CHAPTER 5

Why an Entrepreneurial Company Almost Failed

Remerge Energy was a small but fast-growing and innovative alternative energy company that had the attention of the Obama administration. The CEO, Adam, called us, his voice edged with tension. He explained that the company was four weeks into the second quarter and had already spent half of the government’s Green Energy Award, which they’d been granted the previous year. At the current rate, Remerge Energy would face serious financial issues if they couldn’t secure a new client or sharply reduce operational costs.

Adam clearly held his six-person leadership team in high regard. He had been appointed CEO a year earlier, after the company was awarded their first major government funding. There are three other key players in this story: Nathan, the head of research and development, was the founder and brains behind the company’s prototype technology. Britney, the newest team member and head of sales and marketing, had been brought in by Adam to drive Remerge Energy’s sales growth. Tom, head of operations, came aboard shortly after Nathan started the company.

Adam had tried his best to get his entire team to work well together, but his method of leadership wasn’t creating the teamwork or business results he hoped for. He needed the team to be aligned.

In our initial conversation with Adam, it was obvious he had great strategic focus. He was the voice to the angel funding investors, who remained committed in spite of less-than-stellar sales reports. But Adam’s focus on funding and long-term strategy left him little time to play arbitrator between Britney, the marketing maven, and Nathan, the technical genius. That job was left to Tom, who had great relational skills, but was clearly out of his league in dealing with the horsepower of Britney and the brains of Nathan, his mentor. During that first call with Adam, we agreed to work with the leadership team.

We typically start our team engagements with a leadership team event called an off-site, which is a usually a two-day retreat, and then move to one-on-one coaching with the leader and individuals. We facilitate quarterly off-sites thereafter. The teams who do this make big leaps forward and advance their momentum through the follow-up work. Beautiful big-sky Montana was the locale for this off-site. It was mid spring and we were at a lodge on the lake.

More preliminary conversations with Adam gave us insight about the root cause of the breakdown. We were curious how things would play out at the initial off-site, and we were especially interested to see the potential style differences on the team and how well the team members understood their roles.

THE INITIAL OFF-SITE

Adam opened the off-site by explaining the importance of this gathering. The focus, he said, was to uncover why they were so far off the financial plan. Moving forward, he wanted the team to figure out how to both increase funding and win sales.

Rather than wait for the agenda item, Tom, head of operations, spoke. “When we got the funding, we started down this road of scaling up from the prototype to the new larger site system because Britney has been focused on large customers. Plus, we have been implementing new design features to improve the system. Operations has been struggling to keep up, and I know our overtime costs have been higher. I am sure we are running over the original budget. However, I am trying to keep a balance to ensure we are ready for both the new site and Nathan’s new design features. Both are exciting opportunities for us.” Tom was always positive and determined to make everyone happy.

Britney chimed in, “Adam, I realize I am also over budget. I hired marketing and sales consultants to pull together a top-notch portfolio so that we could impress larger clients and land our second site implementation. I need to ensure we’ll be on track to get more clients and funding this year.”

Nathan, who was typing on his laptop, shook his head and mumbled.

CrisMarie spoke up, “Nathan we didn’t hear you, and we’d like to. First though, we agreed no laptops in the meeting. Are you willing to close it and tell us what you said?”

We think it is crucial that people give full focus in the meeting, especially given the logistics of assembling the team for two days. And we prefer to hear the under-the-breath comments rather than let people stay silent. At least we knew Nathan was not completely disengaged. He was listening, even if he wasn’t all in at that point.

Nathan sighed, slowly closed his computer, gave CrisMarie a look, and then shifted his glare to Britney. “What I said was, ‘Of course she needed outside consultants.’”

Britney spoke up with more energy this time, looking at Nathan. “Listen, I needed a team that could pull together an accurate picture of the success and highlight the potential of the prototype for a variety of potential customers. When I asked you, you handed me a manual that only a physicist would understand. I can’t use that to sell to clients. Plus, you’re keeping operations so busy implementing all your new features that they were unavailable. I had to do it myself, so I brought in resources!” She sat back, arms folded.

Tom was clearly uncomfortable. He leaned forward, wanting to step in and defend both positions. “Look, I think we can agree that any new client is going to love all the new features. And Britney, I also understand translating Nathan’s ideas is not easy and that I haven’t been helping.”

Adam sighed, “Look you guys, I am out on the road trying to keep our investors happy. I need more from each of you. Britney, these outside resources are expensive, and Tom, I wonder why you aren’t able to provide some of the resources Britney needs.”

Britney sat up straighter. “Look, Adam, every time we had our one-on-ones, you made it clear that you wanted sales and it was my job to create them. I talked to you about the importance of pulling together a successful portfolio, and you gave me the go-ahead. So I gathered the resources that were available and got it done.”

Adam looked confused and turned toward Nathan. “I’m surprised you didn’t provide more inside help for the sales portfolio.”

Tom interjected, “I think Nathan’s focus has been on the new designs, and it was probably my job to work more closely with Britney.”

Nathan pulled out his phone apparently scrolling through his email, “Don’t blame yourself, Tom,” he replied. “The reason I didn’t help is because Britney’s plan is ridiculous. She completely focused on the wrong target market!”

Clearly, we were right in the middle of an oh, sh*t! moment that had been brewing for months. People were resorting to their preferred opt-out styles.

When an oh, sh*t! moment surfaces, it is easy to focus on the money or whatever the business issue is. But frankly, that is rarely the root of the problem; it’s almost always a symptom. Going right to the business issue may lead to some resolution, but it won’t likely be the most creative, innovative or sustainable solution. Other issues are bound to arise if the underlying dynamic is not resolved.

SHIFTING GEARS

Since the issue was on the table, we asked that the team pivot and focus on the healthy side of the business before trying to resolve the specific business issue. We assured the team that our intention was aligned with Adam’s, and we would address the business issue by lunchtime. We also requested that all electronic devices be turned off during the team meeting.

Both Britney and Nathan pushed back—especially Nathan on the electronics. Adam spoke up, his voice firm. “This is critical for our business,” he said. “It’s important that we all fully participate so we stop arguing and start finding solutions.” Everyone was on board.

We presented our Path to Collective Creativity team model, which maps out how teams create oh, sh*t! moments, the ways people inadvertently undermine team success with their favorite opt-out style, and the three keys to opt in and engage collective team brilliance. To find out how you tend to opt out, take our online assessment at www.Thriveinc.com/beautyofconflict/bonus.

Adam spoke up seconds after we covered the opt-out styles. “Look, I will start out by saying I think I may have been too engaged with investors and needed to get more involved in listening and working onsite with you guys. I’m guessing it’s my Superstar style and possibly some Separator.”

We let Adam know right then and there that he was doing a great job modeling real-time vulnerability, opening the door for others to do the same.

Tom spoke up next. “Look, I feel torn between you guys. I want to do what’s best for the company, but I think I am too busy making you both happy. Britney, I do worry that you don’t have the same underlying values and vision as Nathan, yet frankly, without you, all of Nathan’s grand ideas aren’t going anywhere. Nathan, you are brilliant, but I really need you to stop tweaking the system.”

Tom, as the Accommodator, had taken on the role of keeping both Nathan and Britney happy at the cost of himself. He had been managing the tension between Nathan and Britney through one-off meetings and assigning his team to do tasks for both as best they could.

Tom knew that Adam wanted Nathan and Britney to work together and for each to weigh in on plans for the new client direction. He was at the end of his ability to navigate their different styles and strategies. In addition, he was not letting either know what he needed—he omitted the ME.

Britney, as the Superstar, was doing what she was asked to do. She had strong ideas, so when Nathan was too busy and didn’t have resources to offer, she got the job done using her own resources. Though she did approach Nathan, he was distant, and she assumed she had to do it herself. Britney was confident in the ME and thought she had the right strategy to solve the problem. However, she omitted the WE and did not check out what was going on with Nathan. She didn’t ask the reason for his lack of cooperation, nor did she tell Adam how she was solving the problem.

Nathan’s Separator opt-out style came into play as he avoided the conflict with Britney’s desire to get new, broader-range clients. As the Separator, he focused on his own area, research and development. He was uncomfortable with many of Britney’s ideas and client choices and, therefore, ignored her request for help. Meanwhile, Nathan assumed Adam would get Britney aligned; Nathan would just wait until she was up to speed, then he would reengage. The problem was his team member also needed some of his resources to move forward.

Nathan left out both the ME (by not speaking up about his concerns with Britney’s approach) and the WE (by not exploring what Britney was up to with her plans). Instead, he put his head down and focused on the business, but only in his specific area. As a result, he justified his position that Britney was a bad hire.

All these choices to opt out happened repeatedly over the course of a few months. Any one of these efforts has merits, such as making sure work gets done, albeit in silos, or keeping harmony on the team. But by not directly dealing with the real conflict between team members, these opt-out styles actually undermined collective effort and, more importantly, the overall business results! This stalled the forward movement of the organization and created a drain on finances. The right conversations did not happen because people avoided conflict instead of putting it to use.

Fortunately for the team, at the end of the morning of day one, they were engaged in our Path to Collective Creativity Team model. With Adam’s willingness to open with vulnerability, and Tom’s stepping up to acknowledge the impact Britney and Nathan had on him, the groundwork was in place for Nathan and Britney to engage fully with each other. Once they identified their own opt-out styles, it was easy to create a space for more dialogue and check out some of the assumptions.

Nathan let Britney know his deeper concerns that her choice to go after big oil companies felt like a misalignment in values. Britney was surprised and shared that she wasn’t going after big oil because she was aligned with them. She actually thought Nathan’s approach and efforts could have a significant impact and influence the oil companies to reconsider environmentally friendly alternatives as a part of their portfolio. Getting that misunderstanding cleared up was monumental.

By the end of the off-site, the team made significant shifts in how they did business. Nathan agreed to work with Britney by going to the next potential client site. The two laid out a plan with Tom to use internal resources to create the input and map for future client engagement.

Once the leadership team was aligned, specifically Tom, Britney, and Nathan, we suggested the team communicate their clarity to the rest of the 80-person organization at an all-hands meeting, which we would facilitate. The day began with team- and trust-building activities, both within the individual teams and cross-functionally. Then the entire leadership team stood to communicate their vision to the rest of the organization.

Adam spoke first. He acknowledged the team’s previous lack of alignment, the impact to the organization, and the need to make it different. Nathan and Britney then openly addressed their differences and how they had come from very different directions without appreciation for the impact that might have on Tom and operations overall. In the room packed with people, you could hear a pin drop. Everyone had already been aware of this. When the two leaders acknowledged what was real, they built strong credibility.

The leadership team then talked about the new direction. Britney and Nathan presented a combined portfolio of their ideas, which reflected their collective brilliance. The room was electric with the new possibilities. We went on to facilitate some round table discussions about the key objection areas and implementation plans. The employees provided great insights and feedback to improve the plan going forward.

Nathan, Britney, and Tom communicated their vision, aligned and re-inspired. Now the company’s focus was new sales and securing funding, and the employees rallied around it. Since the company was aligned from the top down, they no longer needed to spend money on operations overtime or outside sales and marketing firms. Adam could focus on securing funding and also stay more connected to what was happening back at the offices through weekly tactical and monthly strategic meetings. Over the next nine months, the company successfully secured funding, won several new clients, and increased the ROI and success of Remerge.

Do you now have a sense of the impact opting out has on the team and the business? When opt-out behaviors go unaddressed, especially on a leadership team, it can undermine an entire company. When this happens and companies fail, the newspaper headlines shout bad business strategy and poor timing—and that’s accurate. However, if you examine what happened inside those board rooms, nine out of ten times the mistakes were a result of team members’ opting out of the right conversations. Avoiding addressing the underlying team dysfunction wreaks havoc for the business.

It doesn’t have to be this way. You, your team, and your business can increase your bottom line and your sense of satisfaction by working together.

Read on to learn how to opt-in, create more success, and increase the bottom line.