Written by Annie Gray based off interview with Dr Ann Hutchison on April 24, 2019.
This article was published in the May Issue of NZ Management Magazine and you can download a copy of the article here.
CEOs across the spectrum of New Zealand’s business sector are very clear on what they want in their top team - they want them performing as one cohesive, integrated unit. Collaboration is the key word. The problem is CEOs don’t seem, in many instances, to be getting the unity they seek.
New research based on interviews with 45 top CEOs across the New Zealand business spectrum is described by its author as the collective wisdom of CEOs about the reality of managing at the top in today’s environment.
The study, undertaken by Dr Ann Hutchison, senior lecturer at the University of Auckland, and remuneration and performance specialist, Strategic Pay, is still being finalised by Hutchison but what is becoming clear from the interviews conducted with CEOs “is that what CEOs want to be happening is not quite where they are at,” says Hutchison.
CEOs want their top team to be a fully integrated unit, that works as one cohesive team and often what they have got is a lot of silos, where people fall into a financial, HR, sales or marketing silo.
“That way of working is out of the 1980s and 1990s and is the old functional way of working. CEOs really see the need for this silo mentality to go.”
Instead they are looking for senior leaders who see their number one priority is the top team and that their functional loyalties as being secondary to being on the top team.
Some of the CEOs interviewed have managed to build an integrated team but Hutchison said more of those interviewed said they would like to be there and were not, as yet.
“They recognise that it is really difficult to get the team where they want it to be. Because the business environment is so uncertain, and complex, there is a need around the top table for a diversity of opinions, biases and as many different kinds of people and brains as possible, so you can solve some of the things coming your way. And the CEOs know they don’t know everything. Today’s business environment is described as hyper-competitive, and globalisation has intensified the pace. “The playing field companies are competing on is a lot larger and more complex.”
She says CEOs are constantly thinking about their top team and the structure of that team. Is it the right size? The right structure? What kind of roles are needed on it? Is it fit for purpose for the way the organisation is moving?
And she was surprised to learn CEOs restructure quite often and some, several times over the years. She says many of the CEOs in the sample were humble about their role and see the top team as their key to success.
“They find it refreshing if they get diversity of thought in age, ethnicity or industry experience.”
And there is a real recognition that the CEO can’t lead by being directive. Instead they are seeing themselves as a conductor, collaborator or servant leader. And they work by coordinating and asking questions, so decisions are made together.
CEOs realise that the new ways of working are less hierarchical and there is a desire by workers to have more of a voice.
“In the 1990s it was command and control, that way of working will not work anymore, it will not get people on your side and it is not what the workforce wants.”
The CEOs in the sample recognise that if they get collaboration across the whole top team, they will get better decision-making rather than dominating everything. One theme to emerge was that if one person on the top team doesn’t want to buy into working in this integrated way and doesn’t want to break out of his or her silo “that affects the whole team and is a major challenge for the CEO.”
CEOs spoke about not wasting the organisation’s time and dragging along some who doesn’t want to work in a collaborative way. Hutchison’s sense from the interviews was the CEOs are quite quick to say to someone, “if this is not for you, you need to make a decision about your role.” She says CEOs are quite courageous and don’t mess round. A few said, in hindsight, they wished they had done something earlier, which she found interesting.
“They have to make some courageous decisions and are mindful of the fact they don’t want to mess up someone’s life. But they take a pragmatic point of view.”
Even those new to the CEO role have worked in top management teams, before becoming a CEO, and that will have been in both good and bad teams. So, they were often very clear about what a good top team looks like. She says CEOs spend a lot of energy dealing with the board and the strategic directon. They are a go-between from the governance of the board to the operational side of the organisation.
“The board is such a complex part of the CEO role. But if you get the top team working as a meaningful senior leadership team, that gives the CEOs the space to do all the go-between stuff.”
As to the characteristics CEOs value in a top team Hutchison says this includes agility, people who embrace change and being resilient because there is so much change around. And they value creativity in the senior team.
CEOs recognise they need their organisation to be agile and they need fluidity. “The whole environment can change enormously … which can make that lovely strategy you had in place redundant. If there is a shift in the market, or a change in government regulation, the priorities change in what you need at the top. Teams have to be agile and intelligent and working together so they can handle the changes.”
And the feeling is not all top team members realise this. Some may have been promoted because of technical expertise and not necessarily appreciate they need other business skills to sit at the top table. Amongst the skillset wanted at the top, CEOs see emotional intelligence as important as a collaborative way of working needs a lot of trust. People need to feel safe and to be able to debate and argue in a safe environment.
“They need to be very tolerant and part of the problem in top teams is that you get real diversity of personalities. People who choose a career in finance or HR are likely to be very different personalities from those in sales or marketing…. and they will not necessarily be socially drawn to each other.”
CEOs says their teams are not necessarily going to like each other and they quite often fall out. “They say a decent part of the job is mediating relationship problems in the top team or the biases people have. Top team members can be quite strong people and quite dominant types. Part of the CEO role is to stop certain people from steamrolling others who may be quieter.”
Succession is also an important part of the CEO role and one of the issues that arose can be around competition for the CEO’s attention.
Here in New Zealand CEOs work hard to not play favourites which, she says, might be a Kiwi thing as international literature suggests, in the United States or Britain, CEOs do have an inner circle. But in this sample they saw a more team orientated, egalitarian approach.