Analyze this case by answering the following question.

What should the new CEO do to maintain or change CleanTech’s culture?

Read the following case study:

CleanTech is a Southeastern consulting firm specializing in land, water and environmental analysis that would be used by businesses and real estate developers. Because the firm helps clients comply with land use and environmental laws, its work have to be very reliable. If mistakes are made, the firm and the clients could be sued. The company was founded several years ago by two women and a man with various backgrounds in environmental science and engineering. The three had become friends while employed at a large firm in Atlanta with clients all over the Southeast. Fed up with poor management and red tape at their former firm, they became convinced that they would do better on their own. A year after the founders launched CleanTech, another environmental engineer bought into the company, making a total of four principals.

Due to the principal’s reputation for giving clients what they want, CleanTech quickly gained a respectable share of the market and no longer has to worry about bringing in enough business to survive. The firm has added on employees over time and currently employs 12 environmental experts and technicians, who form project teams. Three support staff are responsible for administrative work and the final preparation of client reports. Two part-time bookkeepers keep track of the firm’s finances. Most of the staff are idealistic and very pleased to be working in the environmental field. What they like best about the company are its flexible work hours and knowledgeable, team-oriented colleagues. Given a tightening labor market, the principals are concerned about both attracting and retaining good staff.

Preparing the analyses for clients involved a good deal of teamwork. The office becomes very hectic around deadlines because the work of several people must be pulled together and compiled into flawless reports. Each project is supervised by one of the principals. Given the liability concerns in the field, a second principal always reviews each report before it goes out the door to make sure there are no errors.

CleanTech is housed on the first floor of a small office building on the fringe of downtown Atlanta. Its quarters are cramped and utilitarian. In some offices, reports are stacked in formidable piles on the floor. One of the principals shares her office with two other employees. The CEO’s office is slightly more elegant than the others but fairly small. The lobby has one modest chair in close proximity to the receptionist’s desk. Although the principals have offices with windows, the rest of the employees work in cubicles located in the center of the office. Employees have all the equipment they need, and the computer system and laboratory are state of the art. The only artwork in the office is posters with environmental themes. Employee cubicles décor varies widely from family pictures to decorative lights. The bulletin board by the coffee maker is overflowing with announcements of training courses, outdoor recreational events, and cartoons poking fun at environmentalists. Casually dressed employees walk around quickly as if they are on deadline, but they take time to tease each other as they go. The office is known for bantering and practical jokes.

When they planned the company, the principals wanted to create a firm that provided quality service to customers in a fun, participative workplace. They wanted their employees, all well-educated professionals, to fell empowered—something that was lacking in the large firm they came from. They also wanted to make money more money, which has become a reality for the principals. At present, however, the firm is experiencing growing pains. They were not planning to grow so quickly, if at all, but it seemed foolish to turn down business. In addition to the outgrown office space, employees are starting to complain about unclear policies, lack of input into decisions, and not knowing whom to go to with certain requests. (Actually, the more savvy employees have figured out which principal is likely to say yes to which request.) It takes the principals longer to make decisions that employees think it should. Employees receive year-end bonuses based on a joint decision by the principals, but there is no formal performance evaluation process. The major problem facing CleanTech, however, is the unexpected illness of it CEO, Cher (as in Cheryl) Norris.

Cher, the majority owner of the firm, is a dynamic environmental engineer in her late 40’s. She is extremely goo with clients and goes all out to provide them with the service they want. Some say she goes too far and asks for too many sacrifices on the part of both employees and the firm’s bottom line to satisfy clients. For example, when legitimate extra expenses are involved in a project, Cher refuses to charge clients more than the estimated cost. Cher is popular with the staff. She wants them to enjoy their work, and she and the other principals are generous with benefits. Her major flaw is lack of delegation, which has turned into a vicious circle. Cher’s excuse is that her employees do not have the experience or skills that she does, which is partly true. As a result, she works 80 to 100 hours a week and has no time to develop the employees. Last month, Cher was diagnosed with a serious autoimmune deficiency disease that is usually related to stress.

Cher’s illness has thrown the company into turmoil. Someone else has to take over the CEO position because Cher’s doctors do not think she will be able to return to work any time soon, if ever. The other three principals talked the succession issue over but could not agree which of them should be CEO. All of them are interested in the position. Since the discussion looked as it if might turn into a divisive argument, the principals suggested that their two outside board members should make the decision with Cher’s guidance. There may well be some hard feelings no matter who is chosen. However, the three principals have agreed to accept whatever decision is made and support the new CEO. They refuse, however, to consider bringing in an outsider to be CEO. Cher and the two outside board members have opted to hire a small business consulting firm (You!) to help them select Cher’s successor. Their goal is to choose a CEO who will contribute to the firm’s combined success. The profiles of the candidates, the three principals, follow.

Lew is an environmental engineer in his early 50’s. He is very knowledgeable and has a good reputation in his field. Lew bought in the firm a year later than the other principals because he was working overseas at the time. He is an exacting boss who is very detail oriented. He expects a lot of himself as well as others. Unlike the other principals who want as little structure and bureaucracy as possible, Lew likes to set up policies and track figures. Lew has often argued with Cher about overemphasizing client service at the expense of making a profit. He caused a ruckus in the office by distributing a ranked list of employees from the most to the least profitable. The was perceived as unfair by employees who did more administrative work or who worked on long-term projects that appeared less profitable than short-term projects in his rating system. Those at the bottom of the list were embarrassed and somewhat demoralized. Nevertheless, employees respect Lew and his expertise.

Maria, a woman in her mid-forties, has a Ph.D. in environmental biology. She is good at developing employees, working on teams and building a sense of community. Maria was the one who insisted on company outings, such as the annual “in-tents” camping trip. She has also been encouraging the other principals to create a mentoring program for employees. She and Cher have been good friends for 15 years. Since the firm’s inception, they have worked together so closely in getting new business that it is difficult to know whether Maria is capable of bringing in business on her own. Maria is, however, a very hard worker. She has more people skills than financial skills. In the past, she has taken less interest in the financial side of the business, and the board does not know whether that is due to a greater preoccupation with projects or an inability to master that area. Recently, Maria has been scuffling with Lew over his ranking system. She is afraid employees will start to cut corners on quality just to look good on paper and get a higher bonus.

Ken, in his early forties, became disenchanted with his previous career as a tax lawyer. After going back to school to study environmental science, he now specializes in interpreting government clean air, water and other environmental regulations for clients. Ken seems to have difficulty setting priorities and prefers to work on one project at a time. He is a great prankster and is well liked by the staff. Ken is also popular with clients and good at making contacts. Like Cher, he is not used to delegating as are Lew and Maria. Ken has been opposed to growing the firm and had an upper limit of 12 employees in mind. To him, more employees mean more headaches and red tape. One of his goals in starting the company was to have some control over his lifestyle and work environment. Ken sees unlimited growth as a threat to these goals.

The concerns of leadership, succession and organization continuity are complex and many factors are involved in successfully dealing with such concerns. A change of leadership is an opportunity to assure that all aspects of the organization are aligned for both the present and the future.