Why collaboration and teamwork are essential to effective strategy execution.
We are proud to present an excerpt from Strategic Execution: Driving Breakthrough Performance in Business by Kenneth J. Carrig and Scott A. Snell.
As important as the CEO is, the top management team are the ones who initiate the game plan and have responsibilities for/to others who will ultimately make strategy happen. They are that key point of translation from strategic intent to operational directives. From above and below, we continually hear that it’s critical to get the team right. Yet it’s often a challenge to get the right people in the right roles. There needs to be a balance across the players in terms of knowledge of the business, knowledge of their functions, and ability to collaborate across the team.
Legendary UCLA basketball coach John Wooden used to say, “I don’t play my five best; I play my best five.” Too many CEOs ascribe to a “best athlete” approach to their top teams, promoting high performers into senior roles both as a reward for achievement and an incentive for further contribution. In some cases, this creates an undeveloped “team of rivals” that breeds unhealthy competition and power plays among the most senior leaders. At a minimum, it can lead to those leaders developing fiefdoms, hoarding resources, and erecting silos. In addition to a lack of alignment, this creates dysfunction throughout the organization that impairs strategy execution. Better to find the right combination of leaders, even if this means not always promoting your stars. Ron Wallace, former president of UPS International, reinforced why, saying, “Nine times out of ten, teamwork trumps talent.”8
In our experience, where companies go wrong is simply assigning people to teams or accepting the teams that exist and expecting them to be ready, willing, and able to collaborate. This false belief is that any group of people within the organization can be assembled into a team where the whole is greater than the sum of its parts.
We’re not downplaying the importance of individual talent—it’s crucial—but the collaborative effect is critical as well. Let’s look at a couple of examples from SunTrust and Marriott, to illustrate these points and gain specific insights on how to groom the top team.
SunTrust: Start with the core players.
Bill Rogers would fervently agree with Coach Wooden’s advice about getting the best team in the game. When he became CEO of SunTrust, one of his first questions was “What and who do I need on my executive team?”
From a “what” standpoint, Rogers recognized that coming out of the financial crisis his executive team needed both deep vertical and broad horizontal competencies to compete and grow in the complex financial services environment. So he took several immediate actions to make that happen. He shifted a few of his most trusted direct reports into key leadership roles that were critical to the enterprise going forward. For example, he moved his then CFO, Mark Chancy, into a role leading the wholesale business, taking advantage of his deep financial acumen and experience. He promoted his treasurer to CFO. He moved his head of capital markets, Jerome Lienhard, to run the mortgage division.
Each of these moves was focused on critical business units, central to SunTrust’s growth strategy. And Rogers had great confidence in these leaders, knowing the businesses would benefit from their deep functional expertise. Not coincidentally, these moves were also broadening roles for the leaders, which reinforced Rogers’s emphasis on building an enterprise team who could deliver the whole bank. Moving functional leaders into P&L roles had the added benefit of combining perspectives that helped integrate line and staff priorities.
To round out his team, Rogers named a private wealth management leader to the CMO position, brought in a new CIO from the outside to strengthen SunTrust’s use of information technology, and hired a new CHRO to reinforce the company’s culture and people management. Finally, Rogers consolidated the previously segmented consumer businesses into one, and then recruited a new leader from an outside larger banking institution. In all cases, Rogers looked for top functional expertise and business acumen. But equally important, he sought true team players who would support and challenge each other on behalf of the bank and its customers.
What was the effect of all these moves? In Rogers’s view, it created a tighter leadership team with deeper professional expertise, whose members would complement one another in taking the enterprise forward. He recognized that these “Ability” composition decisions were critical to SunTrust effectively executing its strategy in the short and long term. And he expected and rewarded cross-functional teamwork. The strategies worked: SunTrust’s performance over that six-year window resulted in a significant improvement of its efficiency ratio (expense/revenue management) from 72 percent to 62 percent or nearly $726 million in savings while growing their market cap from $9.5 billion in 2011 to almost $27 billion in 2016.
How might you apply SunTrust’s experience to your own organization? First, place teamwork at the top of your priorities within your C-suite. If it’s lacking, address it. Don’t hesitate to place some of your most trusted and most promising executives into new stretch roles. Second, build an effective support team around them and bring in others with complementary skills to balance out the team.
Leaders must be both discerning and decisive in putting the right people in the right roles to increase performance potential and take the company forward. One of the things we hear most often from CEOs is that they wish they had made personnel changes more quickly. While it is important to let individuals and the team grow and develop, if you see it’s not working, make changes immediately. Execution depends on it.
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Notes
8. Ron Wallance, Leadership Lessons from a UPS Driver: Delivering a Culture of We, Not Me (Oakland, CA: Berrett-Koehler Publishers, 2016), 16.
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