Executive Teams and Organizational Performance

There is a general agreement that the quality of executive team has the most decisive impact on the success of an organization, both in terms of financial and non-financial parameters. After all, it’s this team that sets the strategic direction for the organization and also leads culture building and operational excellence.

The studies on the subject are equally categorical:

1. The seminal, lifetime of work of #JimCollins – from Built to Last (1994) to Turning the Flywheel (2019), clearly point to the decisive role of leadership in the life journey of an organization.

2. Possibly the largest, annual study on Leadership started by DDI | Development Dimensions International 23 years ago, has been consistently pointing to the central role of leadership in growth of organizations.

And there are many more.

If we look at the issue in the context of our country, the impact of the quality of leadership since independence is there for everyone to see. Here are a couple of examples:

Late #VergheseKurien galvanized illiterate farmers of Gujarat to take India to be the highest producer of milk in the world. That was way back in 1970 when the infrastructure in the country was still being developed. And the country has continued to remain a dominant milk producer across the world ever since.

Our country was blessed with people like late #VikramSarabhai and late #HomiBhabha who laid the foundation for science and technology in the country. The result- India continues to rub shoulders with the best in world in this field.

And of course, there are many more, known and some not so well-known, people who excelled as leaders and did the country proud.

Getting back to corporate context, it’s not surprising that the investment on leadership development has been rising, with a staggering USD 60 B + in 2021 ( Ayse Yemiscigil, Dana Born, and Horace Ling , Harvard Business Review February 2023).

Unfortunately, the returns from this investment have been abysmal, to say the least. #DDI ‘s 2023 global leadership forecast clearly points to the stress in leadership bench that large no. of organization is experiencing.

The low levels of employee engagement repeatedly brought out by annual Gallup surveys for a couple of decades, also bear it out.

A recent survey of senior executives carried out by Centre For Creative Leadership reported that 65% of the executives were of the view that their executive teams struggled with balancing their functional and organizational responsibilities. And less than 1 in 5 rated their teams as ‘very effective’ (CCL, November 18, 2020).

There are obviously issues of the kind of people inducted as leaders, design, delivery, and ecosystem support at play, that are adversely impacting results of leadership development efforts. But that’s for another occasion.

What I wish to highlight here is a way of gauging where does an executive team stand on parameters of excellence. It’s only when we know what needs to be done, that we can design and deliver a program for improvement. Needless to add, nothing can be more important for an organization than its executive team. In this context, I love this line from the legend #SteveJobs “whatever happens at the top, filters down to the rest of the organization”.   

Many studies have brought out what differentiates executive teams that excel and lead transformative growth, from the rest. And it’s certainly not about having a ‘team of stars’. There is any no. of examples where team of stars have not delivered. It’s about having a ‘star team’.

In the organizational context and drawing largely from the work of Centre For Creative Leadership and CEO Coaching International , I see these as defining characteristics of the star teams:

1. Unified vision and strategy:

Such executive teams invest significant amount of time on strategic aspects of business and they display two, distinctly different set of behaviors:

The crafting of vision and strategy is marked with vigorous exchange of perspectives, disagreements and confrontation of assumptions etc. Once this phase is over and the vision / strategy is adopted, there is complete ownership of the same by all the members.

No wonder such teams excel in execution as well as no time and effort are wasted arguing over issues along the way.

2. The members have each other’s back:

Whether seizing a business opportunity or dealing with a challenge, they are assured of being able to marshal the best of ideas, talent and resources, available across the organization, not just in their own function. And everyone who contributes to a project is acknowledged.

I am reminded of something that I heard our own celebrated leader #NandanNilekani say in one of his interviews, when he was picked from Infosys to head Unique Identification Authority of India (UIDAI) as a cabinet minister: ‘What’s the difference working for UID authority and Infosys?’ was the question. And he said ‘the easy access to your peers to bounce off ideas before you take a call. I miss that here’. That Infosys has had an outstanding executive team is a common knowledge in India.

They are a highly cohesive and collaborative unit.

3. Complimentary Skills:

Again, burrowing from one of the interviews of the Infosys co-founder, N. R. Narayana Murthy “..as a team we need to have mutually exclusive and collectively exhaustive skills”.

While organizations need to be strong in their area of core competence, you also need diverse perspectives in the team. That’s how problems or opportunities being missed or overlooked by one member are seen by the others.

We need to review the skill set in the team periodically and ensure that the skills to face the the issues that are going to impact your organization are developed. It’s no surprise that many organizations today are building #AI capabilities, given the changing business landscape.

4. Communication and Alignment:

Beginning with the CEO, such teams place great emphasis on clear and complete communication, to ensure alignment of the stakeholders.

The executive team members are generous and clear with communication, within the executive team and also across their respective functional groups. This helps build alignment in the organization across levels and facilitates execution excellence.

5. Transparency:

Members of such team are at ease sharing failures as well with the team, as much as they celebrate successes. It’s from sharing and reflection around failures that the person concerned and the rest of the team learn and improve.

I am sure there will be a few more.

There are formal tools to gauge many of these parameters for an executive team and I’ll cover those in subsequent articles. However, mere reflection around these issues- either by the team itself or facilitated by someone external, can provide important leads for where your developmental efforts need to focus. With that clarity, you can address it either internally or by taking help of external resources.

Are you engaged enough with this issue?