Does your executive team click?
Most organizational leaders are likely to say yes; generally speaking, the leadership team is aligned around a shared vision of what the company is and where it is headed. And if leaders are aligned only about 80 or 85 percent, executives might consider that a success—after all, how many people are in complete agreement all the time?
Yet that small sliver of disagreement can potentially create big problems, depending upon the nature of the disagreement. Too often, we have seen executives aligned around a common understanding of the organization’s Current Performance—the transactional or operational concerns to make products, invoice customers, or otherwise execute in the day-to-day. But then they disagree over the organization’s Future Potential—what makes the organization inherently unique, and where it should be headed in the future. These are the hot-button issues that often stir the greatest passions, so that 15 to 20 percent of disagreement—while seemingly a “small slice”—looms large over the organization and can even cripple it as members get frustrated. Others not involved in the disagreement often see the conflict within the team and are frustrated as well. This results in stagnation that can be very detrimental to an organization.
Given that this is a fairly common source of disagreement, how best to handle it? Executives first need to be in agreement that Future Potential—the exploration of new ideas or opportunities that will enable an organization to adapt and stay relevant in a changing landscape—is critical to an organization’s long-term Vitality. Once that is understood, leaders can begin the more challenging task of deciding how best to pursue these Future Potential efforts, including deciding which resources to use. Often, this is difficult to calibrate, and can lead to more conflict, especially in tight budgetary times. The stress of these situations often lead companies to focus solely on Current Performance, which is easier to understand, agree upon, and requires less risk. Yet organizations that neglect Future Performance risk their long-term health because when marketplace changes occur—from new competitors, changing technologies, or other issues—the organization will not be prepared to overcome these obstacles.
In our book, Creating the Vital Organization: Balancing Short-Term Profits with Long-Term Success, we highlight the story of a growing technology company that was at a crossroads.This company had been doing extremely well with their current technology, which helped them grow incredibly fast, but they were aware that the clock was rapidly counting down to a day in the near future when that same technology would be completely obsolete. The pressure to develop new revenue streams was intense, yet the executives were deeply divided over the path the company should take. The discord sowed frustration and pessimism, and the organization was unable to unite around a vision that would maintain the company’s strong marketplace position. Confidence in the future of the organization plummeted, even by top leadership, and the organization continues to limp along weakly to this day.
Unfortunately, these types of stories are all too typical in today’s rapidly-changing marketplace. We recently helped an executive team navigate a similar situation of discord. Many team members were frustrated by what they perceived as an unwillingness to fund and investigate new opportunities that would be necessary for the organization’s continued success. We worked with the executive leadership to identify the company’s unique strengths and capabilities. This is a key factor to consider when focusing on Future Potential, which will only be successful if the products or services that emerge are both useful and new. By starting with a discussion of an organization’s uniqueness, executives are more likely to be aligned with the direction that the organization needs to take in the future.
Leaders must also understand that employees need to see them take risks in their Future Potential exploration efforts. Communicating a path of Vitality with help create confidence in the organization; employees will understand the value of exploration, especially if the company is quick to “fail fast” and correct course when it becomes clear that something is not working. Ultimately, some Future Potential explorations will be successfully, and should eventually become Current Performance. In the meantime, top-down communication about the importance of Vitality can help steer the organization, stemming the frustration that comes from discord.
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