Case Study - Leaseco Corp

New competitive position for an established company.
This case study illustrates a holistic approach to strategy, leadership development and cultural transformation in the face of aggressive current-business financial targets.


The largest company in its industry, Leaseco had been established by an International cast of players from Europe and Asia, with headquarters in the United States. Growth was phenomenal, and, in a few years, it was a dominant player in the industry. Such results attracted the attention of a Fortune 50 U.S. company (Parentco), and Leaseco was acquired.

Parentco had very aggressive growth targets for all of its businesses, and for the first several years after the acquisition, Leaseco successfully achieved those targets. By the mid-nineties, however, things had changed. Leaseco had not met its financial targets for the previous two years. It had demonstrated to Parentco that this business was cyclical in nature, and that it had been in the down-cycle. They were confident that the cycle was beginning to turn up again. However, there were other issues as well, that drastically inhibited the potential for future growth and profitability.

Leaseco was established when its business concept was new and there were very few competitors. As the concept was proven, however, competition increased rapidly because startup costs were low. In some ways, new entrants had an advantage in that their assets were also new, and customers preferred to lease the new products. Leaseco found itself with very large numbers of older (though still usable), less desirable assets on its hands. The resale market for these older assets was almost negligible, and Leasco could not dispose of them without taking a major loss on its books. That action was unacceptable to Parentco. Leaseco’s strength – its size and reach – had become its Achilles heel.

The President of Leaseco recognized that the company could not continue to operate as it had since its inception if it was to have a chance of being a growth business. Instead, it must change the very nature of competition. On top of that, it must do so while leveraging existing business to increase net income by 2.5 times the previous year’s results.

Scope of Project

The project to be undertaken was nothing less than the reinvention of Leaseco while mobilizing its employees to meet the challenging targets for the current year. Some likened this to “changing a tire while going 90 miles an hour down the road”.

By “reinvention” Leaseco meant renewal of the company through:

  • Devising and implementing strategies that would enable Leaseco to break through its limitations and create a new competitive landscape for itself
  • Developing cultural disciplines consistent with the new strategies
  • Developing leadership skills required to carry the company through this undertaking


After working with the President to better understand his vision, align with him on the approach of the first phase of work, and support communication to the rest of his executive team, the consultants conducted a series of interviews. These gave the consultants a cross-functional, cross-regional and multi-level view of the point of departure for the effort. It also enabled them to identify cultural and leadership issues that must be dealt with.

While the interviews and the summary of findings were being completed, preparation was underway for the first executive workshop. This first workshop developed a shared understanding among all of the executives regarding the current state of the business, including a view of how

Leaseco stacked up against its competition. The executives also confronted the “cultural gaps” between those from the original Leaseco (with a very entrepreneurial culture) and those from Parentco (with a very disciplined culture). They left the meeting with a greatly enhanced sense of team and a commitment to lead Leaseco to a new future.

During a second executive workshop, the leadership team co-created:

  • New vision for Leaseco
  • Three strategic initiatives to be validated with business cases
  • A way to describe the culture required to support the new vision and strategy
  • A fourth initiative designed to create innovative ways to ensure the current year’s results

They also left with a high-level roadmap for engaging the rest of the company, validating and piloting new strategies, and leading their reinvention.

Phase Two began with two major activities: a world-wide teleconference to share the new vision and inform people of next steps, and an in-person meeting of approximately 50 Directors from around the world. During the directors’ workshop, there was an opportunity for participants to grapple with the challenge of this year’s targets and to reach authentic alignment with the goals. They embraced both the current year’s targets and the long-term vision, and dealt honestly with cross-functional, cross-regional and Parentco/Leaseco issues, emerging as an extended leadership team. Finally, they began to develop action plans for dealing with their challenges.

Three Initiative Teams were composed of people from all regions, housed in the United States for two months, to develop validated business plans for their strategic thrust. At the end of the two months, two of the three initiatives were validated and went into the pilot stage.

Meanwhile, regional meetings were held to recreate the results of the directors’ workshop and mobilize all employees, as well as to introduce new cultural disciplines to support the new vision. These meetings raised people’s sense of responsibility and commitment to help build a new future, and energized the organization as one global team focused on a common outcome.

Phase Three dealt with piloting new strategies, practicing new disciplines, dealing with breakdowns and managing the results of the current business. All of this included new levels of global communication and cross-regional collaboration to overcome barriers and keep energy high.


Two fledgling businesses were piloted:

  • One developed new markets for older assets
  • The second was a new service for existing customers – one that would place Leaseco in a new relationship to the industry, lessening its dependence on the commodity side of the business

Leadership capability was significantly developed:

  • Leadership skills became much more visible, enabling executives to identify the “up and comers” as well as the weaker links
  • Leadership became a shared phenomenon, rather than being viewed as simply the job of the president

Cultural disciplines were embedded in the fabric of the company:

  • Challenging assumptions in order to create new possibilities for action
  • Making bold commitments and creating ways to fulfill them
  • Managing seemingly insurmountable problems
  • Nurturing entrepreneurial ideas
  • Embracing necessary discipline
  • Active mutual support and coaching

Net income for the year was double that of the previous year. Even though two large customers declared bankruptcy during the course of the year, canceling their leases and costing Leaseco approximately as much in net income as it made the entire year prior, Leaseco only missed its aggressive financial targets by 9%.