The company we dealt with is a leading Italian woodworking company. Founded as an artisanal family business, it has grown rapidly to a size of about 50 employees today with an annual turnover of about 8 million euros.
The company had evolved very quickly in terms of production but had not adjusted its organizational structure, causing operational inefficiencies that slowed delivery times and compromised future growth.
Alongside these critical issues, however, a deeper cause of difficulty emerged over time, related to the generational transition: the dual relationship -professional and family- was an obstacle to clear communication and effective delegation of responsibilities.
Generational transition
The main objective of the consulting project initially seemed to be to formalize and optimize the organizational structure, to be pursued by creating a clear organizational chart capable of distinguishing roles and defining responsibilities. The next step would focus on building a more effective process for delegating operational functions.
In reality, it became increasingly clear, as we deepened our understanding of the business reality, that the source of disorganization and malaise was another and not operational in nature, namely, the difficulty in passing leadership from one generation to the next.
The most urgent intervention, therefore, was the building of a climate of trust and the balanced separation between family relationships and professional dynamics. Therefore, we proposed to work mainly on two points:
- improving internal communication, through a strategy based on active listening, to overcome communication blockage and foster constructive dialogue between the various levels of the company
- strengthening operational autonomy, to reduce response times and lead times, promoting greater empowerment of middle managers.
The second point is closely related to the first: if top management lives in a climate of tension and mistrust, the whole chain of responsibility is compromised and middle management cannot move effectively and autonomously. The result is a general slowdown and widespread disorganization.
The lack of trust, in fact, blocks the process of circulation of ideas, projects, solutions, emptying the use of the delegation tool of meaning and usefulness.
Preserving know-how when leadership changes
Understanding the roots of the problem is the first step in turning the challenge into an opportunity.”
We adopted a gradual and tailored approach. putting the focus on the listening phase to grasp the real needs and critical issues of the corporate structure.
It turned out to be a long listening and information-gathering phase: it was necessary to get down inside the core of the conflicts and it had to be done in an absolutely super partes way in order to preserve the delicate relational balance and the added value of our intervention.
Without untangling the knots related to the different strategic visions it would have been impossible to support the leaders in the transition and accompany them in the delegation process. In fact, the already difficult process of delegating responsibilities was largely blocked by the delicate balance between family and professional relationships.
The second step involved analyzing the key factors that determined the company’s competitive advantage, from a human resources perspective.
One of the greatest risks in generational transition is that of losing valuable resources.
When leadership passes from the current owner to a successor (internal or external to the company) many of the mechanisms of informal transmission of know-how are likely to be blown. The way in which the present incumbent relates may be very different from that of his successor, and the circulation of information and knowledge depends in part, which may be greater or lesser, precisely on the relationships that have been established over time. It is frequently in that web of relationships and ties that the secrets of business success are hidden, which is why it is essential to avoid losing key people at the time of transition.
Gathering know-how and best practices
The process of defining the new leadership and related organizational chart is still ongoing, so it is not yet possible to track the impact it will have on business performance once it is finished.
On the other hand, from a relationship perspective, the result is already appreciable: the collaboration between top management has enabled the gathering of information and the drafting of documents that keep track of what best practices are at the level of procedures.
More: the trust and awareness of working together, on an important project, that of the company’s future, has been strengthened with greater determination and enthusiasm.
Innovation comes from active listening and the ability to delegate: change starts with trusting people.”
Paolo Sanguanini – Partner ŌdeXa
