A senior leadership team is a powerful asset for any organization.
A strong executive leadership team mobilizes everyone in the organization to propel the organization’s vision and strategy forward. Yet too often, this considerable potential goes untapped. Senior executives struggle to balance running their individual business areas with working together as a leadership team, focused on the success of the whole organization.
In our research survey of senior executives, 65% indicated that their leadership team was experiencing this clash between functional and enterprise accountabilities; only 18% rated their leadership team as “very effective” with respect to their executive responsibilities.
This paints a stark picture: Too many executive leadership teams are underperforming.
Even though individual members may be well-prepared and capable in their individual roles, there is often a sizable deficit when it comes to the overall leadership team’s collective capability.
What can the CEO do to ensure the leadership team capitalizes on the potential for collective impact and results? How do team members integrate their individual skills and expertise into a highly functioning executive team that intentionally acts together, leveraging their opportunity to work for the entire enterprise?
Nearly all the senior executives in our study (97%) agreed that “increased effectiveness of my executive team will have a positive impact on organizational results.” There is substantial value in assessing a team’s current functioning, and then working to optimize its performance and alignment as a genuine “enterprise leadership team” that takes a collective approach to creating results.
What are the common issues facing senior teams today? Where should you focus your efforts? And how do you know if your leadership team is working at its maximum potential? We offer our answers to these questions, plus how to recognize and create a high-performing executive leadership team, below.
4 Big Challenges for Top Leadership Teams
A senior leadership team isn’t just another team. The best practices and conventional wisdom of effective teams are not sufficient to create a high-functioning executive leadership team. The role and realities at the top create unique challenges.
Here are 4 challenges that senior leadership teams often face when they turn to us for help:
1. The game has changed. Something is new and shakes up the leadership team’s equilibrium. It could be a new CEO, a new team member, or new strategic challenges. Whatever the shift, the team struggles with focus, collaboration, and trust.
Conversations circle at a superficial level, not getting into the deeper, more complex issues. The direction for the team (and for the organization) starts to get unclear. Leadership team members begin to doubt if they have the right people in the group; some speculate they are the ones in question.
2. The battle to achieve both functional and enterprise goals has multiple fronts. Members of the senior leadership team typically play a dual role of leading their own function or organization, while being responsible for the high-level goals of the business as a whole. This tension is constant, and can easily lead to lack of alignment and political infighting.
Team members may respond with defensiveness — acting in ways that protect themselves and their personal scope. If this tension is not managed, the senior leadership team will fail to execute enterprise-wide initiatives or collaborate across silos and boundaries.
3. Conflict is either too intense or underplayed. Egos and disagreements overshadow substance. Alternatively, discussions are “too polite.” Either way, important conversations happen outside the room, difficult topics are avoided, and decisions don’t stick.
At the senior leadership team level, the ability to be transparent, give constructive feedback, and address team dynamics is crucial for success.
4. A “good enough” team is no longer enough. The executive leadership team has been effective up to now, but want to up their game. They sense untapped collaborative potential. Maybe they lack innovation, energy, enthusiasm, or are hesitant to take risks. Or, increasing complexity requires new agility or new mindsets. A senior leadership team that is good but not great means the organization is not poised to navigate greater uncertainty or capitalize on new opportunities.
So, what does the senior leadership team need to do to overcome these challenges? Invest in their own development, understanding that improving team dynamics and processes are not secondary priorities to running the business.
The Senior Leadership Team’s 3 Crucial Imperatives
For an organization to be successful, the leadership team must intentionally focus on these 3 areas of collective effort:
1. Strategic Focus:
- Establishing vision;
- Spending time and energy at the strategic level;
- Balancing risk and innovation;
- Anticipating future needs and opportunities; and
- Ensuring future sustainability of the organization.
2. Collective Approach:
- Taking an enterprise view;
- Working together as a collective enterprise asset;
- Putting the good of the enterprise over individual or personal gain; and
- Breaking down silos and co-creating solutions.
3. Team Interaction:
- Valuing differences among team members;
- Listening and communicating effectively;
- Asking each other for input; and
- Trusting and respecting each other.
Symptoms of an Underperforming Leadership Team
Most senior leadership teams are leaving growth potential on the table. Because they’re typically a group of functionally focused leaders, their main challenge is to come together with an enterprise view.
As a result, most executive teams are:
- Not conveying enterprise awareness down through their direct reports and into the larger organization.
- Not driving cross-boundary collaboration to eliminate waste and create new value.
- Not leveraging the diversity of perspectives to help foster multi-disciplinary planning and strategy — figuring out what to keep, what to discard, what they need to learn, and what to start.
- Not fostering “bottom up” insight, awareness, and ideas, leading to an organization that is disproportionately top-down at a time when awareness and mobility need to originate from multiple levels.
- Not examining differences well, out in the open, and with a combination of assertion and inquiry.
If these issues are appearing at the senior leadership team level, those same weaknesses are likely to manifest throughout the organization. As a result, their organizations don’t execute on strategy and change initiatives as well as they might otherwise. They may fail to adapt quickly enough to keep up with the marketplace. And although they may attract skilled people, they may not be able to develop that talent in a way that maximizes value for the enterprise.
The bottom line? An underperforming executive leadership team results in an underperforming organization.
Designing a High-Performing Senior Leadership Team
Most CEOs would agree — and our data supports — that picking the right people for the senior leadership team is critical.
But typically, CEOs select executive team members based on what those individuals have accomplished before, not how they’ll function as part of a team of peers with final responsibility for the organization’s strategy and operations.
The CEO, therefore, must always be focused on the ever-creative process of building and developing the executive team. And there’s no algorithm for putting different people together in the complex roles required in a top leadership team.
However, having the right approach to designing the team can improve the odds of developing a group of leaders who can complement the CEO’s strengths, while also working together well and carrying out corporate strategy. You need to consider the leadership team’s strategic abilities, operational knowledge, and emotional intelligence. Their ability to work together as peers is just as important as their ability to manage their own direct reports.
If the CEO can play the role of team developer successfully, the leadership team will function more effectively. The executive team will perform better, but they’ll also learn to think differently, both individually and together.
The CEO (and board) will benefit from deeper insights about the business landscape and internal gaps, faster access to new ideas, and the ability to rapidly test, develop, and scale new ideas. Furthermore, the entire organization will function more efficiently, with more diversity and more coherence.
5 Keys for a High-Performing Executive Leadership Team
Although developing a high-performing leadership team is complex, there are 5 key actions to get right:
1. Get the diagnosis right. Situational awareness is a must-have for every individual, team, and organization. Your leadership team members should be masters of this skill, starting with their awareness of the executive team itself. That also goes for the CEO. An organization’s top leader needs to understand what makes members of the executive team tick individually, and also what makes them work (or not) as a group.
2. Get the leadership mental model right. Senior executives bring their preferences, past experiences, and biases to their roles. But leadership team roles require them to lead well beyond the circle of their personal influence, and do so in a way that’s coherent with overall organizational culture and strategy. A high-performing leadership team understands and establishes explicit agreement on what it means to lead at the enterprise level.
3. Get the mindset right. Most executive teams are built of executive experts. After all, if they hadn’t been successful earlier in their careers, they never would have ascended to executive leadership roles. But more important than what they already know is that they know how to continue to learn.
A high-performing leadership team has a shared growth mindset. They know their responsibilities go far beyond their areas of technical expertise, and that they need to teach and develop others to also go beyond their technical know-how. They need to be focused on learning, thinking, and leading globally across the enterprise, not merely on their particular functional areas.
4. Get the interactions right. Leaders arrive on executive teams with considerable experience, skills, and relational habits. However, some of those may serve as barriers to their success on the team. Creating “interaction rules” that work — and discarding those that don’t — is essential in developing a strong leadership team.
Blind spots can abound here, so executives must be transparent, able to be vulnerable, comfortable with learning in public, and equipped with strong dialogue skills. The interaction rules that they adopt — they are not the same for every leadership team — have to transcend cultural, functional, and circumstantial variations. These interaction rules become the “relational DNA” that drives professional interaction not only on the leadership team, but throughout the organization.
5. Get the “diffusion rules” right. Executive teams can only be effective when their thinking, actions, and decisions spread and amplify quickly across large numbers of people — to processes, projects, and places where they aren’t personally present. Reports and meetings, though necessary, are insufficient. The “how we think and act” DNA must be universal across the organization.
When your senior leadership team is functioning at its best, the team members will be:
- Thinking like a strategic team and functional experts, simultaneously;
- Meshing the “tribal rules” of their own origins with those of very different teammates;
- Agreeing on interaction rules and team dynamics that allow both fluid, independent function and consistent collaboration;
- Balancing competing values and interests;
- Mobilizing each other and their business units to collaborate and innovate; and
- Cultivating success and engaging the organization at every level.
Ready to Take the Next Step?
No matter how good your CEO is, the ability of your executive team to work together effectively may be the most critical element in your organization’s success. Our organizational leadership experts can partner with you to assess and develop your senior leadership team to ensure they are achieving their full potential, both individually and collectively.Download White Paper