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FMI Quarterly/March 2014/March 1, 2014

The Hidden Secret of High-Performing Leadership Teams

workingplans10_imageTeams are present in almost all organizations. In fact, more than two thirds of Fortune 500 companies rely on teams to accomplish their goals.1 Often, when leaders hear the word “team” or “teamwork,” they can immediately relate to a positive or negative experience they had in the past related to a team. Unfortunately, we hear more about the negative stories than we do the positive.

The challenge for leaders today is that organizations increasingly rely on different types of teams, rather than just a single leadership team or project team to accomplish work. Truly successful organizations have figured out how to develop, lead and operate on multiple teams at a time, in order to produce great results. The root of their success starts with their leadership team, which is made up of various business unit leaders who are running the company. The secret to high-performing leadership teams is simple. They have a clear purpose and highly aligned team members.

The challenge we face is that we may be on a leadership “team,” but are we really a “team”? Decades of research seem to conclude that in order to be a true team, the following must be true:

  • The team is made up of two or more people.
  • The team has a common purpose and shared goals.
  • Team members rely on one another to get their work done.
  • Team members know who is on the team and what their roles are.

Most often, members of the leadership team would agree that, based on these criteria, their company’s leadership team is not a team at all. Unfortunately, it is common for people to put together a team without spending the necessary time clarifying a shared purpose and clarify roles. In reality, the lack of clarity on roles and purpose is the most common cause for low-performing teams. Unlike low-performing teams, great leadership teams exceed the expectations of their stakeholders, produce superior results and outperform competitors on a consistent basis. Given the criteria for what makes up a great team, only 21% of teams are truly high performing.2 The stark realization that your team may not be performing at the level you thought can be a bitter pill to swallow.

The good news is that any team can improve its performance by spending time looking inward to create more clarity and alignment for everyone. Leadership teams can and should act as a team, and a high-performing one at that. Investing in team building at the top can be challenging, but it will make a big difference in your organizational performance overall.

The performance stakes are much higher for leadership teams. Being at the top echelons of the organization, a leadership team’s effectiveness is often evaluated at the organizational level. For example, if an organization performs well (or poorly), the leadership team is held responsible. While many factors contribute to peak performance among teams, we have highlighted two foundational elements that will get you started on your high-performance path: developing a team purpose and forming strong team alignment.

DEVELOP A TEAM PURPOSE

In order to be a true team, leadership teams must have a common purpose. For many teams, a common purpose may exist but often is not communicated or implicitly understood. Simply communicating why the team exists in the first place will provide guidance in decision-making, strategy and goals.

The main reason leadership teams fail to articulate a meaningful team purpose is that a team purpose at the top often should be tied to the overall success of the organization. For example, best-of-class executive teams are purposed to increase financial performance, create an organization that will continue to succeed past their tenure, or establish a healthy and sustainable culture so all employees truly enjoy their work environment. It is important that the team purpose is not too broad, abstract or uninspiring. For example, if a team’s purpose is to “increase the bottom line for the organization,” that is much less inspiring than achieving financial sustainability or a sustainable culture. In order to develop a team purpose that is enduring and meaningful, consider the following:

  • The team purpose should be closely tied with specific organizational goals.
  • A team purpose should be inspiring and authentic to the team’s work.
  • The team purpose should help clarify which actions to pursue, goals to set and decisions to make.

By developing a team purpose with some of these suggestions in mind, a team can begin to create a clear vision for your future. Having clarity on why you are here together and what you are trying to achieve will improve the likelihood of becoming a peak-performing team. A few examples of team purpose statements include:

  • To advise the executive leadership team on overall strategy, financial performance and investments (Board of Directors).
  • To provide the best leadership in our industry to ensure our firm maintains our competitive advantage (Executive Committee).
  • To ensure our compensation system is fair and balanced and rewards high performance across the firm (Compensation Committee).

FORM TEAM ALIGNMENT

Another hidden secret to high performing leadership teams is creating strong alignment between team members. This includes getting each team member “on the same page” when it comes to roles and general team agreements.

Clarify Roles
Though clarifying who is responsible for what on the team may seem obvious, the reality is that few leadership teams have excellent role clarity. One reason is that these teams tend to be a collection of representatives or business unit leaders of functional departments. For example, your team may consist of your CEO, the VP of finance, the VP of marketing and sales, the VP of operations, etc. The challenge with this team makeup is that leaders tend to act in the best interest of their business units rather than the larger organization, creating silos among team members. The most successful teams, however, do not establish roles based on job titles such as VP of Marketing and Sales but based on relevant skills necessary to achieve goals.

A second reason why role clarity lacks in teams is that traditional leadership teams tend to be crowded. Often, leadership teams include all senior leaders from all business units, thereby acting more like a committee or forum than an actual functioning team. The old saying, “the more the merrier,” does not apply when it comes to a team of senior leaders who are responsible for executing strategy and overseeing the well-being of a company. This may mean that the number of people on your team is getting in the way of getting the results you desire. We recommend having six to seven members on a leadership team, especially an executive team. Simply reducing the number of members on the leadership team is not easy, but having a clear purpose for the team will help. Creating an understanding of the work that must be accomplished by the team makes it easier to identify members who are needed based on skill, not simply on their titles.

Once the leadership team has established who the essential team members are and what their roles are, it is important to clarify expectations. Spelling out what each team member will be doing and what his or her expected work output is will create further alignment and agreement among team members.

Establishing roles and clarifying expectations help team members rely on one another, because it is clear who is responsible for what and it builds accountability among team members. As mentioned earlier, these elements may seem obvious, but most teams do not take the necessary time to clearly articulate roles, responsibilities and expectations.

Establish Team Agreements
How should our team members behave in meetings? How do we hold each other accountable for our behaviors? How do we communicate with each other? It is rare to hear the same responses from all team members to questions like these. In contrast, teams that can answer these questions in synchrony likely have a set of clear team agreements.

A team agreement is a set of guidelines that clearly identifies what behaviors are acceptable and unacceptable on the team. Research suggests that when teams have a clear set of agreements, they are more likely to perform at a high level. Individually, we may think we know how we should behave and act on our team, but do we all really agree? When team members fail to agree on what the acceptable and unacceptable behaviors are for the team, important activities, like meetings, can become a challenge.

In order to establish productive team agreements and help your leadership team reach peak performance, you must first determine behaviors by creating mutually agreed-upon guidelines for acceptable and unacceptable team behavior. In doing this, you can help build accountability by establishing what the penalties are for breaking agreements.

It is important to note that simply drafting your agreement is only the first step. Your team now needs to demonstrate commitment to this agreement. Teams can demonstrate commitment by trying some of the following:

  • Display your agreement in a mutual team space.
  • Commit to using the language in the agreements.
  • Hold members accountable when they fail to follow the agreements.

The steps listed above are not as easy as they sound and require consistent attention and effort. By committing to the team agreement, you are taking steps to change the culture of your team to become more consistent, productive and accountable, all of which directly leads to high performance among leaders.

FINAL THOUGHTS

It may appear simple to create a high-performing leadership team, when in reality it is a difficult process that does not happen overnight. Many leaders do not take the time to set up their teams correctly due to the deep, strategic thinking required. While there are many elements that make up a high-performing leadership team, articulating its purpose and creating strong alignment within the team will get you on the right path. Simply starting the conversation within your team is a great first step.


Kim Morton is a consultant with FMI Corporation. She can be reached at 303.398.7262 or via email at kmorton@fminet.com. Emily Nowacki is an associate at FMI. She can be reached at 303.398.7216 or via email at enowacki@fminet.com.

1 Sivasubramaniam, N., Murry, W. D., Avolio, B. J., & Jung, D. I. (2002). A longitudinal model of the effects of team leadership and group potency on group performance. Group & Organization Management, 27, 66-96.
2 Wageman, R. (2007). Senior leadership teams: What it takes to make them great. The Hay Group. Retrieved from http://www.haygroup.com.
3 Mathieu, J. E., & Rapp, T. L. (2009). Laying the foundation for successful team performance trajectories: The roles of team charters and performance strategies. Journal of Applied Psychology, 94, 90.

 

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