Building Great Leadership Teams – Article

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Up to 50% of the variance in organisational performance can be attributed to the top team (Peterson, 2003 and Thomas, 1998).  This is quite extraordinary – that one group of individuals can have such enormous impact on the organisation.  The organisation’s top team casts a very long shadow.

In interviewing leadership teams to identify and understand the barriers to their collective success, the themes that emerge include:

  • We have great people but are not harnessing their energy and effort to get the best results
  • We are short on resources
  • We are running so fast we cannot see what we are achieving yet
  • We ambush each other
  • My function is pulling its weight but others are not
  • Unclear strategy
  • Tough environment
  • We trip over each other
  • We compete with each other rather than the external competitor
  • Short term always dominates

And the list goes on…

The tension between ‘fighting fires’, dealing with the loud, immediate short term issues that are demanding of resources and attention versus investing in the achievement of the longer term goal that will enable strategic success.

Our experience over the last ten years of working with leadership teams shows that the successful teams develop the capability to be able to manage with the dual horizon.  The dual horizon meaning the ability to see and contain the immediate issues within the context of the broader organisational.

They achieve this by gaining shared clarity on the answers to 5 key questions and using this as the navigation template.

We call these the 5Q’s.

Q1.Team Alignment

Do you actually need a team?  It seems obvious but of course it is not!

Katzenbach & Smith’s work suggests that most teams are in fact working groups.  There are a range of ‘types’ of working groups including informational; decision making; project led; coordinating and consulting.  All are task orientated with specific outputs.

Some leaders prefer not to have a team.  IBM’s Asia Pacific Regional Head decided he did not require a team. Ric Anderson felt he was leading a sort of divisional holding company so a single leadership team was not the answer.  He led a collection of working groups that managed each division but did not come together as a traditional executive team would.

However a leadership team is different to a working group.  It has five main characteristics that make it unique:

  1. A clear mandate from stakeholders to deliver an output that only they can deliver together.
  2. Interdependencies between the members as they work toward a collective purpose and strategy.
  3. Clear boundaries i.e. it is clear who is on the team and who is not.
  4. Stability, as they work together long enough to facilitate shared decision making.
  5. Collaboration and collective outputs.

All teams need a clear purpose to guide direction, decisions and activities.  Richard Hackmann, co author of “Senior Leadership Teams” suggests that a team purpose needs to be consequential, challenging and clear to have any traction.  His research suggests that the highest performing teams spend most time on gaining as much clarity as possible.  This allows them to focus on:

  1. Clear execution
  2. When to say NO
  3. Remaining focused on the end goals

Other teams work on the challenging aspect but lose traction when members are unclear as to why they are being challenged so much!

ACTION:  

Decide whether a working group or a team is best suited for your needs.  Don’t refer to it as a team or expect it to work as one if in fact what you want a working group.  However if you are a team, then put in the development time that is needed to optimise the team.

Q2. Structure – the right people in the right roles

Jim Collins made a very clear point about getting the “right people on the bus” and we believe he is accurate.  However, it is not just the team members who have bought into the vision.  A high performing team needs every member to embrace the vision and strategy.  This enhances alignment and subsequently enhances the opportunity to maximise execution of that strategy.

If people on the team are not aligned it is important to take action quickly to ensure their alignment or facilitate their exit from the team.  Many leaders inherit a team, or part of a team, and often do not consider, until it is too late, as to whether the existing team members are those which will enable the achievement of the desired outcomes or not.

Team based research suggests that the quality of team structure (size and norms) is the dominating factor that engenders success.  Structure includes the overall size of the team, the types of tasks focused on (‘meaningful or menial’) and the accepted norms of conduct.

Studies vary on the optimal team size.  For example, informational working groups / teams usually have smaller sizes than an alignment team.  Team based research usually quotes 8 -10 members to be the ideal size.

For a senior team, members need to be able to ‘think globally, not locally’ i.e. beyond their own function.  The idea of being part of a ‘first team’ is an essential concept in terms of its leadership capability.  Members need to buy into the idea that the leadership team is their first team rather than their functional team.

Many leaders on Executive teams think that their team is the function they ‘lead’ as opposed to the one they sit on.  This can lead to internal competition and lack of alignment.

Senior leaders need to make sure they know which team is their first team and which team is their functional team.  They are different teams.

Finally, the frustration that many leadership team members experience is sometimes caused by a lack of clarity on the inter dependencies between functions i.e. how does the sales function impact manufacturing demand schedules or supply chain procurement plans?   Mapping out workflows can be useful to understand these impacts.  One client of ours who asked for help in resolving conflict at a personal level actually needed help in mapping workflows.

Magically, once this was clear, the conflict disappeared!

ACTION:

Do you have the right people on your team?

Act quickly if not.  Ensure the concept of the first team is embraced.

Q3. Optimising each other

Most leadership textbooks rate strategy execution as the number one senior executive priority, yet many teams fail to deliver on well-developed strategy.  Rarely is strategic failure due to flawed strategy.  More commonly, it is due to the leadership team not executing well enough and certainly not holding each other or respective functions to account.

Accountability develops from sources including competence, commitment and ongoing feedback.  Developing a sense of trust allows the team to have robust and challenging conversations.  Lencioni, in his book “The five dysfunctions of a team”, suggests trust is the most important factor in successful team.  Whilst we agree that trust is a crucial factor, many teams are successful without high levels of trust; what is needed is ‘enough trust’.  Trust is an enabler of quality conversations.  Quality conversations build quality organisations.

Asking a team to make a decision is very interesting to observe.  Most teams rush into the process of deciding.  The best teams start with the question, “how are we going to decide?” i.e. what process or methodology?   Despite the initial time spent on an activity that is not the actual decision itself, the mere act of thinking about the overall process accelerates the overall speed of decision and, in most cases, the quality of decisions.

Contrary to this, what usually happens is that leader will decide and no one else will add opinion, diversity or challenge to the thought process.  From speaking to CEOs or other senior leaders, we know that whilst they enjoy the spotlight they do not necessarily enjoy the ‘heavy lifting’ of sole decision-making.  Ironically, they have often set up this outcome by their own actions of how they lead the decision-making session.

Some of the most challenging and distracting challenges for leadership team center on communication and relationships.  A lack of understanding of each other on a personal level or some inner circles within the team itself, can lead to feelings of lack of involvement or a lack of status or, the worst kind, ‘cordial but not collaborative relationships’, as one client reported to us.

Senior leaders often feel like they are doing all the heavy lifting in teams of no one else is offering opinions when it comes to making decisions

If left unattended these negative emotions lead to behaviour that is seen as dysfunctional by the organisation. Famed psychologist, Losada, researched the ratio of positivity to negativity needed on high performance teams and observed that the most productive teams were positive: negative to each other in a ratio of 4:1.  This was in marked contrast to under performing team who reversed that ratio!

ACTION

Create an environment that encourages honest conversations.  Take time to get to know each other especially in learning each other’s styles.  Learn that accountability is not just top down but also peer across.  In doing so develop a team resilience modality.

Q4. Serving our stakeholders

A trap that many underperforming leadership teams fall into is becoming too insular.  In this they loose sight or hearing about what the key stakeholders require from them.  The other option that often plays out is where the leadership team becomes over focused on one or a number of the stakeholders at the exclusion of others.

The result of this is that decisions are made without a robust consideration of the needs of the full system.  The outcome is often a suboptimal scorecard for the leadership team and the organisation as the needs of important stakeholders are not being considered.

One of the greatest “ah ha” moments we observe in the leadership teams with whom we work is when they gain clarity and understanding about who are the full range of stakeholders in their system.  The view is expanded to include groups within the organisation, shareholders, suppliers, customers, community, government and other related parties.

Peter Hawkins in his book, ‘team coaching’, observed that an important activity is to understand what each of these groups is asking of the team.  It is not uncommon that some of the demands will be in conflict with the interests of other stakeholder groups.  It is with this full knowledge that the team can work with the groups to find compromise and manage expectations so that the conflict is minimised.  This allows for clarity, focus and execution of strategy that accommodates and satisfies stakeholder needs.

As in any fluid environment, the needs of stakeholders will not remain static.  It is important for leadership teams to maintain consistent contact and dialogue with stakeholders to, at regular points in time, to clarify expectations as well as gather feedback.

In working with leadership teams we have found that is not uncommon for the team to be working with a ‘premise’ of what a stakeholder wants.  This premise has been formed a number of years ago.  Often, this is not the current reality and as a result the team is operating from a misinformed position.  The result is unmet stakeholder expectations.

 Leadership teams often work with a premise of what their stakeholders need that is outdated

ACTION

Know who all the stakeholders are.

Understand their expectations and gain alignment between the expectations of various parties to inform the team’s mandate.  Check in regularly with stakeholders to ensure currency.

Q5. Loop and Learn

In his seminal work, The Learning Organistion, Peter Senge spoke about the need for organisations to capture and integrate the learning that happens at all levels of the organisation.  The intent of this is that the organisation itself retains the learning rather than it be isolated within the individual who had the learning experience.

High performing leadership teams take the time to capture their learning so it can be used to increase effectiveness and efficiency.  The process for doing this is through active reflection.

The greatest challenge for leadership teams seems to create a ‘shaft of stillness’ in hectic agendas to stop and reflect on what has happened without using the process to ‘blame’ or ‘grandstand’.

This can be done for both positive and negative experiences to examine what worked well?   What could have been done better or differently?  What is critical to this is a culture of honesty (where there is enough trust) and the willingness to forgive mistakes.  Once the situation is understood then the learning can be integrated into systems, processes and interactions to enhance the effectiveness of future efforts.

ACTION

Make a learning / reflection review as a standing agenda item.  Encourage a ‘seek to understand’ approach to exploring events and consequences.  Ensure that learnings are captured and integrated into processes and practices.

 The expected results came after six months… the unexpected results came after eighteen months of team development

Developing a leadership team takes effort and time.  One client of ours recently said that the expected results from their efforts came after six months.  The team members fully understood their collective strategy, started cascading decisions down the organisation and work flows became more efficient.  The unexpected results came after eighteen months of team development.

The discretionary efforts and relationship outcomes created innovations that the leader could not have predicted. If quality conversations build quality organisations, then you have to start asking questions.

Qs.  Are you asking them of of your team?