Building executive teams

Building executive teams

The character of a company's senior management team has a direct bearing on the success or otherwise of the company as a whole. It's common for an executive team to lack a team identity, and for relationships between team members to be poor.

The chief executive occupies a crucial position in shaping the executive team. By encouraging a sense of team spirit, the chief can encourage executives to be concerned with operations outside their own specific departments. By encouraging an atmosphere of open and constructive debate, the chief can ensure that the long-term needs of the company are identified and acted on.

Behavioral integration

It is ironic that while senior management commonly extols the virtues of teamwork at lower levels of the company's management structure, a sense of team spirit can be starkly lacking at the top management level.

The theory of behavioral integration proposes three major elements as the key to creating an effective executive team.

First, optimizing the quality and quantity of information exchange between executives serves to strengthen relationships and facilitate the process of identifying the company's needs and agreeing on ways to act on them. The chief executive's own behavior is key to achieving this kind of atmosphere.

Second, by encouraging collaborative behavior between executives, the chief executive can increase the level of interaction between executives and give them a sense of common purpose. Meetings of the executive team can then involve more than simply exchanging department-specific information – they become a forum for putting forward and debating ideas, as well as for formulating plans for current projects.

It's common for executive teams to fail to agree on even the nature of the company's core philosophy. If more powerful members of the team, especially the chief executive, are unwilling to debate important issues in a constructive manner, it is likely that key requirements for the company's long-term well-being will never be properly addressed. Disaffection within the executive team can lead to a high rate of executive turnover with consequent loss of shareholder confidence in the company.

The chief executive sets the tone

The chief executive should set the tone for the whole executive team. This involves being open and candid with team members, as well as encouraging and rewarding similar openness in team members.

The ease with which a chief executive fits into the company's organizational culture is considered by many company boards to be as important as the chief's performance rating. The chief executive needs to be able to satisfy the needs of customers, while at the same time maintaining and improving the company's stock price and meeting the requirements of important investors. The style of the chief influences the character of the whole executive team heavily and filters down the chain of command, affecting the operations of the entire company.

The chief executive needs to identify and promote within the executive team the correct vision of the company's values. For example, a company that stresses customer service may require more devolution of authority down the chain than one that pursues an economy-of-scale strategy.

Encouraging an atmosphere of teamwork

The mindset and practices of members of the executive team can have a crucial effect on the success or failure of a wide range of activities within the company. For example, the success of the implementation of a corporate transformation rests on the way in which the executive team addresses the concerns of employees in the face of the change. These concerns can include the issue of why the change is necessary and what support employees will get to deal with the change.

The chief executive can't deal with these concerns alone. It is essential that the entire executive team is completely committed to policy changes and new initiatives, and is capable of joining a unified campaign to support these.

Integrating new members

Providing forums for debating ideas

While it is possible for a strong chief executive to lead a well-integrated executive team, it's not a good idea for the chief executive to act as mediator in all exchanges between executive team members. Instead, the chief executive should provide forums in which executives can exchange and debate ideas. While departments should be encouraged to take the initiative, these should fit into the company's overall plan.

Forging a team identity

An effective way to encourage a team spirit at the company's top level is to forge a clear identity for the executive team. The team should be assigned substantive company-wide projects to work on together. The team should meet regularly to collaborate on these projects and to exchange departmental information. These regular meetings will serve to bolster team spirit by strengthening interpersonal relationships within the group.

Cutting parochial zones

It can be beneficial to give individual executives company-wide responsibilities, whether in the short term or on a more continuous basis, to supplement their departmental duties. This serves to encourage executives to think beyond the parochial concerns of their traditional duties.

Rotating team members selectively

Another approach is to selectively rotate members of the executive team so that they are exposed to different aspects of the company's operations for periods of time. This has the additional benefit of bring a range of different viewpoints and competencies to a given area of the company's operations.

Linking incentives to company performance

To encourage executives to be concerned about the performance of the entire executive team, and by extension the company as a whole, it is recommended that no less than one third of company incentive schemes can be linked to company performance. And at least a third of these incentives should, in turn, be granted in the form of company stock or stock options.