The Three Obstacles Breakthrough Leadership Teams Avoid

May 1, 2014

Last year within a Fortune 50 company—the top global player in its industry—one of the highest-performing teams was at a crossroads.The group ran an $18B business segment and had been instrumental in contributing to the company’s performance through a time of both organizational and industry transition.As a team, they consistently hit or slightly beat their numbers within their geographic, product and functional silos.

Butin 2013the team faced a different kind of challenge: its own ability to collaborate.

Executive meetings had become largely report-outs: Asia’s region president would give her updates to the leader, answering his questions while her nine peers checked email. Then she’d pull up her email while her counterpart for Europe delivered his updates. And so on.In addition, the team regarded stretch goals with caution. They knew that once uttered, the stretch goal would quickly become the real target by which performance would be measured.

While acknowledging their successes, their leader chose to challenge them: How can we do better?How can we risk more, in a smarter way, to take our business further? How are our fates linked, and what’s holding us back?

From Silo Mentality to an Enterprise Mindset
If this scenario sounds familiar, you’re not alone. In our 2013 data from senior teams across 11 countries and 13 industries, the issue of team collaboration consistently came up as one of the top 3 priorities for the year. In a majority of US-based multinationals, it has jumped to the #1 priority for 2014.

As the recession wanes, boards and executive committees are calling on senior teams—often comprised of members who don’t know each other’s silos well—to tackle enterprise-widechallenges ranging from growth to disruption.But after years of becoming expertsathitting their individual silos’ targets, many top team members have grown accustomed to “going it alone.”

Their collective teaming muscles are out of practice.

Breaking Through: First, Get the Plumbing Right
“Plumbing before poetry…” James March once wroteabout leadership effectiveness and the ability to actually execute an elegant strategy.

Breakthrough teams don’t leave the plumbing to chance. They’re deliberate about clarifying three core team alignment factors and linking that clarity to their own strategic and execution performance:

  1. Breakthrough teams get specific about why they exist. Understanding your purpose or charter mayseem elemental, but the fact is, fewer than 1 in 5 senior leadership teams we interviewed between May 2013 and March 2014 could articulate why they existed as a group.Individual members frequently started off with diametrically opposed responses.Differenceson the “why” willdulla team’sstrategic clarity and ability to execute at full potential.
  2. Breakthrough teams know how they want to show up to key stakeholders. The best-performing teamsknow what values they want to display as a team, and they hold themselves accountable.Do our ends justify our means? Is everyone on the same page about that? This isn’t a feel-good conversation;it’s a hard look in the mirror.
  3. Breakthrough teams confront the ways they undermine their own efforts. Many senior teams (88% in our interviews) undercut their own goals through their day-to-day leadership behaviors.Internal rivalries or competing incentives—a CFO incented to cut costs and a COO incented to improve safety, for example—reverberate through the organization.If leaders aren’t aligned on how to address such paradoxes, the message to direct reports can be:it’s OK to obstruct rather than collaborate. Without clarity about what specific behaviors violate their purpose and values—and thus will not be tolerated—the team won’t be able to execute at a high level.

Purpose, Values, Behavior – Then Strategy and Execution
Seeing this pattern repeat itself across numerous large organizationsover the past year, we’ve come to label these three elements as Purpose, Values, Behaviors.As operators ourselves, we’re not picky about those labels.Whatever you call them, though, they are the “plumbing” that largely differentiates thosesenior teams that achieve breakthrough performance from those withlimited success. With clarity on those points, difficult decisions on strategy, execution, and dealing with real-time disruption becomes faster, more honest, and more effective.

That is what theFortune 50 leadership group discovered.

They got clear on their purpose. They articulated how they wanted to show up, and they identified specific behaviorsdirectly undermining their stated goals. With that common base established, they revisited their strategic and operating plans and uncovered blindspots holding them back. They set out a new plan, with milestones and accountabilities, and they changed their incentive structure to reward collaboration.

As a team, they crushed their 2013 performance targets.And in the process, they received acknowledgement as a breakthrough teamand model of enterprise mindset.

So here’s your challenge—and your opportunity: Where do you rate your own team on the spectrum of silo vs. enterprise performance?

Click the link to view our recent blog: The Perils of Perfectionism, or check back for more on business leadership, team development, and thought leadership.

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