Work Systems Associates Canada

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The Power of Top Management Teamwork?

CEOs and chief executives around the world are beginning to realize that they have not tapped the great potential of their top management. It is only by using these highly skilled individuals as a team that the overall goals of the firm can be achieved.

A single person can make a big difference in an organization. But no single person has enough knowledge or experience to understand everything that goes on in a complex and sophisticated organization. Major gains in quality and productivity most often result from teams - groups of people pooling their skills, talents and knowledge. With proper chartering, development, and leadership, teams can tackle complex and chronic problems and come up with effective, permanent solutions.

Besides this pooling of skills and understanding, top management teams have another distinct advantage over solo efforts: the mutual cross-functional, integrated performance that arises among team members.

As a spirit of teamwork grows among the top management, the core concepts of teamwork start to develop at all levels of the organization. Team members everywhere begin working together - no barriers, no factions, “all one team” moving together in the same direction.

Traditional vs. Team Approach

What is a Top Management Team?

A team is a group of people who work together for a common purpose, to produce a specific outcome. In an organization, the top management team consists of the chief executive and his/her direct reports. Selected other individuals with core responsibilities may be included as well. For example, in a multi-plant manufacturing company, the plant managers may report directly to the vice president for manufacturing, but may be included on this team at the discretion of the president.

Typically, a top management team is comprised of 6 - 15 individuals. These individuals are collectively responsible for the strategic direction, guidance and overall performance of the firm. They are also responsible for providing the collective leadership in the firm for the entire workforce.

The CEO or president is responsible for forming the team, building it into an effective force for providing the leadership of the firm, and using it as the primary vehicle for achieving the organization’s business results.

This team has both an external and an internal set of responsibilities. The external responsibilities have to do with understanding the marketplace and setting the strategic direction for the firm. This team is ultimately responsible for crafting and executing the firm’s strategic plan.

The internal responsibilities have to do with providing the overall direction and guidance for the workforce. This is accomplished both through the formal structure of the organization, as well as the core cross-functional business processes that drive the organization.

This team must execute both a leadership and a management role. In its leadership role, the team provides the overall vision that guides the firm; develops alignment to that vision and the subsequent goals that flow from the vision and strategic plan; and then assures the deployment of the firm’s resources as required to achieve the vision and strategic plan.

The management responsibilities of this team assure that once the deployment of resources is made it is executed successfully, and adjusted as required to meet customer needs and shifting marketplace conditions. This includes allocating resources; coaching and guiding others in the execution of their work; monitoring individual and team performance; and guiding corrective action as required ensuring that business results are achieved.

When is a Top Management Team Required?

In the simplest of organizations, the CEO sets the strategic direction, makes all major decisions, and personally guides and controls the work of the organization. This is viable in an organization as long as the technical scope of the organization is within the core competence of the CEO; the issues and problems are sufficiently straightforward that one person has the ability to understand and manage the variables and the complexity of their interaction; and the general size and scope is such that the CEO can personally review and offer the best guidance for virtually all aspects of the organization.

Obviously, this only works for a small organization, and one that is fairly narrow in scope, products and services, and customer base.

As organizations and the business environment grow in size, scope and complexity, the CEO must rely on others to perform much of the work and make the day-to-day decisions that may have implications far beyond their apparent scope at that moment. This is the work of the top management team.

If the CEO simply divides the work and apportions it among top management, all solutions will arrive piecemeal, and the CEO must integrate the elements. Often what best serves the interest of one area may be devastating for another area. When these circumstances prevail, the CEO must mold his/her top management into one team to provide the overall guidance and direction for the organization.

An integrated top management team is essential when any one or more of the following conditions prevail:

1. The firm is too complex for any one person to be able to know and handle all the variables.
2. The interdependencies of the team members to each other are such that good communications and connectivity is essential to overall organizational success.
3. The organizational requirements are such that commitment to all the goals by all the members of top management is essential if the company is to meet its many requirements.
   There are no obvious answers that are clearly known by one person. The collective knowledge and wisdom of the team is needed to ensure company success.
4. The expertise required for successful organizational performance is spread among the top management team.

Under any of these circumstances, the CEO will be hard pressed to meet the business goals by working alone, or by attempting to serve as the single point of knowledge or decisions. Multiple individuals must contribute to the process and add their expertise with a full commitment to the agreed upon collective goals of the firm.

Why Top Management Teams Fail

Teams can fail for many reasons. Some of the most common ones are:

• No clear vision - not sure why we are here
  The top management team is not clear about or collectively committed to the overall goals of the organization. Or, the top management does not have a vision of the additional power it can generate by working together as a team.
• No boundaries on the individuals and on the team - not sure what we can or can’t do as individual senior managers, and as a team
  Not clear regarding who makes what decisions, or what areas of decision-making belong to this team vs. other divisions, Board of Directors, etc.
• Failure to address process - team behavior is poor
  Individual behavior becomes a barrier to effective team performance.
• Focus on personalities
  Who’s right becomes more important than what’s right. Conflicts are excused or allowed to continue and fester with the excuse of a “personality conflict” allowed to serve as a permanent barrier to identifying and resolving the conflict.
• Focuses on individual vs. team success - individuals dominate
  This is a common condition among top management, especially around functional or departmental walls or barriers.
• Distracted from purpose - lose track of where we are going as a team
  Individual or departmental success become more important than company success. Short term gains become more important than long term sustained growth and profitability. The drivers, control systems and reward structures function counter to the vision and strategic direction for the firm.

Critical Success Factors for an Effective Top Management Team

A team consists of a group of individuals working together to achieve a set of common goals. In order for this team to function effectively, several specific criteria must be in place. If any of these elements are missing, the team may become a group of disparate individuals who spend their time debating with each other and have a negative impact on each other’s contribution, rather than an integrated team that creates additional value through its work together.

In order for a top management team to achieve the synergistic results expected from effective teamwork, the following criteria must be in place.

1. The team must have a common agreed upon charter.
   The team charter is represented through a set of common goals,
   measures and rules known, understood and agreed to by all team
   members.
2. The team members must be committed to the goals and tasks required.
   If a major project has been allocated 10 percent of the operating budget, then the individual assigned must agree that it can be done with that budget, and be personally committed to achieving that result. Lack of commitment to the tasks and goals will lead to failure.
3. The team members must be committed to each other.
   This means that the team members accept each other, and are committed to working together and to ensuring each other’s success, regardless of how they may feel about each other. For example, if one member’s professional expertise is not fully trusted by another team member, then that team member has the responsibility to help - not criticize or pick on - that person’s work to ensure success both for the individual and the team.
4. The team members must be interdependent.
   That is, they must need each other to be successful. If any one team member can successfully do his/her job without any support or integration with the other team members, then that person can well argue that the team is unimportant to him/her. This is obviously not the case for a top management team that is collectively responsible for the overall results of the business. Yet, a review of the behavior of independent team members would often lead to other conclusions.
5. The team and team members must have both collective and individual accountability.
   The team result - overall success of the business - must be clearly related to each person’s success. If the team fails to achieve its goals, then each team member must have some culpability for the overall lack of results - regardless of who did or did not do the work. Similarly, each individual team member’s goals must be clearly identified and accepted, and that person must be singularly responsible for those results. The accountability for every team member must be endorsed by the entire top management team. This accountability should be tied into both the team and individual performance reviews and reward structures, as well as future career opportunities.
6. The team members must demonstrate acceptable team behavior.
   There are a number of key personal and interpersonal behaviors that are essential for a team to perform well when it is together. These behaviors are described in detail elsewhere in these materials.

Characteristics of an Effective Work Team

The President or CEO should conduct the acid test of these six critical success factors for the top management team before proceeding. If any of these factors are missing, they should be resolved before moving the team forward into the formal chartering and team development processes.

1. The “atmosphere” tends to be informal, comfortable and relaxed. There are no obvious tensions. It is a working atmosphere in which people are involved and interested. There are no signs of boredom.
2. There is a lot of discussion in which virtually everyone participates, but it remains pertinent to the task of the team. If the discussion gets off the subject, someone will bring it back shortly.
3. The task or the objective of the team is well understood and accepted by the members. There will have been free discussion of the objective at some point, until it was formulated in such a way that the members of the team could commit themselves to it.
4. The members listen to each other! The discussion does not have the quality of jumping from one idea to another unrelated one. People are not afraid of appearing foolish by putting forth a creative thought even if it seems fairly extreme.
5. There is constructive disagreement. There is no reluctance to take on "ugly" subjects were the unpleasant reality is debated with a "let's fix it" discussion. The team is comfortable with disagreement and shows no signs of having to avoid conflict. Disagreements are not suppressed or overridden by premature team action. The reasons are carefully examined, and the team seeks to resolve them rather than to dominate the dissenter

   Sometimes there are basic disagreements which cannot be resolved. The team finds it possible to live with them, accepting them but not permitting them to block its efforts. When the disagreement cannot be resolved and action is necessary, it will be taken but with open caution and recognition that the action may be subject to later reconsideration.
6. Most decisions are reached by consensus in which it is clear that everybody is in general agreement and willing to go along with it. However, there is little tendency for individuals who oppose the action to keep their opposition private and thus let an apparent consensus mask real disagreement. Formal voting is at a minimum; the team does not accept a simple majority as a proper basis for action.
7. Criticism is frequent, frank and relatively comfortable. There is little evidence of personal attack, either openly or in a hidden fashion. The criticism is constructive in that it is oriented toward removing an obstacle that faces the team.
8. People are free in expressing their feelings as well as their ideas both on the task and on the team’s operation. Everybody appears to know quite well how everybody else feels about any matter under discussion.
9. When action is taken, clear assignments are made and accepted. Even members who have strenuously argued for a different decision accept the outcome as the best for the circumstances and unify behind the decision.
10. The leader of the team does not dominate it, nor on the contrary, does the team defer unduly to him or her. In fact, leadership shifts from time to time, depending on the circumstances. More often when a subject is raised it comes as a question rather than a statement encouraging participation in the debate. There is little evidence of a struggle for power as the team operates. The issue is not who controls, but how to get the job done.
11. The team is self-conscious about its own operations. Frequently, it will stop to examine how well it is doing or what may be interfering with its operation. Whether the problem is a matter of procedure, or an individual whose behavior is interfering with the accomplishment of the team objectives, it gets open discussion until a solution is found.
12. Respect for diversity of team members builds confidence and has an impact on team effectiveness.

The Stages of Team Development

Teams go through a number of stages in their development. The length and complexity of each stage is a function of the complexity of the goals and assignment of the team, as well as the number and styles of the team members themselves.

A relatively small top management team in a fairly straightforward company would move through these stages relatively quickly. A top management team for a fairly complex organization with multiple products, services or locations offered to a diverse customer base will require much more attention to this process.

The following diagram describes the stages of the process for creating a high performance top management team. The three rings indicate the three major stages of team chartering, team development and then team maintenance and continuous improvement.

NEXT: "The Chartering Process for Top Management Teams"

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