Elaine Yew Egon Zehnder, Singapore
The team is the star
Using a Team Effectiveness Review to analyze and enhance performance
A good team achieves more than the sum of its parts; in a bad team, by contrast, talent could go to waste. Companies need great teams at all levels if they are to master the many and diverse challenges they face in today’s world. The Team Effectiveness Review brings a new methodology to the table with which to identify weaknesses in the way a team works and align all of the teams with the organization’s goals.
Not all that long ago the collegial style, which had for decades been the defining characteristic of many management teams, was widely regarded as hopelessly outdated – too slow, not nearly reactive enough, wedded to a consensual mediocrity. In many respects this criticism was justified, because in most cases the way the management team was assembled lacked the necessary rigor. In recent years, however, a great deal has changed in this respect. Professionally-supported executive searches to fill executive positions, and the use of management appraisals to compare candidates’ competency profiles with the requirements of demanding management roles are now established procedures. More and more companies are also recruiting and developing their top people as part of a wider talent management strategy, focused on the organization’s long-term goals.
The traditional collegial approach may no longer be entirely relevant, but there is one enduring characteristic that is: the focus on the performance of the leadership as a team. The complex environment confronting companies today calls precisely for a degree of reactivity, speed, quality and ongoing adaptation that even the most high-flying executive can no longer achieve as a solo performer. The current crisis, forcing many companies to restructure or even radically re-define their business model, has increased these pressures exponentially.
The multitude of tasks facing today’s companies can only be accomplished effectively by a well-formed, highly qualified management team that can work successfully, even under extreme pressure, without losing sight of its long-term goals. This poses the question of how the overall performance of a management team can be assessed and improved on a systematic basis.
The fact is that many teams within organizations don’t function effectively. In many cases they talk too much and do too little; navel-gazing and thinking focused entirely on the group itself block ideas from outside or critical voices from within. At times – precisely in difficult situations – the team simply falls apart altogether. Cynics have been known to maintain that “teamwork” is really little more than a euphemism for offloading responsibility.
Poor team performance is always a problem, but the consequences are especially dire when it happens at the top of an organization, and particularly when the company is going through difficult times. New evaluation metrics are therefore required, not just to identify weaknesses and rectify them in time but also – and above all – to optimize team performance and align it effectively with the organization’s strategic goals.
Next-generation talent management
For decades, organizational specialists have investigated what distinguishes good teams from bad ones – seeking to explain, for example, what makes FC Barcelona just about unbeatable, while their arch-rivals Real Madrid – by no means inferior in terms of the quality and class of the individual players – have recently won next to nothing.
Similarly, in our consulting work, we frequently observe that some teams, despite boasting executives with above-average competency profiles, fail to achieve their full potential. What is the reason for this? What makes a good team more than the sum of its respective members and a bad team so much less than this? To find the answers, we need to take internal talent management onto the next stage, or, more precisely: to widen its focus from the qualities of individual talents to the performance of whole groups of managers.
The search for the answers to these questions, particularly concerning the importance of effective management teams in times of crisis and in rapid, successful post-crisis recovery, has led Egon Zehnder to develop a new diagnostic tool, the Team Effectiveness Review (TER). Its aim is to optimize the structures, processes and behaviors of a company’s existing teams or to find the optimum combination of managers for creating a new team. As such, Team Effectiveness Reviews present a new element of a comprehensive approach to leading-edge talent management.
A TER reveals the strengths and weaknesses of a particular team. It creates transparency with regard to both collective and individual strengths and weaknesses.
It makes individual behavior patterns and interactions among team members visible, giving team leaders a clear overview of the dynamics. This enables them to identify the causes of poor performance and try to address them.
A TER also shows the kind of tasks a group is well suited for and where it needs to improve in order to achieve its particular goals.
The six dimensions of effective teamwork
In developing this new approach we studied some 150 academic sources, focusing on ten or so leading schools of thought on team-related issues. Drawing on research findings and also on the in-depth understanding of organizational practice gained from our own consulting work, we have identified six key factors that drive a team’s effectiveness. They are:
- Balance: this refers to the diversity of skills and perspectives within a team and how this is actively used to achieve objectives.
- Alignment: this is the degree to which each team member is clear about the team’s goals and how the team fits into the wider organizational context; and the degree to which all members together are focused on this goal.
- Resilience assesses the group’s ability to cope with extreme internal and external pressures and to work successfully even under difficult conditions.
- Energy measures how successful the team is in creating and maintaining a high level of self-generated dynamism, ambition and initiative.
- Openness refers to the team’s openness to ideas from and contacts with its environment. This includes both the rest of its own organization and the wider business setting.
- Efficiency refers to the team’s effectiveness in using resources and time in order to achieve the desired outcome.
For each of these dimensions the aim of the TER is to establish the team’s mindset and behaviors. Where specific dimensions are under-developed this points to a certain dysfunctionality, which may affect overall performance. For example, teams that perform poorly in terms of efficiency and alignment are often like “debating clubs”, which get caught up in endless discussions without reaching decisions. A lack of openness and balance characterizes groups that act in a closed “tribal” way – running the risk of letting new market developments entirely pass them by. Results like these might not seem all that surprising initially – yet in most cases the people involved are simply not aware of their behavior. It is only through the TER analysis and subsequent discussion that these issues are brought to light and can then be addressed openly, which is the first step towards improving in certain ways.
Of course it is not necessary for companies to develop all of these dimensions equally in every situation they face. The actual tasks facing the team and/or the objectives of the team are the determining factors here. In a turnaround situation, for example, the management team needs to score particularly highly in resilience, efficiency and alignment: They need to be able to deal with opposition very effectively and to utilize the available resources in an optimized, targeted way within a short time period. In phases of dynamic growth, by contrast, teams need energy and alignment in particular, in order to maintain direction and momentum not only in the team itself but within the organization as a whole.
How it works in practice
The new CFO of a major telecoms supplier, for example, used a TER to gear his executive team up to address a significant crisis. The group comprised the 14 executives reporting directly to the CFO. The organization had been contending with major financial problems for some time. The CFO himself had inherited a bloated, inefficient and weary organization which had focused exclusively on a series of re-positionings in previous years. Now it was a question of driving forward strategic partnerships effectively and working more efficiently overall. The purpose of the TER was to reveal where unrecognized team-related issues were obstructing this process.
As it turned out, the Team Effectiveness Review revealed weaknesses in Efficiency and Openness. Decision-making was frequently protracted by over-analysis; ideas from colleagues in other departments and necessary coordination with the rest of the organization were not pursued in any consistent, systematic way. Team members were not even sufficiently clear about the overall strategy, leading to frequent discussions and misunderstandings. And the team was too easily distracted by details. Other dimensions provided a good working basis, however: The team was clearly determined to pull together to resolve the challenges they faced. They all actively supported each other and made good use of each others’ strengths – with the exception of one lone wolf who repeatedly undermined the work of the team. In this case, supported by additional management appraisals, the first step was to change the structure of the team – the spoiler left the team, two areas of responsibility were merged, some roles were re-allocated and overall the core team was reduced from 14 people to 10. Three managers whose personal profiles showed them to be effective drivers of change were designated as a task force responsible for implementing the necessary transformation both within the finance division and beyond. The CFO himself recognized that he would have to adopt a much more hands-on role with his executive team, having previously applied more of a consultative, coaching style in his dealings with them.
Group and individual evaluation
Every TER starts with a systematic assessment by team members of themselves as individuals and their team as a whole. These assessments help to form an initial hypothesis on the dynamics of the team, the atmosphere, typical patterns, internal sub-groups and weak points. These areas are then thoroughly investigated in intensive individual interviews with all team members, in order to pull together a detailed picture of the structure, processes, dynamics and relationships within the team, in relation to the six dimensions of team effectiveness.
The findings are drawn together in the team report, which analyses the team’s strengths and weaknesses for each of the six dimensions of theTER. The most important element is the feedback of the group’s results to the team leader and the team as a whole. The results are discussed in detail with everyone involved, resulting in recommended actions for the team. Additionally each group member could receive individual feedback highlighting his or her personal strengths and weaknesses as a team member. In all, a TER project typically takes between five and ten weeks to implement.
Another client was the CEO of a mid-sized energy group. He and his Senior Leadership Team – comprising 13 executives – chose the TER to help the group focus on getting the right behaviors as they embarked on a new strategy, and sought to establish a new organizational structure and a more performance-focused culture. The CEO and his leadership team wanted to identify entrenched modes of behavior that were obstructing their effectiveness.
Spoiled by years of success, the organization had developed a widespread silo mentality. The executive team preferred to work as individuals, each focusing on their personal area of responsibility, rather than as a group. Decisions were not discussed openly and agreed as a group – they tended to be taken individually or negotiated behind the scenes, leading to a number of misjudgments in an increasingly challenging market environment. Overlapping areas of responsibility were not resolved, and a lack of consistency stood in the way of achieving the desired performance culture. Moreover scarcely any of the executives had any experience of working in other companies. The TER highlighted these difficulties very clearly, pointing up significant weaknesses in the dimensions of balance and resilience. In addition, while the new CEO had from the outset invested significant energy in communicating his vision and the new strategy externally, he failed to maintain this clear strategic focus internally.
The coach is the key
Once the diagnosis has been made, the necessary measures are generally straightforward and easily identified by the team in group discussions. In a meeting with the CEO and subsequently in a two-day workshop with the board as a whole, we supported the development of an action plan to set the team on the right path. The starting point was significantly clearer, more pro-active internal communication on strategy by the CEO, supplemented by a regular group review in this area involving the whole executive team. The CEO also decided that two board members should swap responsibilities. Alongside a series of improvements in operational collaboration, the leadership team also set up committees to focus on particular issues with the aim of improving coordination between the various divisions – including, for example, an investment committee and a “market board”.
This illustrates how a TER can give companies insights into the dynamics of their key teams, laying the foundations for improving team performance in a targeted way in line with the organization’s strategic goals. Each individual team member receives useful feedback about their own role in the group, and learns about their individual strengths and areas where improvements can be made. Also, TERs are not solely designed for executive teams: Any team that shares a common goal can benefit from this resource.
Last but not least, the TER gives the team leader a detailed insight into his or her personal leadership style and how profoundly this influences the group’s dynamism and performance. The team leader perhaps stands to learn the most – about their team and about themselves. Because this, too, is something we have learned from experience: Like the coach in a football team, the team leader is the most powerful driving force on the road to greater effectiveness – which comes as no surprise to the football fans among us.
Elaine Yew is a consultant in Egon Zehnder’s Singapore office. She is a member of the Leadership Strategy Services, Strategic Restructuring and Consumer Practices, and she led the team that developed the Team Effectiveness Review.
Leo J. Barth is based in the Munich office and heads up the German activities of the Leadership Strategy Services Practice, advising clients on the development of a comprehensive leadership strategy. He also has a focus on the industrial goods sector.
ILLUSTRATION: JULIAN OPIE