Working Group Performance may be Enough

As we indicated in Chapter 5, working groups are neither good nor bad. As Table 11-1 shows, they are simply an approach that differs from that of a team. While we believe the performance results of a real team will almost always outstrip that of a working group, working groups can and do help their members perform well in their individual roles. Often this is all that total performance at the top requires. Hewlett-Packard, for example, is run today by an effective working group at the top. HP has performed well for decades, has one of the world’s strongest performance ethics, and regularly generates real teams without actually promoting them. All of this, of course, could also happen with a team at the top; indeed, all of it did when the team of Packard and Hewlett ran the company.

Many successful large corporations today are run by effective working groups, an option that makes good business sense and often represents the most realistic approach given the people involved. Senior executives are more comfortable operating in working groups. In the typical senior working group, individual roles and responsibilities are the primary focal points for performance results. There is no incremental performance expectation beyond that provided by individual executives working within their formal areas of responsibility. The performance contract is between each executive and the leader as opposed to mutual accountability among all members of the group. The dominant group activities are sharing information, reinforcing performance standards and expectations, strengthening basic values, and making critical decisions. Most of each executive’s time and attention is spent outside the working group with people in his or her part of the organization. Finally, the group performance ethic revolves around total company and individual (as opposed to team) success and failure.

The more open, constructive, and supportive the members of these groups are, the more effectively they share useful information and insights as well as help motivate one another. They can also be extremely effective in collectively reinforcing standards or values across the group and in bringing multiple judgments to bear on critical decisions. Certainly, they can and do practice teamwork as defined earlier. These attributes are not trivial benefits, and for large, multibusiness enterprises like Prudential, they are the most common performance benefits for groups at the top to obtain.

Robert Winters and the other top officers of Prudential’s Executive Office have worked hard at becoming an effective working group since he became CEO in 1987. Over that period, the performance of the company has improved significantly. It has grown in overall size and diversity, improved its profitability, developed a number of strong business units, and increased the quality of management across the company.

The individuals in the Executive Office are responsible for directing the affairs of a wide variety of enterprises including, among others, commercial, group, and individual insurance, institutional asset management, corporate and real estate finance, venture capital, stock brokerage, and investment banking. As a group, their central purpose is to provide leadership and guidance to the entire corporation. In the past several years, they have sought to do so through a variety of activities typical of top management groups. For example, they have developed and disseminated a corporate vision and values statement, launched a new strategic planning and review process, discussed a variety of strategic and operating challenges at length, and made a number of critical decisions together. They also have spent a lot of time reviewing and managing the careers of key people, and have paid considerable attention to how they and others could better reinforce their vision and values.

The Executive Office meets twice a month for two and one-half hours and also has quarterly two-day off-site sessions. The agenda for the biweekly meetings is fairly standard, focusing on operating matters and communications updates and needs. The two-day away sessions revolve around longer-term challenges. The topics are selected by Winters and his staff, who carefully prepare the background and positioning materials needed for rich and worthwhile discussions. Thus, the Executive Office benefits from a well-planned, carefully thought out management process.

In the opinion of many people in the company, however, this group has the potential to become more of a real team. The members possess an extremely rich set of skills and experience; their discussions are open, constructive, and effective; they are clear on their vision for the corporation; and their aspirations are high. On the surface at least, it would not take much to make them a real team.

On the other hand, Prudential does not face performance problems that the members of the Executive Office feel would require them to shift away from the current working group mode. Hence, they see no real urgency for making the leap from working group to potential team. And as Winters indicates in the opening quote of this chapter, he questions whether the potential benefits of becoming a real team are worth the extra effort required or the risks entailed. Moreover, he realizes that simply trying to become a team for its own sake makes no sense. Indeed, for Winters and the Executive Office, the working group option works. A reason for Winters’ Executive Office to consider a team approach, just like for any other group that runs things, would have to stem from a set of performance aspirations that demanded significant and incremental contributions beyond the reach of individual performance.

Why Teams Are Tougher to Form at the Top

When we began our exploration of teams, we expected to find a different set of elements and risks involved in teams at the top. We were wrong. Teams that run things—at whatever level in the company—must meet the same criteria and take the same risks as teams that make, do, or recommend things. We did find, however, that there are far fewer examples of real teams at the top than elsewhere, and those tend to have a smaller number of team members. We also found that when such teams exist, they strongly influence the performance of their enterprises.

Many of us, for example, know about the performance legacies of such well-known teams as John Whitehead and John Weinberg of Goldman, Sachs; Walter and Peter Haas of Levi Strauss; and David Packard and William Hewlett of Hewlett-Packard. There also are a number of less familiar team examples at the top of companies of various sizes, including the Burlington Northern Intermodal, Garden State Brickface, Motorola’s Government Electronics Group, and Tallahassee Democrat teams. Still, team performance at the top of any organization is more the exception than the rule. Based on empirical evidence alone, teams at the top are tougher to form.

We cannot explain all of the reasons for this. But we do believe there are five popular yet misguided beliefs about how executives are expected to act at the top that bedevil the formation of real teams. Some of these are more subtle in operation than others; each tends to make a self-fulfilling prophecy out of the working group approach—all warrant careful questioning by those at the top considering the team approach.

1. “The purpose of the team at the top is identical to the purpose of the company.” Potential teams at the top, just like potential teams anywhere else, must identify a common team purpose and set of performance goals that require them to do real work together as a team. Groups at the top, however, tend to see their team purpose as synonymous with the overall company purpose.

At one level, of course, the executives at the top are responsible for the company’s purpose. But the same thing is also true of potential teams elsewhere, although to a lesser degree. All employees in a company are responsible, in some way, for the purpose of the company. Unlike at the top, however, potential teams elsewhere—for example, those responsible for making task force recommendations or reducing machine set-up time or bringing a new product out in record time—can more easily distinguish between their team purposes and their generic purpose of supporting the company.

By contrast, “leading a corporation” represents a relatively abstract challenge that takes a long time to realize, is often difficult to assess, and is rarely suggestive of a clear set of team purposes, team goals, and team work-products. For example, most groups at the top only measure themselves by how well the company does along various economic criteria. Certainly, this approach will assess the top group’s influence on the work of others. But it fails to measure what they do as a team against performance goals and work-products they set for themselves.

Consider, for example, the Enron Corporation vision described in Chapter 6. The senior Enron executive group articulated an aspiration to make Enron “the first natural gas major and the most innovative and reliable provider of clean energy worldwide for a better environment.” This vision provides Enron’s entire organization with an all-important rational and emotional reason for pursuing the major changes required for industry leadership, customer service, innovation, and environmental responsibility. Moreover, it helps shape what each Enron senior executive needs to do—as an individual leader—with his or her part of the organization. Based on this vision, Ron Burns, the head of the pipeline group, initiated “Project 1990s” and the Deal-to-Steel Team. It is not apparent, however, what team performance goals the Enron executive group should pursue in support of their vision. It is even less clear what set of discrete work-products they should hold themselves mutually accountable for.

2. “Membership in the team is automatic.” It is counterintuitive at best, and unimaginable at worst, that someone who reports directly to the head of a company or a division, let alone the head himself or herself, would not be a member of the team. On the other hand, as the stories in this book relate, real teams ultimately only include members with the complementary skills, common commitment, and mutual accountability to get the team’s job done. When “official” team members fail to meet those standards, the rest of the team operates without them, whether formally or informally.

This, however, is far easier to do down the line than at the top. Strong individual performers with advanced functional skills who lack teamwork or interpersonal skills are more difficult to exclude from the team, if only out of fear of losing their individual contributions. And ego, visibility, and even personal commitments and compassion can make it hard to exclude weaker performers. As a result, many potential teams at the top that face seemingly insurmountable skill problems feel like they are in a “damned if you do, damned if you don’t” situation.

Notwithstanding the difficulties, however, team membership at the top does not have to be hierarchically dependent. One of Bill Greenwood’s direct reports in Burlington Northern Intermodal, for example, was not a member of the team. This individual contributed to Intermodal’s overall purpose and was valued by Greenwood and others for doing so, but never made the personal commitment to the team’s purpose, goals, and working approach. The team at the top of Motorola’s Government Electronics Group also did not include all direct reports to the head of that group. And the members of the Lake Geneva Executive Team described later in this chapter do not include all executives in that company’s top management group. In each case, an intense focus on a specific performance challenge and set of joint work-products plus the “everyone does real work” standard of team membership permitted real teams to form that excluded some individuals without ostracizing them. Our point here is not to argue that teams at the top must exclude individuals, but rather that the assumption that they cannot do so is invalid.

3. “The role and contribution of team members, including the leader, are defined by their hierarchical and functional position.” In the vast majority of groups that run things, the expected contribution from each person coincides with that individual’s formal job description. The head of marketing, for example, worries mainly about marketing, operations about operations, finance about finance, and so on. Each individual might constructively counsel his or her peers and otherwise practice teamwork values. Or, at the other end of the spectrum, executives might harshly criticize one another or fume in accusative silence. But in either case, their individual spheres of influence define their solution space for performance. Like Knights of the Round Table, they recognize and respect that each has his or her own individual quest to pursue. Put less metaphorically, at the top of companies, “my job” is far more clear-cut and easier to commit to than “our job.”

Deeply ingrained biases toward individual accountability and achievement reinforce the executive behavior patterns that run counter to team requirements. Teams at the top, like teams elsewhere, must develop a sense of mutual trust and interdependence. Yet by the time most executives get to the top, they find it hard to allow their performance to depend on people who are neither their boss nor their subordinates. And the risks of personal failure are much greater because many top executives view themselves as candidates for the top job at their or other companies. Thus, while they have confidence pursuing accomplishments in their individual roles, they are uncomfortable with the idea of gambling on a switch to team behavior patterns. Even Ron Burns, for example, who provided effective leadership to Enron’s Deal-to-Steel Team (Chapter 6), eventually rejected the task force’s bid to follow through on implementation. Instead, he chose to hold the pipeline company presidents individually responsible for carrying out the task force’s recommendations by tracking their progress against quarterly scorecards. “Those who don’t buy in will be flushed out by the scorecard,” he said.

All of this puts even more pressure on the leader. Because of the leader’s unique role and influence, it is commonly assumed that he or she alone will either make or break the group’s performance. A corollary of this dictates that the leader alone must prescribe the group’s purpose, goals, and approach. Such assumptions reach beyond the executive suite. When big trouble threatens or occurs, boards of directors replace individual CEOs, not teams at the top. Consequently, everybody—the leader and the leader’s direct reports—knows that the leader’s job, not theirs, is most squarely on the line.

As a result, many leaders are cautious about giving up “solution space,” even to individual executives, let alone to a team; and they instinctively rely on their own wisdom and control rather than on team approaches to management. They are not expected to express uncertainty, depend on others for help, and display attitudes of not knowing the answers. Hence, it is difficult for them to be team leaders, which in turn discourages the shared “purposing” required to develop common directions and mutual accountability. Meanwhile, the leader’s colleagues find it more comfortable to hang back a little and play it safe rather than aggressively challenge the leader and themselves to establish a common purpose, set of performance goals, and approach built upon the ethic of “only the team can fail.”

4. “Spending extra team time is inefficient.” Executives rarely have much discretionary time. Moreover, they must spend most of their time leading the people in their separate parts of the organization. When they gather as a top management group, their goal is to minimize the time spent together without, of course, sacrificing the effectiveness of the discussions and decisions they make. They stick to well-prioritized agendas.

Unlike other teams, executive groups are not likely to “roll up their sleeves” and do real work together such as interviewing customers, digging into analyses, and experimenting with new approaches. In fact, executives expect themselves, and are expected by others, to delegate such efforts to down-the-line people, then review the outcomes in meetings. Consequently, each executive’s contribution often reflects two aspects: 1) work done by other people; and 2) the executive’s own judgment and experience. Each of these is essential to a well-functioning working group; neither equates with the “real work” of teams.

5. “Team effectiveness depends only on communications and openness.” This all-too-common misconception equates teamwork with teams. The Cosmo Products executives fell into this trap (Chapter 5). So did the ComTech Cellular general managers (Chapter 5). Certainly, the discussions and decisions of top management groups benefit from shared practices emphasizing active listening, cooperation, sharing, giving the benefit of the doubt, and recognizing the interest and achievements of others. But once again, the purpose of such behaviors is primarily to enhance the quality of decisions that, in and of themselves, do not necessarily reflect joint team work-products or a sense of mutual accountability.

In combination, these five assumptions drive executive groups to the working group approach without any consciousness that a choice is being made. The essential work-product of such groups becomes decisions based on effective management discussions and other processes; these decisions then get assigned to individual members who are held accountable for carrying them out. Unless the group takes joint responsibility for the outcome of such decisions, however, such activity does not constitute the kind of real work required for team levels of performance.

The work-products of a team reflect an incremental performance value that exceeds the sum of each member’s individual effort. They also require the joint, real work of people on the team themselves, and they build a sense of mutual accountability for results. Of course, real teams at the top do not operate without effective “discuss and decide” meetings. But when real teams make such decisions, accountability for carrying them out is mutual, not only individual.

We will illustrate the difference between the individual accountability for decisions of working groups versus the mutual accountability for team decisions with two examples. The first example, a disguised two-billion-dollar company we call “Slader Field Corporation,” concerns the classic top management decision—reorganizing the company. In it, we will see an effective working group that, nonetheless, does not have a shared sense of accountability for the decision made. The second example, from a disguised company called “Lake Geneva Multinational Corporation,” comes in the form of a dialogue we observed and have paraphrased here. The quality of the discussion itself conveys a picture of a real team at work, the members of which hold themselves mutually accountable for the decisions they make.

Slader Field

The idea to reorganize emerged mid-autumn in the mind of Slader Field’s CEO, Jeff Selkirk. He believed the company would perform better if it were structured differently. He shared his thoughts with his two closest advisers, asking them to help him think through how to reorganize and who to put in which jobs. It was winter before Jeff was confident enough in his basic direction to take the next step. Jeff then spent several weeks holding one-on-one discussions with the key players in his senior management group. These men and women had a range of reactions from excitement to disappointment, depending largely on the nature of the new assignments Jeff asked them to consider. Of the few executives who were less than thrilled, none rejected Jeff’s proposal out of hand; each supported him.

Jeff then asked the group to go away for a three-day off-site meeting to agree on the implications of the reorganization, flesh out how it would work in detail, and develop a plan for announcing it. Jeff wanted to use the off-site to get his group to buy in to the decision. Accordingly, he asked for and sincerely sought a full airing of the planned actions and how to make them work best. Nevertheless, in a clear distinction understood by everyone, Jeff did not expect or want anyone to seriously challenge and rework the fundamental direction of the decision he had already made.

The off-site met all of Jeff’s expectations. The executives had honest and candid discussions about many of their concerns, and they put together a thorough communications plan for letting key people hear personally about what was happening and then announcing the reorganization broadly. Every one of the executives bought into the decision in the sense that, as individuals, they committed themselves to do their best to carry out their new assignments.

The Slader Field executives, however, did not emerge from the meeting with a sense of mutual accountability for making the decision work. Notwithstanding the time and effort, there was little doubt that the decision belonged to Jeff. Most of the executives were enthusiastic. A few, though mollified by the discussions of their concerns, remained quietly apprehensive or skeptical, though willing to move forward. Every one of them, however, including the skeptics, was committed to doing his individual best. After all, Jeff was the CEO and a reorganization decision like this was his to make. Like the others, Jeff understood this. Accordingly, all parties believed they had conducted themselves responsibly and effectively. And for a working group they had. But they were not a team. Consequently, while the new organization made progress, much potential performance went untapped.

Lake Geneva Executive Team

When real teams meet to discuss and make decisions, they tend to focus entirely on performance, particularly on those issues that cut to the heart of the team’s basic purpose and goals. They almost automatically avoid the administrative and bureaucratic issues that bog down other groups. In addition, the decisions that emerge are team decisions, for which everyone feels a strong sense of mutual accountability.

To illustrate this, we asked a top management team from the Lake Geneva Multinational Corporation to let us observe one of their confidential discuss and decide sessions. This team of six Americans and six Europeans sets the compensation for the top 150 executives in the company. None of them are personnel officers. Instead, each of the twelve holds a senior position in one of Lake Geneva’s major geographic, product, or staff groups. Several, though not all, are also members of Lake Geneva’s Executive Office, which is not a team.

Significantly, this team has evolved a much broader purpose and set of performance goals than simply determining pay. All of the members believe Lake Geneva’s performance depends heavily on continually maintaining and upgrading a superior pool of executive leaders throughout the company. To achieve that purpose, the team developed criteria against which to evaluate each senior executive. Furthermore, it measures itself as a team against specific goals of improving the profile of Lake Geneva’s top 150 people. It also rigorously measures and tracks the overall quality of the pool. Each member is assigned particular executives to monitor. Each personally spends several weeks every year interviewing colleagues of those executives, talking with the executives themselves, and preparing required documentation for the committee. In more difficult cases, like that of “Marion Meyer” in the following discussion, the committee assigns two or three members to prepare the case. None of this work is done by staff; the team does not allow it.

As we look in on this meeting, Frank Andrews, an American, is just concluding a long discussion he has led on the performance and potential of Ursula Mandreik.

FRANK: . . . so I’m still recommending that we leave Ursula in Category 3 another year.

WILL (the group’s official chairman, a fact not discernible from either his position at the table or his behavior):

Any more questions or discussion on Ursula’s case before we vote again?

KRUGER: Just one last comment. I understand why Frank recommends leaving her in Category 3, but her overall business performance results—particularly compared to some of our European colleagues—simply do not warrant that evaluation level, despite her new product introduction results. If we don’t drop her a category this year, we should certainly flag her case for special attention next year. I think we are temporizing here on a rigorous application of our criteria. Remember our rule: any exceptions to criteria are automatically flagged for special review next time.

WILL: We’ve already agreed on that, Kruger. Now let’s vote, and then take a ten-minute break. (At which point everyone marks something on a small blank slip, folds it, and passes it to Will. He and Roberto, who is sitting next to him, tabulate the results while others leave the room to make their inevitable late morning phone calls.)

ROBERTO: Well, at least the vote is not as close as last time. Frank did his homework very well, don’t you think? I was particularly influenced by that new information about how effectively Ursula has led the creation of that new product group. Three new products up and running in 18 months is impressive.

WILL: Yes, but I’m also glad that Kruger made his final point about next year. Unless her annual business results pick up significantly, we will not be treating her fairly relative to others around the world.

(Roberto goes to the blackboard, which has lots of dots with names plotted on a two-axis grid with one labeled “business performance” and the other “institution building.” He places Ursula’s name on the grid. In most groups like this, Roberto’s tasks would be performed by a staff person, but no staff people are allowed in this meeting. By this time, the members have returned to their seats.)

ROGER: So who’s up next? We’d better jolly well get moving, or we’ll have to start changing our flights. Given the six man-weeks we each spend on this task, you’d think we would be further along by now.

WILL: Marion Meyer is next. You will all recall that when we looked through Marion’s case last month, the financial aspects of his division’s business results were extremely impressive, both relative to last year and relative to other units around the company. This makes the third year in a row that Marion’s division has shown that kind of improvement, and Martin’s recommendation was that we move him up a full category. The problem that some of you had with that recommendation was that neither the division’s market position nor people development performance has kept pace with the financial results. For some reason, Marion has not been able to build the kind of potential leadership group under him that we expect of people in the next category. Since the first vote was inconclusive, we asked Martin and Roberto to get us more information.

MARTIN: We talked with Marion’s boss again and with three of the executives who have worked most closely with him over the past two years. We were also able to get helpful inputs from people who have worked for him, two of whom have left the company. We also asked Andre to check into the evaluation files of those under Marion to get a factual indication of their progress and potential. All this took us three extra days, but I think you will agree that it was well worth it.

The good news is that he is improving a lot. Most people believe that he is giving much more attention to the development of his people than before, and the actual results as summarized in that sheet I passed out earlier seem to confirm that. The bad news is that he still has a way to go. While he is no longer regarded as a “people eater,” he still hasn’t yet attracted or nourished the high-potential talent we are looking for. Compared to other units around the world, Marion’s leadership group is still weak.

However, given the marked improvement in this area, and in light of his persistently strong financial results, we are still strongly recommending a full category change.

(At this point, the door flies open, and Glen, the CEO of the company, bursts in and rushes to his seat.)

GLEN: Sorry, guys, but it was Charlie Jones [chairman of the finance committee] and I couldn’t get off the phone.

MIGUEL: Too bad, Glen. That will cost you fifty pesos—put it in the kitty for the New York homeless at the end of the table.

GLEN: Fifty? Don’t you think that’s a little steep, given that Charlie’s such an important board member?

MIGUEL: Rules is rules, Glen. The fine for late return is $10 per minute. How about it, guys?

EVERYBODY: (in virtual unison) Fifty bucks! Right on! (Glen grins sheepishly as he pulls the fifty out of his wallet.)

WES: (Resuming the prior discussion) Marion works for you, Mark, what do you think?

MARK: As Martin indicated, Wes, I’ve already given my comments to him. I don’t feel right about circumventing our process to answer your question just because I happen to be a member of this committee.

KEN: He’s absolutely right, Wes. Remember our rule that committee membership should not provide an opportunity for special pleading, positive or negative; let’s stick with our process. If you have a question, and in fact, even if the question is “What does Mark think?,” it should be directed through Martin.

MARTIN: Mark’s view has not changed since our last session. He believes that Marion has improved more than enough on both scales to warrant the category change. He also believes that our view of the potential of Marion’s management group has been unduly harsh because the members are young and developing well under Marion’s leadership. Moreover, when he took over the job, he had a pretty sorry group to work with. He may not have developed them to their full potential as executives yet, but they are improving. In case you’ve all forgotten, five years ago this committee viewed Marion as a marginal executive, and was considering termination. Now he’s in the top third of our executive group and still climbing. If ever there was a case for betting a little on the future, this is it.

KEN: That’s not the issue, Martin. Marion’s been in that role for more than five years now. That’s more than enough time to correct any people gaps he might have inherited. If he’s really a Category 2 executive, he should have a top-notch pool of talent under him by now. Moreover, he should probably be developing enough excess to transfer people to other units in short supply. If we allow ourselves to overlook this gap just because of his annual business performance, we are allowing him to sacrifice the long term for the short term.

ROGER: That’s expecting too much. Not too many executives have been saddled with the dearth of talent that Marion inherited. Besides, it has taken a tremendous effort on his part just to get the business turned around financially, much less be ready to give away some of his talent pool to others.

WILL: Okay, guys, let’s get back to the facts at hand. I don’t mind our giving attention to the difficulty of the situation, but we’ve already discussed that at length. Let’s also stay with the new facts Martin, Roberto, and Andre have developed about Marion’s performance, both short and long term.

WES: I agree. And as I see it the facts are these: Marion’s business performance has improved financially by over 20 percent for three years in a row, but his market share continues to slip, as Martin’s latest report clearly shows. That gives me almost as much concern as the fact that his executive talent pool has remained roughly constant. Granted they are each improving as individuals, but how come Marion hasn’t been able to attract some higher-caliber people into the group? This guy is neglecting the building blocks so essential for our future position in Prague.

GLEN: I’d like to inject a strategic consideration at this point. You all know how critical Marion’s area is to our growth strategy. I’m worried that if we don’t give him a clear, positive signal this year, we could lose him. Given the relative weakness of those under him, I don’t think we should take that chance.

KRUGER: I take your point, Glen, but I think it is largely irrelevant, and dead wrong. Our basic purpose here is to evaluate our colleagues’ performance, not to shore up shaky strategies. Besides, it seems to me your comment further enforces the point that Marion has not done the people development job we needed. If we do have to replace him, it could be very good for the company overall. It would force us to bring in a young, high-potential person from another unit. And almost every time we do that, we win. Let’s not forget that the fundamental mission of this group is to upgrade the quality and productivity of our total executive pool, not just to distribute bonus money. If anyone is not delivering balanced performance results, we should both pay accordingly and be prepared for replacements accordingly.

WILL: Time out, guys. It’s getting a little hot and heavy here. Besides, it’s nearly lunch time. Luckily, we’ve scheduled a little boat ride across the lake in the hope that the fresh air will clear our heads. I’d also like to use that time to discuss how to implement the four termination decisions we reached at our last session. We will continue the discussion of Marion after lunch.

GIORGIO: Hold it, everybody. Before lunch, I have a special award to present. As you all know, Ken here has been a member of this committee for a long time—which is okay. The only problem is that he always wears the same stupid sweater. Not only does the sweater have holes in the sleeves, but it’s actually beginning to smell. We had hoped that Ken would have done something by now to give us an excuse for giving him a present, but he hasn’t. And we can’t wait any longer. Ken, here’s a new sweater we all chipped in and bought for you—provided you promise never to wear the old one again.

KEN: Well, I don’t know, guys, this old sweater means a lot to me . . . (at which point Roger and Wes both grab Ken, and force him to take off his sweater, to the obvious delight of all. The group then broke for lunch, after which they decided to hold Marion Meyer’s performance rating constant).

It should be clear by now that we are watching a real team in action, where mutual accountability is the norm. It has open conflict and debate that are supportive and constructive. Neither the hierarchy of the company nor the formal positions of any of their members bears on its decisions. The CEO has no more influence than any other team member; in fact he is treated by and treats others as any normal member would. It tracks its progress against the team’s purpose. It obviously is committed to the process and approach that it has developed.

The members all work incredibly hard at their task, often double-and triple-covering difficult cases like Marion Meyer’s. Each member plays different team roles in the meetings depending on the situation. All keep each other honest and accountable with regard to the quality of work, wisdom of decisions, and the achievement of their agreed-upon team goals.

The official leader plays whatever role is appropriate for the team, sometimes being a tough mechanical disciplinarian to get through the agenda, and sometimes staying completely out of the discussion to let others do the job. The leader is more evident for what he does not do than for what he does. Certainly, he has no more influence on the team’s decisions than any other member.

The group also enjoys itself. Meetings are invigorating as well as productive. The members have time for a little hi-jinks designed both to poke fun at one another and to display the strong mutual respect they have. They regularly rotate people off and on the committee, and without exception, former members we talked with openly miss the experience. They are not all close friends, but they have a strong regard for one another as people as well as executives. They are also a high-performing leadership team at the top of their company. This makes them doubly unusual.

Breaking Through to Team Performance at the Top

Some people suggest that only groups blessed with “good personal chemistry” can perform like the Lake Geneva Team. This perspective, however, is too narrow and even self-defeating. Good personal chemistry is an exceptional phenomenon among any group of people, whether senior executives or not. Moreover, it is far more likely to characterize smaller numbers of individuals, even two or three people, than all those involved at the top of most companies. Naturally, if certain executives have good personal chemistry, they should, as a group, take advantage of it. But the kind of mutual accountability that characterizes the Lake Geneva Team, like that present in the Burlington Northern Intermodal Team and the Dallas Mafia, developed first out of delivering specific team work-products against a team purpose and only later, if at all, out of a growing sense of personal compatibility.

The most practical path to building a team at the top, then, lies not in wishing for good personal chemistry, but in finding ways for executives to do real work together. When they succeed, a discernible pattern emerges with respect to their assignments, approach, and contributions, including:

1. Carving out team assignments that tackle specific issues. These are narrower and more concrete than leading the organization as a whole toward the realization of a vision, mission, or strategy. And while the development of visions and strategies themselves can represent joint work-products of senior managers, it requires more than review and approval efforts. Moreover, the exhilaration of having jointly created a meaningful vision or strategy fades rather quickly if senior managers do not use the vision or strategy as a guide to identifying and pursuing a continuing stream of narrower, more concrete team tasks, like designing a new program to upgrade management marketing skills or carrying out a merger integration effort.

The Dallas Mafia, for example, committed itself to specific team goals regarding business mix and staff quality, then realized those objectives by negotiating with key accounts, recruiting high-talent candidates for the office, training new professional hires, and exposing younger people to greater responsibilities. The Burlington Northern Intermodal Team worked directly on a variety of team work-products including hub construction plans, advertising campaigns, capital budget proposals, and the purchase and installation of interoffice communication software and equipment. As we suggested in Chapter 5, the Cosmo Products executives might have, but did not, set themselves the team task of improving the quality of the new-product development process. These are the kinds of top management work-products that require and enable real teams.

2. Assigning work to subsets of the team. Most teams we have observed do not create their work-products as an entire team. Task forces, project teams, and worker teams almost always assign individuals and subgroups within the team to do the preparatory work that can support a rich and meaningful full-team working session. Senior management groups, by contrast, spend nearly all of their joint time as a full team reviewing the work of others, discussing issues, and making decisions.

The successful teams at the top we know have broken out of this pattern by assigning specific tasks to one or more individuals and by expecting them to deliver essential work-products for integration by the entire team in subsequent working sessions. This causes members to do real work together beyond full-team meetings, allowing team involvement and accountability to grow outside the context of discuss and decide sessions.

3. Determining team membership based on skill, not position. Skill-based membership relieves the difficult constraint of hierarchically imposed membership. Not everyone who reports to the CEO has to be on a single team. It is important to be tough-minded about the skill requirements and not simply assume that the formal position of the member defines his or her skills for team purposes. Otherwise, the team will suffer the fatal flaw of skill deficiency relative to its goals.

A skill-specific approach allows the option of multiple smaller teams, constituted to address particular issues and match up different skill profiles. The smaller groupings and the focus on single issues give top executives the chance to experience teams which, especially if membership in these subgroups overlap and interlock, offers the potential for a larger team at the top.

4. Requiring all members to do equivalent amounts of real work. The assignments call upon each team member (including the leader) to do real work, as opposed to delegating and reviewing the work of others. In real teams, when tasks are assigned to team members, they are expected to do the work themselves. To be sure, task force or worker team members might ask for help, and staff support may be required. But each team member’s sweat equity in the work-product is always evident. So is their firsthand knowledge of the output. By contrast, senior managers normally follow a pattern of real work delegation that has an insidious effect of precluding a team contribution. Staff work has the stamp, but none of the sweat, of the delegating senior executive. This, in turn, subtly but tangibly limits the commitment and appreciation by everyone in the group for the work-product itself. It also limits the insights and, hence, the innovative potential of the group.

By contrast, members of the Intermodal Team operated equipment, negotiated with suppliers, wrote advertising copy, constructed pricing models, and set up communications networks. As a result, the members of the team doing any particular piece of real work had personally invested in its lessons and outcomes, earning a higher regard and deeper trust from their teammates. To be sure, the Intermodal Team also delegated work to others. The members did enough real work themselves, however, to engender the mutual respect and mutual accountability characteristic of team performance.

5. Breaking down the hierarchical pattern of interaction. The work assignments and the contributions to be made often should be unrelated to hierarchical position. When Fred Mott and the other senior managers at the Tallahassee Democrat agreed to jointly prepare each other’s budgets, they broke down one of the most critical barriers to team performance: the assumption that each person’s real work contribution to the team must only reflect his or her formal position and role in the hierarchy. Almost by definition, that path leads to working groups and not teams because it precludes personal, value-added contributions that go beyond the important but already assumed contribution each person makes from his or her hierarchical role.

At the Democrat, for example, like most other companies, each division head is expected to put together a budget. Typically, however, division heads are not expected to roll up their sleeves, dig in, and help resolve the thousand and one trade-offs that go into preparing the budgets of other division heads. Nor would most executives have the time to do this for every separate division. But most executives, like those at the Democrat, do have time to get deeply involved in at least one other division’s budget. When the team running the Democrat took this approach, it had the effect of developing mutual appreciation and mutual accountability for “making the whole paper work, not just our part of it.”

Such nonhierarchically oriented assignments provide fundamental building blocks for team work-products and team performance. When an executive not responsible for human resources, for example, interviews a candidate for a job not in that executive’s division, other team members appreciate both the time and effort as a contribution to the team. The same effect occurred when Dallas Mafia chief Canfield agreed to report to a more junior colleague on a critical account, and when Garden State division head Charlie Baum took on the role of helping the head of sales with customer follow-up. Naturally, many of the contributions of executives must relate to their respective hierarchical roles and experiences. Without a consistent flow of contributions that go beyond those given roles, however, each person is deprived of the opportunity to do real work on behalf of the team.

6. Setting and following rules of behavior similar to those used by other teams. Top managers, of course, must spend time together reviewing the work of others and making decisions. As we have suggested, the most critical distinction between the discuss and decide activities of teams versus working groups lies in the degree of mutual accountability for the results of decisions made. Senior management teams can facilitate a greater degree of mutual accountability by setting and following the same rules of conduct we outlined in Chapter 6 that help all teams provide focus, avoid hierarchical constraints, and promote openness, commitment, and trust.

The patterns of assignments and team work-products we have just reviewed should also be treated as clear rules of conduct. By identifying specific team tasks, assigning them to individuals or subgroups to do themselves, and making sure that many of them call for nonhierarchical and nonformal contributions, top managers can and do deliver team work-products in support of team performance goals that have a major incremental impact on company results.

Conclusion

The critical issue posed by this chapter is how to determine when corporate performance aspirations warrant team levels of contribution at the top. The subtle and difficult choice between working group and team is not a one-time event. Top groups need to periodically re-examine whether their chosen mode of operation best fits the changing performance challenges they face. By choosing a working group mode, groups at the top avoid the risks of making the leap and failing. Team performance requires an investment of time that must come out of already tight executive schedules; thus, team efforts can lead to neglect of individual responsibilities. A failed team attempt at the top breeds skepticism about teams generally, and can even cause the group to fall into pseudo-team attitudes and behaviors that are debilitating and difficult to break. These downsides pose a high price, especially if the group at the top remains uncertain about the benefits of a team.

On the other hand, choosing the team approach promises significant performance potential and offers important benefits over a working group, some of which cannot be measured—for example, the higher degree of commitment in a team. In addition, of course, there is the tangible benefit of incremental gain that comes when team performance goals and work-products are achieved. Team performance possibilities at the top are not trivial, nor can the choice be dismissed lightly.

Ultimately, the difficulties inherent in the choice depend on three subtle judgments: 1) whether the collective aspirations of the group are attainable through the sum of individual performance; 2) the intrinsic quality, skills, and attitudes of the individual executives; and 3) the decisions and attitude of the leader. In our experience, these considerations seldom receive the careful deliberation they deserve.

Whether a gap exists between the group’s collective aspiration for the company and their potential individual contributions depends on some tough judgments. For example, we have observed that if the organization faces major change of the kind we described in Chapter 10, some kind of team performance at the top is necessary. Short of that, however, it is inherently hard to estimate the potential “individual bests” of key executives. Talented and committed executives who share insights and best practices and are mutually supportive can accomplish a lot, even when they are not a team. What they do not do, however, is roll up their sleeves and deliver the kind of collective work-products and incremental performance of teams.

The quality, capability, and attitude of each individual in the executive group also must be considered. A group of “all star” caliber executives can achieve more as a working group than lesser-talented people. Indeed, if there are skill deficiencies at the top, a team approach may make sense because real teams will find ways to make up for individual shortfalls as well as provide a more supportive, performance-focused context for skill development. On the other hand, if the executives are all stars, the performance potential of a team would be even higher, and may even include a better chance of becoming a high-performance team.

The capabilities and attitudes of the executives also influence the extent of the risks involved in moving from a working group to team approach. The constructive conflict and hard work necessary to build trust, interdependence, and mutual accountability will not occur without openness and candor. And since the personal stakes are so high for executives at the top of their companies and careers, such candor risks more than hurt feelings and bruised egos. Strong individualists may refuse to subordinate their personal ambitions to the team. And, if pushed, such people can and do leave.

Finally, there is the leader. Leaders at the top of most organizations are expected to take the working group approach. Indeed, even for groups at the top to openly discuss working group versus team choice requires the leader’s support and encouragement. Unless leaders go out of their way to make the team option clear and compelling, and unless they persist in driving a potential team, including themselves, down that path, the working group is so automatic and so reflexive that it will almost always take over. We believe more top leaders should introduce the team choice to their colleagues and discuss it openly and continually.

Without being overly prescriptive, such discussions will be enhanced by considering carefully the answers to a few key questions that help determine whether the group can establish a practical team purpose and goals, pull together the needed skills, and shape a realistic team working approach. To that end, the following may be useful.