Top Management Teams and Their Discontents Sandra Aria Pärnu 2008

Purpose To give an overview of the top management teams (TMT) To intruduce 4 different possibilities to ensure a high-performing TMT Differences between CEO and non-CEO perspectives

To give an overview of the top management teams (TMT)

To intruduce 4 different possibilities to ensure a high-performing TMT

Differences between CEO and non-CEO perspectives

What is TMT? CEOs constantly want to improve performance Many CEOs overlook one of the richest and most available target for improvement: TMT Collaboration -> team’s effectiveness

CEOs constantly want to improve performance

Many CEOs overlook one of the richest and most available target for improvement: TMT

Collaboration -> team’s effectiveness

There are four ways to ensure a high-performing top management team

1. Address unhealty competition among team members TMT members see themselves as competitors Unhealthy competition reduces the opportunities to generate corporate strategies and successful change Why there is a competition? CEOs reward members for successfully competing with each other and promote them Regular communication with all the team members about where they stand can lead to competition

TMT members see themselves as competitors

Unhealthy competition reduces the opportunities to generate corporate strategies and successful change

Why there is a competition?

CEOs reward members for successfully competing with each other and promote them

Regular communication with all the team members about where they stand can lead to competition

Many companies want to avoid competition among team members Do not reward team members personally Set goals that individuals cannot achieve without the help of orher colleagues Reward collaborative effort

Many companies want to avoid competition among team members

Do not reward team members personally

Set goals that individuals cannot achieve without the help of orher colleagues

Reward collaborative effort

2. Get team process right Underperforming TMTs struggle with making tough choices They do not have effective decision-making process and conflict resolution What matter most for team effectiveness is how team works together For managing a conflict, it can be helpful to build a healthy dialogue Too much time is spent for unimportant topics Improve the nuts of effective team processes

Underperforming TMTs struggle with making tough choices

They do not have effective decision-making process and conflict resolution

What matter most for team effectiveness is how team works together

For managing a conflict, it can be helpful to build a healthy dialogue

Too much time is spent for unimportant topics

Improve the nuts of effective team processes

3. Get team structures right Changing team structures can be important point in many cases CEOs must give clear directions to their teams CEOs have been concerned with getting the right numer of people on their teams It is important to organize the team with the right mix and diversity of skills.

Changing team structures can be important point in many cases

CEOs must give clear directions to their teams

CEOs have been concerned with getting the right numer of people on their teams

It is important to organize the team with the right mix and diversity of skills.

4. Maintain focus on the team’s responsibility for creating long-term value Team members feel that they are effective at short term tactical activities Members feel less effective at the leadership acitivites Emphasize important-but-not-urgent activities

Team members feel that they are effective at short term tactical activities

Members feel less effective at the leadership acitivites

Emphasize important-but-not-urgent activities

By the Numbers: CEO vs. Non-CEO Perspectives 4.02 5.39 Overall, the top management team is effective Non CEO CEO Overall Effectiveness 3.73 4.98 The team deals effectively with internal conflict 4.18 5.56 Members put the overall good of the organization above the interests of their own divisions/functions 4.72 5.70 The team responds effectively to customer needs 4.29 5.26 The team effectively adjusts to external market turbulence 4.23 5.87 The CEO provides effective directions to the TMT 3.86 5.62 There is a clear decision-making process 4.97 5.78 The team meets often enough 4.61 5.43 When together the TMT focuses on the issues that most affect company performance 4.06 5.55 Team members are held accountable for shared goals 4.46 5.14 Structurally, this is the right TMT for the company-the right set of executive positions have seats at the table 4.66 5.25 The TMT has the skills and talent it requires to be a high performing top leadership team Non CEO CEO TMT Structures and Processes

Thank you for your attention! 