Great Leadership Teams Are Fundamentally Sound

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.

Inaccurate Assumptions

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.

As articulated in the book Senior Leadership Teams, a leadership team’s purpose should meet four important requirements. 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.