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strategy and business
Published: May 29, 2012
 / Summer 2012 / Issue 67

 
 

The Right Role for Top Teams

The top team addressed the problem by setting up subgroups to deal with a range of implementation issues, such as launching new services or addressing account penetration (expanding business with key clients). Each subgroup was given latitude to act and a defined process and time window for obtaining input from the top team; this meant that they could function either as single-leader units or as real teams when needed. The membership mix of each subgroup was deliberately designed to cross the silos, engage the disengaged, and break up the bottlenecks — even as the subgroups brought people together to work on issues they all cared about.

The senior leaders themselves used the same subgroup model to change the way their functions and divisions operated. The chief information officer set up flexible global solution teams, drawing on subject matter experts across regional boundaries. The chief financial officer redefined dollar thresholds to grant lower-level employees more autonomy in setting prices. Another leader, seeking to help people collaborate across regions, decided not to create formal committees. Instead, she identified people who were already highly connected within the regions, and then set up regular but informal calls among them to take full advantage of their networking capacity.

Within six months, many of the weaknesses in the network began to disappear. Links to the account managers who had previously been on the network’s periphery increased by 17 percent. Employee collaborations across functions increased by 13 percent and produced numerous examples of improved client service, sales, and best-practice transfers at these junctures. There was a 27 percent increase in collaborations on smaller sales (those with revenues of up to $500,000); 15 percent on medium-sized sales (between $500,000 and $2 million); and 9 percent on large sales (between $2 million and $10 million). The firm’s overall revenues rose by nearly 10 percent on an annualized basis.

As one VP put it, the senior leadership had realized “the degree to which the enemy was actually us.… [We were spending far] too much time finger-pointing.” Instead of “teaming” when team performance was not critical, they now focused on building high-performance subgroups, with the ability to act as real teams when it mattered most.

Making Networking More Productive

Most businesspeople accept the fact that a great deal of time must be spent on inconsequential interactions such as unnecessary e-mail, bureaucratic approvals, time-wasting meetings, and decisions about scheduling and other rote matters. Clearly, you can’t do away with all these interactions. But with a greater awareness of the way your behavior is magnified through more carefully designed informal networking, you can improve your efficiency by 10 or even 20 percent. The CEO and the top team can foster this efficiency by recognizing each member of the top group as the hub of a larger network; making disciplined choices about when and how to get the right people interconnected in the right way; supporting the maintenance of those links; and reinforcing the leadership of those who can maintain productive networks (and lead subgroups as needed).

In the mid-2000s, a network analysis in one of the world’s largest outsourcing and data processing organizations revealed the benefits of making networking more productive. Over the course of several decades, this organization had grown into a premier provider of employee services (payroll, benefits administration, tax-compliance management, and retirement services), with revenues of several billion dollars a year. Set up as part of an organic growth initiative, the analysis looked at the top four layers of leaders — 210 people in all — to diagnose where breakdowns in informal communication might have undermined the company’s ability to execute strategically.

 
 
 
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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.