Harris & Associates Inc. has had just two chief executives in its 36 years, and the departure, in 2010, of a designated heir apparent didn't help the California professional service firm in changing out its aging leaders. So, knowing it faced a tough market and tougher decisions ahead, the firm agreed to a new direction. "We couldn't just give lip service for succession planning," says outgoing President and CEO Guy Erickson. "Because of the economy, it was time to change the way we were doing business. It was time for a new wind to blow."

The change hit the firm with hurricane force. After an extensive search, Harris took the advice of its board consultants to bring in an outsider who was neither a professional engineer nor allowed to use the men's room. Lisa V. Larrabee—degreed in geology and a seasoned but not well-known industry manager—was initially referred to as "the chick," admits one company manager. Now, when referring to Larrabee and the corporate and cultural changes she has implemented, staffers use the phrase "breath of fresh air."

"We have a very veteran staff with long-standing careers here. I've been here 22 years," says Marie Shockley, the Concord-based firm's director of human resources and marketing. "There was no anger or angst at the decision, but there was surprise. But when staff saw her credentials and had the opportunity to meet her, they just knew that there was no issue and also saw what Lisa brought to the table."

With firm revenue and profit both on the rebound, Erickson and founder and Chairman L. Carl Harris, both still board members, agree the firm made the right choice. Larrabee came in with 21 years of experience at Sacramento, Calif.-based Jones & Stokes, a planning and resource management firm that was acquired for $50 million by ICF International, Fairfax, Va., in 2008. Previously chief operating officer at Jones & Stokes, she was named ICF's senior vice president of environment and planning division leader.

"I was reasonably happy with the way the merger went and was trying to figure out how things would work out," says Larrabee. However, one source close to the firm says the difficulty of reporting to an East Coast-based management team made her amenable to a recruiter's call. Larrabee says she was vetted for nearly five months. She even met with a consulting psychologist and participated in the online Hogan Personality Inventory program, which analyzes strengths and weaknesses, financial acumen, stressors and emotional intelligence, among other characteristics.

Despite her not being a professional engineer, Larrabee offered the firm critically needed expertise, observers say. "Things were broken, and some hard decisions had to be made," says Christopher Dunne, the firm's vice president for program management.

Larrabee began to forge a new corporate philosophy and identity based on employee development and market diversification. Harris & Associates has about 230 employees in Concord, two other California offices in Irvine and San Diego as well as offices in Las Vegas and Bellevue, Wash. It has four primary public and institutional markets now—municipal, public works, water-wastewater and transportation—and has made inroads in health care, education and energy. The firm offers program management, construction management, architecture and engineering consulting.

Larrabee's transformative measures included providing to all Harris managers copies of "Silos, Politics and Turf Wars," a 2006 corporate manual on dealing with the silo problem. "Harris had traditionally operated as separate units under one umbrella," says Senior Vice President Neil McCosker, northern region manager and a 12-year veteran of the firm. "When Lisa came on board, she helped us recognize we were stronger together, a one-firm approach, with formidable resources at our disposal." Adds Vice President Brett Bartlett, "Our silo culture was gone within nine months. She did a lot of listening."

But the new CEO also embarked on a financial cleanup operation that replaced, earlier this year, a long-term chief financial officer with Gary Wohl, who was formerly in that role at DPR Construction. Last year, Harris cut staff by about 12% and saw its backlog drop 2%. But the firm also reported construction management revenue increased 7.5% last year over 2010 and profitability was up 4%. "The balance sheet had gotten stressed over the years, to put it mildly," she says. "I think the psyche of the staff was in a post-traumatic recession syndrome mode." One staffer says employees had gone without raises or bonuses for a "couple years, and some folks had to take cuts."

McCosker says Larrabee brought a leadership philosophy that effectively blended vision and goal setting with practical execution and accountability. "She caused us to focus on very specific, concrete achievements, like meeting utilization targets, and then let each region determine how to carry this out," he says. "This led to a sense of common purpose with enough autonomy to instill real ownership of the outcome."