Welcome to the New Year, with all of its potential ahead of you. As you ponder how to dive into your strategy this year, see performance soar and outcomes imagined become realities, consider the role of your leadership team. Is your leadership team designed with strategic execution in mind or functional excellence? One advances the organization, the other maximizes department performance which can create turf wars and resource allocation conflicts. Strategic execution starts at the top with a common vision for the company’s future. That means each function should be designed to work together, contributing to the future goals. If your leadership team doesn’t work that way, it may be time for a change.
Who sits at your strategic leadership table? Is it by design or default? Does it depend on title or contribution? “This isn’t a matter of preference but performance,” says Ron Carucci and Jarrod Shappell, who co-wrote “Set Up Your C-Suite to Execute Your Strategy”. They suggest that strategic leadership teams are not about who reports to whom, because reporting lines serve the CEO and strategic leadership teams should serve the company. Rather, the team is designed to include those who are needed to lead the change the strategy calls for. A speed-to-market strategy requires different players, with different roles than a low-cost strategy or an innovation strategy. According to the authors, firms seeking breakthrough ideas to better serve their target customers must have R & D or product innovation at the table tightly paired with commercial leadership. Creating a seam between those functions keeps innovation from languishing on the drawing board. “The design choice is to prioritize creativity and market connectivity above breadth.” What you want to avoid are roles that clash—say a Chief Digital Officer who fights with a CIO over who owns platforms, or argues with Marketing over customer data, and has a separate innovation agenda, all of which invites chaos.
Strategy dictates design of the leadership team as clearly as budget does. If someone looks at your budget, they should be able to see your “strategic priorities” by how resources are allocated. The same should be said of your strategic leadership team. The authors believe that when designing a team there are three key criteria to consider:
- Size: Is the team inflated and representative of functions or is it designed to elevate those with strategic roles over reporting duties? For example, a chief legal officer while essential may not be a driver of strategy. Smaller teams with shared priorities can be more effective. Five or six is much better than ten to twelve. More can be done faster with a focused group, and it eliminates the ability to diffuse accountability. The goal is real-time problem solving and decision making.
- Scope: How broadly or narrowly should roles be defined? Is greater focus needed or more alignment across key functions? The answer to that often dictates scope.
- Seams: This is the place where functions require synergy to achieve tangible market results. For example, seams are needed between product and sales for service delivery or R & D and marketing to accelerate innovation. This is where teams can succeed or fail.
If your organization is struggling to produce results with an all-star team, it could be because the team needs to be designed to reflect the strategy, not tenure or reporting assignments. Every role matters, but not every role will drive the strategy. Be as deliberate in setting up your strategic leadership team as you are designing the strategy itself. Need someone to evaluate your current set-up against strategy? Happy to help. Our strategic audit might be just the right thing for you. GrowthDNA-Diagnostic-and-Action-Plan.pdf
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