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Is your senior leadership team your most critical business risk?

Is your senior leadership team your most critical business risk?

The biggest risk to business continuity and the future of your organisation is probably not Brexit or AI or the Trump/Putin on-off bromance but the Executive team of your business. With two similar organisations in any crisis or time of rapid change the difference between the one that flourishes and the one that flounders will be the quality of performance of the senior management team. And an ongoing problem for many organisations is that their Executive Leadership Teams are too ‘brittle’ lacking responsiveness and resilience. It is the CEOs and the board’s first duty to tackle this; for the management of ALL OTHER BUSINESS risks depends on creating a cohesive, flexible response from this group of people. It sometimes astonishes me that that this core risk to business sustainability is treated in such a cavalier manner.

Brittle teams can’t adapt, innovate and move the organisation at the speed of the changes going on around them. At their worst most of the key conversations about what is happening and how to respond to it, simply never happen or are hidden away in sub groups amongst cliques and confidants. 

‘Brittle teams’ can flatter to deceive, appearing strong in good times or bad times as long as market circumstances are not changing too fast.  This appearance of strength arises from the action of talented individual leaders each leading her or his department or functions well. A CEO who, with the help of his or her HR Director, has taken some tough decisions and recruited talented individual people into senior leadership roles will certainly be making a difference to performance. Done well there will be improvements in key areas of the business. These new talented leaders will, by and large. focus on ‘downward leadership’, creating focus, challenging complacency, building momentum, levelling with their own people within their direct sphere of control. They may even be recognised as building much more effective relationships with other business lines and functions.  However, in my experience, after initial and sometimes impressive results, things will start to run out of steam.  This is because fixing the parts is not the same as fixing the whole. Team performance is never simply the sum of individual talent. Brittle leadership teams simply don’t have the levels of interdependent awareness, reactivity, coordinated decision and action to function well in more volatile environments.

Or to put it another way, the CEO has provided the organisation with strong bones but no muscle or cartilage, meaning it can’t flex, duck, dive or weave and punch back!

This will result in difficulties in delivering a consistent customer experience; too slow implementation of innovation; over high costs of coordination; and potentially a catastrophic lack of awareness and responsiveness as risks are ‘handed off’ to others.

On the other hand, a resilient senior leadership team is characterised by:

• A powerful shared sense of purpose held individually and collectively and not just imposed by the CEO.

• A deep sense of ownership of ambitions and challenges across the organisation e.g. if one part of the operation is struggling it hurts, even if it is not the direct responsibility of other leaders.

• Anticipation of the short medium and long term operating environment; its threats and opportunities are part of the ‘conversation’ of the team. This results in a much earlier and informed collective response. Resilient teams are very rarely surprised, they are surprised!

• A bias towards joint problem solving rather than solution selling with the early disclosure of difficulties and an openness towards changing mindset.

• Being able to be decisive and change direction and execute at speed in a disciplined way.

• All founded upon mutual respect, openness, warmth, practical challenge and commitment to the success of each other.

So how do you manage this - ensuring that an organisation is led by a suitably resilient senior leadership team?
If you have a team which is at all brittle, it is mostly, though not completely, the responsibility of the CEO. This can be a hard pill to swallow. But it is the CEOs attention and behaviour which is the single biggest lever on senior leadership performance. If issues are not raised openly and resolved:  Who sets the agenda? Who creates the tone in the meeting? Who creates the permissions, the open environment?  If all that is ever reviewed is the past and the future is undiscussable: who is responsible for that focus? Who uses the Finance Director as a Policeman or ensuring management of history becomes the focus of effort? Who encourages or discourages blame?

In my view it must be a primary concern of the CEO or leader of a particular part of a business, to ensure team resilience as a primary focus of business risk management. It is perhaps also the role of the Chair to hold that person accountable for this.

Consultants like me can be effective change agents, stimulating awareness, insight, helping develop practical responses to an ever-changing world in terms of actions and new behaviours. But we are no more than craftsmen and women helping an organisational leader build resilience as a vision and a reality within an organisation.

Comments on this Post

Krishna Kumar on 27th September 2018

The challenge in any team is to understand how individual expertise /skills can kick in to complement efforts and leveraged at the right time and place as well.

Julie Harding on 30th August 2018

Elegant framing Steve, completely agree

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