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The powerful CEO, either cowing the board of directors, or constantly battling them, is a popular corporate image today. However, it is far from reality. New research finds most CEOs and boards share a mutually respectful, supportive relationship.


Read full article from The Conference Board.

Design & Leadership Due to their stature and high level of visibility in the business world, it is understood that the Chief Executive Officer and the board of directors of an organization exert a strong influence on its success or failure. What may not be so apparent is the significant effect generated by the next level down in the pyramid of power – the CEO’s senior executive team. Empirical research offers some evidence that connects organizational outcomes with the performance of senior executive teams. Until now, however, the mechanism behind the link remained more or less a mystery. But findings from RHR International’s soon to be published Team Effectiveness Study™ not

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Design & Leadership

Due to their stature and high level of visibility in the business world, it is understood that the Chief Executive Officer and the board of directors of an organization exert a strong influence on its success or failure. What may not be so apparent is the significant effect generated by the next level down in the pyramid of power – the CEO’s senior executive team.

Empirical research offers some evidence that connects organizational outcomes with the performance of senior executive teams. Until now, however, the mechanism behind the link remained more or less a mystery. But findings from RHR International’s soon to be published Team Effectiveness Study™ not only confirm this relationship, but also provide support for a number of key factors – specific to superior senior teams and their leaders – that drive results.

What exactly is a Senior Executive Team? It should be a group of executives carefully chosen for their abilities to address enterprise and cross-functional challenges of the highest level and to provide the CEO with all the information necessary to make an informed decision. In actuality, the makeup and quality of “senior teams” varies greatly. Through analysis of data from 200 senior teams, RHR has isolated seven Key Success Factors that differentiate an Aligned Superior Senior Executive Team (ASSET™) from lower performing teams (LPTs).

• Agile Design
• Engaged Leaders
• Disciplined Focus
• Efficient Decisions
• Adapt and Connect
• Shape the Culture
• Get Results

AGILE DESIGN How does a group of diverse individuals become an ASSET™? First, the chief executive must make it clear that he/she really wants and needs a multi-disciplinary, cross-functional team. Equally important is the thoughtful and purposeful selection of its members. Many CEOs inherit large “grandfathered” teams, consisting mainly of their direct reports. When this happens, the chief executive often turns to a sub group or “kitchen cabinet” to do the actual work, causing a negative impact on the others. Senior teams must be more than mere status symbols. Individuals on “the staff” do not necessarily have the proper abilities to be ASSET™ material. The key to remember is “who for what?” What are the challenges on the table and what skill sets are required to resolve them?

The CEO also assumes much of the burden to define the boundaries of the group and pull together the elements that will make it operate smoothly and effectively. It is vital to first review the organization’s current strategy and operating environment. Only then can the leader determine the organizational need and select the team members based on the abilities and mix of talents required to execute the plan. In our study, 97% of ASSET™ members indicated that their group was properly structured to achieve strategic goals versus only 70% of LPTs.

An ASSET™ is not only comprised of the right talent mix given the company’s strategy, but roles and lines of decision-making authority are clear within and across top teams. High performing teams are also designed to be nimble, expertly utilizing ad hoc groups and steering committees to provide information and resolve challenges below the senior team’s charter. This results in faster, more efficient execution of decisions at all organizational levels. An ASSET™ also tracks any ad hoc teams carefully so they are disbanded after their mission is achieved.

ENGAGED LEADER While many organizations pay lip service to the team concept, the CEO usually makes solo decisions, perhaps after “touching base” with staff members. We found that the most engaged leaders structure thorough deliberations with the right team members about the right issues. Consensus isn’t required, but there does need to be an understanding that team members’ input is critical to shaping decisions made by the CEO. This clarity engages the team in ways that include important cross-functional input into decision-making and gives team members a higher purpose than just to share information, which is a hallmark of many LPTs.

The best method of creating engagement within a senior executive team is for the CEO to establish shared, enterprise-oriented goals. Such goals naturally fall out of a good strategic planning process that verifies the specific issues for which the senior team will have responsibility. Our study shows that an ASSET™ is five times more likely to have a leader who excels at holding them accountable for these shared goals. By definition, these shared goals will require interdependent decision-making that cuts across business unit silos and/or functional areas of responsibility. Examples of shared enterprise goals include: defining and executing an innovation agenda that drives organic growth, building cross-functional capability to absorb multiple acquisitions, and transforming a culture to deliver on a new business model or strategic direction.

Forty-two percent of ASSET™ members indicate that their leaders are highly effective or even exceptional when it comes to engaging the team and inspiring action. These CEOs also consistently demonstrate commitment to their teams by providing the tools and resources necessary for achieving organizational goals and removing barriers to team functioning. In contrast, only 9% of LPTs said their leader inspired them and only 3% said they were given the proper resources. Tools and resources can include consulting help from external sources and task forces formed to provide intelligence. ASSET™ leaders also create the right rhythm (in terms of timing) and the right space to explore and execute decisions. You can’t tackle the tough issues by meeting for half an hour once a month.

THE BOTTOM LINE By following the suggestions outlined above, organizations will take the first steps into making their senior executive teams into an ASSET™ by having:

• Clarity on need and purpose
• A design created for agility
• An engaged leader who inspires the team
• Teams that partner with the CEO to solve problems
• Shared, enterprise-oriented goals
• Team members with the right abilities for specific challenges
• A group properly structured to achieve strategic goals
• Carefully controlled ad hoc teams for specific needs

In a new posting next month, we will look at the roles Disciplined Focus and Efficient Decisions play in creating an ASSET™.

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Does an outstanding chief executive always make a good company director? Moving from the corner office to the boardroom requires a conscious change in leadership style. As the focus changes from solo decision-making to being part of a group, following becomes as important as leading. Belief in “self” should become belief in the organization and its leadership.