This article builds on two recent publications (Preece 2013; 2013a) concerning the application of asset-based community development and adaptive leadership theories when negotiating university service learning placements with community organisations in one South African province. The first publication introduced the concept of 'adaptive engagement'. The second analysed empirical findings from the first phase of an action research project that endeavoured to take a teamwork approach to service learning placements. This paper reports on the larger, second phase. Different student teams were each tasked with undertaking an activity that had been identified by an NGO as an area of development need. The paper discusses this approach filtering the above-mentioned theories through a Foucauldian lens for analysing power relationships, knowledge and ownership over decision-making. Findings highlight the multi-layered complexity of community engagement, communication and power relations, and the limiting nature of institutional governmentality in terms of student contributions to sustainable community outcomes and university recognition of community-based knowledge. But the findings also demonstrate the potential for contributing to community change and knowledge sharing when an adaptive leadership approach of clarifying competing goals and values is used alongside respect for community assets of experiential, or subjugated, knowledge.