When the top team in an organization struggles, the immediate instinct is to work on harmony and team building. But in Strategy & Business, University of Virginia Professor Rob Cross and Booz & Co. consultant Jon Katzenbach say that’s a misreading of how a top team is effective.
“In most companies, the phrase top team is a misnomer. Senior executives throughout the company may clamour for a seat on the leadership committee because that is where the key strategic decisions are supposedly made. But in actuality, the group rarely conducts its work in unison, as a deliberative body or a source of command,” they write.
“Instead, its power comes from its members’ informal and social networks, their determination to make the most of those connections, and their ability to work well in subgroups formed to address specific issues.”
Social network analyses show that as much as 90 per cent of the information that most senior executives receive and take action on comes through their informal networks – not from formal reports or databases. So you want senior executives who have large networks and know how to use them.
The writers note that in one global health sciences company the CEO expected to improve the leadership team’s effectiveness by strengthening committee structures and decision-making processes. But in studying networks in the company and asking people who was a key information source, it was clear one member was extremely poorly linked and the CEO was below par also. Enriching the networks enriched the company.