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Writing for the Harvard Business Review, Navalent co-founders Ron Carucci and Mindy Millward, as well as managing partner Eric Hansen, outline three important roles that good leadership teams play to "have lasting impact on the company's performance, culture, and ability to adapt."
3 roles leadership teams need to play
1. Setting competitive direction and securing resources
An executive team's role in directing the organization toward a specific future, mobilizing the necessary resources, and narrowing focus to stay on course can be risky, the authors write.
Oftentimes, setting a clear, focused direction can be usurped by a leadership team turning into the "Company U.N." featuring "the ambassador from marketing" or "the ambassador from Asia-Pacific," specifically there to represent the interests of those they lead, the authors write. As a result, the leadership team turns into a lobbying platform where backroom deals replace good decision-making and transparent tradeoffs.
In an assessment made by the authors for a client, their interviews found at least six different versions of the enterprise's strategic priorities. Over the course of their work, the authors helped the company articulate and validate four competitive differentiators and five competitive capabilities they could use to exclusively prioritize their capital and talent.
Doing so dramatically reduced the clutter on the leadership team's agenda and concentrated their strategic conversations on driving growth and the priorities they defined together.
2. Shaping healthy culture by building relationships and modeling values
Leadership teams need to not only think of themselves as stewards of their culture and values, but also remember that they embody that culture, the authors write.
A successful leadership team articulates an operating philosophy that aligns with their strategy rather than a set of platitudes that sound nice, but don't feel relevant to their organization's day-to-day operations.
Unfortunately, research has found that a commitment to modeling a healthy culture is rare. A study from Gallup found that just 27% of employees believe in their company's values and 23% think they could apply them to their jobs. Similarly, a study from McKinsey found that just 25% of employees experience their leaders as inspiring them by example to be their best.
"This suggests that executive teams don't understand that, in order to align the organization, they must exemplify cohesion among themselves," the authors write.
To better shape workplace culture, leadership teams need to regularly assess the strength of their culture, starting with themselves, asking "How could I/we have done that better?" Doing so ensures the leadership team sustains the competence and commitment necessary to embody the values they've declared.
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3. Establishing disciplined governance to synchronize performance
Leadership teams need to establish a productive rhythm and pace for their business, something that can be done through a well-constructed system of governance. This allows leaders to guide the flow of information, allocating the resources needed to support the requirements for coordination across the enterprise, the authors write.
Oftentimes, many leadership teams struggle to establish sufficient governance to keep their business focused and moving forward. These leadership teams get bogged down in too many different priorities, a failure to clarify decision rights, an undisciplined allocation of resources, and poorly documenting outcomes.
One of the most common problems leadership teams run into is bloated membership. The idea that "more is better" often justified by the complexities of industry dynamics or broad portfolios doesn't consider the reality that too many leaders at the table creates "unwieldy dynamics as the number of relationships to manage increase," the authors write.
For example, a leadership team of 15 people means there are more than 100 different relationships to be managed, which dilutes the trust that enables people with differing views to debate but then support the conclusions the team eventually reaches.
Being overbooked with meetings can also cause issues. For one company the authors worked with, their assessment revealed an intense degree of frustration over the amount of time useless meetings were taking, leaving "only evenings to do our day jobs." The top 500 leaders in the organization collectively spent more than 57,000 hours a year in recurring meetings, the authors write.
Motivated by this assessment, the leadership team eliminated hundreds of unnecessary recurring meetings, which allowed them to redeploy thousands of hours of capacity towards clearly defined priorities.
"To be sure, the demands of leading an enterprise can be unrelenting. To do it well entails playing three sophisticated, integrated roles requiring a complex range of capabilities," the authors write. "It's understandable that so many have obsessed over how to increase the effectiveness of executive teams — their disproportionate impact on a company's performance is immense, and the frequency of their underperformance disturbing. But if you want an enterprise that is aligned, cohesive, and can execute, all while protecting a culture enveloped by trust, this is the price of admission."
(Carucci et. al., Harvard Business Review, 10/22)
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