Great Leadership Teams are Fundamentally Sound
This article was published in Chief Executive Magazine on March 13, 2019.
When mastering a craft, the best performers practice, execute and continue to refine the core skills and techniques that form the foundation of their greatness. For a basketball team, understanding and committing to a method of play and plans for each game greatly enhances the team’s likelihood of success. For a symphony orchestra, the diligence of the warm up is a predictor of a great performance. For an Army Ranger unit, holding each other accountable to a set of simple operating principles can be the difference between life and death.
What these entities understand is the importance of focusing on a few critical fundamentals. Leadership teams are no different. For a leadership team to be great it has to align on a common purpose that informs critical priorities. Great leadership teams create simple but disciplined mechanisms for rehearsing, evaluating and learning. Finally, great leadership teams understand the unique principles that guide how their teams behave and operate collectively and individually.
Impacts of Poor Fundamentals
Much like a basketball team, symphony orchestra and Army Ranger unit, it is not too difficult to spot when leadership teams don’t pay sufficient attention to the fundamentals. Below are a few indications…
Doing the wrong work– Holiday parties, brochure colors, seating arrangements, performance review templates. These are all real examples of distractions that have inhibited leadership teams from having a laser focus on competing and growing. As an example, the executive team of a $100 million professional services firm spent hours at multiple meetings critiquing performance review templates in the face of massive customer concentration risk.
Duplicating effort– Symptoms include departmental infighting, customer frustration, and productivity challenges. A large government contractor received complaints from several customers about having their time wasted with multiple sales calls from the contractor’s different lines of business at different times. A customer executive commented, “are you one company or three different companies?”
Repeating mistakes– Indicators might include customer frustration, chips in the accountability armor, and operational delays. A $30 million construction contractor experienced multiple delays in transitioning to a larger and more modern warehouse designed to improve productivity and strengthen service. In frustration the CEO shouted, ‘this is the same issue we had when we installed the new financial system and it is burning money and destroying customer goodwill.”
Relational strife emanates– Symptoms include turf battles among executives resulting in friction at the departmental level, executives focused on departmental performance at the expense of company performance, and incentives that create unhealthy departmental competition. The commercial arm of a $5 billion pharmaceutical company expected collaboration among their customer acquisition and customer maintenance teams, but sales incentives promoted siloed efforts.
Given the pace and complexity of running a growing business it is not surprising that important fundamentals are often overlooked. Most CEOs assume that their leadership teams consist of executives that are experienced, talented, smart, and seemingly knowledgeable about what it means to be a member of a leadership team. Unfortunately, this assumption is often off the mark. Team members are capable of addressing their functional responsibilities, but many have very little experience working as a member of a truly interdependent leadership team.
This is exacerbated by the fact that many leadership teams are structured as vehicles for reporting out on functional progress and plans. As a result, team members narrowly focus on their functional responsibilities and either look to the CEO to address overlaps or build up walls to protect their functions. Many teams talk about the need for collaboration, but the skills and techniques (from meeting management to incentives to mutual expectations) required for operating as an integrated team are not properly addressed. The balance of this article will focus on three important fundamentals for building and operating truly great leadership teams.
Fundamental #1 – Clarify of Purpose
When we ask members of leadership teams to articulate their team’s purpose, we often get blank stares. Other times we receive responses such as ‘our purpose is to carry out the company mission’ or ‘our purpose is to execute the firm’s strategy to grow profitably.’ While mission and strategy should certainly strongly inform a leadership team’s purpose, they do not provide adequate guidance for how the team should behave and operate as a unit.
For example, without clarity a team that assumes its purpose is to execute the firm’s strategy to reduce customer concentration risk will likely deploy multiple and potentially competing approaches. Team members will often naturally focus on the parts of the strategy that relate to their areas of responsibility.
The chief marketing officer might concentrate on a marketing strategy to diversify the customer base and fail to think through the potential implications on each line of business or the new types or resources that might be required. A line of business leader might focus on leveraging the services within his line of business to a targeted set of customers without regard to how the other line of business leaders are approaching these customers. Gaining clarity of leadership team purpose drives consistency of approach and establishes a foundation for how the team will operate and behave as a unit.
“While mission and strategy should certainly strongly inform a leadership team’s purpose, they do not provide adequate guidance for how the team should behave and operate as a unit.”
As articulated in the book Senior Leadership Teams, a leadership team’s purpose should meet four important requirements.[i]First it must be consequential and have impact on the lives and work of others and on the viability of the organization it serves. Second, the purpose must be challenging and require members to exchange strategic information, coordinate organization wide initiatives, and make vital decisions on behalf of the organization. Third, a leadership team’s purpose must be clear and help the team maintain focus on its critical priorities. Finally, as the organization’s environment evolves (new competitors, economic challenges, changing customer requirements) the purpose of the leadership team must evolve.
To shape a leadership team’s purpose, it is important to start with the organization’s strategy and identify the most critical areas that must be tackled for the strategy to be successful. In the case of a professional services client the critical need was to focus on reducing customer concentration risk. Next, the team needs to identify the interdependencies among leadership team members that will drive the strategy. Our client realized that it was critical for their three lines of business to understand each other’s services and the potential ways they might support each other to benefit clients. Finally, once the interdependencies are well understood the leadership team needs to narrow them down to the critical few that it is uniquely positioned to address and drive. Our client identified the following priorities: integrated sales approach; new products that leverage their current offerings; and a robust support infrastructure.
“Poor structure … is much more likely to hold a leadership team back and make it an impediment to the organization it serves.”
Fundamental #2 – Logical Structure
Defining and gaining commitment to a leadership team’s purpose is a necessary fundamental but it is not sufficient. For a team to be able to move toward its purpose it must have a common understanding of what work team members need to do together and how they are going to interact effectively. This may seem like a trivial expectation but in our experience team members are often great at executing their functional responsibilities but not as effective at working together as an integrated unit to address the critical priorities facing the organization.
A logical team structure consists of two important elements – (1) clarity of enterprise roles and (2) use of simple vehicles for maintaining effective coordination and communication. When these structural elements are understood and committed to by each team member leadership teams are more innovative, the quality of decision making is strengthened, and the organization tends to be more collaborative and in sync. Poor structure, on the other hand, is much more likely to hold a leadership team back and contribute to making it an impediment to the organization it serves.
Role Clarity:Most leadership teams understand the functional roles played by each team member (CFO, CMO, Line of Business VP), but members of truly great teams have clarity on how these roles integrate and evolve to serve the team’s purpose. Great teams also recognize that each member brings a wealth of experience beyond their functional capacity and welcome input and challenge beyond titles and functions.
Unfortunately, role clarity doesn’t happen overnight and requires dialogue, debate and challenge on how the team is going to work together to achieve its purpose. It is through these types of discussions that teams understand areas that require integration, those where coordination would help and those where a simple exchange of information will suffice. These discussions also help team members move from seeing themselves as representatives of their areas of responsibility to recognizing that as senior leaders they are responsible for maximizing the effectiveness of their organizations.
Coordination & Communication:Once a leadership team defines its critical priorities and all members understand the work they need to do together; the team has to gain agreement on a few practical mechanisms to stay informed and in sync. Some typical coordination and communication mechanisms include team meetings, written plans and status updates, and one-on-one or small group work sessions. Time spent on any of these mechanisms should be focused on strategic and mission critical issues that the leadership team is uniquely qualified to handle.
Great leadership teams use their meetings as vehicles to look forward and as venues to challenge, debate and decide issues that make progress towards the team’s purpose. Any time spent on the past is focused on learning so that risks can be mitigated, and future actions strengthened. Once a great leadership team gets in a rhythm, team members expect meetings to be time bound, focused on what’s most important, have clear agendas with expected outcomes, and to be full of lively debate, challenge and resolution. Team members come prepared, actively participate, and hold themselves and their teammates accountable.
While there is no doubt that meetings are a pivotal leadership team tool, the very best leadership teams handle most of their work outside these formal settings. Again, when team members understand their purpose and know what work they have to do together they diligently spend their time in dyads and triads both face- to-face and electronically to address mission critical tasks.
“While there is no doubt that meetings are a pivotal tool, the very best leadership teams handle most of their work outside these formal settings.”
Fundamental #3 – Operating Principles
Leadership team operating principles should be designed to foster and reinforce the team’s purpose and structure. Teams that proactively discuss, debate and gain agreement on a limited and targeted set of operating principles are more likely to experience the behavior they collectively desire. Without attention, however, a leadership team’s operating principles will emerge by default. Some principles will likely be constructive such as ‘team members actively participate in our meetings’ while others may less constructive such as ‘in our environment it’s ok to be late or miss meetings.’ Context, self-awareness and accountability are the keys to establishing and living meaningful leadership team operating principles.
Context:Clearly there are certain principles will work for almost every leadership team (i.e., integrity, punctuality, etc.), but it is important for the team to be acutely aware of the context in which it is operating. Some context questions might include: What are the unique business challenges facing the team at the current time; How long has the team been together; What are the different personality types that comprise the team; What have been their experiences working on other teams? Reflecting on context will help the team to shape principles that are relevant to their current environment.
Self-Awareness:Most leadership team operating principles emerge in response to a current or past behavior that one or more team members has perceived to be disruptive. Examples might include: “It drives me crazy when she goes off on tangents that aren’t relevant to the agenda.”; “I recognize that he is the CMO, but I’d like to hear what he has to say about these important operational issues.”; “It is simply disrespectful to not respond to email messages that are directly relevant to the most important issue our team is facing.”
There is no doubt that every team member has examples of similar frustrations. However, it is also quite likely that these same team members display behaviors that annoy their colleagues. The key is for leadership teams to first discuss expectations of the behaviors they expect of each other and then openly discuss their frustrations. Most importantly, it is critical for team members to be self-aware. As Tasha Eurich points out her book Insights, self-awareness has two parts – first individuals need to dig deep and evaluate what they might be doing to frustrate their teammates and then they need to be open to receiving feedback from their teammates.[ii]Self-awareness is the grease that will enable a meaningful set of operating principles to be established.
“… operating principles are only useful if all team members commit and feel accountable to following every principle all of the time.”
Accountability:The process a leadership team goes through to agree to a set of operating principles can be a powerful vehicle for building trust and reinforcing the benefit of productive dialogue. However, operating principles are only useful if all team members commit and feel accountable to following every principle all of the time. Of course, we are all human so there certainly will be times when individuals violate the principles. What transpires when this happens is the real test! Great leadership teams don’t rely solely on the formal leader to enforce operating principles. Rather, they constructively confront each other when principles aren’t followed.
Good News – Bad News
The good news is that when a leadership team works to put these fundamentals into practice it has increased the likelihood that the team to thrive. However, these structural fundamentals are only as good as the relational dynamics the team has established. In fact, without sound relational dynamics it will be extremely difficult to sustain these fundamentals. Great leadership teams are comprised of team members who trust each other (they might not like each other but they trust intent); who are able to confront and challenge each other with minimal defensiveness; and are able to hold each other accountable without relying solely on the formal leader.
I hope that we have demonstrated in this article that building a truly great leadership team – one that is resilient, laser focused on results, and has the ability to learn and grow to address increasingly complex challenges – is really hard work. It requires commitment to structural and relational fundamentals. Good luck on your journey to build a great leadership team!
[i]Ruth Wageman, Debra A. Nunes, James A. Burruss, J. Richarch Hackman, “Senior Leadership Teams: What it takes to make them great”, (Boston: Harvard Business Review Press, 2008), 73.
[ii]Tasha Eurich, “Insight: Why We’re Not as Self-Aware as We Think and How Seeing Ourselves Clearly Helps Us Succeed at Work and in Life”, (Crown Business, 2017).