“Is our team fit for growth?” This is the most important question in the human resources (HR) field. Having the right players on the executive leadership team is the crucial factor that defines a company’s ability to compete and win.
Executive boards play a critical role in building their companies’ leadership teams and setting them up for success. Decades of experience in the HR field has revealed that successful executive teams use four best practices to ensure productive dialogue and effective decision-making within their leadership teams.
1. Agree on strategy
Every company runs its business through people working together in teams. In today’s complex world, individuals working alone are not able to make a difference anymore. It is always a team of people that makes things happen. Think about the most recent success that your business has had; it is always the result of teamwork.
A well-informed executive board thinks in terms of teams and debates their capabilities to deliver on strategy. The board members understand that the guard rails for a discussion on leadership are uniquely vague.
Unlike a financial discussion where debates can be framed in more concrete terms, a people discussion has no obvious shared language.
It is imperative that a shared language is created, and this starts with agreeing on the strategy the team has to deliver. Without a shared understanding of the strategy, it is impossible to reach a conclusion on the capabilities the team needs. Since strategy changes like the weather, it is important to clarify and set expectations – with the strategy in mind – first.
Secondly, it is imperative that the CEO/chairman acts as the guardian of the values and behaviours that are fundamental to the leadership discussions. This will ensure they remain at the forefront of these discussions and guide decision-making.
2. Establish required capabilities
A functioning executive board seeks to understand the critical capabilities required at the team level. Given the team’s objectives, what combination of skills and experiences does the team need to possess? This overview is key because it defines the key areas of risk and helps set priorities.
A simple plotted How/What matrix with the team members offers a good starting point. The matrix allows the board to understand where their opinions converge and/or diverge. Once this high-level understanding is established, the board can then zoom in on the individual level, where a more granular assessment of each person can be determined based on pre-defined criteria for the ‘how’ and the ‘what’.
Each potential team member will then be evaluated against the required capabilities. Personalities and working styles should also be considered to select team members who can work well together. It must be noted that the full range of necessary skills must be considered to build an effective team.
3. Match capabilities with complexities of strategy
Ideally, the company’s executive team makes the connection between the capabilities of the team and the complexity of the strategy the team has to deliver. It is clear that a ‘hold strategy’ (ie, do tomorrow what you can do today) has a different level of complexity compared with an ‘ambitious growth strategy’ (eg, enter the Association of Southeast Asian Nations markets without any prior experience). In today’s people/team discussions, the strategic complexity is usually overlooked.
A second-tier team can never be successful in the ‘premier league’. Not because of the team, but because of a mismatch between second-tier capabilities and first tier delivery expectations. In business, this simple principle is frequently overlooked. A rigorous comparison between the capabilities of a team and the complexity of the strategy is essential.
4. Independently assess team members’ capabilities
People decisions are never black and white. Some decisions are straightforward while others are more challenging because decision-makers have different perspectives and priorities. In the latter case – and when there is time – it often serves the decision process well to have the person in question undergo an assessment.
The people without ‘question marks’ do not need an assessment. The people with ‘question marks’ in light of the strategy, and who are in critical positions, are the ones that need to go through an external assessment. This is when the executive team uses assessments to validate their decisions, not to drive their decisions.
Assessments can be a great instrument when used in the right context. The right context is knowing the team, knowing the strategy, and knowing the key questions for each of the individuals who are being assessed.
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