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CASE STUDY

BAD BLOOD ON THE SENIOR TEAM


HOW SHOULD A CEO ADDRESS FRICTION
BETWEEN HIS CFO AND THE SALES CHIEF?
BY BORIS GROYSBERG AND
KATHERINE CONNOLLY BADEN

The feedback in the


360-degree reviews was
supposed to be anonymous.
But it was crystal clear who’d made the negative “I guess not,” Lance acknowledged. BORIS GROYSBERG
comments in the assessment of one executive. His CFO and his sales chief had been at logger- is the Richard P.
Chapman Professor at
Lance Best, the CEO of Barker Sports Apparel, heads for a while. Ahmed’s 360 also contained a Harvard Business School.
was meeting with Nina Kelk, the company’s gen- few pointed complaints about his working style1— He is a coauthor of Talk
Inc.: How Trusted Leaders
eral counsel, who also oversaw human resources. no doubt from Damon. Use Conversation to Power
It had been a long day at the company’s Birming- Lance sighed. Five years earlier, when he’d Their Organizations. Twitter:
ham, England, headquarters, and in the early stepped into his role, he’d been focused on @bgroysberg. KATHERINE
CONNOLLY BADEN is
evening the two were going over the evaluations growing the company that his father, Eric—the a research associate at
of each of Lance’s direct reports. Lance was previous CEO—had founded. Barker licensed the Harvard Business School.
struck by what he saw in CFO Damon Ewen’s file. rights to put sports leagues’ logos on merchandise
Most of the input was neutral, which was to be and partnered with large brands to produce it for HBR’s fictionalized case
studies pres­ent problems
expected. Though brilliant and well respected, retail markets, and when Lance took the com- faced by leaders in real
Damon wasn’t the warmest of colleagues. But pany over, its revenues were about £100 million. companies and offer
solutions from experts.
one person had given him the lowest ratings Soon after, he’d landed the firm’s biggest partner,
This one is based on the
possible, and from the written remarks, Lance Howell. Negotiating the deal with the global brand HBS Case Study “Blake
could tell that it was Ahmed Lund, Barker’s head had been a challenge, but it increased business Sports Apparel and Switch
Activewear: Bringing the
of sales. One read: “I’ve never worked with a so much that Lance and his direct reports still felt Executive Team Together,”
bigger control freak in my life.” they didn’t have enough hours in the day to get by Boris Groysberg and
“These comments are pretty vicious,” everything done. They certainly didn’t have time Katherine Connolly Baden
(case no. 417048-PDF-
Lance said. for infighting like this.2 ENG), which is available
“You’re surprised?” Nina asked. “So what do we do with this info?” Lance asked. at HBR.org.

Harvard Business Review


January–February 2019  145
Nina shrugged. “This is the first time more fallout to come. He needed to fix “Have you talked to them
I’ve been through this process myself.” this. “My dad always wanted to do one of about this?”
“Right. Clearly I’ve got to do some- those team-building retreats,” 4 he said, “The holdup with Clarkson? Of
thing, though. I know that Ahmed and smiling. This had been a running joke course I have. But it doesn’t help.
Damon aren’t mates, but I do expect among Barker’s executives for years. This situation is a mess.”
them to be civil.” Whenever Eric had sensed tension, he The last comment stung. The team
Nina nodded, but Lance sensed she would mention the idea, but he never wasn’t perfect, but it was still operating
was biting her tongue. “You can be hon- followed through. at a pretty high level.
est with me, Nina. I need your counsel.” Nina laughed. “Unfortunately, I think “It would really help if you talked to
“Well,” she said tentatively, “I think we’re beyond that.” them,” Jhumpa gently pleaded.
that’s part of the problem. The expecta- Lance thought back to the last
tion is that we’re civil, but that doesn’t THIS MESS time he’d sat down with Ahmed and
translate to collaboration. We all trust The next morning, Lance was in his Damon. Each had brought a binder filled
you, but there isn’t a whole lot of trust office when he got a text from Jhumpa with printouts of the e‑mails they’d
between the team members.” 3 Bhandari, the head of product and exchanged about a missed sale. Lance
“So does everyone think Damon is merchandising: Can you talk? had marveled at how long it had proba-
awful?” he asked, pointing to the report. Knowing this couldn’t be good, Lance bly taken each of them to prepare—never
Nina shook her head. “It’s not just called her immediately. mind the wasted paper.
about him. You can see from the feed- Skipping the formalities, she “Let me look into it,” Lance said. This
back that Ahmed isn’t a saint either. He launched in: “You need to get them on had become his default response.
picks fights with Damon, and the tension the same page.” Lance didn’t have to ask “Can I tell you what I’d do if I were
between them—and their teams—has who “them” was. “Ahmed has promised in your shoes?” Jhumpa said. “Fire
been having a ripple effect on the rest of samples for the new line on the Clarkson them both.” 5
us. You see the finger-pointing. It seems account, but his order exceeds the limits Though Lance had always appreci-
like everyone is out for themselves.” accounting set, so we need Damon’s ated her straightforwardness, he was
Although Lance hated hearing this, it sign-off, and he won’t give it.” taken aback. “Just kidding,” she added
wasn’t news. He’d just tried to convince This was a recurring fight. Ahmed hastily. “What about having them work
himself that the problems were growing accused Damon of throwing up road- with a coach? I mean, we could all bene-
pains and would sort themselves out. blocks and using his power to undermine fit from having someone to help us talk
After all, sales and finance were often at the sales department. Damon retorted through how we handle conflicts and
odds in organizations, and the conflict that Ahmed was driving Barker into the from establishing some new norms.”
hadn’t had a big impact on Barker’s rev- ground by essentially giving products Lance wondered if the firing com-
enues. They’d grown 22% the previous away. Lance went back and forth on ment had really been a joke, but he let
year and 28% the year before that. whose side he took, depending on which it pass. “I did talk to that leadership
Of course, none of that growth had of them was behaving worse. But he development firm last year,” he said.
come easily, and opportunities had cer- didn’t want to intervene again. Why “They had some coaching packages that
tainly been missed. Barker had dropped couldn’t they just find a compromise? seemed appealing, but we all agreed we
the ball on inquiries from several Practically reading his mind, Jhumpa were too busy with the new accounts.”
retailers interested in its products by said, “They’ll stay in this standoff “Well, maybe we should make time
failing to coordinate getting them into forever if you let them. It’s as if they’re now,” Jhumpa replied.
the company’s system quickly. Now, in their own little fiefdoms; they act like After they hung up, Lance was
Lance realized that might be a sign of they’re not even part of the same team.” still thinking about the idea of letting

1. Many Fortune 2. According to a study 3. How critical is trust 4. Do team activities 5. Research from
500 companies do from CPP Global, 36% on teams? A Mars Inc. actually result in better RHR International
CASE STUDY 360-degree reviews, of U.S. employees study showed that collaboration? Or are found that CEOs who
CLASSROOM but researchers have say they always or individual motivation they mostly feel-good replaced members
NOTES raised concerns about frequently deal with drove collaboration exercises with little of their senior teams
the usefulness of the conflict at work. more often than trust lasting effect? actually wished they
data they generate. and relationships did. had done so sooner.

146 Harvard Business Review


January–February 2019
Ahmed and Damon go. Terrifying as the heads with a few people.” Lance had wasn’t structured to encourage collabora-
thought was, it might also be a relief. heard him say this before, but Damon tion. Bonuses were based on individual,
He’d heard of CEOs who’d cleaned house took it one step further this time. “Your functional-unit, and company perfor-
and replaced several top execs at once. discomfort with conflict doesn’t make mance at respective weightings of 25%,
He could keep Jhumpa, Nina, and a few this any easier.” 7 70%, and 5%.
others and bring in some fresh blood. It They both sat quietly for a min­ute. “Maybe it’s time to bump up that 5%
would be one surefire way to reset the Lance knew that as part of this process to at least 10% or even 20%,” Eric said.
team dynamics. he’d need to examine his own leadership. “I’d like to make those changes, but
Indeed, his 360 had been eye-opening. I need Damon’s help to do it, and he’s
DOING JUST FINE His people had described him as a pas- swamped,” Lance said. “Besides, lots of
Later that afternoon, at the end of a sionate entrepreneur and a visionary, but experts say that too many people view
regular meeting with the finance team, they’d also commented on his preference comp as a hammer and every problem as
Lance asked Damon to stay behind. for managing one-on-one instead of a nail. CEOs expect comp to fix anything,
“I heard there’s a holdup on the shepherding the team and on his ten- but usually you need other tools. I may
Clarkson samples,” he said. dency to favor big-picture thinking over have to do something more drastic.”
“The usual. Sales needs to pare back a focus on details. “You’re not considering firing any-
the order. As soon as Ahmed does that, “OK. I hear you on that,” Lance one, are you?” Eric had personally hired
I can sign off,” Damon said calmly. finally said. “That’s on me. But you also all the senior executives now on Lance’s
“It doesn’t sound like Ahmed’s need to think about what you can do to team and was almost as loyal to them as
budging.” improve this situation. There’s a differ- he was to his own family.
“He will.” ence between productive and unhealthy “To be honest, it’s been on my mind.
Lance decided to wade in. “Is every- conflict, and right now it feels like we’ve I’m not sure what I would do without
thing OK with you guys?” got too much of the latter.” 8 Ahmed or Damon. They’re an important
“Same as usual. Why? What’s going part of why we make our numbers each
on? The numbers look great this quarter. OUR VISION MIGHT CRUMBLE year. They help us win. But I look back
We’re doing just fine.” “Have you considered one of those and wonder how we did it playing the
“I agree on one level, but I have con- team-building retreats?” Lance’s father game this way. I need a team that’s going
cerns on another. It’s taking six months asked when they spoke that night. “I to work together to reach our longer-
to onboard new customers at a time know you all never took me seriously—” term goals.” 9 When Eric had retired, he
when everyone is fighting for them.” Lance chuckled. “Because you never and Lance had set a target of reaching
“Is this about those 360 reviews? booked it!” revenues of £500 million by 2022. “This
I tried to be fair in my feedback,” Damon “—but I still think it’s a good idea,” group feels as if it could disintegrate
said a bit defensively. Eric continued. “No one really knows at any moment. And our vision might
“The input is anonymous, so I don’t how to have a productive fight at work. crumble along with it.” 10
know who said what, but the tension It’s not a skill you’re born with. You have “I’m sorry,” Eric said. “Do you feel like
between you and Ahmed is obvious.” to learn it.” you inherited a pile of problems from
“Of course it is. I’m the CFO and “I’m considering it, Dad. But I’m not your old dad?”
he’s in charge of sales. If we’re both sure it would be enough at this point.” “No, I feel like I’ve somehow created
doing our jobs well, there’s going to be “What about the comp?” This was this one—or at least made it worse.”
conflict.6 And that’s what I’m doing: another thing Eric had brought up “Well, one thing is certain: You’re
my job. I’m the keeper of the bottom routinely. During his tenure as CEO he’d the boss now. So you’ll have to decide
line, and that means I’m going to butt realized that the C-suite compensation what to do.”

6. Should sales and 7. Can you be an 8. Conflict over how 9. A study at Google 10. Would this conflict
finance departments effective CEO if you’re to perform a task can found five keys to have played out differently
be at odds? Can the uncomfortable produce constructive team effectiveness: if Barker weren’t
resulting tension be dealing with conflict? debate and improve psychological safety, a family business?
productive for an decisions. But conflict dependability, structure
organization? over personal issues can and clarity, meaning,
erode trust on a team. and impact.

Harvard Business Review


January–February 2019  147
HOW SHOULD LANCE LANCE’S PROBLEM ISN’T personnel; it’s
culture. He should focus less on the
up at my office with the CHRO and
the general counsel. Now it’s very rare

HANDLE THE CONFLICT specific conflict between Ahmed and


Damon and more on the silos that
for someone to come to me without
having first bounced things off at least
BETWEEN DAMON his executives are operating in—silos
that he has enabled and perhaps
a few colleagues.
The idea isn’t to create extra work.
AND AHMED? even encouraged. Aligned incentives, By all means Lance should be careful

THE EXPERTS RESPOND outside coaching, and team-building


exercises are all helpful, but they won’t
with his team’s time. But I’m not
advocating for extensive consultations
work unless Lance is clear about the or long meetings to hash out every
kind of collaboration he wants to see. detail. I’m just arguing for more open
Teamwork happens when people conversation—between Ahmed and
understand that their goals are intri- Damon and everyone else—so that
cately linked with their colleagues’. the group can avoid conflict and make
The CFO alone can’t ensure an orga- higher-quality decisions together.
nization’s success; he or she needs to Lance can start by holding biweekly
agree with the sales chief about the staff meetings where the group mem-
best type of growth, with the head of bers talk candidly about organizational
goals and how to collectively accom-
LANCE NEEDS TO FOCUS ON plish them. He might even ask them all
THE SILOS HIS EXECUTIVES to work on a proj­ect—perhaps revamp-
ARE OPERATING IN. ing the compensation system—so that
they have a concrete business reason
HR about talent needs, and with the to collaborate.
general counsel about contract terms. Soon after I took over ABM, we
It may sound clichéd, but the C-suite reorganized the business from service
is an ecosystem, not a fiefdom. lines to customer verticals and moved
Four years ago, when I took over as to a shared-service-center model. To
CEO of ABM, one of the largest facility- help us through the process, I formed a
services providers in the United steering committee of the firm’s senior
States, the company was pretty siloed. leaders. I told them I expected them
So I created a rule that no decision to debate and argue, but that when we
could be made without at least three made a decision, there would be no eye
people in the room. When the CFO rolling or second-guessing. Most were
came to me with a recommendation, able to abide by that. A few who contin-
I’d say, “Let’s bring in the CHRO and ued to stir up conflict and undermine
see what he thinks.” My belief was— our efforts were eventually let go.
and still is—that greater input from Lance may need to do the same
more people yields better decisions. with Ahmed and Damon if they can’t
I’ll admit that it was awkward at the work through their tensions. But first
start; people thought I didn’t trust he must explicitly encourage more
them to do their jobs. But within six C-suite teamwork. “Fresh blood”
months they had embraced the won’t solve the problem if the culture
change. The CFO would show is still dysfunctional.

Scott Salmirs is the


president and CEO
of ABM Industries.

148 Harvard Business Review


January–February 2019 Illustrations by JOEL KIMMEL
Dale Winston is the
chairwoman and CEO
of Battalia Winston, an
executive search firm.


I AGREE WITH Jhumpa: What a mess! or Damon now. When two senior
COMMENTS FROM THE
Has Lance really turned a blind eye managers don’t play well together in HBR.ORG COMMUNITY
to this problem since he took over the sandbox, employees inevitably
as chief executive, five years ago? start to take sides. If Lance sacks one Play Mediator
He’s lucky that Barker has main- or both of them simply because they Lance needs to bring Ahmed
tained its growth, because this bicker with each other, he looks weak and Damon together to talk
kind of turf war can be crippling to an and incapable of managing healthy about mutual respect and
organization. And I suspect that if he debate on his team. get them to open up about
doesn’t address the tension between There are conflicts in every the frustrations they each
Ahmed and Damon soon, his luck will organization. Damon is right that have and why. With that
run out. sales departments often prioritize information, they should be
At this point, outside help seems revenues over profitability and that able to come up with a new
warranted. Lance should hire an it’s the job of a CFO to push back. way to communicate.
organizational consultant and coach Most of the conflicts I’ve seen among Sara Koenig, vice president,
to objectively analyze and diagnose our senior staff throughout the years Advantage Home Health
the situation and make neutral have been over territory, clients, and Services
recommendations on how to fix it. claiming credit for other people’s
It may be that Damon needs Make It About Customers
coaching on how he communicates IF LANCE SACKS ONE OR I’d bring in some customers
or that he and Ahmed need to talk BOTH OF THEM, HE LOOKS affected by the inefficiencies
through their conflicting approaches. WEAK AND INCAPABLE. this rivalry has created and,
In the 27 years that I’ve run Battalia in a focus group, have them
Winston, one of the largest woman- work. But we’ve always been able to relay their concerns. The
owned executive search firms in address those issues—and ensure that hope is that Damon and
the United States, I’ve hired many they don’t devolve into destructive Ahmed will understand the
coaches to help executives under- personal battles—by emphasizing our threats to the business as a
stand how their work styles may be team ethos and showing our consul- whole and assess how their
affecting those around them. tants how everyone’s work contrib- actions could erode customer
I’ve also had success with the utes to our collective success. confidence.
team-building exercises that Eric sug- Lance has made the mistake of Lanre Adigun, senior
gests. Retreats are a great opportunity letting this fester. As a newly minted management consultant, Verizon
to step away from day-to-day issues CEO, he should have headed this
and gripes and discuss work styles problem off at the pass. But it’s not Focus Them on the
and how people want to collaborate too late. With a renewed commitment Big Picture
and generally put everyone on the to top-level collaboration and help Lance should meet with both
same page. With the right facilitator, from an expert, I believe, he can ease men face-to-face and ask
which is always critical, Lance can get the tensions between Damon and them if there’s a higher goal
his team rowing in the right direc- Ahmed and, I hope as a result, meet they can both get behind. If
tion, and the exercise will benefit all Barker’s revenue goal.  either one refuses to get on
members even if some people need it HBR Reprint R1901M board, Lance should fire him.
more than others do. Reprint Case only R1901X Jessica Liu, technical proj­ect
I certainly would not recom- Reprint Commentary only R1901Z manager, IGT
mend that Lance fire either Ahmed

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January–February 2019  149
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