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The CEO of a major energy company recently confided to me that the way his company was currently operating wasn’t going to work for much longer. It wasn’t a matter of firing incompetent executives, changing strategies or even cutting costs. In fact, nearly every executive was doing a great job for his or her business or function.
It was that narrow focus, however, that was the problem. No one was focused on helping the entire company. The CEO believed if the company were really going to excel in a world becoming less dependent on fossil fuels, then the firm’s top leaders would have to work as a cohesive team, executing an overarching strategy. So why couldn’t the boss just get everyone into a room and work together? “I’m an engineer and so is almost everyone else in the group,” the CEO said, somewhat sheepishly. “We’re not used to working as an effective team.”
On the surface, that sounds ridiculous. How could a group of highly talented senior leaders not work well together? Many of us first learned the value of teamwork as kids, whether it was by doing a big school project or playing sports. You talk about what needs to be done, debate new ideas, respect one another’s perspectives then work collectively toward a common goal. But a lot of time passes between your childhood experience and being near the top of a multibillion-dollar organization. And it turns out senior leaders aren’t very good at working as a team with other senior leaders.
In partnership with researchers from Harvard University, Korn Ferry conducted a study of 127 high-level teams in public and private organizations from 11 countries. We rated them on whether the team accomplished big goals, grew more effective over time, and whether the teammates themselves developed into better leaders. The results were awful: About three-quarters of the teams graded as either mediocre or poor. Organizations may have been able to get away with that type of performance years ago. But in today’s complicated and disruptive world, the issues facing an organization are too complex and the stakes too high for one person, no matter how talented, to handle effectively alone. Organizations need a cohesive team at the top of the organization to work collectively to execute the strategy.
There are a couple of reasons why many of today’s senior leaders aren’t particularly good at working together. For one thing, it wasn’t a point of emphasis for many of them when they were coming through the ranks. Much of their working careers have been spent managing risk, defining a market, recognizing opportunities and leading subordinates. They weren’t, however, often asked to be a teammate of similarly driven, talented colleagues. Even as recently as the 1990s, only about 20 percent of professional work was team-based. Now it’s about 80 percent.
The CEO, even one of a major multinational company, may be a little intimidated getting the whole senior group together. Sure, the boss can handle them in one-on-one meetings, but getting the whole senior leadership team—each member individually talented and highly opinionated—to work as a group can be considerably more difficult. Then there’s a problem of ulterior motives. That head of a region may not want to collaborate with the chief financial officer because the regional president sees the finance guy as a potential rival for the top job.
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But as daunting as that may seem, getting senior leaders to work together isn’t the corporate equivalent of herding cats. A CEO can get that team humming if he or she can instill in the team a clear, challenging and compelling purpose. For instance, a US manufacturing firm I worked with had five separate divisions that were all pursuing their own growth strategies within China. The CEO had nightmares of all the potential unnecessary duplication of effort, out-of-control costs and getting approval from government officials five separate times. So the boss sat the leaders of the divisions down and ordered them to come up with one expansion plan that would help grow the entire company throughout China. The team’s purpose was certainly clear (grow the company profitably in China), certainly challenging (any international expansion is tough) and unquestioningly compelling (sales in China would double the firm’s revenues).
It may turn out that the CEO will have to replace some senior leaders just because they aren’t good teammates; after all, there were kids in school who wouldn’t do their part of the class project, too. Don’t expect a top team to be a smooth or even friendly experience, either. But combining the skills, experiences and perspectives of the team at the top can create an overwhelming competitive advantage for the organization.