Teamwork at the top

Electric Perspectives, Jul/Aug 2001 by Herb, Erika, Leslie, Keith, Price, Colin

Top teams without a common direction spend more time on business as usual than on doing the strategic work only they can do.

Increasingly, the top team is essential to the success of the enterprise. Indeed, Welch is celebrated not only for increasing GE's revenues nearly sevenfold in his 20-year tenure but also for building one of the world's strongest executive talent portfolios, which has provided new leadership for many Fortune 500 companies besides GE.

So despite the obsessions of the business press, senior executives, shareholders, and boards of directors question the myth of heroic leadership. Merely bringing in a new CEO to reshape an organization will tend to show mixed results. In the consumer goods companies analyzed in Figure 1, for example, they were always worse after the arrival of a new CEO. In reality, long-term success depends on the whole leadership team, for it has a broader and deeper reach into the organization than the CEO does, and its performance has a multiplier effect: A poorly performing team breeds competing agendas and turf politics; a high-performing one, organizational coherence and focus.

Often, however, the leadership team is at best a collection of strong individuals who sometimes work at crosspurposes. What does it take for senior managers to gel as a team? Our work with more than a score of top teams, involving upward of 500 executives in diverse private- and public-sector organizations, suggests a straightforward process for enhancing their performance.

The most effective teams, focusing initially on working together, get early results in their efforts to deal with important business issues and then reflect together on the manner in which they did so, thus discovering how to function as a team. Formal team-- building retreats are rare; behavioral interventions and facilitated workshops, though sometimes helpful, are not central to team building. Top teams address business performance issues directly but behavioral issues only indirectly and after the event.

A second myth of leadership, as pervasive as the myth of the heroic CEO, is the idea that seasoned managers slotted into an organizational chart can easily function as a team. In reality, top teams face many problems: finding the right people, matching the available skills to the job, and learning to work together without taking the time to craft roles. Teams don't magically coalesce overnight. Their members have to be close in the professional rather than personal sense; they can thrive in an atmosphere of conflict if it is managed to increase creative output and to catalyze change. Becoming a top-performing top team must be one of the team's goals.

To meet that goal, teams have to master three dimensions of performance. First, they require a common direction: a shared understanding of goals and values. Second, skills of interaction are crucial if the team is to go beyond individual expertise to solve complex problems and, equally, if it is to withstand the scrutiny of the rest of the organization, for people usually take their cues from the top. Finally, top teams must always be able to renew themselves-to expand their capabilities in response to change.

One reason for the difficulty of improving a team's performance is that interaction, direction, and renewal are interdependent-teams need to go forward simultaneously on all three fronts to make real progress. (See Figure 2.) It isn't surprising, for instance, that top teams interact poorly when they don't have a common direction. By contrast, enhanced performance in one dimension not only reinforces the improvement in others but also provides for the genuine personal development that builds success.

Suppose, for example, the team believes that it must build trust among its members. It rarely helps to have selfconscious discussions or "sharing" exercises about keeping or breaching trust, an approach that may actually be quite destructive. But by working together to hone the sense of strategic direction-and in this way experiencing successful interactions-the team can indirectly, but often dramatically, improve its effectiveness and thus the feeling of trust among its members. In effect, the team exploits its strong reasoning abilities to build trust.

Real Problem 1: Confused Direction

Tolstoy wrote, "Happy families are all alike; every unhappy family is unhappy in its own way." The same can be said of underperforming teams. Nonetheless, there are typical warning signs in each of the three dimensions of team performance.

The first is confused direction. Many CEOs assume that they and their top teams share a common understanding of corporate goals and values. Formal descriptions of roles, expected conduct, and corporate strategies and plans all reinforce this assumption, but several realities undermine it.

Lack of alignment. Executives may nod their heads when the CEO propounds a vision, but the team often lacks a shared view of how to implement it. At one well-known energy company, the five executives of a top team were asked to list the company's 10 highest priorities. Alarmingly, they listed a total of 23 priorities; only 2 appeared on every executive's list and only 7 on the lists of more than three members. Indeed, 13 of the 23 priorities appeared on only one list. In other cases, the team doesn't agree about how performance should be assessed, who the company's top performers are, or how to motivate the organization to achieve its stated objectives.