Most management/leadership teams aren’t really teams; they’re a collection of well-intended professionals who meet from time to time around business issues. Real teams work in concert to meet common goals.
To be a team, people must share success models, collaborate for achievement and be willing to give up resources for the good of the collective. Organizations unable to function this way may struggle with strategic issues such as long-range planning, capitalization and product/service planning.
In many of these cases, the CEO is left to carry the entire strategic workload. Team members may be focused on turf issues, defending their positions and avoiding anything that makes them look bad as opposed to concentrating on broader company issues. In many corporate cultures, executives are rewarded for successfully advocating their positions rather than inquiring into the more complex issues of running the business.
Required: Different Mindset
High-performance teams, on the other hand, regularly challenge each other for their best thinking. Teams where the financial executive asks great marketing questions or the sales executive asks pertinent operations questions see such inquiries as helpful and instructive as opposed to insulting. In dysfunctional teams, asking the tough questions is often avoided because people fear making others angry or exposing themselves to criticism. This manifests in “go along to get along” behavior.
To function effectively as a team, members must be open to inquiry without defensiveness and be willing to consider making improvements and changes to benefit the collective — even if it means giving up some resources or responsibilities.
Transforming business groups into actual teams presents several challenges. First, leaders must think differently about their jobs and become more strategist and general manager and less focused on the narrower issues within their functional areas of responsibility. This is no small task. Most executives have spent the majority of their careers working and being rewarded for success within a discrete functional area.
Changing this dynamic takes a concerted effort and touches all areas of any business enterprise. A number of steps can be taken to promote this change, beginning with rewards and recognition systems. People will do what they are paid to do regardless of other efforts to have them behave differently. Unless the way they are compensated changes, most people will not change the way they work.
To build any team, members must understand what’s in it for them and be able to tie that to their own rewards and recognition. Once they are convinced their own needs are going to be met, most can begin to think more as “we” rather than “I.”
The next step is for all team members to participate in a series of facilitated dialogue sessions to identify specific changes that must be made and discuss the ramifications of each change. A common way to accomplish this transformation is to identify shared goals that represent success for the organization. Functional executives negotiate their goals with the CEO, and once this has been accomplished, the team meets to share information and ensure there are no conflicts.
These goals become the drivers for a regular meeting process — at least twice monthly — where goal progress and accomplishment are measured and reported, and corrective actions are developed when falling behind. Once these goals are set, each individual’s compensation must be aligned with goal accomplishment in these areas, and they become a major component of the performance management process. Many companies use a blended compensation model where a certain percentage of the executive’s compensation depends on hitting shared target goals, and another percentage depends on the executive’s functional area achieving its goals.
This shift requires building different relationships between functional leaders based on mutual trust. Building trust requires effort over time and a delicate balance between self-disclosure and self-protection. Generally, selective sharing of values, personal information and career and life goals between team members goes a long way toward building trust.
A certain amount of reciprocity around resource sharing, providing assistance and working together for the common good of the organization is also required. If only one or two team members are willing to do these things, creating the kind of collaborative relationships required is not possible. Talent leaders can play a vital role in helping to provide structure, facilitation, skill building and coaching.
What’s Really Important?
To begin this process, look at the nuts and bolts of common business metrics. Measuring for measurement’s sake does not add value, but measuring vital factors focuses the team on individual and team goals and guarantees these areas of the business are actually managed as opposed to merely reported on. For executive teams, there is a relatively short list of mission-critical areas that must be focused upon, measured and managed. They usually include top line or gross sales, fixed and variable expenses, net operating profit/loss and bottom line or net profit/losses.
There may be others, but successful organizations tend to limit the number of categories upon which to focus so reporting does not become a laundry list of numbers. If there are too many categories being measured or if actions are being confused with results, individual and team efforts are diluted. Other critical areas to measure belong to managers further down in the organization.
According to Tony Deblauwe, founder of HR4Change, an information and services resource for individual and business productivity, “Most bonus components of executive compensation packages I have seen center on a split between individual and company measures of performance. Typically the corporate results are more heavily weighted in the formula because the intent is to align executive behavior with the broader success of the company versus a particular functional area. While fair market leveled bonus structures do provide a motivation to align an executive team, ultimately this model works best when there is a culture of teamwork and collaboration versus silos and competition.”
For sales organizations the vital factors usually consist of gross sales and gross margin. While any sales organization will do thousands of tasks each month, if it misses the sales or margin number, the business hurts.
Another example is an accounting function. To be successful, it must manage accounts receivable, accounts payable, payroll and closing the books and generating financial reports for the management team. Again, people will do thousands of tasks each month, but if they don’t collect the cash, pay the vendors, have an error-free payroll or get vital financial information to the management team, the business hurts.
This logic can be applied throughout any organization at every level. This gives everyone involved a success formula. If all employees know what the success metrics are and how they contribute to them, they are more likely to team rather than not.
Internal competition is another barrier to effective teaming and is a reality of corporate life. People do compete for the boss’ time and favor and for recognition and promotions. What is important here is what sort of behaviors are rewarded within the culture. If individual contribution and success are recognized and rewarded, teaming is more difficult. On the other hand, if peer support, collaboration and mutual goal support and achievement are rewarded, people are more likely to work together to accomplish broader business goals.
Wanted: Sustainable Cultural Change
Organizations that are serious about building real teams must examine their culture, behaviors, and rewards and recognition practices. These must align and support teaming, collaboration and accomplishing mutual goals. This examination can be difficult, as some team members may experience a perceived or actual loss of power, recognition or compensation. Further, if the company says it wants collaboration and teamwork, but it continues to reward individual achievement and superstar behaviors, people will experience what the company says as a sham.
Success in this realm requires the active, vocal support of management at all levels. Outliers must be coached into supporting the change in culture or moved out of the organization. In some cases, people will say they support the changes but do little or nothing to actually support them. Offline conversations may occur where people express their resistance and disagreement with the new direction and do not actively communicate and coach people in their area to adopt the new behaviors. Other people will ignore change initiatives as just another “flavor of the month” and not actively support them because they know the effort will die within six months. Individual contributors behaving in ways that undermine management’s efforts must receive the same treatment, and the company must celebrate successes large and small throughout the transformation and beyond to sustain them.
This becomes more difficult when most Western cultures are examined. Management’s attentions tend to focus on individual stars rather than team. Look at professional athletics. There are 11 members in the offensive unit of an American football team, yet the quarterback gets the majority of the credit — or blame — when success or failure is discussed. In professional baseball, the media promotes pitcher A against pitcher B, but in the American League, they never even face each other directly due to the designated hitter rule.
Individuals, teams and organizations must prepare themselves for a long transformation and many barriers to success because society at large seems to follow a different model. People are often raised to be competitive rather than collaborative, so learning to team effectively is almost counterintuitive.
This is not to say it cannot be done. Take Sharp HealthCare in the San Diego area, for example. It employs more than 15,000 people and is in the midst of this kind of transformation. The company is not implementing corporate initiatives to tinker around the edges; it has undergone a wholesale transformation of the business with full support and leadership from CEO Mike Murphy. At the NEXT Symposium in September 2011, Murphy detailed the steps the company has taken and continues to take, and the resulting financial gains. Sharp has pursued an aggressive program of training and coaching at all levels, brought in new people and raised the levels of energy, focus and attention on creating a winning culture.
The company was in some jeopardy when Murphy took over and began the transformation process. He has since succeeded in getting staff to be patient- and physician-focused, physicians to be outcome-focused and the entire organization to be community-focused. Financial success has followed, and the company is now focused on the future of health care in the United States.
Having experienced the transformation of its business already, Sharp is more equipped to adapt to the changing landscape. The organization is more agile, flexible and able to see change as an opportunity rather than a threat.
In organizations that are serious about building strong teamwork, senior leaders must make a serious commitment to make decisions in the long-term best interest of the enterprise. This will require rethinking how they do what they do, breaking some time-honored and tested paradigms and being willing to take the heat from those who do not yet see the necessity to remake business.
For too long, management and non-management alike have looked to the past for how best to run their businesses. Organizations’ relentless pursuit of industry best practices could serve as a warning that people are looking in the wrong direction when attempting to optimize their companies. So-called best practices are based on the past and represent honing and optimizing processes around efficiency.
Now business leaders at all levels must focus on future practices that will allow them to keep up with the rapidly changing business landscape. Teaming in new ways, collaborating across organizational boundaries and sharing resources in new ways will be required for success in the future.
John R. Anderson is the founder and principal of The Glowan Consulting Group and author of Running the Corporate Rapids. He can be reached at email@example.com.