Members of the C-suite must work as one to execute the organization's vision.
The success of any organization depends in large part on its top leaders, who establish strategy, direct and align resources, and help shape the company culture.
Although CEOs are the most influential individual leaders, the collective C-suite is just as important—or perhaps more so. The executive team's performance sets the pace for the rest of the organization.
Despite the importance of executive teams' effectiveness, research from the Center for Creative Leadership suggests that most executive teams are underperforming. In a recent survey of top executives, almost two-thirds of respondents said their executive teams experience conflict between their functional and enterprise responsibilities. Only 18 percent of those surveyed said their executive teams are "very effective" when it comes to executive team responsibilities.
What's going on here? After all, executive teams typically consist of highly successful individuals who have proven technical knowledge and extensive managerial experience. However, being in the C-suite requires skills and behaviors that many of these leaders simply haven't had an opportunity to develop. Even further, C-suite leaders often find that the same expertise that helped them earn a spot on the executive team can create tensions with the strategic and collaborative roles now required of them.
Executive team failings
Executive team performance is complex, but we can boil down underperformance to five common symptoms.
Not conveying enterprise awareness downward. Underperforming executive teams frequently fail to clearly convey to their direct reports (and therefore down through the rest of the organization) enterprise-wide strategic priorities, knowledge of what's going on across the organization, or the "bigger picture" of the company's competitive environment.
Not driving cross-boundary collaboration. The most successful organizations drive collaboration across organizational boundaries, breaking down geographic and functional silos. Cross-boundary collaboration opens opportunities to eliminate waste and create new value for the organization.
Not leveraging diverse perspectives. Top-performing executive teams foster multidisciplinary planning and strategy. They harness a diverse range of perspectives and skills and figure out what to keep, what to discard, what they need to learn, and what to start.
Not fostering bottom-up insight, awareness, and ideas. Organizations that are disproportionately top-down may fail to take advantage of input and ideas from multiple levels of the organization. Executive team members are responsible for making sure that relevant input from all tiers of the organization makes its way into C-suite discussions.
Not examining differences well. Underperforming executive teams don't examine their own differences well—in the open, in constructive dialogue. The most effective executive teams are conscious of how each team member differs and what these differences mean for how they function as a team and as an organization.
Those five symptoms of underperforming executive teams can infect the entire enterprise. The executive team is not only critical as the group of leaders who set the direction for the entire organization; they also are the most visible and most important team in any organization. These leaders model what team behavior should look like for the whole company.
What got them there
The challenge for an executive team is that the individual leaders on that team typically reached their position through success at a functional or business unit level. They've ascended to the C-suite thanks to their skill leading finance, marketing, or a certain country-level operation, for example.
On the executive team, though, they have new, enterprise-wide responsibilities. They must continue leading their function with excellence, while also carrying out the organization's strategy and ensuring collaboration between different units of the enterprise.
Often, managing the dual enterprise and functional responsibilities are challenging for individual leaders and the executive team as a whole. This tension is at the heart of most executive team underperformance.
It's useful, then, to consider what a maximally effective executive looks like. To understand that, we need to understand the three crucial imperatives that every executive team faces.
The big three
When we talk about the executive team leading an organization, what do we really mean? Any organization's top leaders must:
- Establish and maintain a strategic focus.
- Harness a collective approach.
- Model optimal team interactions.
Let's consider each of these.
Strategic focus. Setting and maintaining the strategic focus for an organization is a role that only the executive team can undertake. This includes establishing a vision for the organization, balancing risk and innovation, anticipating future needs and opportunities, and ensuring the future sustainability of the organization. This imperative requires executive leaders to work collectively, spend time and energy at the strategic level, focus on the enterprise as a whole, and understand the current and future environment the company faces.
Collective approach. Leaders must transcend their functional roles and take a big-picture view as the executive team takes a collective approach. They must work together for the good of the entire organization, putting collective interests ahead of individual of functional gains. In taking this approach, top-performing executive teams model how organizational silos can be broken down and how solutions can be co-created across boundaries.
Team interaction. How members of the executive team behave with each other goes a long way toward setting the culture and behavior expectations for the entire organization. The most effective executive teams value differences among their members, listen and communicate effectively, ask for one another's input, and trust and respect one another. They have the conversations they need to have, in a constructive way, and don't shy away from tackling tough topics. These behaviors ensure the executive team can fully harness the knowledge and capabilities of all its members.
An executive team that carries out those three imperatives and avoids the pitfalls that lead to subpar performance is not an accident. Top-performing executive teams are almost always the result of careful work by a CEO who not only leads the team, but also serves as its chief development officer.
Best practices for high-performing executive teams
There are five keys for creating effective executive teams:
Get the diagnosis right. Executive team members—and the CEOs who lead them—must understand themselves, their team, their organization, and the environment. They must have acute situational awareness. For CEOs intent on developing the strongest possible executive team, this requires understanding what makes each team member tick and what makes them work together as a group effectively.
Get the leadership mental model right. When leaders join the executive team, they bring their own experiences, preferences, and perspectives to the job. But being a part of the executive team requires them to lead beyond their circle of direct reports and peers with whom they interact.
They must be able to lead in a way that's consistent with organizational culture and strategy—at the enterprise level, across boundaries, and down through the organization. They must know how to take leadership from the enterprise level to the organization's front line and be intentional about the way they're leading.
Get the mindset right. High-performing executive teams must have a mindset of shared growth and continued learning. While they are already experts in their individual fields, they must continue to learn and embrace responsibilities beyond their technical skills. Senior leaders joining the executive team shouldn't think of the new role as a culmination of their career experience, but instead as a new stage of their career, in which they must master new skills to be successful.
Get the interactions right. How members of the executive team interact with one another is critical to effectiveness. Generally, individual leaders join the team with an existing set of habits and preferences for how they interact with peers. On the most effective executive teams, interaction rules are made explicit. What doesn't work is discarded, and executives must be able to be transparent and vulnerable.
They must be comfortable learning in public and equipped with strong dialogue skills. They also model and design the interactions that will be repeated throughout the organization. How executive teams interact among themselves becomes the cultural DNA that shapes team interactions throughout the company.
Get the dissemination right. Executive leaders, individually and collectively, must be able to quickly and clearly communicate their decisions, thinking, standards, and plans throughout the organization. Since no executive team member can be omnipresent to ensure that strategy and policy decisions are carried out consistently, these leaders must clearly and consistently communicate across the organization through a shared set of practices and beliefs about "how we think and act."
The effective executive team
A strong executive team is one of the most enduring and powerful competitive advantages any organization can have. When your executive team is performing at its best, its members will:
- Think as a strategic team and as functional experts simultaneously.
- Mesh their own preferences and aptitudes with those of their teammates.
- Agree on interaction rules that allow smooth, independent functioning and consistent collaboration.
- Balance competing values and interests, keeping the good of the organization foremost in their decision making.
- Mobilize each other and their own business units to collaborate and innovate.
- Cultivate success and engage the organization at every level.
In the real world, there is no single "silver bullet" for any organization that guarantees success. We live in an environment that is more unpredictable and faster changing than ever before, with disruption and change as the new normal. But an effective executive team makes it much more likely that your organization can thrive in the face of those challenges. A recent Center for Creative Leadership survey of senior executives makes that clear: 97 percent of respondents agreed that increased effectiveness of the executive team will have a positive impact on organizational results.
Nonetheless, the CEO who can develop an executive team to be strategic, collaborative, and effective has a considerable advantage over the CEO who must constantly struggle with a team performing at suboptimal levels.
Read more from CTDO magazine: Essential talent development content for C-suite leaders.