Transcript of How to Measure the Effectiveness of Your Leadership Team

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Hello. Welcome to today's or this month's version of Great Leadership Teams Build, Great Leaders Build Great Leadership Teams webinar series. Today's topic is an important one, not an easy one, but an important one on how to measure the effectiveness of your leadership team.

Before we get started is just to introduce myself. My name is Jack McGuinness. I'm the managing partner of Relationship Impact, a consulting firm that works with the executive teams of growing companies to help their leadership teams get and stay in sync. So just a couple words on the logistics. Those of you have joined our webinars in the past, our are slides are full of content so you'll see a lot of words on the pages. These will be distributed to after the webinar and we like to just provide you as much content as we possibly can. We won't be reading off the slide.

So in addition to that and logistical note, if you have any questions during the course of the webinar, please just use the chat feature and I'd be glad to answer any questions as we go along. So here we go.

So how to measure the effectiveness of your leadership team. First of all, I just want to start by saying that business results are most important, business results are key. Organizations are in the business to ... commercial organizations into business of making money. Nonprofit ones are in the business of reaching their advocacy or fundraising goals, et cetera, et cetera. And we are no doubt proponents of that the leadership team is instrumental in making, in helping organizations achieve those business results. But I hope what you'll see during the course of today's discussion is that there are other ways in addition to business results predicting how well your executive or leadership team will do to contribute to those results. So here we go.

Okay. I'm sorry guys. I think I have to start again. I messed up the ... so welcome to this week's, this month's version of Great Leaders Build Great Leadership Teams webinars series. The topic today is how to measure the effectiveness of your leadership team. For those of you who haven't joined before on our slides are chock full of content, which we hope you will enjoy, post the webinar, which we'll pass these out to you and provide you a link to a webpage that includes this transcript, the audio and video of the webinar, et Cetera.

So again, my name is Jack McGuinness. I'm the managing partner of Relationship Impact, a consulting firm focused on helping growing organizations build great leadership teams that are in sync both relationally and structionally, which we'll talk about it a little bit further.

And another note before we even get started, I just want to make sure it's crystal clear that our point of view is that the executive leadership team or leadership team is instrumental in impacting the business results of any organization. So for commercial organization, that's the profit. For a nonprofit that's either fundraising or an advocacy type of goal. And so no question. So what we're going to be talking about today is that plus, how do you build a great leadership team that can increase your likelihood of the leadership team having that that type of dramatic business impact.

So first the challenge. There's the big challenge in terms of building great teams CEOs have to find a strong balance between getting results and maintaining a healthy culture. The balance is really important because without one, without an over focus on results or an over focus on culture can be counterproductive.

So for example, too much focus on results. This is directly from a five year study from Google that that they did on their, what made Google teams most effective. And what they found out is the teams that had too much focused on results don't last very long because there's that burnout feeling or that what becomes an overemphasis on metrics and measuring and a lack of focus on how do we work together as effectively as we can. On the other side is when there's too much focus on culture at the expense of results, that's not a sustainable construct. So really important for CEOs as they're building or rebuilding their leadership teams is to make sure that there's a healthy balance put on focus on results and focus on building a healthy culture.

So what are some of the characteristics from our perspective that make a great leadership team to begin with? Well, number one, as we pointed out, they oversee and contribute to the achievement of tangible business results. Number one. No question about it. Number two is they have what we call a force multiplier effect or an impact above and beyond the contributions of any one team member. And you just, if you think about a great team that you've participated on or you've been on, either a sports team or business team or a church team or whatever it might be, and you get the feeling that everyone's pulling their weight and contributing and helping each other when they fall down, that that force multiplier effect of having an over and above impact, you can feel it.

Next two are really important. We see in the work that we do working with executive teams, when they grow in their capacity to address increasingly complex challenges over time, you can see a team really humming, right? And so what does that look like? We have the next crisis that comes to us, we've learned so much from the previous ones. It doesn't mean it's not stressful. It doesn't mean it's not difficult. It doesn't mean we're not going to get frustrated with each other, but it does mean that we have the capacity to address these challenges more productively. And we see that ability, that fiber among the team members to deal with complexity growing over time.

The last thing that's really important is a sense of resilience. An ability to get back up when things aren't going well and just being able to go back at it with minimal scars and challenges to people's egos and that kind of scene. They just get back on the horse and get back up and ride again. Again, doesn't mean that it's easy, doesn't mean that it's people don't get, aren't sensitive, but it does mean that they don't waste a lot of time getting right back and addressing the teams most important issues in a productive way. So that's what a great leadership team from our perspective looks like. And again, there's as you'll see in these four bullet points right here, there's a balance between a focus on results and a focus on the healthy team dynamics so that they're able to produce those results.

So here's a context that we used when working with a leadership teams. There's three layers to this model. The first is no question that a leadership team is the steward of the organization strategic direction. They're responsible for shaping that direction. They're responsible for setting goals and priorities within that direction and driving execution towards that direction. That's most leadership teams have that as part of their mandate. You have a bunch of functional or business leaders that are reporting up to a CEO and their job is to make sure that the organization strategies carried out effectively.

When we see kind of a difficult, sometimes difficult concept to get across, but if really important, important construct for the most effective leadership teams that we've worked with are there is a sense of specific purpose for that leadership team to be working together to integrate on a specific issue or two at a particularly point in time in the the team's or organization's journey.

And what that might look like is if an organization has a high customer concentration there might be a strategy to differentiate, to reduce the customer concentration risk and come up. The team is focused on working together to build a common go to market strategy. So all lines, business leaders, marketing, finance, project management office, whatever it might be, all working together to make sure that that customer concentration risk is addressed. So, and those are typically 12 to 18 month focus points.

So the best teams we've seen are those that leverage each other's capabilities to address specific business challenges at a particular point in a team's journey. And in order to and you see this as a foundational point. In order to be this good stewards and focus on a specific purpose is really important for teams to continue to refine the structional and relational dynamics that are critical for making a team healthy and able to focus on business results. And so we'll talk a little bit more about the structional and relational dynamics as we get into the specific vehicles for how to measure the effectiveness of a team. So this is the important context that we used for to set up our measurement, leadership team measurement framework.

Oh, here's a couple of perspectives, just like anything else. Measuring performance of anything meaningful, it's important to make sure we have a short and a long term ... we're keeping sight of the short and the longterm perspectives. Short term typically focuses on areas that help predict the likelihood that the team results will be achieved or just make sure that the team is set up in a way that the structure and the relational dynamics are managed in a way that's going to be able to predict the likelihood that we're going to be able to achieve the longer term, the specific purpose I talked to, or just the organization strategy. So the short term view and what we're mostly gonna talk about today is how to set up a construct to predict how well your leadership team will be able to organize itself so that it can achieve its longterm results.

Well, here's the predictive measurement model that we're talking about. We often refer to this as two sides of the same coin, right? And so the one side of the coin are what we call structural factors or those areas that help team focus on achieving a specific result. And these things include ... these are just a few items. Do we have the right people on the team? Does the team operate by a set of agreed principles or norms? Do incentives support the teamwork? Does the team manage meetings well? Do they focus on the longterm strategic or the short term reactive issues at the expense of making sure they're maintaining focus on the longterm? Another structural factor might be do we have, based on our purpose, we have a strong purpose. Do we have a sense for how our roles at the leadership team level are supposed to integrate?

Now there are functional roles that we join a team with, where a line of business leader, with a CFO or whatever that might be and we certainly have our day to day functional roles, but it's also important that we understand how we integrate and what our enterprise roles or cross organizational roles are as a member of the leadership team.

The other set of factors, the other side of the coin that we referred to are what we call relational factors or factors that help teams develop productive and healthy work environments. These are basic blocking and tackling. All these things I'm about to mention to you are very easy to say and harder to do, harder to put in practice. Do team members trust each other? Not so much do they like each other, but do they actually trust each other's intent? Do they feel like they can confront each other, challenge each other without getting judged or having overly defensive responses. Does the team encourage diverging points of view? Is the team able to, again, what was this?

I think now just take a pause here for a second and point out that one of the most important things that we see getting in the way of affect the teams being a leadership team being effective as they possibly can is what we call lack of ability to have productive dialogue, which we simply define as the ability for teams to debate, challenge, discuss the most important issues, confronting the team in a productive manner with a minimal relational damage. People get defensive, people's feelings might get hurt. However they're able to debate well so that we can be that the good stewards of the organization and focus on what the purpose is of the leadership team at any given point in time.

And ultimately, if you're able to have this productive dialogue, if there was a sense of trust and there is an ability to challenge and debate and discuss issues, well then a team is much more likely to be able to hold itself accountable. And we talk about accountability. There's three types of accountability, right? There's individual accountability, there's a third party accountability. And then there's what we view as critical for great teams is mutual accountability and ability for teams to actually hold themselves accountable without the formal leader, the CEO, the president, having to be the arbiter of debate or holding someone accountable for business, the results the team is supposed to achieve.

Really, really when we see a team where the members are actually challenged each other and saying, hey, we missed our deadline or we're about to miss our deadline, even more productively. It seems like you're falling down with your part of the plan here. What can we do to help you? And what's getting in the way, as opposed to waiting for it to happen or waiting for the boss, quote the boss to hold an individual accountable.

And when these things work well together, we believe, again, nothing's perfect, right? But when these two sets of factors of working well together, there's a strong balance among a team's ability to get results and produce a healthy work environment.

So just back to the Google study, for example, for a second. Google, I just repeat what I said before, did a five year study of teams and they were trying to figure out how to does, what does a perfect team look like here at Google? And what they learned was that what really mattered was less about who's on the team, but more about how the team worked together. And that's been our experience as well. It's even and they quote a person, executive or leader that's on a team that's not necessarily the best team player can learn how to become a more productive team member through these factors that Google identified.

One is called psychological safety. The ability to be able to put your viewpoint on the table without being judged. You got to be able to make mistakes without feeling overly threatened. And again, I'm not talking about performance problems that were just swept under the rug, but I'm just talking about the ability to put my ideas, and to hear diverging viewpoints in a way that I feel it's going to be okay to say what I say and it's going to be okay if I make a mistake.

Second thing they came up with is that mattered most from Google's perspective was dependability. There was the sense of reliability. If I say something I was going to do it right.

Next is structuring clarity, right? That gets back to my construct that we had in the previous page around structural structural dynamics, just making sure that there's good team structure in terms of who's on a team,, with the roles are, how they integrate, how do we meet that type of thing. And then there's a sense of meaning that there's a purpose for why we're here working together. It's a really critical one. And study after study has proven us and our own experience has demonstrated this as well. And then impact. Impact, are we having the business impact we had intended to have.

Okay. So that's my backdrop and what you're about to see is, how do we measure a leadership team's effectiveness based on the predictive model that I showed you in the previous slide? How can we set up our team in a way that we're going to have the right structure in place and the right relational dynamics in place so that we can get the business results. We can be that steward that we weren't, we're called to be for the organization. We can achieve that leadership team purpose that we've agreed on together. That's going to have a meaningful impact on the organization, business impact on the organization.

And so we use a tool called the team diagnostic from an organization called Team Coaching International. And it mirrors our predictive construct of structural and relational dynamics. And a couple of points on the diagnostic before we get into the actual tool itself. This provides a baseline for improvement, right? And so, and most of our engagements, we start with a team diagnostic where the leadership team assesses itself. The board often assesses the leadership team and the direct reports are the folks on the leadership team assess them based using the same instruments. So we have a sort of a 360 view of how this leadership team is performing as a system.

Again, it focused on both structural and relational aspects of team performance. It also enables performance to be assessed from the perspective of those various stakeholders that I talked about, and perhaps most importantly the tool. The tool looks at a team as a system rather than a group of individuals. And I think that's really important because what we start with in our diagnostic work is how are we performing as a team, not how are you necessarily performing as to the team leader or team member X, Y, or Z. It takes a look at the team from a systems perspective so that we can start getting a sense for how well is the team doing both structurally and relationally. And it's a valid and reliable instrument that's been around for almost 15 years now.

Okay, so the team diagnostic. As I said, it focuses on the team as a system and it assesses performance from two perspectives. What's results is the team achieving and how is the team achieving these results? Right. Again, these structural and relational factors.

Yeah. As you can see here, they're are things like resources, decision making, alignment, goals and strategy, productivity on the competencies that supports the team's ability to be productive. And then how is the team achieving these results? That's more on the relational side. Respect, the ability to communicate well, their ability to trust each other and their ability to have tough conversations about the most important things that are facing them. Or these are competencies that create environments that supports teamwork or collaboration. We believe that this model, this instrument called the team diagnostic does an outstanding job of helping a team assess first where it's at both structurally and relationally, and then target and pinpoint those areas that the team needs to work on to build the right balance of structural and relational dynamics.

And so here's an example of what we're looking at. And so it's a quadrant, right? And we look at teams that are in the upper right hand corner, this is Nirvana. This very infrequently happens, but it's high team productivity and high team positivity or good structural dynamics, good relational dynamics. And teams that ... we're starting to move teams up in this quadrant. Teams that have a low team positivity and a low team productivity are burned out. That's why you see this red color here. It's a survival mode thing and then, but teams that are like we ... we started with too much of a balance on too much focus on culture, right? We're low team productivity and high team positivity or fun to work on for awhile but don't produce results on are not necessarily sustainable. And so this is the sort of the two by two construct that the team diagnostic uses.

And the output is pretty, this is just one level of the output. It did shows for in this example. And the beauty of this tool is that we use it, when we first start, we use it six months in and we often use it a year after the fact to give a team a sense for how it's progressing on these predictive elements of a team's ability to get the results it's looking for. So if you look on the left side of my a chart here, it's in April of 2017 this one team had some serious challenges. It didn't ... had some productivity and positivity challenges and it made some strong progress in actually the 4 18. Sorry about that. The 4 18, actually the 4 18 blocks is right up there in the high positivity, high productivity. And so they made some dramatic challenges or progress in on some of the challenges they faced.

So let's take a look at on the right side and the spider diagram, you'll see what some of their biggest challenges were. So if you look at the dotted diagram, the things that stand out most are a lack of alignment, an inability to communicate well, inability to have constructive interaction with each other, an inability to make decisions well, a lack of trust. And so these are obviously related to each other. And when we worked with this team, we looked at what are some of the things that we can do to address constructive interaction, for example, and getting teams to make better decisions. So let's just talk a little bit about that, those two dynamics to start with.

Decisions aren't made in this team, decisions are made or kicked ... decisions or kicked down the road. Decisions aren't made in a timely way. People don't feel like their voices were heard. Well the team's inability to trust each other led to the team's inability to interact constructively with each other, which led to some poor decision making. And so what we did was we hit on this notion of rebuilding trust and helping a team confront each other, provide feedback to each other constructively and receive feedback constructively, which are two easy things to say and harder things for people to deal with.

So there were two sets of things we focused on. We sit focused on a set of relational things where teammates made some behavioral commitments to each other to for example, one team member made a commitment to listen more to, and this was happens to be the leader. He had shut down dialogue by talking over people and not wanting to hear their perspectives and pushing, pushing things along so people decided not to speak up. So his commitments to slow down and get people's voices heard. Other people's commitments were to speak up more and to challenge the CEO when he had a tendency to stifle conversation.

The other side of the commitments is that they put a structured decision making process in place so that there was, not on everything but on the issues, most strategic issues, most important resource types of issues they put a a decision making process in place where timeframes were set, people's opportunity to contribute to the discussion were set and then the folks that were, the person that was accountable for the particular issue made a call. Sometimes that was the CEO and sometimes that was a business unit leader. And so two sides of that coin is a structural issues and relational issues both dealt with at the same time to make improvements in how this team was operating. You can see these were pretty dramatic improvements. We don't typically see that type of dramatic improvement over, I guess this was over a year period of time, so I guess that's possible.

Oh, just to recap a little bit. Leadership team measurement context. No question that the leadership team is in business of being a steward for the organization's strategic direction. They're also the best teams that we've seen are those that have a real strong understanding of their collective roles together, not just their functional roles, but their collective roles together, what they're working on together, how they integrate, what is the purpose of their integration and how are they going to measure whether they're making progress towards that purpose.

And again, teams have to continually refine their structural and relational dynamics. Team members leave. Team members, new team members are added. And the challenges change. It might move from like the earlier example I use for reducing customer concentration risk was their biggest challenge. And now their next challenges acquisition of complimentary companies that can accelerate the growth of one of their business units, for example.

So just to repeat really important that leadership teams are in the business of helping organizations achieve results. The model we talked to you about today, is really designed to help a leadership team understand how to address any potential structural and relational challenges it may be confronting, that may be confronting it at any given time and to pinpoint and put plans together to work on those particular challenges.

Our experience, the hardest challenges to overcome are the relational dynamics, the lack of trust that that may be built up over time when teams aren't working well together. People make assumptions about each other and things start to denigrate from there and really hard to rebuild that trust.

But nonetheless, if you're really going to have a team that is able to confront, debate, challenge each other on it's most important issues it's facing in a productive manner, then really have to focus on building that trust so that a team can ultimately hold each other accountable.

So again, we have a complimentary leadership team assessment at the end of our ... On our website. And here's the URL to that. And here are a couple of resources that I mentioned during the webinar. First is what Google learned from its quest to build a perfect team. That's a New York Times article that describes that. Really interesting, really cool stuff, and has some links back to Google and the actual study and then a great talk by Amy Edmonson on psychological safety.f