How effective is your leadership team?

by Lars Even Rasmussen

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On average, only 30% of tenured CEOs (those in role three or more years) say their senior teams are effective.

DDI CEO Report 2021

One of the major challenges of senior leaders is how they can make their leadership team work effectively.

I have heard this consistently over the years and it seems to be a universal issue across any size of organisation and business, all types of industries, in all geographies, and all layers in the organisation. Having leadership teams work effectively is hard to obtain.

This is obviously a major leadership challenge. Ineffectiveness from the leadership team will cascade through the organisation and create some of the well-known organisational diseases: rigid silo focus and suboptimization, inefficient strategic execution, bureaucracy, unaligned communication and erosion of trust in leadership, etc. The list of symptoms is long.

The other day, I came across research that puts data on my experiences. In a recent published global survey by DDI, CEO’s around the world were asked about how effective their senior leadership team is operating.

A striking result is that only 30% of CEO’s with more than 3 years in the role feel that their leadership team works effectively. Or put the other way around, 7 out of 10 does not feel that their senior leadership is operating effectively.

This is a devastating result. Needless to say, that there’s a lot to be gained by improving this. No doubt that the effectiveness of the senior leadership team has a direct impact on business results and overall organisational health.

The good thing is, that you can do something about it.

First, the DDI CEO Report 2021 clearly shows, that using professional assessment in talent decisions with a strategic approach have a significant positive impact on the effectiveness of the leadership team.

Among organisations that leverage objective data in their strategic talent decisions, 64% of the CEO's rated their senior teams as effective, more than double the average.

DDI CEO Report 2021

The two important aspects are “objective data” and “strategic talent decisions”. Strategic talent decisions means that you must be conscious about the calibre of talent you need in your leadership team and how you continuously “build or buy” talent for future need. Objective data underlines the need for continuous assessment of team effectiveness, individual performance, development, and potential based on professional methods and applications. It’s crucial to understand, that while objective data is a requirement, it is not sufficient. Unless you act upon it, make “strategic talent decisions”, and support the development of talent, it does not provide any value.

Second, my claim is that supplementing the use objective data in talent decisions with a structured approach to team effectiveness amplifies leadership team effectiveness.

This requires investment and commitment, and it includes “hard-wiring” and “soft-wiring”.

By “hard-wiring” we understand the formal parts of team effectiveness, e.g. a clear and compelling purpose of the team, ambitious goals, clear priorities, well-defined roles and an efficient operating system.

“Soft-wiring” are on the other hand the informal parts around team dynamics, e.g. trust, conflict management, etc.

Working with team effectiveness is not a one-time investment nor a “once-a-year-event”, but an ongoing priority for you and your leadership team members.

The data shown above clearly shows, that it doesn’t come by itself and the question for you is: How much can be gained for your business and organisation if your leadership team becomes even more effective?

Source: CEO 2021 Survey, DDI

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