What makes a leadership team effective? Start with these eight steps

All too often, executive teams stumble in their attempts to lead their organizations effectively. Michael Beer explains how to refine a top management team to advance a company's strategy

By Michael Beer

Published: Apr 16, 2025 04:29:53 PM IST

Team members must be eager to resolve differences and agree to the best solutions based on facts. Image: Shutterstock

Executive teams serve a critical role for organizations: They are tasked with defining the company’s strategic direction and ensuring the enterprise is organized, managed, and led effectively to execute the strategy smoothly and in a timely manner. Yet all too often, management teams do not fulfill their leadership role well—and in some cases, executives on these teams seem to know it.

Consider what a vice president of marketing said about his top team in the article “Fragmentation and the Other Problems CEOs Have with their Top Management Teams,” written by Pennsylvania State University Professor Donald C. Hambrick:

“Team? How do you define a team? When I think about a team, I think of interaction, give and take, and a shared purpose. Here, we are a collection of strong players but hardly a ‘team.’ We rarely meet as a team—rarely see each other, in fact. We don’t particularly share the same views. I wouldn’t say we actually work at cross-purposes … a lot of self-centered behavior occurs. Where’s the ‘team’ in all of this?”

That article was published in 1995, but team cohesiveness problems persist 30 years later. Even many CEOs, the ones who should be setting the tone at the top, know that their management team’s ineffectiveness is leading to the underperformance of their company, but they don’t know how to improve the situation. They have the power to affect change yet cannot seem to achieve it. This indicates just how difficult it is for leaders to develop effective top management teams.

However, business leaders can take a careful step-by-step approach to ensuring their teams are equipped to make strong recommendations that will improve company performance.

What makes a management team effective?

To be effective, senior management teams need to:

Meet often enough to develop and revise strategies

Developing effective strategies takes time. We live in a volatile, complex world in which there are significant economic uncertainties, as well as continuous changes in technology. Business leaders may alter their views about the direction the larger enterprise strategy should head in, but they often don’t share these new insights with their colleagues. So new strategies to address changing conditions can remain stuck, unable to gain steam. Meetings are often too short and scheduled too infrequently to discuss ways of keeping up with changing circumstances. Top teams should meet at least once a week to communicate changes in the organization’s strategy and keep the team on the same page.

Also read: Why your team is afraid to share ideas (and what to do about it)

Come to meetings ready to be part of a cohesive team

They must be willing and capable of exchanging ideas. It’s not enough to simply show up; team members must actively engage in conversations and contribute their unique perspectives for the greater good of the organization.

Remain open to learning

Team members must be eager to resolve differences and agree to the best solutions based on facts. It’s important to listen with an open mind, appreciate the value of diverse viewpoints, and create an environment where every member feels heard and valued. When team members feel safe enough to share their honest opinions, the organization benefits from the creative problem-solving and decision-making that results.

These capabilities are especially crucial for top teams whose members manage interdependent, value-adding activities. For example, introducing new technology in a hospital to manage patient records requires input from doctors, nurses, and administrators who will use the technology to make sure the tools help streamline time-consuming tasks and reduce frustrating pain points.

Assess your team members’ interdependence

Are the value-creating departments reporting to you coordinating their decisions with one another? For example, developing a new product requires tight coordination between sales, marketing, research and development, and manufacturing. That means people from these departments should be meeting frequently and working closely together to enable a smooth and frictionless product development process.

Invest the time and resources necessary to develop the team

One reason so many top teams are ineffective is that CEOs and general managers of business units do not invest sufficiently in the process of creating the right teams with the right players to begin with. They let a sense of urgency in getting daily tasks in the organization done drive out this important task. Instead, CEOs should allocate time for teams to examine, discuss, and deal with concerns they have about their team.

Create an action plan for the team

Develop a vision of how the team must operate and the skills the group needs to hone. In creating an action plan for the team, you should start by asking yourself these questions:

Do you, as a leader, have the desire and skills to lead a highly interdependent and effective top team? Your answer may surprise you if you are honest with yourself. One of the root causes of ineffective top teams is leaders who don’t actually want to lead a team, don’t have the skills necessary to do so, or don’t want to work on developing them. If that’s the case, you should seek training to learn how to lead a team better—or hand this leadership position over to someone more interested in the role.
What characteristics should your team members possess beyond expertise in their discipline? You might be looking for team members who are comfortable with letting others take the lead on projects and, at the same time, are willing and able to take the lead themselves at appropriate times. Can team members develop the skills they need to work effectively together?
Do you need to differentiate the purpose of your meetings? Should you devote some meetings to reviewing operations or financial results and others to discussing and planning strategy? Does every team member need to attend every meeting, or can people get more done by breaking into smaller groups?
Should team members be involved in agenda-setting and decision-making? Or would you prefer to have control? If the team cannot agree on a decision, what is the process you will use to arrive at a decision? Has your team decided and agreed on the process in advance? Deciding these matters explicitly ahead of time and providing time to assess how well they are working is part of the work of developing an effective team.

Communicate your goals for the team

Bring your team together to discuss your vision of how the team should function, clearly outlining the goals you expect the team to achieve. For example, is the team expected to develop and agree on a strategy jointly, or will that be the job of strategic planning or marketing and then shared with the team as a whole? Is it the team’s responsibility to do more than simply review financial results and instead take corrective actions to meet budget requirements? Or is it also to assess the organization’s effectiveness?

A team’s effectiveness is subject to decline if an organization doesn’t remain vigilant and ensure the team continues to evolve and grow.

If you have concerns about whether the team will produce the results you’re looking for, share those thoughts and your desire to make changes to improve its effectiveness. Advocate for an effective top team and signal that those unwilling to learn how they can contribute aren’t welcome on the team. Follow up with each member, setting up a one-on-one conversation to discuss each person’s role in fulfilling your vision.

Consider bringing in more expertise to guide the effort

Consider hiring a team development consultant or appointing someone internally to lead this process. With his or her partnership, you can create a process for developing an effective team. This process should include:
Interviewing each top team member about how they view the team’s effectiveness to better understand its strengths and barriers to success.
Synthesizing information into themes that the team leader feeds back to the team after sharing this information with the CEO.

Promoting discussions of the data collected to determine various logistical details, including how often the group should meet, the ground rules for discussions and decision-making, and how to report suggestions for changes to the CEO.

Developing a vision for the organization

Effective leaders develop a vision of where they want to take their organization strategically. They advocate for their vision but give the top team influence and a voice if they disagree and involve them in developing an action plan for change. At the same time, they stay forcefully in control of the process and steer the direction of the change. Without strong democratic leadership, chaos will result, undermining the top team’s efforts.

For example, too many teams have several needless discussions and struggle to reach a consensus. At what point should the leader step in and make the final call to put an issue to rest?

Also, it’s important to remember: A team’s effectiveness is subject to decline if an organization doesn’t remain vigilant and ensure the team continues to evolve and grow. After all, the company’s circumstances are bound to change, requiring new roles, and natural turnover in positions can decrease the capabilities needed to maintain an open discussion of issues. For that reason, continued investment in refining top teams is required.

Are you motivated and ready to make this investment in your top team?

This article was provided with permission from Harvard Business School Working Knowledge.