THE STRATEGIC LEADER:

Group Process in Executive Leadership Teams

Lorne Hartman, Ph.D., Founding Principal, Psybase Network Inc.

Contact: Psybase Network Inc. | 905.764.2696

Published in STRATEGY & LEADERSHIP, 2000, Vol. 28, No. 6, pp. 34-35.

What helps or hinders the successful implementation of organizational change? The author reports on recent research that identifies key levers for change. One important factor is an aligned leadership team — a team that shares information, makes joint decisions, and exhibits collaborative behavior. The chief executive’s own behavior and style of operating affect how team-like the top group will be. Bringing unity of purpose to the senior team is not the only challenge a CEO faces, but it is one of the most critical.

In-depth interviews were recently conducted with chief executive officers of major companies headquartered in Canada and the USA. The interviews were a follow-up to earlier studies of a large number of organizations, studies that included site visits, focus groups, personal interviews and skill assessments. The overall purpose of the research was to explore the dynamics of change–what helped and what hindered the successful implementation of change. A number of important levers were identified. A key make-or-break factor in successful organization change is an aligned leadership team. In fact, a leadership team that fails to realize its potential for collaborative, high impact action is frequently identified as a "show stopper" in launching large scale change.

Attributes of team alignment at the executive level include sharing information, joint decision making and collaborative behavior. The CEO interviews were an attempt to better understand the obstacles that get in the way of behavioral integration in leadership teams.

The characteristics of the company itself (e.g., size, product-market diversity, structure and the incentives of executive team members) may cause disconnected top teams. Thus, the larger the size of the company, the greater the physical distance between team members, the larger are the sub-units requiring individual attention, and the more likely it is that team members have relatively specialized, distinct and clear spheres of activity.

The company’s competitive strategy also has an impact on integration of the top team. Whether companies are competing primarily on the basis of product-market innovation, cost and efficiency, or quality will determine how much different organizational units need to come together to debate, orchestrate and collaborate around shared company-wide agendas rather than focus on unit-specific initiatives.

The appointment of a new CEO almost always represents a new beginning for the top management team. A new CEO often injects enough new members or simply enough new tension and uncertainty into a team to essentially throw it into a social disequilibrium. Patterns of communication, exchange and influence are disrupted, often even among continuing team members.

A number of the CEOs interviewed described the stages the top team goes through as it develops more "team-like" properties early in a new CEO’s tenure. The stages of development parallel the sequence identified in the research literature by Tuckman in 1965): forming (where the team defines its roles, values, and mission), storming (disagreements occur over information sharing and decision-making), norming (where ground rules are set and disagreements are resolved), and performing (the team works effectively together to achieve common goals).

It appears to take as long as two years for a new CEO to foster team cohesion and behavioral integration. This alignment of a leadership group can go too far, however. A number of CEOs complained of "groupthink" characterized by excessive likemindedness and striving for unanimity within the top team resulting in decisions that are unsound because the group is so harmonious, amicable and smooth-running. Research indicates that long-tenured teams, associated with long-tenured CEOs, have homogeneous mindsets or "paradigms". Long-tenured teams and homogeneous teams tend to undertake little strategic change.

In today’s business environment, the competitive arena is turbulent. Strategies must be promptly adaptive. The recent thrust of many companies has been to re-focus on a core set of businesses and competencies, requiring more, not less, interdependence of action among senior executives. Company wide changes need to be mounted quickly with the top team all together on the same page. Unless top executives are an integrated team, and demonstrate alignment in their actions (what they do and what they say) day-in and day-out, the chances of seeing much sustained energy (involvement and commitment) at other levels are limited.

Many CEOs find off-site retreats to be important devices for coalescing their top teams. Held perhaps quarterly, often with outside facilitators, these sessions can catalyze an open-mindedness, spirited exchange, and energy for collaborative problem solving that cannot be attained with brief meetings sandwiched in between the frenetic activities that consume executives at their office locations.

Team transformation ("stirring the pot") helps to create and sustain constructive ferment in the top team. Transformation vehicles include gradual, staged turnover within the team; purposely injecting a bit of overlap and ambiguity into senior jobs; or assigning line executives additional responsibility for corporate-wide endeavors.

Perhaps even more so at the executive level, "you get what you incent". If the various elements of an enterprise depend on each other (as they usually do) and true teamwork is needed, then incentive criteria (stock options, profit sharing and bonuses) must be tilted toward overall team, or company performance.

Finally, the CEO’s own behavior and style of operating also affect how team-like the top group will be. The CEO must have a demonstrated commitment to candor and openness of information flows. He or she must be comfortable with the noise, jostling or tensions that come with content-rich collaboration and exchange among assertive, strong-willed executives. Bringing unity of purpose to the senior team is not the only challenge a CEO faces, but it is one of the most critical.

Reference: Tuckman, B. Developmental sequence in small groups. Psychological Bulletin, 1965, 63, 384-399.