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What Makes An Executive Team Dysfunctional?

Recently I spoke with one of the world's most successful pharmaceutical executives on leadership and building a cohesive and highly functioning management team. Here's what he had to say:

"What organizations very often ignore is that dysfunctional executive teams negatively impact operational results faster and longer than any shareholder should tolerate. Misalignment creates silos between functions and divisions, duplication of data gathering due to mistrust, slow decision-making and much more. While almost all organizations aim at being customer-centric, dysfunctional executive teams will consume employees' attention and energy. The consequences are significant in terms of operational performance, failed launches, market share and brand erosion. This is an organizational cancer that requires constant prevention and radical treatment if diagnosed."

As executive search consultants our goal is to recruit stellar C-Suite leaders who will have lasting impact on our clients' organizations. While working with executive teams, we have witnessed brilliance and greatness, as well as executive team dysfunction.

We asked top executives to identify some reasons for executive team dysfunction. Not surprisingly, their answers followed common themes.

1. No clear vision

Even with the best spirit of cooperation, if the CEO's vision is not shared then the team will not succeed. Executive teams need to be focused, inspired and have clearly defined priorities, milestones and metrics. Poorly defined goals and the lack of a shared vision are both major causes of executive suite dysfunction.

2. Unclear or overlapping roles and responsibilities

CEO's must define clear rules of engagement, mapping out who does what. Otherwise, the classic Abbott and Costello's "Who's on first?" will happen quickly and painfully. In return, team members must be accountable for outcomes, completely committed to their goals, and prepared to "go the extra mile" to deliver.

Biotech commercial executive, Rolf Hoffmann, highlights non-negotiables: "Align on annual corporate and functional objectives, along with D-A-I allocation-who Decides, who Advises, and who is Informed...lay out clearly expected behaviors, and reward for overall company performance, not individual function only."

3. Lack of trust

Trust is the foundation of any successful team. Without trust, there is no team. Backyard Farms, President and COO, Stuart Jablon, commented, "Give me trust, and alignment, agreement, credibility, consensus and engagement will follow."

Many times companies recruit C-suite executives from the external search process. Often the external executive is recruited to make changes. Whether the changes are as significant as turning around a failing business or simply providing new leadership, those changes cannot happen without trust between the executive and his or her team. We have found that the more the degree of change is proportional to the amount of trust. If an executive team trusts their leader, that trust permeates the entire organization.

4. Lack of honest feedback

Honesty is another essential element of any relationship, business or otherwise. Charles Alaimo, Senior Vice President of Human Resources of Aceto Pharmaceuticals says:

"Not having a team that will 'tell it like it is' is the most dangerous dysfunction. It's important to surround yourself with an honest core team who will tell you the hard truth. Get rid of 'yes' people. For example, an executive team failed to advise the CEO that their key product idea was late to market and therefore, unlikely to succeed due to increased competition. What happened? The project went ahead and as expected, drained the company's capital and eventually led to the company's demise."

5. Anemic or undefined company culture

A well-defined company culture and core values are a cornerstone of building strong executive teams. In companies both large and small, there is room for improvement. When hiring, companies need to assess a candidate's cultural fit within the executive team, which is as important as their functional expertise.

6. Toxic participants or poor team chemistry

J. Mike Smith, Vice President, Talent & Culture at Atara Biotherapeutics, Inc. believes that executive team members who actively dislike each other and engage in constant infighting through direct reports or through peer intermediaries can create a dysfunctional team. Smith comments that "a CEO who doesn't value or require a cohesive executive team that works well together is building a clear path to executive team dysfunction." A healthier team culture can weather frictions between team members, disagreements over tactics, and even bad business cycles.

7. Lack of fairness and consistency

Leaders need to be mindful that bending the rules, or showing favoritism only creates distrust, dissention and resentment within an executive team. If favoritism and inconsistency is not immediately addressed, the team will lose its sense of community and common goals.

8. Lack of transparent communication

Often as companies grow in size, from start-up to mid-size to large global players, it is likely that the culture will evolve. The communication style and team dynamics of a 20 - 200 person organization may not work within a 2000 - 20,000 person multi-national organization, given the growing scale and complexity of the business. Senior leadership needs to plan for the impact that growth will have on a company's culture.

Executive team cohesiveness and functionality must be assessed regularly

Marc Reuss, ConvaTec Global Head of Human Resources, comments: "It is not easy to develop a highly functional team; even once you have achieved it, it needs to be nurtured and assessed on a regular basis. Left unchecked, the team begins to deteriorate."

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Beth Ehrgott

Beth Ehrgott

Managing Director