset, and which to pass by.

The teams looked at new markets, offerings, and capabilities. They considered the organization’s strengths and differentiators. And they explored which areas of the portfolio which to invest in and emphasize going forward. “Some of us had no idea about all the things we are able to do,” said one case team member. “We are starting to realize that there is a lot of opportunity we are leaving on the table. Our clients have needs that we are not, but could be, meeting.” Under the guidance of Navalent, the teams worked for approximately three months, using a rigorous set of tools to complete their assignments. They gathered market analytics, scoped new offerings, tested assumptions about possible adjacencies, and had spirited debates about how they could, and could not, compete in a fiercely contested space.
Then, over the course of three days, the three owners carefully considered the thoughtful and creative approaches presented by the business case teams. Now came the really hard part. It was ultimately the leadership team’s job to make the tough choices and tradeoffs. “It’s like we’re standing in front of a mirror and being really honest about what we do well and where we could improve. Opening up about the things that need fixing will allow us to get focused and serious about fixing them,” said one of the siblings.

Ultimately, the leadership team was up to the task. They chose to narrow their focus to two specific industries in which they already had a strong footprint and to serve only higher-end clients. While maintaining the production side of the business, they decided to invest in expanding their agency services. This meant severing some existing relationships and forgoing ancillary services in order to optimize the core of the business. The team also chose to strategically delay pursuing several new potential offerings in order to concentrate on its key differentiators. Said the newly-minted CEO, “We felt it was important to earn our right to grow into new strategic areas. I wanted us to prove to ourselves that we could win in the areas we’d committed to before taking on more.”

“The strategy work was so energizing. At first, our leaders were a bit anxious about being able to do the work, but once they got started, they loved it. And to a person, they all told me how much they learned and grew through the initiative. Navalent brought just the right balance of expertise and guidance but they never got in the way from us taking control of our own future.”

Putting strategy into practice.

With a company-wide understanding of the business’ strengths, differentiators, and focus areas, people now had a solid sense of the organization and its future. The siblings chose to work with Navalent to do the organizational design work to structure the business around the new strategy.

They were also very pleased to find that by engaging their people in the strategy work, they had already made a great deal of headway in grooming the organization’s next set of leaders. In the words of a case team member, “This is the most thorough and thoughtful we’ve been in planning for our future. The art of collaboration is so profound, and we feel like we have grown as an organization through this process. We’re having conversations we’ve never had and connecting dots we’ve never connected before.”

Ultimately, the company not only beat the odds against family businesses changing generational hands; it also found the leadership and direction it needed to grow beyond the vision of the original owners, incorporate the next generation’s passions and strengths, and fully engage its key people on the journey of writing the next chapter of the organization’s future.


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