According to a study conducted by DDI, EY, and The Conference Board, only 14 percent of CEOs have the leadership talent needed to grow their companies. This research analyzed over 28,000 leaders and HR professionals, showing there’s a huge problem with the leadership teams businesses build. When companies don’t effectively create an executive leadership team, it puts the entire organization in peril. Leadership starts at the top and dictates company culture, a business’s ability to succeed, and what type of impact it has on the world and the lives of those driving the organization’s mission forward. Without it, a company and those who work at it will inevitably suffer.
A business is only as successful as its leaders. Leadership expert John C. Maxwell refers to this as “The Law of the Lid” in his book The 21 Irrefutable Laws of Leadership, stating: “The higher you want to climb, the more you need leadership.” In short, he means, company growth gets capped depending on how effective or ineffective its leaders are. To determine how great your leaders are, all you need to do is take a closer look at the organization because leadership reflects upon the business itself.
As the statistic above shows, most companies do have room to improve when it comes to building a stronger senior leadership team. To do this, find out more about the role of a leadership team, what a good one looks like, its top priorities, common problems, and tips for growing your leaders and business.
What is a Leadership Team?
A leadership team consists of the organization’s upper-level executives. This group often includes people with titles like chief executive officer (CEO), vice president, chief financial officer (CFO), chief operating officer (COO), chief information officer (CIO), and chief technology officer (CTO). While these people run daily operations, in corporations and publicly traded companies, an elected board of directors (not a part of the leadership team) also impacts the overall direction of the business. Their job is to ensure senior leadership makes choices that protect shareholders’ best interests.
Together, these people are responsible for guiding the business and its employees toward fulfilling the CEO’s vision of a better future. To do this, they might meet with their leadership team several times a week to discuss strategy, make decisions, problem solve, set goals, and get updates from cross-functional departments. Spending time with your leadership team is also an excellent opportunity to teach, inspire, and motivate upper-level executives to positively influence their own teams. When this happens, outstanding leadership engulfs the entire organization and its people.
The Conditions Needed for a Great Leadership Team
According to management professor Dr. Jennifer Mueller, a person should consider three different factors when building a great team.
- What is the team responsible for doing or achieving?
- What type of people should the team be composed of, and which skills should they have?
- How big should the team be to be the most effective?
When it comes to the size of a team, Mueller tells The Wharton School, “After about five people, there are diminishing returns on how much people will pull.” She says this is due to “social loafing” or having the opportunity not to participate as much in the group because there are more places to hide and go unnoticed.
What Should a Leadership Team Focus On?
It’s essential senior leadership teams are intentional about using their time together wisely. Each meeting should have a specific purpose, complete with goals to achieve. By staying organized and focused, teams can be more productive and impact-driven. But, what exactly should leadership prioritize and keep their attention on? Find out several common focal points you’ll want to address consistently.
Leadership teams are responsible for creating and finding ways to execute the strategy that fulfills the organization’s purpose and mission. To do this, they need to have the foresight to think about the company’s direction and what they can do to get there. Those on your team should hold all of the qualities needed to develop strong strategic plans. These characteristics include but are not limited to creativity, an analytical mind, the ability to conceptualize, a talent for problem solving, objectiveness, and the emotional intelligence needed to think about how choices affect others.
Leadership teams should drive the organization closer together rather than further apart. Individuals on the team don’t let self-interest lead them. Instead, they choose to focus on doing what’s best for the company and its people. When organizations have a strong collaborative spirit at the top, it naturally radiates throughout the business’s culture. Focusing on collaboration produces dynamic, communicative cross-functional teams that work together to create and offer world-changing products and services. When senior leadership lacks a collaborative attitude, employees begin working in silos, generating an increased amount of errors and a poor company culture.
This point might seem obvious, but there’s a crisis in poor leadership plaguing America. The truth is, most people get promoted into leaders instead of developed into leaders. According to Harvard Business Publishing Corporate Learning, “only 7 percent of organizations feel they have a Best in Class leadership development program.” The person in charge of a senior leadership team should be growing themselves and their leaders at all times. Additionally, senior leaders should consider taking what they’re learning and distilling it into their direct reports. This continues the cycle of positively influencing one another until every employee knows how to be a leader.
Apart from this, the leadership team should also strategize on ensuring employees at all levels are growing their leadership qualities. Whether it be weekly training within various teams, one-on-one mentorship, or a book club, creating a plan that makes leadership a company priority is one of the top responsibilities of this group.
Top Causes of Ineffective Leadership Teams
Just because a leadership team exists doesn’t mean it’s effective. Differing personalities, agendas, and motives can all be contributing factors to this problem. Additionally, failure or ineffectiveness can also occur due to outside circumstances like changing CEOs. To find out more about why leadership teams don’t always drive impact, learn more below.
1. New Leaders Don’t Practice Change Management
Sometimes businesses need a change in leadership to be effective. Yet, when this isn’t coupled with organizational change management practices, it can cause panic and chaos. New leaders that come in with a heavy hand and start changing everything about the company need to understand that too much disruption too quickly produces fear, anxiety, and cynicism among their leadership team and the employees those people are responsible for guiding.
Unfortunately, many businesses struggle with this problem. As the Harvard Business Review provides, over 50 percent of CEOs at the largest American companies will be replaced within the next four years. Because this leader dictates who’s on their leadership and management team, a new CEO could come into the business and shake up the roster, which can cause a ripple of upset across the company.
2. The Team Isn’t Compatible
While all leaders should practice leadership styles that allow them to handle varying types of people, this doesn’t mean that they’ll automatically have an amazing synergetic connection with everyone they interact with. However, the goal of a person building a team should always be to develop a group of people who do. A strong executive leadership team must complement one another’s strengths, weaknesses, disposition, and innate leadership abilities. When the hiring process is treated as a careless exercise, you wind up with a disjointed, haphazardly put-together team.
3. Leaders Don’t Know How to Manage Conflict
Workplace conflict will occur on great leadership teams. Executives shouldn’t agree with each other all the time. Otherwise, the entire group is only participating as “yes men,” which doesn’t allow the business to develop, innovate, and grow. As author Doug Floyd writes, “You don’t get harmony when everyone sings the same note.” However, this goes without saying individuals who are interested in conflict for the sake of it are toxic to workplace environments. They can manipulate people’s feelings, cause the group to make terrible decisions that result in substantial business mistakes, and destroy team bonds. Strong leaders know this is unacceptable behavior that negatively impacts the entire organization. Because of this, they become proficient in using conflict resolution skills that set boundaries and dissolve disagreements before they get too heated.
4. Stress Causes the Team to Crumble
Executives who don’t know how to manage stress and prevent work burnout are a huge reason leadership teams become ineffective and fail. A survey by DDI reveals that this is a widespread problem at businesses, with over 60 percent of leaders saying they feel burned out at the end of the workday. When leaders overwork themselves to the brink of exhaustion, their performance, productivity, participation, and even health begin to suffer. People are what make organizations run, so when they’re run down, it has the power to bring operations to a screeching halt.
Ways to Build and Improve Your Leadership Team
All of these problems might make it seem like it’s virtually impossible to build a strong leadership team. However, this isn’t the case. The truth is, while building teams and leadership takes clear focus, intention, and the constant pursuit of self-growth, when these things become a regular daily habit, creating a world-changing leadership team becomes second nature. Learn a few tips on how to get started below.
1. Be Intentional About the Team Members You Hire
Think of your leadership team like a war chest. They’re there to make sure you come out of the other end of your fight successfully. While you have the vision, they are the ones who help you reach the finish line. For this reason, it’s a good idea to hire a diverse group of leaders who have various, different strengths the team can utilize. You wouldn’t want to go into battle carrying five swords, so be intentional about what you need, what purpose each person serves, and how the candidate you’re considering fulfills leadership skills that the team is missing.
2. Communicate the Company Vision
Leadership teams need to be clear on what vision they’re making a reality. While everyone in the group is responsible for outlining ways to fulfill this objective, the CEO’s job is to cast a vision so the group can visualize the finish line. Companies fall apart when there’s no strong, collective vision that executives and their teams all work toward. For example, silos form, and various groups throughout the organization start prioritizing the work they feel is important. Effective organizations don’t operate in this manner. When fulfilling the purpose of the business is the purpose of the business, executives and all those they guide unify across the board to drive real impact.
3. Value “We” Over “Me”
As referenced above, collaboration is the key to any successful leadership team. As Reid Hoffman, the co-founder and executive chairman of LinkedIn, says, “No matter how brilliant your mind or strategy, if you’re playing a solo game, you’ll always lose out to a team.” He means that teams of people who play to each other’s strengths are stronger than a singular person calling all the shots. One leader can’t master every leadership quality and skill needed for organizational success. For this reason, it’s more important to build a diverse team where each individual contributes in a unique way that benefits the growth and development of the business.
One way to do this is through strengths based leadership. To practice it:
- Find each team member’s strengths. For precise results and analysis, you can have the group take the StrengthsFinder assessment.
- Discuss the findings with each person (and group so they know how they can play to each other’s strengths).
- Help everyone grow into these talents even more.
- Provide opportunities for people to use their gifts.
- Encourage each individual to spend 25 percent of their time growing in the places they’re weak, too.
4. Develop Structures and Systems
As famed executive chef Gordon Ramsey says, “Teams need leaders, and leaders need structures.” Without a framework for organizational operations, businesses quickly become unproductive, inefficient, and chaotic. For this reason, leadership teams need to create guidelines on how the business will operate from top to bottom. This eliminates confusion and helps create scalable systems that prepare the company for massive growth.
To work on structure and systems:
- Address how the leadership team will operate. For example, the team must decide how the group makes decisions and each person’s specific role. This might also include the responsibilities each person has, too.
- Determine the company’s internal systems and what structure it operates under. Include discussing how business initiatives get turned into actionable goals, which project management software employees use, and how to manage employees.
- Outline work policies and organizational values in an employee handbook.
- Work through your business plan again since it should cover many topics you’ll need to address to keep operations running smoothly.
- Conduct a “Start Stop Continue” exercise.
5. Determine How Progress on Goals is Measured
Along with developing structure and systems, leaders should also consider how they’ll measure progress. It’s not enough to set high company goals—the leadership team also needs to construct a strategy that ensures they meet them. This can be done by creating and monitoring key performance indicators (KPIs) at every level in the business. To put it simply, KPIs are personal and professional goals that grow team members while also hitting targets that grow the company. The leadership team’s objective is to outline overarching goals that fulfill the company’s vision and mission. After this, leaders can decide the “what,” “who,” and “how,” which will intersect across cross-functional teams.
To get started with KPIs:
- Reverse engineer the company vision. What must be true in order for this to become a reality? Work backward and break down your vision into smaller steps.
- Get with your leadership team to work on a strategy for making these actionable organizational goals with deadlines.
- Meet regularly to monitor the progress of each phase. Figure out how to eliminate roadblocks, set higher goals, and adjust as needed.
Find out more about establishing KPIs and other types of useful metrics.
6. Make Leadership and Self-Development a Top Priority
Finally, the last tip for those guiding leadership teams is pursuing growth as a leader each day. In The Five Levels of Leadership, leadership expert John C. Maxwell says the highest status a leader can reach is “Pinnacle.” This type of leader spends their life pursuing growth and development. As a result, they transform those around them into leaders, who turn their team members into leaders, creating an infinite loop of positive influence and great leadership. Companies with these types of leaders thrive: Think Apple (Steve Jobs), Publix (Todd Jones), and General Motors (Mary Barra). Their leadership teams are successful and effective because learning to lead is one of the group’s top priorities. It’s something the executives on the team never stop pursuing individually and collectively.
To become a Level 5 leader:
- View each day as a new opportunity to grow your leadership traits and qualities.
- Hire people you can mentor into great leaders.
- Model leadership for your team, so your influence radiates throughout the company through the group of leaders you’ve taught.
- Put others above yourself by practicing servant leadership.
- Be of service to your community.
- Don’t rest on your laurels—always keep striving to grow, no matter what you’ve accomplished.
- Teach leadership outside your organization. This might look like giving keynote speeches at a conference or discussing how to guide organizations on one of today’s leading business podcasts.
Get more insight on the 5 Levels of Leadership.
How to Know When Your Leadership Team is Effective
Once you’ve built a strong leadership team full of individuals who complement one another, and you start practicing the tips above, you should start seeing results. The team culture will shift to be more energetic and exciting, the business will become more productive, the company will experience more growth, loyal customers will multiply, and the people within the organization will drive more impact in others’ lives.
Pouring your time and energy into strong team leadership turns good businesses into great ones. It allows the influence of strong leadership to radiate throughout the company so everyone at the organization thinks, acts, and speaks like leaders. When this becomes the company culture at an organization—your business will be unstoppable in terms of what it can achieve.
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