Why assess?
Pretty much every executive in business would tell you that having an effective leadership team is crucial to success. CEOs everywhere need strong, supportive and competent teams, and so it seems natural that it would be a priority to assess leadership teams and encourage their development. Yet, surprisingly enough, fairly little assessment of senior leaders actually takes place. Even assessment from outside of a business – such as that conducted by potential investors – rarely evaluates how individuals actually work together in a team.
Of course, you don’t have to assess your senior team. After all, legislation is not breathing down your neck, and you’re busy enough already, without more tasks to fit in, right? But surely it should not be a threat of oversight or the lack of prioritised time that should dictate the value of critically reviewing the effectiveness of such a costly and potentially valuable resource? There must be some better reasons than that!
Taking time to reflect on the many facets of a leadership team, its strengths and the possible gaps it has in knowledge, skillset or character is probably the strongest action that can ever be taken in any organisation in working toward its strategic objectives. Assessing the leaders delivers; it delivers steps towards excellence.
Who will assess?
Having decided that, in seeking excellence, the assessment of the senior leaders would be valuable and have a strong impact on the business, there is now the question of who should undertake that assessment. Essentially, there are three approaches that can, with the right ethos, achieve positive results and engage in critical, productive enquiries.
Firstly, leadership assessment could be led by the CEO. This has the merit of engaging the overall knowledge of the team that the CEO already has, saving time and therefore money. But there are several drawbacks to this approach, notably the fact that the CEO may be too friendly with their team, and equally likely they may find it hard to see past the normal company expectancies. We can all quickly become oblivious to much that has been around us for any length of time, seriously hampering genuine objectivity.
Secondly, it is quite possible for a team to become its own assessor. This is likely to be a cheaper option in terms of time and money, and it can be highly effective if a strong culture of support and challenge are built into the fabric of the organisation. Without that culture, however, the result is likely either to play down difficulties or areas of lack, in an attempt to remain a friendly and cohesive team, or result in open warfare in which blame and anger can erupt. One other challenge that team assessment faces is the propensity for the group to assess its individual members rather than its overall functional ability and success as a team.
A third option is to bring in a figure from outside of the team, or indeed outside of the company. This might be an internal member of the Human Resources team who has sufficient knowledge of the company’s workings to make a fairly prompt assessment, or it could be an external professional, such as a consultant, who is able to remain objective and not be drawn into the ongoing political or relationship tensions that exist in any setting.
How to assess?
Before considering exactly what to assess, it is worth considering five overall principles concerning how to carry out the process of measuring the effectiveness of the governance of a business or organisation.
- Define what strategic success looks like. The senior leadership need to decide on what is meaningful measurement and what the results of that measurement would mean in terms of progress towards its overall objectives.
- Distill the top-level objectives into shorter-term goals and create a balanced scorecard that can report consistently on the KPIs developed. Once this is done, the focus will remain on that which is strategic and its execution, rather than simply operational matters.
- Create both board and, if separate, CEO buy-in to the process. Without this, the process is likely doomed to be superficial, lacking in rigour, and considered an expensive add-on.
- Assess progress and development over a period of time, rather than taking occasional snapshots which will not lead to much clarity on actual impact. Are the milestones towards targets being met; are industry benchmarks being effectively trailed; and are promises, plans and programs being actualised rather than only being talked about?
- Make regular assessment (within obvious limits of over-zealousness), as the added frequency of gaining real-time feedback tends to improve the quality of governance through accountability and ongoing momentum.
What to assess?
The process of assessment can begin logically with a SWOT analysis, executed probably before developing any strategic plans or setting clear objectives. But then more detail will be needed, probably broken down into key questions around some of the following suggested areas:
Functions and roles
- What strengths exist in the team?
- What roles are currently effective?
- Are different relationships between functions clearly defined?
- Are roles, responsibilities and accountability structures clearly established?
Direction
- Are core values clearly defined and do they direct what the organisation does?
- Do the senior leaders have a thorough grasp of, and buy-in to, the strategy being followed?
- Is there strategic alignment?
- What are the top strategic priorities over the next…?
- What changes foreseen in the organisation and/or the industry over the next…?
Principles
- Is succession planning evident?
- Are robust ethical principles clear, and being followed?
- Is corporate social responsibility clearly established and promoted?
- To what extent is delegation and shared leadership encouraged and evident at all levels?
Decisions
- Are team decision-making processes functioning effectively?
- Are processes and standards clearly stated to prevent confusion?
- Is the process of strategy and decision execution reviewed?
- Are leaders accountable for their decisions?
- Do the leaders learn from mistakes through adequate evaluation and revision?
Reporting
- Are both financial and non-financial reporting mechanisms kept under review?
- Does reporting meet the requirements of regulation in all jurisdictions?
Communication and conflict
- Can the team engage in constructive conflict and feedback?
- Are conflicts about tasks or relationships?
- Are all team members heard and is a broad range of opinions sought?
- Where do team communication problems hinder the development of the business?
- Do cliques exist that damage open communication across the team?
Outcomes
- What important outcomes have been evident in the last year?
- What is the ratio of successful outcomes with major projects and developments?
- What problems or issues reoccur on a regular basis?
- How are both positive and negative outcomes fully and accurately recorded?
Achieving excellence within the senior leadership of any organisation is a process, but one which will only take place when a robust and effective approach to ongoing assessment of the team occurs. This article has only scratched the surface of how that process might look and provided just a starter to whet the appetite. Good luck as you explore and strengthen the assessment of your senior leadership team and continue to work towards excellence.