Every Executive Has Two Teams

Mickey Anderson (0:00)

When the executive team runs as five functions, rather than as one team, the whole business runs at a fraction of what it could. If you're at a growth plateau, and each of your functions has their own numbers, and is working hard within their functions to optimize and drive things forward, but they're not all working together, collaborating and making decisions that are best for the business, not necessarily best for themselves or their own functions, you're gonna struggle to actualize all of the hard work and effort and results that each of those individual functions are getting. The business is going to struggle, and the key to this is building that collaboration and coordination from the top. Ultimately, what you want is an executive team that debates hard, decides together, and owns the business outcomes as one. So you stop being the connector between all of the functions to make sure that they're driving towards the ultimate business objectives and not just self-optimizing. We often see this, where revenue and timelines are slipping. Each function is hitting their own KPIs and driving their own objectives. But cross-functional initiatives take three times longer than they should. Handoffs between functions break at the seams, and functions are pulling in different direction while the CEO is trying to pull things together and make sense of it to connect the gaps.

There's this discomfort, we feel, of watching really skilled functional leaders miss the bigger picture. The growing sense that the executive team meetings feel more like reports and updates rather than a true shared strategy. Well, it really shouldn't be this hard to get a group of talented functional leaders moving as one team towards the same outcome. But this is more common than you'd think. Functional identity tends to trump the team identity at the top. And objectives set inside each function don't connect to the true business outcomes. The myth that if each function does its job well, the business wins on its own is a complete fallacy. What we see and hear every single day are functional leaders talking about my team. And most often, meaning their functional team. They seldom mean their executive team. We also see metrics that make each function look strong on its own, on paper, without actually adding up to the business outcomes we're supposed to be driving. I've been in hundreds of executive team meetings that fill with status updates and context sharing and information transfer and real decisions are rescheduled or escalated to be decided at the top by the CEO. Functional leaders tend to defend their turf when a decision requires a trade-off across functions, and it becomes a real challenge. Handoffs break, marketing to sales, sales to delivery, product to customer success, and new customer initiatives.

New cross-functional initiatives need a project manager to hold the middle because the executives are not. What this is showing you, if you're experiencing this, is that although each function might be hitting their targets and looking good individually, the strategic outcomes are still slipping quarter after quarter, and that growth plan is stalling despite each team working really hard and each function performing on paper. There was a time early in my career where I was working with an executive team and each function was doing their best to make themselves look as good as possible. They didn't want fault to land on their desk or their team. They were trying to be protective and ensure that their team was focused and delivering outcomes that they thought were most important for their function. But when we looked at the overall business objectives and priorities, there was a complete disconnect between how all of these things come together. It took quite a bit of time to recognize that each functional leader, although doing a great job themselves of holding their teams together, of driving performance and protecting their people, they had the best of intentions. The executive team was not functioning as a true team, where they were making decisions based off of the business outcome. What's best for the business, not just for their own function. They saw their functional team as their primary team that they needed to protect, instead of the executive team as being their primary team that connected everything they do within their function to a larger business outcome or customer outcome. I spent years running agencies and advising corporations, watching these functional leaders show up as function first. I was fortunate enough to watch my dad, who is the CEO of a large public enterprise, model the alternative of this. He connected every piece of work, every objective to the business purpose, the business objectives, and the customer. He was already teaching his executives to sync as one team with the functional work sitting inside shared work rather than above it. Most executives are promoted for being great at their function. Fewer ever taught how to be a great executive team member. Now, we think of this from a psychology perspective. Whichever team the executive names as their first team is going to be the one they optimize for. If we can change that identity and shift their thinking around where their primary team is and what their focus should be, we can create a massive ripple effect that leads to collaboration, coordination and making decisions that are best for the business, not just best for the function. And in making decisions best for the business, we find more often than not that fear of not protecting and taking care of their people, it's not actualized. Their team is actually driving results, working on meaningful work, seeing how their work connects to everyone else, and being connected as a team to the rest of the functions, not just on their own fighting their way. My husband was in Tier 1 Special Forces for 15 years, and he introduced me to a book by General Stanley McChrystal called Team of Teams. And this book documents what it took for the JSOC to break the silos between their units, agencies and countries. This shared consciousness that they focused on, plus the decisions being pushed to the people closest to the work, is what unlocked the speed they needed at that complexity, in order to drive massive positive change across the organization. And now, they are one of the most effective and efficient teams within the world. These are the same patterns your executive team is up against. Now, after two decades of building and advising growing companies, one of the books that I come back to all of the time is Patrick Lencioni's Five Dysfunctions of a Team. They name this concept beautifully. An executive's first team is at the peer executive group. The functional team is second. And Jim Collins, Good to Great, points that the disciplined focus and confronting the brutal facts together, those are practices that are required at that executive level. Stanley McChrystal's team of teams shows that shared consciousness and empowered execution can drive massive results for an organization. Every executive has two teams. The one they choose as their first team is what the business becomes. Now if you're in this situation looking for a plan to move forward, I have three moves that you can start this week that are all about making the executive team that primary team and ensuring that everyone is making decisions that are best for the business aligned with the business and customer objectives and not self-optimizing their functional silos. The first is the brutal first. Name and set the first team in your next executive meeting. Say the words out loud. Is this your first team, your function, your second team? Ask each executive the question, what changes for you if you take that seriously starting today? You can write down what each person says and work through that discussion to really uncover what the challenges are within the executive team, why they may be overprotect or siloing or self-optimizing their function, and how you can make that transition so they truly see the executive team as their first team. Move to is to rebuild the shared objectives from the business outcomes down. You'll pick your top three to five business outcomes for the next 90 to 120 days. And I want you to write each in plain language connected to a customer or a business result that someone can actually see and measure. Then have the executive team agree together what each function contributes to that outcome. Name the seams where two or more functions have to work together.