Events and
publications
June 23, 2010
Business model innovation
8.00 – 9.00 am
University of San Diego
July 23, 2010
Free
webinar: Agile Strategy for New Ventures
An introduction to applying the principles of agile strategy to maximize new
venture success.
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Building an effective management team
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Provide direction, coaching, feedback and rewards
Hiring good people is certainly not enough. No matter how experienced your executives, each venture and each team has its own unique circumstances and challenges. Just like world-class athletes, even experienced executives need direction, coaching, feedback and rewards to maximize their individual performances.
Giving direction is about agreeing to the goals to be achieved, and the broad guidelines on how to get there. It is not detailed micro-managing. It begins with the focus and responsibilities you assign to each executive. Building on that foundation, tailor the amount of direction you give to the needs of each team member. With some, you may only need to provide little more than inspiration; others may need you to be more specific.
Recognize the strengths and skills or your executives, but also be alert to their individual development needs. Whether you personally provide coaching or use a range of other formal and informal training methods, it is critical that you put in place a process for continually improving your team’s individual skills and knowledge. Successful companies integrate training into their core management practices and make it a source of competitive advantage.
Provide feedback regularly, primarily informally and occasionally more formally. Most successful ventures adopt an open culture in which team members are open and willing to receive and provide feedback. In addition to direct manager feedback through performance and development plan review and informal conversations, feedback can be solicited from peers, team members and even external stakeholders. Feedback should be paired closely with professional development to build competencies in areas of need.
Executives join ventures for a range of both financial and non-financial rewards. Translate the value proposition you offered to your team when you hired them into tangible rewards that meet their needs and motivate the performance your venture needs to be successful.
Change executives when necessary
As mentioned above, with rapidly growing and changing innovation-based ventures, management team changes often need to be made relatively frequently. There could be many reasons - the business grows to a level beyond the skill-set of the incumbent, the business needs change or external market conditions cause unexpected stresses.
As the venture’s leader, you must place the good of the company above personal relationships. Each executive must be regularly and objectively assessed against his or her goals and responsibilities, and those who either can’t or won’t meet the required standards must be replaced. This is probably one of the responsibilities most CEOs like the least – yet it is vital for the health and success of the venture. Very few venture CEOs feel they let people go too soon – almost always their rueful observation is that they held onto people for too long.
It is important in making such changes to do so within the right legal and ethical parameters, placing a high value on the lives of those affected, and ensuring that the way in which changes are carried out minimize distractions to the task at hand and cultural upheaval.
Teamwork
With the right organization in place populated by the right people, the final dimension of management team effectiveness is to ensure your executives truly work together as a team. A high performance team is one that together can achieve results well beyond the aggregate of individual capabilities. The New England Patriots in the early 2000’s were an example – few individual stars, but spectacularly successful as a team.
This is easier said than done. Venture executives are typically experienced, type-A personalities, with strong views and individual ambitions and preferences. In addition, by necessity (as described above), each person has individual goals and accountabilities, which the venture needs them to achieve. How do you foster teamwork in such an environment?
Three elements are key:
Develop shared vision and values
One of the foundational tenets of teamwork is to have your team share common values and be committed to a single vision of the team’s goals. This can include:
- Developing a core, written set of values as a team early on, and evolve as needed.
- Establishing mutual accountability and trust
- Insisting on transparency – do not shield ulterior motives or political agendas
- Accepting and encouraging diverse viewpoints
- Managing disagreements in a healthy and productive way – encouraging open expression, empathy and listening, with a joint commitment to make fair tradeoffs where needed
Conduct joint problem definition and solving
Teams that identify and solve problems together typically experience strong bonding and mutual commitment. However, team problem solving can be lengthy, so should be reserved for key issues that face the business as a whole. Individual executives should focus on solving functional problems, and the CEO should make decisions on issues that do not warrant team attention.
It is important that you identify clear criteria that will define which issues will be problem-solved by the team. Failure to do so may lead the CEO to view his or her team as indecisive or the team to consider the CEO’s actions as unilateral and unfair.
For key issues that do warrant management team attention, incorporate the following best practices:
- Begin by jointly defining the problem and the outcomes to be achieved
- Define the criteria by which solutions will be evaluated
- Do not focus on only a few alternatives, rather generate multiple possible solutions
- Do not be unnecessarily hampered by perceived constraints; identify and agree on which constraints can be overcome and which cannot
- Explore each option’s advantages and disadvantages; insist on factual support wherever possible
- Try to avoid a vote, rather “take the pulse” of the team periodically and use that to guide the discussion
- Creatively devise hybrid solutions that borrow the most desirable elements from distinct alternatives
- Designate ample time to discuss and solve problems, but also set a deadline to impart urgency.
Pursue continuous joint learning
Similarly, a team that learns together, particularly through extensive joint experience and problem solving, develops a very strong group culture and identity.
One way to facilitate group learning is to reflect as a team on performance and lessons learned after reaching a milestone or overcoming a significant obstacle. Other tactics can include 360-degree feedback, creation of new processes and metrics, revision of team’s values / ground rules, and team-building exercises.
* * *
Effective management teams are critical to venture success. Venture leaders, typically under huge pressure and dealing with many issues, need a practical and effective framework to help them build effective management teams. In this article, we have presented such a framework, comprising three elements: defining the right organization structure and responsibilities, hiring the right people and managing them effectively, and turning them into high performance team. By following this integrated approach, venture leaders will build great management teams, able to realize the full potential and value of the venture’s innovation and market opportunity.
Additional reading and resources
Frisch, Bob “When Teams Can’t Decide” Harvard Business Revenue, November 2008 (subscription required)
An insightful article about management teamwork from the newly released November edition of Harvard Business Review. Frisch focuses on improving decision-making processes of the CEO and the management team.
Gouillart, Francis J. and James N. Kelly. Transforming the Organization: Reframing Corporate Direction, Restructuring the Company, Revitalizing the Enterprise, Renewing People
A comprehensive source focused on the organization and management practices. Gouillart and Kelly do a good job of laying out the elements presented in the Organization section of this article. Central to their advice, is the concept of treating the management team and its transformation as if it were a living organism.
Katzenbach, Jon R. and Douglas K. Smith. The Wisdom of Teams: Creating the High-Performance Organization
Katzenbach and Smith focus on breakthrough elements of forming and nurturing teams. In addition, they focus on debunking longstanding myths about the importance of real team performance within senior leadership groups and the underlying assumption of strong leadership. This well regarded tome presents valuable teamwork recommendations.
Pfeffer, Jeffrey. The Human Equation: Building Profits by Putting People First.
Noted organizational behavior thought leader, Jeffrey Pfeffer, pioneered people management as a potential sustainable competitive advantage. In his book and through his research Pfeffer concludes that companies have a one in eight chance of pursuing profits by people first. One-half of organizations won’t believe the connection between how they manage people and the profits they earn. One-half of those who do see the connection will attempt piecemeal change that won’t be effective. One-half of those who pursue comprehensive change won’t persist long enough to see economic benefit.
Sutton, Robert I. Work Matters (blog)
A sharply written blog authored by Stanford University Management Science Professor, Bob Sutton. His research is focused on links between managerial knowledge and organizational action, innovation, and organizational performance. Sutton has written several acclaimed books such as The Knowing-Doing Gap: How Smart Firms Turn Knowledge Into Action (co-authored with Jeffrey Pfeffer), The No Asshole Rule: Building a Civilized Workplace and Surviving One That Isn’t, and Weird Ideas That Work: 11 ½ Practices for Promoting, Managing, and Sustaining Innovation.
About the authors
Michael Lurie is Founder and CEO and Dan Zagursky is a Manager with Blue Mine Group in San Diego, CA. Blue Mine Group is a strategy firm specializing in new product development, venture management, and corporate innovation.