Instilling purpose in a senior team

Senior Client Partners for Korn Ferry Janet Feldman, who co-developed the firm’s Chief Executive Institute, and Michel Buffet, who works in the Leadership Development practice, write how CEOs should confront the need to change their work and that of their top team.

PwC’s annual survey of more than 4,000 global CEOs, on full display at Davos, asked whether they think their company will be viable a decade from now if it continues running on its current path. A full 40 per cent answered “no.”

“That’s unprecedented,” says PwC’s global chair Bob Moritz. “What’s interesting… is the focus on getting their act together over the longer term to do the transformation stuff.”

Long-range strategic planning is nothing new, especially for leaders of industries like energy, insurance, or pharmaceuticals where capital investments, research and business cycles are measured in decades instead of years. What is new are the profound changes and high levels of uncertainty in the post-pandemic global ecosystem.

In this era of continuous disruption and rapidly shifting priorities, CEOs face a need to change their work and that of their top team.

Much attention has gone into understanding team dynamics, in the belief it helps separate low- from high-performing teams.

Although it is a critical piece of the puzzle, it should not be the initial or sole focus of team development efforts. Doing so exposes teams to missing the fact that their journey to high performance starts with a clear and shared commitment to compelling team priorities – including a strategic mandate to both perform and transform.

With a clear, consequential mandate guiding their work, high-performing teams avoid wasting time and resources on just being more ‘effective’ at what they are currently doing.

In our research (conducted with Richard Hackman of Harvard Business School), less than 19 per cent of the executive teams were labelled as high-performing.

That’s largely because most leaders struggle with framing and communicating what they need from their leadership team. A significant factor is the number and diversity of stakeholders – often with competing values – that force trade-offs and dilemmas for CEOs and leadership teams.

However, the same research revealed that high-performing teams share at least three common qualities:

• High-performing teams demonstrate a clear sense of purpose — both why the team exists and what the work of the team is. In contrast, less effective teams struggle with a more general sense of their role, holding the belief that the purpose of the team is the same as the collective work of them as individual leaders. But there is unique work that must be done by the executive leadership team. Clarifying this work that is beyond individual functions/businesses sets the stage for collaboration and joint decision-making on the team’s most critical priorities.

• Teams are formed to collectively deliver on their leader’s remit, on behalf of the organization. A team leader owns meeting agenda content, focus and governance, team members collectively own the leadership of the enterprise team, with the team leader. Together, they need to comprise a diverse ‘fit for purpose’ mix of experience and expertise, in addition to possessing the right enterprise leadership mindsets required to put enterprise priorities above parochial agendas.

• High-performing teams develop disciplined approaches to meeting/agenda management that govern decision making and other activities to deliver on the team’s collective accountabilities. When used in combination with adherence to established norms and standards of behavior, these form the basis for trust, openness, constructive debate, and conflict resolution. Finally, high-performing teams engage in continuous improvement of their collective capabilities and ways of working.

Measuring the performance and effectiveness of executive leadership teams can be simple, but not easy. CEOs of high-performing executive teams are clear on both the hard metrics (e.g., stock performance) and drivers (i.e., credo/values) of performance. Tying these explicitly to the team’s key priorities and purpose, in the form of a formal dashboard, helps ensure that team delivers for its stakeholders effectively.

One CEO of a global pharmaceutical company explicitly allocated two-thirds of his team’s performance ratings – from which bonuses and other incentives are determined – to team deliverables over individual KPIs. We see this practice becoming increasingly common to ensure the top team is delivering the organization’s most important priorities and ensure leaders are equally committed to improving the team.

Organizations have shown a steady adoption of information technology to collect, analyze and report performance metrics. Balanced scorecards, KPIs, dashboards, and surveys, powered by sophisticated, digital platforms, have long informed strategic management.

The accelerating advances in artificial intelligence and machine learning promise new breakthroughs for leaders and may seduce some to let the machines make the decisions. This is likely to create new challenges for boards, CEOs and their teams, having to define their unique contribution to leading growth and sustainability.

Pictured top: Janet Feldman