Most executive leaders today either work in teams or are trying to build teams. It is important for all executives to understand how executive teams develop and how this development is connected to business results.
As they develop, all executive teams go through four predictable stages. Each stage builds on previous stages so teams cannot skip stages. The good news is at each stage overall sustainable performance increases significantly. The bad news is that higher stage thinking can be perceived of as threatening to lower stage leaders and teams, so the journey to becoming a high-performing team can be an arduous leadership and team development journey.
The Evolutionary Stages To Becoming A High-Performing Team
The four “evolutionary stages of high-performing teams” can be shown on a clock. And, clock times can be used to represent developmental milestones. At each stage, a different logic for success dominates. In Stage I, a team is a loose confederation of individuals, in Stage II a team has a directive business leader, in Stage III a team focuses on developing a complete system-of-roles and in Stage IV, a team becomes high-performing.
The Journey To Becoming A High-Performing Team
At Growth River, we offer workshops and coaching to help leaders and teams accelerate through these stages.
The following is the story of high-tech start-up developing into a global organization. It is an example of a team's evolution through the four stages.
Stage I - Individual Contributors
Four partners formed a tech firm — each had 25% ownership. The firm was in Stage I. The four partners were a loose workgroup of individual contributors. The system-of-roles included all key participants:
- Multiple Ownership Interests
- Top Influencer(s)
- Top Producer(s)
Each team member's internal dialog was "what's in it for me?" The firm had some success but it was limited by lack of focus and alignment. It became clear to the team that a single partner needed to be the boss!
Stage II - Directive Leadership
The team entered Stage II, after one of the partners became the CEO and also became the biggest shareholder at 35% after buying more ownership from the other partners. When this occurred, the four partners had moved from being a workgroup without a leader to become a team with a single business leader. The system-of-roles now included all key skill sets and players:
- Business Leader
- Function Leader(s)
The team's internal dialog was now "how to keep the boss happy?" As a result, there was more focus and alignment. And, the firm grew to include multiple businesses and functions. However, overtime growth began to slow because the enterprise became too complex for a single leader to make all of the key strategic business decisions. It became clear to the team that the business leader needed to delegate business leadership responsibilities!
Stage III - Complete System-of-Roles
The team enters, Stage III, after different businesses are segmented and assigned dedicated leaders. The role of the top leader was now that of an enterprise leader. The organization also added a formal board of directors to protect owner interests. The system-of-roles now included all key responsibilities, skill sets and players:
- Board / Owner Role
- Enterprise Leader Role(s)
- Business Leader Role(s)
- Function Leader Role(s)
The team's internal dialog was now "how do I win in my role?” As a result, there was more focus. Each business and function had a dedicated leader who began advocating a strategy to win from the perspective of their role. Also, there were greater economies of scale as business and function leaders began to share key capabilities. However the organization had also now become a matrix, with many more potential intersection points between roles. As a result there was a significantly higher potential for conflict. As a result, the team culture became much more risk-averse. It became a "gentle person's culture" where mediocre performance was tolerated as long as a person was liked. And as a result of this risk-averse team culture, innovation became very slow. It became clear to the team that they needed to develop a culture in which creative tension among roles could be intentionally leveraged as a source of innovation.
Stage IV - High-Performing Teams
In Stage IV, the enterprise begins to invest to increase innovation across a portfolio of businesses — as a result they change the incentive system to reward high-performance team behaviors. The system-of-roles now included all key perspectives, responsibilities, skill sets and players:
- Governance Perspective
- Enterprise / Division Perspective(s)
- Business Perspective(s)
- Function Perspective(s)
- Developing Perspective(s)
- Selling Perspective(s)
- Delivering Perspective(s)
- Supporting Perspective(s)
The team's internal dialog was now “what is my contribution to making our vision for success real?” Team members now thought of the system-of-roles more of a as a system-of-perspectives for solving problems. The idea is that innovation becomes inevitable when all of the right perspectives are present, when they are in intentionally in creative tension with each other, and when there are clear mechanisms for making decisions and aligning for implementation.
The Good and Bad News
Like I said above, there's good and bad news about this journey from Stage I to IV. The good news is at higher stages, teams are able to sustain significantly higher performance. For example, Stage III teams can sustain an exponentially higher level of performance over Stage I teams. The bad news is this: higher stage team thinking can be perceived as threatening to lower stage leaders, so it can be challenging for leaders to develop themselves and their teams to higher-levels. For example, a Stage I team of independent contributors might feel threatened by the directive style of a Stage II leader. And that Stage II leader might feel threatened by assertive atmosphere of a Stage III team. This happens all the time.
Ask these questions of your team:
- In which stage is your team on its journey to becoming a high-performing team?
- Which investments should yield the highest returns?
- What next steps will take your team to its next stage?