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Published: May 29, 2012
 / Summer 2012 / Issue 67

 
 

The Right Role for Top Teams

When the senior leadership committee conducted a network assessment to improve its performance, the CEO assumed the bulk of improvement would come from within the committee, through the strengthening of committee structures and decision-making processes among those 14 senior leaders. But those efforts led to only a few beneficial changes. There was much more leverage for improvement in the links between the senior group and the rest of the company. That was because although members of the senior leadership committee held a disproportionate share of collaborative ties, those ties were not distributed evenly. (See Exhibit 2.) One executive (“Person 1”) was a highly networked individual, with more than 60 people claiming her as a key information source, whereas another (“Person 14”) maintained only four connections. The CEO — in the middle of the pack, labeled “Person 7” — was shocked by his own relative lack of influence. He was also surprised by the prominence of a few executives he had not realized were so important in enabling others.

The network pattern also revealed a correlation between poor connections and some failed decisions in the company’s past, including unprofitable entries into certain markets and ill-advised acquisitions. Seeing the importance of the larger network prompted leaders to enrich their own networks, connecting with more employees throughout the hierarchy, not just with those who currently had their ear. It also prompted them to improve the way they operated, using subgroups of the senior leadership committee. One year later, the committee members credited this shift with generating ongoing improvement in innovation and business performance, along with more rapid decision making and execution.

If you’re interested in shifting the operating model of your company’s top team this way, there are three particularly good places to start:

1. Rather than focusing on improving the senior group’s interactions as a whole, design a group of smaller, more focused subgroups, drawing in others from around the company as needed.

2. Invest in the quality of links between top team members and the rest of the company.

3. Recognize that conflicts among top executives are often driven or exacerbated by broader tensions in the network, and deal with them at the constituent level first.

These three tenets seem simple, but they are hard to put into practice, because they require changing the conventional view of how a top team should operate. Together, however, they can help a top team move to a more balanced and integrated operational model — addressing diverse performance challenges, working together in more effective ways, and making more disciplined choices.

Harnessing the Power of Subgroups

When confronting the performance of the top group of executives, as in any other major change effort, CEOs and other senior leaders often leap to the role of architect. They move boxes and lines around on an organization chart, and redesign the formal incentive structures and workflow. Align the top executives around strategic objectives, they figure, and the business units and functions that report to them will naturally follow. If the top team proves difficult to align, the company may invest in team-building exercises. But exercises like these are often counterproductive. Not only are they costly, but they can lead to excessive consensus seeking, lengthy decision-making cycles, and isolation of the top team from the rest of the organization. Moreover, this approach assumes, erroneously, that there is only one way to operate as a team, and that when teams don’t function well, improving their group interactions is the only way to help.

The most effective senior leadership groups, whether they explicitly acknowledge it or not, have a different operating model. Instead of conducting their work as a single, autonomous unit, members of these groups divide into a shifting, relatively free-form, interconnected collection of subgroups, each oriented toward a particular issue, problem, or opportunity. Moreover, the best subgroups function in at least three different modes — as discussion groups, single-leader units, or real teams — switching among them as the circumstances require:

 
 
 
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Resources

  1. Jon R. Katzenbach and Douglas K. Smith, The Wisdom of Teams: Creating the High-Performance Organization (Harvard Business School Press, 1993): More detail on the three types of teams, including “real teams.”
  2. Jon Katzenbach and Ashley Harshak, “Stop Blaming Your Culture,” s+b, Spring 2011: The next step for an effective top team is reinforcing and building new behaviors that make the most of the existing corporate culture.
  3. Tim Laseter and Rob Cross, “The Craft of Connection,” s+b, Autumn 2006: How organizational network analysis can improve performance throughout a company.
  4. For more thought leadership on this topic, see the s+b website at: strategy-business.com/strategy_and_leadership.
 
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