The top team consisted of about 25 executives with varied backgrounds. Some had been partners in major consulting firms; others had been entrepreneurs. Although they often met in subgroups or “kitchen cabinet” gatherings that formed naturally, these seldom functioned with real-team rigor, because the emphasis was on company politics rather than the pursuit of shared performance goals. And although the full senior team conducted its formal sessions efficiently, it operated only as an information-sharing discussion group. Nonetheless, senior leaders spent 64 percent of their time, on average, in interactions with one another, rather than with their own direct reports, the broader employee base, or even key clients. The leadership team’s aloofness, from one another and from their direct reports, had resulted in an invisible but pervasive and costly level of anxiety throughout the company. Fearing public reprimand, private reprisal, and the career consequences of taking risks, employees directed routine questions and problems up the hierarchy. Peer-to-peer interactions were increasingly tense and constrained.
The analysis revealed ways to improve the top management group’s effectiveness by combining better networking with a relaxation of controls. It turned out that many people used an inordinate amount of time getting ready for formal reviews with higher-up teams — they often spent four or five hours preparing for every hour of meeting time. Releasing decision-making rights on routine matters (such as simple promotions and pay raises, travel approvals, and pricing) to lower levels in the hierarchy lightened the burden imposed on everyone. Intensifying the network contacts through carefully crafted informal problem-solving subgroups and other forums gave people the support and knowledge they needed to assume new accountability.
As one junior member of the top 210 put it: “The network results definitely showed that we are hierarchical in decision making and [the costs] have finally captured the attention of our leaders. Before, I think they thought it was grousing. Of course, they did not want to give up control — and neither would I, probably, if I were in their shoes. But this has forced the conversation [about decision rights] to the forefront.”
In another company, a software firm with about 700 employees, a network analysis of the organization showed that some departments were far more connected to the top team than others — and not in a way that represented the value of these departments to the company. Each department was mapped both for its perceived value to senior leadership committee members (the extent to which they felt energized by that contact) and for the department’s access to top executives (the extent to which department staff felt they had their ear). It turned out that the departments that commanded senior leaders’ attention did so in a way that felt draining for those in the top group. These departments were mired in problem-solving and firefighting interactions that precluded leaders from seeing and discussing important innovations. The study also showed broad differences in the feelings that employees in different departments had about the top team. (See Exhibit 3.)
The analysis helped the senior leadership committee members see that some of them needed to be much more accessible to the broader organization. Each top team member saw, in customized reports, which departments drew energy from the direct informal connection to the committee and which did not. As a result, the senior leaders explicitly changed their behavior, strengthening contact with departments they had ignored, changing the way they worked with those “firefighting” departments (channeling more productive investments to them instead of simply helping manage their crises), and maintaining a much better balance of time and attention with the organization as a whole.