Choosing the right executive leadership team is one of the most important decisions that a C-level executive can make. Many leaders populate their teams with the “usual suspects”: people who have been on the top team a long time, seemingly entitled to a place there by virtue of their positions. Others are added only if there’s room. In our article on top teams (“How Many Direct Reports?” Harvard Business Review, April 2012), Harvard Business School professor Julie Wulf and I advised executives to turn this logic on its head: “Start with the capabilities and roles needed to push your company’s strategy forward.” In other words, your top team’s members — drawn from some of your current direct reports, along with appointees to new positions that you create — should together be accountable for all the capabilities that shape your company’s distinctive edge and enable you to win in the market.
Even with that criterion in mind, it’s tough to get the size and composition of your top team right, especially given all the competing priorities that senior leaders face today. This is particularly true when you first come on board in a new position. The territory is often uncharted, your predecessor’s experience may be irrelevant to your most pressing challenges, and reflective time is sorely lacking. Without guidance, and with few unbiased stakeholders in your immediate circle, you may end up relying on guesswork, gut instinct, or rules of thumb that have little to do with your actual needs. The result? Too many or too few people reporting to you, with other peoples’ competing priorities setting the terms of your discussion.
If you are a senior executive pursuing a coherent strategy, you need a span of control that is “fit for purpose.” Each voice at the table is a signal to the rest of the organization about what you consider important. Each represents a strategic capability needed to drive success for the company, or for the portion of it you lead.
Hence the need for a high level of rigor and objectivity in choosing the leadership team. Identifying the right number of people, articulating the roles and functions that have strategic importance, figuring out who should be a direct report, and deciding whether you need an operations chief are vital decisions that impact your effectiveness. An important first step is determining the right number of team members. Booz & Company’s C-Level Span of Control Diagnostic Tool, at strategyand.pwc.com/c-levelspan, enables you to determine a target span for your top team, based on the criteria most relevant to your particular situation. This insight can replace some time-honored conventions that have little to do with your actual challenges. For example:
- The assumption that seven constitutes a kind of magic number, when the particulars of your situation may actually require a larger or smaller leadership team
- The common practice of using metrics such as the number of employees or total revenues of a unit to determine whether its head should be your direct report
- The belief that appointing an operations chief will buy you breathing room so you can focus on the big picture
These conventions are largely irrelevant when it comes to assessing your real needs, and they may draw attention away from the factors that matter most. For example, where you stand in the executive life cycle needs to be a key consideration. If you’re new to your position, you will probably need a comparatively large leadership team of up to 10 to 12 direct reports. This will help you evaluate your top people, work with the team to chart the strategic direction, and increase your exposure to more aspects of the business. If you’re near the end of your cycle and are focused on succession, you can probably be more hands off and will benefit from having a tighter team. When you create more full-business P&L roles for one or more potential successors, your span of control naturally becomes smaller. Given these differences, it’s also worth keeping in mind how your span of control may need to shift in the future.