Leveraging senior teams in the new economy
The new economic “normal” is going to call for tough decision making and very hard judgment calls to keep analysts, shareholders and the board happy. With rare exceptions, CEOs are starting to realize they can’t do it alone. Who will be your strongest ally in preparing for the future? It should be the people who share the C-suite with you: the senior executive team.
This will only be true, however, if fundamental changes take place in how the partnership works. In the past, senior management teams have been more a collection of individuals focused on their own agendas than a single entity pulling together for a shared purpose. To be successful, the new senior team model must be “enterprise driven.”
How can you leverage this collective diversity of skills and talents and mould them into an aligned, well-functioning unit? To build an effective senior team, several essential fundamentals need to be addressed.
The Right Leader
Before any senior executive team can reach its full potential, the CEO must take a careful look in the mirror and address any shortcomings in his or her leadership skills. Acknowledging that the assistance of a real team at the top is essential for progress is an excellent, but sometimes scary, first step. Getting more involved in the “how” of business model transformation is the second.
With consumer confidence down, most businesses today are dealing with business model transformation. CEOs and their teams are re-evaluating “where to play” and “how to win.” Many do not have clear roadmaps as to what their ultimate business model will look like, but odds are it will involve immense sacrifices across functional and business unit silos and uncommon ways of thinking and operating to drive growth.
This will require senior team collaboration and conflict at a level unprecedented in most organizations. Such behavioural agility requires a transformation of team norms and interaction that must come from the top. It means letting your team know that, instead of proceeding more or less independently, they will now have collective responsibility with you for driving real innovation and coming up with the right growth strategies and capital allocations necessary to achieve the company’s goals, and to win in the marketplace.
In very competitive markets, the days of the “hero” CEO are over. By creating an environment that more effectively leverages the talents of the senior team and creates buy-in to corporate strategies through participation, the odds of “getting it right” in uncharted waters are increased.
The Right Members
All teams are made up of individuals. Each brings a level of expertise in certain areas to the table. The question to ask is, “what skill sets do I need to drive the new vision and business model transformation?” Evaluate the team within that framework first and then make decisions about membership. If a transformational change is required, and pivotal members of the team are unable to adapt, you may need to replace them. It might be helpful to search for executives who have already been through a transition. Look outside the industry if you have to.
The members of the team must also believe the new way of operating is here to stay. In other words, “is the enterprise aspect of my position on the team more important than my individual leadership role of my function or business?” You must make it clear that the enterprise role is 50-60% of the job. How can this be done? Many companies are now aligning compensation and rewards around this concept. This often forces the executive to decide whether he or she belongs in this environment or not.
The Right Process as CEO
Your career will be judged on the decisions your team makes. To obtain the best results for your business in the new economic paradigm, you must “unlearn” what you read years ago about the lonely art of decision making at the top. Gaining true consensus from your team will be imperative.
Consensus does not mean unanimous agreement. It does mean coming to a conclusion based on a credible decision making process. When paving new ground with a new vision and business model, taking the necessary time to decide on the big strategic bets will accelerate execution when you and the team are ready. A good decision making process is one team members see as fair, complete and based on solid data. Resource allocation will be extremely contentious in the years to come.
For team members to accept decisions that benefit the enterprise at the expense of their own operations, they must be satisfied that certain conditions were met:
- The proper amount of discussion was held
- The right people were at the table
- The right information was shared and debated. When these conditions are met, the hard decisions can be made and accepted.
The right decision making process will lead to true consensus. Team members will be able to tell if their participation was valid, or if they have been duped into agreeing to a foregone conclusion. If you consistently use bad decision making processes to push forward strategy, you will lose the team. On the other hand, good process ensures that you will reach the right decisions with the full engagement of your most senior leaders.
The Bottom Line
To mould a group of individuals into a cohesive team that is strongly aligned with the business needs of the organization:
- Look at your own leadership style. Does it create the right environment for the senior team to collectively tackle the company’s biggest challenges?
- Determine if you have the right members on the team, based on a new direction and business model.
- Develop a decision making process that is fair, complete and based on solid data.
Reprinted with the permission of RHR International, a firm of management psychologists and consultants who work closely with top management to accelerate individual, team and business performance. For more information visit www.rhrinternational.com