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Redefining leadership effectiveness

Author: Nigel Purse, Published: 26 November 2018

Nigel Purse shares why it’s time to redefine what operational effectiveness looks like for your senior leadership team

How well do you think your senior leadership team are doing? Be honest. When was the last time you reviewed how well you work together as team? Do you know precisely what you do well and what behaviours are holding you back from taking your organisation to new heights? 

Arguably, the way leadership teams operate together should be under constant review. But in reality, time constraints and business as usual frequently push the process of reviewing your team strategy to the bottom of the list of priorities. Furthermore, without the knowledge of how to conduct a review appropriately, little positive impact will come of it. So when, and how, should your leadership team re-examine how they are working together? It’s something I feel strongly about clarifying and it’s simpler than you expect.

When it comes to timing, annual reviews are ideal. However, there are also some specific circumstances which should initiate a review, such as:

  • Unexpected reductions in business performance
  • Mergers or acquisitions
  • New competitors or changes in the competitive environment caused by new technology
  • Political and economic challenges such as Brexit, the release of government budgets or regulatory change
  • Changes in customer preferences and behaviour driven by new technology, competitors and political and economic change.

Certain dysfunctional behaviours can hold leadership teams back from being operationally effective – regardless of whether a major internal or external change is afoot – so vigilance must be paid to recognising and using them as a catalyst for a review. Signs that a leadership team is not operating effectively may include: dictatorial, no questions asked requests (“Because I said so”); ego-based decision making; an inability to commit, or constant changes, to strategy and planning; office politics hinting at division within the leadership team; or frequent mis-communication or a lack of communication between members of the leadership team and between leaders and their employees. 

Based on the information above, knowing when to initiate a review is relatively straightforward. How to approach the challenge of redefining operating effectiveness is trickier, as it must start with an honest appraisal of how the senior leadership team is actually impacting business performance – for better or worse. For such a delicate task, impartiality is needed, so it is wise to engage a skilled external coach or consultant to lead this process.

We recommend using a simple process with the following stages:

  1. Interview each member of the senior leadership team and ask them to describe critical incidents in the past 12 months where a specific decision taken by the team (or by an individual) has shaped or changed the way the business has performed. These include examples of a decision that has led to improved performance, a decision that has worsened performance, or where no decision was taken (or an issue was ignored or missed) causing reduced or stagnating performance.
  2. Review all these examples and quantify the impact they have had on business performance – you will need to measure this impact on a number of levels such as financial terms, staff retention/loss, productivity, innovation and customer satisfaction. You can then use this information to project the likely impact on the business if the current way of working continues, especially in the light of any foreseen changes to the operating environment.
  3. Re-interview members of the leadership team to gather examples of how the team can modify their ways of working to increase the positive impact they have on business performance and mitigate any negative effects. This may include doing more of what has been working, establishing more robust information gathering and decision-making processes, structured debates, increased or more detailed communication.
  4. Next, through a series of leadership team events, secure agreement to these new ways of working and develop a shared understanding of the implications they have for the team as a whole.
  5. Finally, where improvement demands new personal behaviours from team members (which will likely be an important component), put in place individual coaching programmes with external coaches to support these changes. You may also wish to train the team collectively in holding conversations that help them cement behaviours and remain accountable to the new ways of working via a formal training programme such as 5 Conversations to improve Trust, Engagement and Performance at Work.

The power of this outwardly simple approach is captured in the phrase “critical incident” used in the first stage. Very few teams review their performance, individually and collectively, in terms of those very few, distinct moments when something one of them said or did, or did not say or do, caused a material change to business performance. Most of the time leaders are consumed with business as usual – attending meetings, reviewing projects, meeting customers. What must be paid attention to is when they actually make key decisions that impact the future, whether on purpose or through omission. This type of analysis is very hard to do because:

  • identifying moments of truth is difficult and sometimes controversial, as people will remember the details differently. People’s perception of whether the critical incident was good or bad, or worthy of note, may also differ based on their memory; 
  • if that moment of truth led to a positive outcome, you need to commit to learning as much as possible from the experience and what lead up to it so that it can be repeated;  
  • if that moment of truth led to a negative outcome (e.g. a multi-billion-dollar loss for the organisation) people are unlikely to take ownership of it for fear of the ramifications it may have for their career and self-worth. Without ownership, it can then be difficult to unpick the moment and derive lessons from it;
  • it’s embarrassing to admit how little impact you actually have on the business at times. However, these reviews are an ideal opportunity to identify new ways that individuals can contribute moving forward.

This process can be uncomfortable for participants, but the depth of analysis it provides creates the basis for a review that will lead to real changes. More importantly, it gives the team an opportunity to take a birds-eye view of how they truly operate, providing much-needed clarity that can alter or strengthen the approach the team takes to meet the company’s mission and vision.