What exactly do you mean by the term team-based top management?
Chief executives around the world are realising they have not tapped the great potential of their top management. More and more, firms’ overall goals can only be achieved by using these highly skilled executives as team.
A single person can make big difference in an organisation. But no single person has enough knowledge or experience to understand everything happening in complex and sophisticated organisation. Major gains in quality and productivity most often result from teams – groups of people pooling their skills, talents and knowledge. With proper leadership, teams can tackle complex and chronic problems and come up with effective, permanent solutions.
An important effect of top management teams is that the core concepts of teamwork start to develop at all levels of the organisation. Team members every-where in the company start working together, moving in the same direction.
When are companies most in need of team-based top management?
An integrated top management team is essential when:
• The company is too complex for any one person to be able to know and handle all the variables.
• The interdependencies of team members mean good communications and connectivity are necessary to overall organisational success.
• Commitment to all goals by all members of top management is essential for the company to meet its many requirements.
• There are no obvious answers clearly known by one person. The team’s collective knowledge and wisdom are needed to ensure success.
Don’t most senior managements already operate as team?
Much thought and attention has been paid to project, process improvement, functional organisational and self-directed work teams. But the executive team poses some unique requirements and challenges. First of all, company’s senior executives hold collective set of responsibilities which is exclusively theirs. The success of the organisation rests in their hands, and from their collective vision and direction the organisation’s longer-term strategic direction and success will flow.
It is generally assumed that by the time group of individuals reaches the senior executive level they have pretty well developed and honed their leadership skills, including those of serving on wide variety of teams, and functioning as leaders of their own teams.
Unfortunately, the reverse is more often the case. In 35 years of consulting experience with hundreds of organisations across the globe, I seldom found an executive group functioning as high-performance team.
More often, the senior executive group consists of number of fiercely independent individuals who enjoy competing with everyone, including each other. Power struggles are common and separate fiefdoms dividing the organisation along its functional structure is common manifestation for what passes as senior executive team.
What was the essence of the traditional model for senior management?
Traditionally, executives rose to the top of their organisations because of their high achievement focus and skills, honed over years of successful performance in competitive environments. Success has often been defined by the scope of an executive’s power: for example, the size of the manager’s organisation, staff, budget and scope of decision-making authority. Senior executives often see each other as rivals, both in terms of accumulating their share of the organisation’s power base, and their chances of getting the chief executive’s job. And, sometimes this rivalry is used by CEOs as valuable tool to stir the competitive pot and get the best results from each function.
In stable marketplace with an organisation seeking to maintain consistent, predictable output, functionally driven organisation where members of the top management team control their individual areas with little cross-functional involvement might be justified. Actually, just such control-driven environment created the structures we’ve seen since the industrial revolution. But rapid shifts in the competitive marketplace have caused major re-examination of the basic business models needed for the competitive environment we have now and will surely continue having in the decades ahead.
When the business environment is stable, executives function more as managers than leaders. They establish the core business strategy and agree on the organisation’s structure and the systems required to control the activities which will ensure achievement of the business plan. So, the system is essentially hierarchical. With such system, the organisation is divided up into its logical parts based on the functions performed. And, these functions are divided among top management with each responsible for particular part.
Within this context, there is no compelling need for members of top management to operate as an executive team. While they may need to share information and collectively review overall business results, course corrections are assigned to the functional members who own the source of the problem. So, the essence of the traditional model was designed to create and ensure stability and predictability: the assumption being that the whole is the sum of the parts, and if each part performs well, the whole will be achieved.
However, the core assumptions regarding business conditions and stable economic environment no longer reflect the nature of the world. In today’s changing marketplace, the economic environment is neither predictable nor stable. Economic growth is no longer assured, and competition abounds from all sides.
What do you see as the requirements of this new economic environment?
The new reality is that in this changing environment top-down, hierarchical, compartmentalised, control-oriented management culture simply will not work. It is too slow, too rigid, too far removed from the customer, too insensitive to feedback, and the layers of bureaucracy required by the hierarchy are too costly. The management system needed in this new era sees that the various elements of the system are interdependent and must function as an integrated whole. The entire system needs to be highly responsive to customer and marketplace feedback with the organisation being very flexible.
Here, knowledge and the ability to solve problems no longer flow down from the top of the organisation, far removed from the customer. The best source of knowledge comes from where the work gets done, not from the top. The role of employees shifts from one where individual differences need to be suppressed, to one where individual differences – knowledge and skill – are the firm’s most essential competitive advantage.
So, today’s executives are responsible for guiding the work of much more amorphous, flexible, distributed network of core competencies which must be brought together with speed and fluidity to meet the needs of rapidly changing markets, often using technologies with life cycles shorter than those of the products or services offered.
So this calls for substantial changes in the way top management operates.
Very much so. major consequence of these changes in the business world is that the role of top management must adapt and change as well. I see this new role as one where top managers guide an interdependent system, rather than control their own functional turf. And this presses the need for new skills and mind-sets. Top managers must now function primarily as leaders rather than managers. They must now guide the interdependent elements of system, applying all the concepts of systems thinking to their jobs while also seeing employees as their greatest resource.
For this to work, top management must also function as an interdependent system – as well-oiled executive team with the primary responsibility being leadership, rather than management, of the firm.
How do you see the core responsibilities of leader
