Is Your Business Operating on All Cylinders?
Elise de Beer | James Donohue | David Elbaz | Jeff Jolton
Spencer Stuart
The October, 2025 edition of the Hub is highlighting a report from Spencer Stuart which focuses on the pivotal role of the “Engine Room” — the layer of leadership just below the C-suite — in driving organizational strategy, transformation, and performance. Companies with a fully activated Engine Room exhibit 2.7x higher financial performance than those without.
1. What Is the Engine Room?
The Engine Room comprises senior leaders (often top 100, S-suite, or senior VPs) who translate executive vision into operational action. They act as co-creators of strategy, culture, and change, bridging strategic intent with day-to-day execution. Additionally, they form a crucial succession pipeline for future C-suite roles.
2. Why It Matters
When properly activated, the Engine Room ensures alignment between strategy and execution, enhances agility, and strengthens culture. Conversely, neglecting it can lead to organizational paralysis — as illustrated by Boeing’s cultural breakdown and Nokia’s innovation failure.
3. Key Roles of the Engine Room
- Culture Carriers: Model and reinforce organizational values to drive engagement.
- Change Agents: Break silos and enable transformation across functions.
- Innovation Drivers: Collaborate across divisions to spur new ideas and customer solutions.
Activated Engine Room leaders report higher motivation (94% vs. 29% of inactive peers) and stronger career engagement.
4. Common Dysfunctions
Spencer Stuart identifies four patterns that weaken the Engine Room:
- Failure to Engage with Strategy – Leaders don’t internalize or communicate the vision.
- Failure to Translate Strategy into Action – Strategy support exists but lacks actionable follow-through.
- Misaligned Actions – Leaders pursue their own priorities, diverging from corporate goals.
- Inconsistent Engagement – Engagement fades over time, causing uneven execution.
5. How to Activate the Engine Room
Organizations should develop a targeted, sequential activation plan, not a “fix-everything” approach. Start with business-critical priorities — such as collaboration during transformation — before addressing broader leadership development.
To measure ROI, track:
- Satisfaction with development programs
- Behavioral adoption
- Leadership performance
- Tangible business impact
6. Assessing and Sustaining Performance
A diagnostic checklist helps leaders evaluate whether strategies are “sticking,” culture is aligned, and collaboration exists between C-suite and Engine Room.
Bridging strategic intent with operational execution depends on empowering and engaging the Engine Room. Organizations investing in this leadership layer cultivate collaboration, innovation, agility, and succession strength, ensuring readiness for future challenges.
Note: IICA duly acknowledges the authorship / ownership of the report and republishing the same only for educational purpose of Independent Directors.
