When your top team fails to function, it will likely paralyze the whole company.
Few teams function as well as they could. But the stakes get higher with senior-executive teams: dysfunctional ones can slow down, derail, or even paralyze a whole company. McKinsey in their work with top teams at more than 100 leading multinational companies, including surveys with 600 senior executives at 30 of them, they identified three crucial priorities for constructing and managing effective top teams. Getting these priorities right can help drive better business outcomes in areas ranging from customer satisfaction to worker productivity and many more as well.
Get the right people on the team . . . and the wrong ones off
Determining the membership of a top team is the CEO’s responsibility—and frequently the most powerful lever to shape a team’s performance. Many CEOs regret not employing this lever early enough or thoroughly enough. Still others neglect it entirely, assuming instead that factors such as titles, pay grades, or an executive’s position on the org chart are enough to warrant default membership. Little surprise, then, that more than one-third of the executives they surveyed said their top teams did not have the right people and capabilities.
The key to getting a top team’s composition right is deciding what contributions the team as a whole, and its members as individuals, must make to achieve an organization’s performance aspirations and then making the necessary changes in the team. This sounds straight-forward, but it typically requires conscious attention and courage from the CEO; otherwise, the top team can under-deliver for an extended period of time.
Make sure the top team does just the work only it can do
Many top teams struggle to find purpose and focus. Only 38 percent of the executives McKinsey surveyed said their teams focused on work that truly benefited from a top-team perspective. Only 35 percent said their top teams allocated the right amounts of time among the various topics they considered important, such as strategy and people.
Address team dynamics and processes
A final area demanding unrelenting attention from CEOs is effective team dynamics, whose absence is a frequent problem: among the top teams McKinsey studied, members reported that only about 30 percent of their time was spent in “productive collaboration”—a figure that dropped even more when teams dealt with high-stakes topics where members had differing, entrenched interests.
Correcting dysfunctional dynamics requires focused attention and interventions, preferably as soon as an ineffective pattern shows up.
Finally, most teams need to change their support systems or processes to catalyse and embed change.
Each top team is unique, and every CEO will need to address a unique combination of challenges.
Developing a highly effective top team typically requires good diagnostics, followed by a series of workshops and field work to address the dynamics of the team while it attends to hard business issues. The best top teams will begin to take collective responsibility and to develop the ability to maintain and improve their own effectiveness, creating a lasting performance edge.
© McKinsey & Co • Michiel Kruyt, Judy Malan, and Rachel Tuffield