It’s time for the Chief Executive Team
The Executive Team has the power to maximize or destroy the work of any other team in the company, including itself. But top executives don’t consider themselves a team, because usually they don’t function as one.
Research of the last twenty years with thousands of companies of all business sectors around the world shows that when you improve the dynamics of the executive team, you impact these key performance indicators of the company: return on assets, return on sales, return on equity, stock performance, profitability, productivity, sales growth, market share, operating result, budget compliance, innovation performance, employee engagement… The list goes on and on.
The results of improving teamwork at the top are too good to miss. But how many companies put their leadership team through a program that improves their effectiveness and efficiency? Very few. It all boils down to one thing: right now, most executive teams leave a lot of money on the table.
This is even more important during a crisis like the one we are facing now. Crisis means you have less time and less resources to recover from bad decisions. During crisis you must make better decisions faster. You are in zero-tolerance zone. You have no margin for error. A Chief Executive Team allows you to make faster and better decisions. This translates into better strategy and more effective execution, producing more results.
Especially in crisis situations, having the thinking power of a team to figure out the best way forward, instead of only one individual, can make a big difference in the amount of information processed, viewpoints considered, options evaluated and problems solved for its effective implementation.
The most damaging myth for leadership effectiveness is “The good CEO knows it all and does it all”. It disengages people all over the company, from the executive level down to the individual contributor. It gets the CEO interfering with everything, either because they think they know better or because they must hide the fact that they don’t know better.
Fixed mindset describes a situation where people believe that theirs and others’ qualities, such as intelligence, talents or competences, are fixed attributes that can’t be changed. If you have a fixed mindset, you will spend more time trying to prove that you know something than learning more about it. You will focus more on what you can already do than on what you can possibly do.
Growth mindset is the opposite. You build on your abilities with a pure desire for learning. You embrace challenges and accept criticism as ways to improve your skills. You find inspiration in others’ success and believe one must put an effort to grow. You team up with others that can add perspective and knowledge to the process of achieving ambitious goals.
The myth that the CEO can know everything that is needed for the success of a company is 100% fixed mindset. It assumes everything stays the same and no-one learns or develops better ways to move forward. It also embeds the assumption that market changes are predictable, therefore it just takes one informed person to figure the right way of dealing with them. A notion that can trigger some good laughs in 2020.
Teams entered the organizational world many decades ago. When we needed something vital done fast, we created project teams. The implementation of self-organized teams in manufacturing improved the quality of products continuously since the 1950’s. Fast forward to today, and teams are ubiquitous in corporate life. They contribute with much of our results, our joy at work and professional identity.
Companies are made, developed, and changed by teams. They are just not managed by one.
Everything changed but the way we manage companies stayed the same. The notion that company leadership is better performed by a chief executive team instead of a chief executive officer can feel very threatening. There is the fear of dilution of accountability, there is the fear of loss of effectiveness, there is the fear of loss of power through “democracy”.
Allow me to be straightforward: we don’t think of loss of accountability and effectiveness in any other team in the company. In fact, as I will prove in this book, executive teams can increase effectiveness and accountability. The reasons for this fear come from the fact that top management teams are unique in the way they are built and operate, and it becomes more difficult to design processes to make them more effective. But we must not shy away from that challenge. When we solve it we reap outstanding benefits.
And no, companies are not democracies and should not become that. You will not read anything like that in this book. Developing and managing an executive team does not weaken the formal power of the CEO. Instead, it creates a bigger type of power that the CEO can use to transform the company: team leadership.
For too long we have been thinking of leadership as an individual characteristic. We crave so much for heroes to save the day that leadership face value is all about CEO individual personality. But the real value of leadership is about Chief Executive Teams transforming companies and leaving a legacy of personal and business growth.
We have the wrong CEO job description. Know-it-all and do-it-all are not success factors. Quite the opposite. It’s time for a transformation of leadership.