Although business lore is full of lone geniuses, sustained corporate success is rarely a one-person show. Here business consultant Walter Hale offers some guidance on the factors to consider when trying to build a strong team of leaders.
In an uncertain, complex, fast moving marketplace, even smaller companies may stand or fall on the quality of the team that leads it. A resilient, varied, flexible team that understands the values of the business – and has a common vision of what success look like – can give business a decisive, enduring competitive advantage.
So how do you go about creating such a team? Each company will have its own view on when it is appropriate to promote or import talent. Yet diversity – in terms of race, gender, background, personality and sector experience – can be useful. Too many small businesses see the marketplace entirely through the lens of their founder’s experience and that can make it harder to detect the subtle changes that often catch a company out.
1. It’s not all about being smart.
Bill Marriott, the former CEO of the global hotel, once admitted it had taken him 35 years to get the right management team at the top of his company. His mistake, he recalled, was that “Over the years I tried to hire a lot of smart people, people who were smarter than me. But many of them had big egos, and they wanted to be CEO. There was a lot of competition, they were fighting with each other and fighting with me.”
Slowly, Marriott build a more functional team –“where people were doing their best to support the company, instead of themselves” – by looking for other managers who liked to get their hands dirty, had good people skills and listened more than they talked. He realised that the common thread linking the managers who succeeded in his organisation was that they excelled in developing relationships and, as he put it, could control their egos to ask colleagues: “What do you think?” and generally be interested in the answer.
Effectively, Marriott’s definition of ‘best’ for the job changed drastically. Nobody wants to hire morons but intelligence became, for him, less important than how his managers combined in a team.
2. Ask yourself…
… could you sit next to this person on a long plane trip? Recruitment is a hit and miss process – even if you’re promoting from within. One of the difficulties is trying to decide whether an individual will ‘fit’ the business.
Fit is a dangerously ambiguous concept. If you’re hiring externally, you and they need to be clear what fit means. It shouldn’t mean, for example, that they feel obliged to toe the company line until they've earned their spurs. Nor does it mean they should come in with the immediate goal of changing every practice in the department they are responsible for.
During the interview, you can discuss long term ambitions, business strategies and corporate visions but such conversations may not tell you that much. There are obvious danger signs - does their CV show that they move on to the next challenge every two or three years? - but, failing that, you might want to get them talking about a passion or interest outside work. And as they’re talking, ask yourself: can I imagine myself sitting next to this person on a long-haul flight? If the answer is yes, they could - after the inevitable period of adjustment - fit very well.
3 Find out how they solve problems
Some managers will study a problem, see a solution and act. Others will study a problem, see a solution - and then ask colleagues and subordinates what they would do. The self-solving manager may look more capable - and their remedy will probably come quicker - but that approach is not without its risks. The most obvious one being that their preferred solution may be wrong. Yet their self-solving approach could well demotivate other managers, worsen communication (if people know they’re not listened to, they’re hardly likely to speak up) and lead colleagues to resent them as arrogant. This can be especially damaging if the manager has been asked to manage change.
One way to get a sense of a recruit’s modus operandi is to ask them to talk you through the last significant problem they encountered at work and how they changed it.
4. Get the balance right
Every managing director has an idea of the kind of management team they want to run their business. Yet that idea needs to be mapped against the needs of the company, the maturity of its business, the strategic challenges it faces, its distinctive competencies and the state of the marketplace it serves. For example, many companies were caught out by the recent economic crisis because they promoted too many “growth gurus”, reflecting the zeitgeist of an age when market growth was seen as a given. What they really needed, it quickly became apparent, was managers with stronger operational experience, adept at controlling cost, restructuring and knowing what changes to make in a crisis. Yet now, with the UK economy finally bigger than it was before the recession started, the blend might need to change again.
5. Be clear about your company culture
Businesses routinely talk about something being part of their DNA yet too few define what that DNA is. When asked, many business leaders insist that employees know what the company’s values are, yet how are they supposed to acquire this knowledge if nobody shares it with them?
Identifying - and communicating - what your company stands for is at the heart of building a great team. Defining your business’s DNA isn’t as simple as, for example, setting a target for growth or profitability. Just as there are many ways to win a football match – Germany could not have won the World Cup playing defensive, reactive football – there are many ways to grow a business. How can you be sure if your team shares it values if they don’t know what they are?
6. Understand how you want the team to behave
One call that only a managing director - or the business owner - can make is how much internal debate they may want to encourage. Management consultants McKinsey have gone as far to suggest that proposals to boards should be accompanied by a ‘red team’ report that presents arguments to the contrary. Few managing directors will want to go that far yet most recognise that life has changed since the Hollywood producer Sam Goldwyn famously declared: “I don’t want any yes men around me. I want men who’ll tell me the truth even if it costs them their jobs.”
When shaping strategy, it’s vital to balance the flow of ideas, to be sure they are coming from the bottom up, as well as top down. If the leadership at the top is weak your business could drift as it is driven by a plethora of ideas and initiatives from below. If the top ignores the bottom, you end up with the Great Leader model where everybody is expected to march full speed in the same direction. Jobs reign at Apple is a perfect example of this approach. It worked brilliantly for Apple with Jobs in charge but hasn’t helped his successor, Tim Cook.
If you envisage yourself as a Great Leader, like Jobs, there’s no harm in that - as long as you are almost always right – but that will affect the kind of team you want to build and the company you manage.
7. Make sure you’re not doing their job.
The managing director’s role is an odd one. On any given day, you could be doing anything or nothing. Yet Irving Grousbeck, who teaches an entrepreneurship class at Stanford Business School, advises those running a company: “You can hire people to do everything but hire people.” So find the right people for the team, let them manage and focus on doing the things only you can do. If you’re being asked to do too many things that aren’t really your job, you probably haven’t got the right person in that role.