Team composition

Team composition is the starting point. The team needs to be kept small—but not too small—and it’s important that the structure of the organization doesn’t dictate the team’s membership. A small top team—fewer than six, say—is likely to result in poorer decisions because of a lack of diversity, and slower decision making because of a lack of bandwidth. A small team also hampers succession planning, as there are fewer people to choose from and arguably more internal competition. Research also suggests that the team’s effectiveness starts to diminish if there are more than ten people on it. Sub-teams start to form, encouraging divisive behavior. Although a congenial, “here for the team” face is presented in team meetings, outside of them there will likely be much maneuvering. Bigger teams also undermine ownership of group decisions, as there isn’t time for everyone to be heard.

Beyond team size, CEOs should consider what complementary skills and attitudes each team member brings to the table. Do they recognize the improvement opportunities? Do they feel accountable for the entire company’s success, not just their own business area? Do they have the energy to persevere if the going gets tough? Are they good role models? When CEOs ask these questions, they often realize how they’ve allowed themselves to be held hostage by individual stars who aren’t team players, how they’ve become overly inclusive to avoid conflict, or how they’ve been saddled with team members who once were good enough but now don’t make the grade. Slighting some senior executives who aren’t selected may be unavoidable if the goal is better, faster decisions, executed with commitment.

Of course, large organizations often can’t limit the top team to just ten or fewer members. There is too much complexity to manage and too much work to be done. The CEO of a global insurance company found himself with 18 direct reports spread around the globe who, on their videoconference meetings, could rarely discuss any single subject for more than 30 minutes because of the size of the agenda. He therefore formed three top teams, one that focused on strategy and the long-term health of the company, another that handled shorter-term performance and operational issues, and a third that tended to a number of governance, policy, and people-related issues. Some executives, including the CEO, sat on each. Others were only on one. And some team members chosen weren’t even direct reports but from the next level of management down, as the CEO recognized the importance of having the right expertise in the room, introducing new people with new ideas, and coaching the next generation of leaders.