CURT NICKISCH: Welcome to the HBR IdeaCast from Harvard Business Review. I’m Curt Nickisch.
Break any company down and at the core is the team, people working together with the team manager to achieve outcomes. A high performing team can drive success and inspire others. A dysfunctional one can stack up losses, run up costs, drain morale, and send team members running away. That dynamic is strongest at the top in the leadership team of the organization. When that team is dysfunctional, it puts an immensely disproportionate drag on strategy execution and organizational success.
Today’s guests have studied this and find that when the leadership team is dysfunctional, it’s usually in one of three ways and they have advice for changing those common types. Our guests today are Thomas Keil, Management Professor at the University of Zurich and Mariana Zangrillo, a partner at the Next Advisors. They wrote the HBR article, Why Leadership Teams Fail, and they join me now. Thomas and Mariana, thanks for joining me.
THOMAS KEIL: Thanks for having us.
MARIANNA ZANGRILLO:
Thank you for having us.
CURT NICKISCH: I guess we should start by defining exactly what you studied. You spoke to people in leadership teams.
MARIANNA ZANGRILLO: That’s correct. So we know that basically the health of the leadership team is quite crucial and very often is underestimated. And to learn about what kind of problems might affect these teams, we have interviewed more than 100 CEOs and senior executives while pursuing a multi-year research program of about 10 years. And in our study, while of course there are differences across different companies and situations, we noticed that leadership teams tend to exhibit one or three main patterns of dysfunction.
The first being very competitive, lot of infighting and considerable political maneuvering. We do know that some competition is necessary, but when that gets taken to the extreme, problems basically start. The second pattern we observed is the one of extreme conflict avoidance where team members just pursue collaboration, don’t challenge anymore each other because there is also a guarantee of not being challenged back. And then the third pattern that we notice is too much complacency, lack of competence, and fundamentally, focus on past performance, which is probably one of the most complicated of the patterns that we identified.
CURT NICKISCH: I’m curious how common this is to have a leadership team that is dysfunctional.
THOMAS KEIL: Initially when we started our study, we were not really looking at failing leadership teams. But as we spoke with people and as they often talked in more detail and often also asking to stay anonymous, they opened up that they had a lot of issues with the leadership team and it was surprisingly common in fact. You don’t often hear about that. You don’t often read about that because of course we all try to project a picture of success and of a strong team. But when you really go beyond that surface, it is very common in the top leadership teams. And it is very interesting that in some instances, CEOs were not really aware of the dysfunctions in their team, that they thought they had a well-working team. And when we spoke with some of the executives reporting to them, they portrayed a very different picture.
CURT NICKISCH: It sounds like the strength of a leadership team can make or break the job of the CEO, and they’re also the person who probably has the most control over shaping that team. But if they’re not aware of it themselves, what can they do to assess the effectiveness of their own team?
THOMAS KEIL: In our view, one of the first things is to watch out very carefully for telltale signals for each of these dysfunctions that we identified. There are signs, sometimes small signs that you need to be very carefully attuned to where you have to watch out very carefully, listen carefully what people say, what different people say. Those often signal that there is a problem well before it deteriorates to the extent that it really drives down the performance.
For instance, if people are starting to be too emotional when you have shouting matches in the meetings or when people are decidedly not communicating in the meeting, but try to take you aside afterwards, these are very strong signals that your team is starting to become too political.
If you have the other extreme that you have no emotion in the team, people don’t challenge each other. They rather play to each other’s proposals. That’s a sign that you’re lacking the level of ambition. You’re lacking the level of energy. You are ending up in what we call a petting zoo.
Or if people are fundamentally backward oriented, have no ideas, then you don’t have the right caliber in your team and you are in a mediocracy. So it’s really about monitoring very clearly what’s going on both inside the meetings but also outside of the meeting to get a sense of where your team is at.
CURT NICKISCH: Often CEOs will inherit that team. They may bring certain people in, they’re not always building it from scratch. Is part of the problem just the fact that it could take a long time to actually switch the team over or have the people in place that you think are optimal?
MARIANNA ZANGRILLO: We see a lot of differences depending also on the current situation that the CEO find. But we do see that in situations like a shark tank, it is often just one or two team members, which may be the problem. And if the CEO pays attention to how the individuals behave, they may quickly identify the one who might be the problem, have conversations with him and her. And if the person can get back on track and work with the rest of the team, it may even be possible that no change is needed. But if the person is really not adjusting the behaviors and keeps being self-serving, then a different situation is at hand and more changes are needed. The other extreme we typically see instead in the third type of dysfunction. So when we are looking at a team where we have a mediocracy, then basically we see the situation where the CEO may have to carry out many more changes.
CURT NICKISCH: There’s a famous story of Howard Schultz, the Starbucks CEO, going to Steve Jobs and complaining about his team. And apparently Steve Jobs said fire everybody and Schultz didn’t. But he said within a year, everybody had left anyway. So sometimes these are, do you want the pain now or do you want the pain later?
THOMAS KEIL: And we have a number of instances where we actually had CEOs that changed anything from 80% to a hundred percent of the team simply because they needed to transform the organization so radically that this wasn’t possible with the existing team.
CURT NICKISCH: So it sounds like a lot of judgment calls here to turn their teams into better performing ones. Let’s spend a little bit of time on each of these three main types and how to navigate those. The shark tank analogy is pretty vivid. This is one where there is a lot of in-fighting, whether outright or clandestine. How does this dynamic come about and what influence does the CEO have on that?
THOMAS KEIL: In the shark tank, you really have a competition taken to the extreme. When you start to say, “Okay, winning is more important than paying fair.” Then what you find is that where you would need cooperation, it no longer happens. And that is where the organization becomes political, where people only drive their own agenda, and no longer the agenda of the company. And that’s really a place where you need a very strong leader that actually reins in these behaviors, that sets limits very clearly, that sets a very clear direction.
Defines where competition is acceptable, defines what behaviors are acceptable, and also very clearly shuts down when behaviors escalate into a political domain, which is unfortunately even may mean that you have to lose a high performer because in a shark tank, you often have many high performers, but when you perform at the expense of the organization, it’s no longer in the interest of the organization. And you may have to in the short run, accept that you are losing a high performing individual, but then the team as a whole becomes stronger.
CURT NICKISCH: Well, let’s get to maybe the opposite problem, which is the petting zoo. What does that look like in practice at an organization?
MARIANNA ZANGRILLO: Well, when we have petting zoo, basically we have-
CURT NICKISCH: I love that name by the way. It’s great
MARIANNA ZANGRILLO: When we have the petting zoo, we have executives which tend to be extremely collaborative. Sometimes, they’ve been with organization for a very long time, tend to support each other to protect each other. Disagreement doesn’t happen. And in the executive meetings, when one executive speaks, everybody else nods and that is a clear sign the team is not basically doing their job because they are not constructively criticizing each other, pushing a little bit the boundaries, and ultimately breaking or going against the nature of what leadership teams really need to do.
We had one case where a CEO told us people just did not want to talk openly. They all were supporting each other, were not speaking up, conversations were not happening. And then he basically decided to shift the focus of executive meetings from questions of policy and procedures to interpretation and purpose and principles.
And during the various meeting, he carefully followed up on how much discussion was happening, who was speaking, who was raising issues and challenging colleagues, and who was simply nodding. And then from there, it was basically testing the temperature to see how well the team was functioning. So more debate is always necessary in these cases and that’s the CEO’s job to try to push each of the executives to participate more actively to the conversation, contribute with new perspectives to come to more optimal outcome.
CURT NICKISCH: Some people will hear that description of that team and think it’s maybe okay. It might be calming to the rest of the organization too to see there’s no apparent disagreement at the top. Why is the petting zoo so damaging?
THOMAS KEIL: What the petting zoo fundamentally misses is the level of ambition and the level of challenging each other that is needed, that people get out of their comfort zone. If we want to drive performance in a modern organization, we need to step out of the comfort zone and we need to work together on creating novel solutions. But if I’m just accepting my peers’ solutions, that’s just not happening. So we are essentially taking it too easy.
MARIANNA ZANGRILLO: The petting zoo sometime is the outcome of many years working together. So we see teams which are work together for 5, 10, 15 years, and whoever knew was brought in was someone who had to be fitting into that ways of working and not really the type of person who would challenge. And as we know very well, when there is no change, no novelty, no diversity, no new thinking, then it’s very difficult to make progress. So they favor stability and calmness over progress, which sometime can be also a choice, but certainly the overall performance and profitability in the long run tends to suffer.
THOMAS KEIL: And it may in fact be a sign of a lack of trust in the team. Because to really engage each other constructively, critically, you do need to trust that people will not attack you on the person, that it’s about the issues. It’s about the idea. It’s about building on each other. And when that trust isn’t there, you often find people acting nicely because it feels safe. But fundamentally, not trusting that any debate is actually meant to help me rather than to hurt my position in the organization.
CURT NICKISCH: Can a CEO in that petting zoo then replace one or two people? Can they simply try to change the culture of the team by challenging them more, by changing the budgets more so that there’s more competition over new projects? Any other tactics that a CEO can do in that situation?
THOMAS KEIL: In our view, it often depends on what is the underlying root cause of this behavior. If it’s a matter of trust, then you need to start with building the trust in the team. If it’s a matter of some degree of complacency in the team, then you need to start to change the behavior by processes, by for instance, forcing numbers onto the table by debating numbers. If it is a matter of people having been too long in a role, then one of the things a CEO can do is for instance also switching around roles so that nobody feels they are the absolute expert in their domain, and therefore you get some more of this challenging into the team.
CURT NICKISCH: Let me ask about the mediocracy. It sounds like this is a team where you could have people who are appropriately competitive, who are appropriately collaborative, but just not excellent in their work and what they’re doing. Is that the issue?
MARIANNA ZANGRILLO: Well, in the mediocracy, we typically find leaders that are ill-suited for the roles and they’re not up to the task. And these are the situations where we have seen CEOs carrying out the highest amount of executive changes. In this situation, we typically find teams where some people are competing excessively, some people are collaborating excessively, they can be different groups which are created, and they’re not really working with each other. So we have seen a number of CEOs which had basically to significantly remake the team, if not entirely. Typically, much more than 50% gets changed in these situations.
CURT NICKISCH: I’m just going to underline something that you said that these teams, they can look almost like shark tanks. They can also look like petting zoos or they can look like good teams, but they’re just still made up of people who aren’t up to the task.
MARIANNA ZANGRILLO: It is true, but actually in the mediocracy, what we actually see is people which are not fundamentally capable or suitable for the job. So it’s not anymore an interpersonal issue the way people deal with each other, but there is an objective issues with the capability and the fit of the individual or many individuals within that organization. And that’s probably what makes the role of the CEOs most difficult in these cases because it’s not anymore enough to address the behaviors, but you fundamentally have an issue also with the individual, many individuals independently of how they interact with each other.
CURT NICKISCH: What else can you do to right the ship in this case?
THOMAS KEIL: Changing people is always just the first step. You need to be very careful, of course, in this case with the selection of people so that you get then the right mix of skills. And again, the ability to compete, collaborate as is needed for the mandate of the CEO. But then also you need to very clearly define how you’re going to run this team. So because you’re essentially rebuilding the team, you really need to start from thinking about what is your purpose? What is your mandate as a CEO? How do you align a team around that? What kind of people will serve that best? What are the kind of mixes of responsibilities and where do you then design collaboration, competition around that? So it is really in the end more or less a complete rebuild of the top team.
CURT NICKISCH: Where do CEOs most often go wrong or what are the biggest stumbling blocks for CEOs when they’re trying to change these teams into more functional ones?
THOMAS KEIL: We see two important stumbling blocks. The first one, and you mentioned that already yourself earlier, is to actually recognize what are the issues in your team, because the team members will interact differently with the CEO than they interact as a team. Then they interact with each other when the CEO is not in the room. So it’s not always easy for a CEO to really understand what dynamic is going on. But the next, and even if you have recognized and you want to institute change, is the fact that the CEO needs to be very controlled in instituting the change. How the CEO acts himself or herself as a leader, how he or she interacts with the individual team members, interacts in those meetings is such an important driver. And often CEOs talk one game and then themselves behave differently, and that completely derails any kind of change that they may try to institute.
CURT NICKISCH: You study these teams, you advise these teams. I’m curious if you can just share some additional general advice for CEOs and leadership teams. How can they become more effective?
MARIANNA ZANGRILLO: Well, this basically goes back to the steps to high-performing teams. Very often is the lack of clarity, whether strategic, operational or behavioral, which causes this leadership team dysfunction. So if the CEOs go back to developing a clear vision and purpose so that they articulate a compelling vision, then we always tell the next step would be to focus on alignment. The team members have to have skills and behaviors that align with the vision and the purpose of the CEO and the organization, and on top of that, clearly need to have backgrounds, experiences, and strengths that will contribute to organizational performance.
It is very important to outline responsibilities as clearly as possible, defining goals and roles, and also how the decision making will happen, and finally, establish behavioral norms. If it is clear what are the norms that are expected from the team and the team members are encouraged through coaching and role modeling, then it is more likely that the organization will function in the way the CEO basically envisions that to drive ultimate performance.
CURT NICKISCH: I bet a lot of people listening to this episode, if they’re not in leadership teams too, they’re going to be wondering about their own and wondering about how well they perform, and they probably just don’t have enough insight into that. It’s the CEO, the manager of that team who has the best idea of whether or not an outwardly effective team is actually effective.
THOMAS KEIL: Let me challenge what you just said a little bit. I think very often the people in the teams have a very clear understanding what is working and what is not working, and I think teams also can take charge of changing this and of engaging as a group in change. It’s not only top down. We believe that there is a very important role for the executives in a top leadership team or then for team members to create the type of environment that the team as a whole can perform.
CURT NICKISCH: That’s really interesting. You don’t have to wait for the CEO to try to make a positive change and try to build trust.
MARIANNA ZANGRILLO: It’s very important that every individual takes ownership of own behavior, own future, and also organizational success. If everybody thinks that it’s only the CEO or the leader job to do the correct things, then the likelihood that the organization takes a good direction is much smaller. And if we are letting things happen to us or to our organization, then basically we are in the hand of fate and not in the hand of our competence.
CURT NICKISCH: Thomas and Mariana, thank you for coming on the show to talk about this.
MARIANNA ZANGRILLO: Thank you very much for having us.
THOMAS KEIL: It’s been a real pleasure.
CURT NICKISCH: That’s Thomas Keil, Management Professor at the University of Zurich and Mariana Zangrillo, a partner at the Next Advisors. They wrote the HBR article, Why Leadership Teams Fail.
And we have nearly 1000 episodes plus more podcasts to help you manage your team, your organization, and your career. Find them at HBR.org/podcasts or search HBR in Apple Podcasts, Spotify, or wherever you listen.
Thanks to our team, Senior Producer Mary Dooe, Associate Producer Hannah Bates, Audio Product Manager Ian Fox, and Senior Production Specialist Rob Eckhardt. Thank you for listening to the HBR IdeaCast. We’ll be back on Tuesday with our next episode. I’m Curt Nickisch.
