Source | www.mckinsey.com | Natasha Bergeron | Aaron De Smet | Liesje Meijknecht
Annual financial reports. Quarterly analyst statements. Acquisition and expansion plans. Such information is closely associated with a company’s performance and growth.
As investors cast a wider net to gain a more accurate view of a company’s prospects, most realize they should also look closely at the management team. Leaders can make or break a company transformation. In fact, 33 percent of failed transformations occur because the leadership team’s behaviors did not support the desired changes.
Consider one large insurance company. Discord among senior leaders led to low trust among team members, misaligned priorities, ineffective meetings, and struggles to make or adhere to decisions. The result was significant churn and rework. Employee engagement and accountability dropped, and the transformation slowed.
With so much riding on the leadership team’s performance, what can be done to improve its effectiveness?
Our experience, combined with scientific literature on organizational psychology, revealed 22 behaviors that contribute to effectiveness. These behaviors can be broadly condensed into four characteristics of effective teams:
- They configure the team around a clear mandate and precise roles, understanding which roles drive the most value and securing the right talent for those positions.
- They align on a value agenda, set of priorities, and way of working together, which helps forge a distinct identity.
- They execute under a governance system that allows them to make decisions quickly and effectively, collaborate, and challenge one another.
- They take time to renew—evolving, innovating, learning from the broader context, and investing in individual and team-wide development.