Over the past 15 years, I’ve enjoyed the opportunity to work with top management teams on a variety of key business issues, particularly those related to creating and then implementing business strategy. And while there’s no question that thoughtful strategic choices are vitally important to a business’ success, I’ve come to realize that alignment of leadership behaviour with strategy is even more important.
Without changes in leadership commitment and action, even the most brilliant strategy and well-planned execution will typically fall far short of expectations. Unfortunately, in my experience, executives rarely take the time to consider their roles both as individuals and as a team in effectively translating strategy into operational reality. A few simple changes can help top teams become more effective as leaders, administrators and team members.
Top Management Teams are Unique
Simply put, top management teams are significantly different from other teams. They must address a continuous flow of broad, complex and ambiguous issues, many of which elude easily defined solutions based on previous experience or current expertise.
Senior leadership teams must also effectively manage a wide range of diverse stakeholders (often with conflicting interests), including shareholders, boards, partners and suppliers, regulators, employees and more – and this is no small task. In addition, the very position that top management teams occupy magnifies the impact of their decisions and the influence of their behaviour on both business operations and organization culture. These key differences play a significant role in aligning strategy and executive behavior for the short- and long-term, which is why they’re so important to factor into any discussion on strategy and leadership.
Missed Opportunities Add Up Quickly
Most top management teams today recognize the kind of leadership effectiveness needed farther down the ladder in the organization. Far too often — and ironically — those same executives fail to recognize the importance of such leadership skills and qualities at their own level.
The impact of executive behaviour, at both the individual and team level, has been demonstrated extensively through research and practice. From generating creative ideas and resolving difficult problems to responding to the dynamics of a rapidly changing marketplace, the leadership function of every top management team is critical.
Yet despite high expectations for improvements in business outcomes, few top teams develop an understanding of their own effectiveness, much less make the effort to determine how to enhance performance.
I recently worked with the executive team of a large financial institution. During strategy discussions, the team decided that strengthening customer focus at their call centers would enhance the company’s competitive advantage. One of the key aspects of this strategy was providing front-line supervisors and managers with expanded latitude, including the ability to make mid-term adjustment of loan qualifications and terms depending on the customer’s situation and relationship with the company.
While this strategy was good in theory, practice proved otherwise. When portfolio margins showed a moderate decline in the quarter following the launch of the new approach, certain members of the executive hastily pointed fingers. This, in turn, led the accused team members to take the recently empowered front-line managers to task for the shortfall, effectively undoing all the work that went into empowering them to begin with.
Clearly, this was a case of misalignment of business priorities and executive behavior, further underscoring the importance of aligning leadership behaviour with the company’s chosen direction.
Clearly, the first step towards meaningful action is building awareness of a business’ current situation. Executive team members need to achieve a clear, focused, and agreed-upon understanding of their business strategy and then spend adequate time identifying the implications of their choices on leadership behaviour, both as individuals and senior team members.
To help jump start the process, top teams can use specific assessments to measure performance against proven factors that influence executive effectiveness. These measures include similarity of information and alignment of interests among team members, the degree of perceived power and safety within the group, and actions the team leader can take to positively influence team dynamics. Ideally, the assessment should also focus on the degree of interdependence required among team members, since different business structures, approaches, and issues require varying degrees of team cooperation and collaboration.
Fortunately, there are a variety of tools and assessments that can help teams easily take these steps toward greater success and effectiveness.
Moving to Action
Once executive members have identified their effectiveness as a top management team, there’s a distinct need to identify the changes required to enhance individual and team performance. This may entail new commitments such as improved sharing of sensitive information, setting aside portfolio-specific interests, or providing meaningful feedback to other team members regarding the impact of their behaviour on other team members.
In many situations, top team members will likely need to adjust some aspect of their leadership behaviour so there is a stronger fit between espoused business priorities and the way team members demonstrate their commitment and support for those priorities. This can take some time and adjustment, but can make a noticeable difference in leadership effectiveness.
Too Important to Ignore
Without a doubt, the starting point for success in today’s organizations rests with the performance of the executive team and, as a result, top management team effectiveness should be a priority for every CEO in business today. Ignoring current reality, or maintaining the status quo, just isn’t realistic anymore: It’s time to move top management team effectiveness to the top of the priority list.