Why Leadership Teams Fail

In their pursuit of strong performance, CEOs and executives often overlook a critical factor in organizational success: the health of their leadership team. That’s a big problem, because a dysfunctional team can become a serious drag on strategy execution and erode morale. Not only that, the health of a senior team can make or break a CEO’s tenure.

To learn more about what kinds of problems affect leadership teams and how leaders can solve them, we recently interviewed more than 100 CEOs and senior executives as part of a multiyear research program. What we encountered in the process was a recurrent narrative of dissatisfaction and disappointment.

Many of the leaders, after requesting anonymity, told us that their teams had so many internal problems that they were often unable to work together effectively. “When I arrived as CEO,” one of them told us when we were researching our book The Next Leadership Team, “there was an extremely dysfunctional team. There was almost no communication within the team, the communication with the board didn’t reflect reality, and communication with the management levels below was completely absent. The people on the team simply didn’t like working with each other.”

For good reason, most CEOs don’t like to talk publicly about problems on their leadership teams. But our research suggests that dysfunction is quite common. Instead of working together to advance their company’s interests, many teams procrastinate, engage in political infighting, get mired in unproductive debates, let themselves be overtaken by complacency, and more. The companies they’re supposed to be leading suffer as a result.

Every senior leadership team will have its own unique dynamic, of course, but our research revealed some recurring patterns. In this article, we’ll introduce a typology of the common types of dysfunction that leadership teams fall into, and we’ll offer remedies designed to help leaders address their team’s specific problems and move toward alignment and high performance.

Shark Tanks, Petting Zoos, and Mediocracies

Leadership teams tend to exhibit one of three main patterns of dysfunction. The first, characterized by infighting and political maneuvering, we call a shark tank. The second, characterized by conflict avoidance and an overemphasis on collaboration, we call a petting zoo. And the third, characterized by complacency, a lack of competence, and an unhealthy focus on past success, we call a mediocracy. All three negatively affect team and corporate performance and can be equally disruptive.

The shark tank. Only highly ambitious leaders make it to the top team, and it’s inevitable that they will compete with one another—to promote their ideas, gain access to scarce resources, or win promotions. Within limits, this is healthy and important, because competition fosters innovation and drives results. But unconstrained it can lead to a self-serving, destructive feeding frenzy in which meetings become battlegrounds for personal agendas, decisions are made through power struggles rather than open discussion, and teams have difficulty coming to consensus and executing on strategic initiatives. Such is life in the shark tank.

Consider the example of a Swiss bank that we studied. After a new CEO was hired, industry analysts and the press voiced criticism of the appointment. Before long some members of the leadership team took advantage of that criticism to gun for the CEO position themselves. These executives started bad-mouthing the CEO internally, slowed down the implementation of core projects that he had launched, fought with one another over projects and responsibilities, and even leaked confidential information to the press that portrayed the CEO and other potential contenders for his job in a negative light. This behavior damaged team morale and hindered the bank’s ability to implement critical projects aimed at improving profitability and competitiveness. The situation became so dire that the board chair had to intervene and actively and publicly support the CEO to end speculation about a replacement.

Why do leadership teams become shark tanks? Often, our research suggests, it’s because the CEO or the executive leading the team fails to provide clear direction, set boundaries, and reign in incipient aggressive behaviors among team members. Even a single rogue member who makes unchecked self-serving moves can force others to abandon their collaborative ethic, undermining morale and team effectiveness.

Leaders should be on the lookout for several signs that their team of competitive executives is at risk of devolving into a shark tank. Members might start approaching the CEO one-on-one to discuss topics that should be discussed in team meetings. Or they might start negotiating among themselves or engaging in power struggles outside of meetings, avoiding group discussion and debate on key decisions. Another warning sign is when decision-making erupts into shouting matches, or when even relatively straightforward decisions turn into tug-of-war contests. Executives might continue to question and criticize plans after they’ve been made or resist implementing them unless forced to do so. They might begin to bad-mouth one another and form alliances against rivals, prioritizing personal gain over the collective good.

The petting zoo. The second pattern of dysfunction involves a misguidedly deferential approach to cooperation. Like competition, cooperation is essential to a healthy team—but when members of a leadership team sacrifice vigorous debate for a facade of harmony, organizational performance suffers.

Here’s what team members stuck in the petting zoo have forgotten: Executive work is by nature a contact sport. The problems that top teams face rarely have an obvious solution; that’s why they haven’t been solved at lower levels of the organization. To address the complicated problems they’re presented with, the members of a leadership team have to spar actively. They must challenge one another’s ideas, question assumptions, and push back in debates. Even as they move collaboratively toward a shared goal, they are propelled by the forces of conflict, competition, and ambition. When these forces fade away, what’s left is a petting zoo, in which an atmosphere of ineffectual niceness reigns. Everybody shies away from confrontation, meetings become echo chambers, ideas go unchallenged, and decisions are made without sufficient critical evaluation. As a result, teams uncover few opportunities for innovation, renewal, and growth.

A large European services company we studied exemplified this kind of dysfunction. The leadership team had been working together for many years and operated with a strong sense of camaraderie. Leaders had their own areas of responsibility, but all decisions were made by consensus. What’s not to like?

A lot, as it turns out. During team meetings, there was little to no debate, team members automatically approved one another’s proposals, and performance issues rarely were discussed openly, to avoid putting any individual leader on the spot. Team members were reluctant to challenge the status quo or hold one another accountable for failures, because they worried about disrupting the harmony of the team. This lack of candor and constructive criticism prevented the team from identifying and addressing critical problems, and the company found itself unable to meet its goals for growth and profitability.

A single rogue team member who makes unchecked self-serving moves can force others to abandon their collaborative ethic, undermining morale and team effectiveness.

Given how ambitious and competitive the members of most leadership teams are, why do some become petting zoos? Often, it’s because the team leader has put an inordinate amount of emphasis on collaboration. Mutual trust and openness—key ingredients in collaboration—require a significant degree of vulnerability. Team members who actively challenge and confront their colleagues can be misunderstood as using that vulnerability to serve their own ends—even if they’re pushing back for the good of the team. Sometimes a quid pro quo is at work too: Team members may agree not to invade one another’s territory, engaging in a form of mutual forbearance that benefits each person individually but hurts the team’s performance as a whole.

It’s not all that easy to detect when a team starts to become a petting zoo, because the changes happen gradually and don’t involve open conflict. On the surface, the leadership team may appear to be working together smoothly. The signs to look for are muted discussions, a lack of emotional intensity, and little robust debate. Sometimes the leadership team simply isn’t willing—or able—to have a good fight to get to the best solution. Instead of putting issues on the table, the executives may engage in performance theater, focusing on positive news and downplaying problems. You may also notice members of the team horse-trading over projects and decisions in offline discussions so that they can avoid conflict during meetings.

The mediocracy. While the first two patterns of dysfunction emerge from an overemphasis on either competition or collaboration, the third pattern emerges when neither competition nor collaboration is emphasized enough. Team members lack the skills or motivation needed to drive individual unit performance; at the same time, there is little collaborative spirit on the team. The executives operate in silos, hindering synergy and leading to duplicated efforts and missed opportunities.

One CEO we interviewed recalled what he had encountered after taking the helm at a European professional services firm that was experiencing a period of stagnation. At the outset of his tenure, he undertook a three-month investigation of the leadership team—and discovered that it had become a mediocracy. “The team was really not fit for the purpose,” he told us. “The individuals were not strong enough. They didn’t have the competencies to run a scalable organization. More fundamentally, I felt that they were not working together as a team and didn’t have a sense of corporate purpose. The word did not even exist in their vocabulary.”

In mediocracies, there’s a mismatch between what a team needs to do and what it is able to do. Long periods of success are sometimes to blame: Instead of challenging themselves and developing plans to meet the demands of the future, teams become complacent, fixate on past glories, and develop a harmful preference for the status quo. At other times, the source of the problem is a leader who allows the team to divide into two groups—one that prefers competition and another that prefers collaboration. Mediocracies can also emerge when leaders fail to adjust to changing situations. Teams that function well in a stable environment may not be equipped to cope during economic crises, and those that are ideal for leading a turnaround may not be able to steer steady growth.

Reversing Course

If you detect any of these warning signs, you’ll have to figure out how to get your team back on the path to high performance. How you do that depends on which kind of dysfunction you’re dealing with.

From shark tank to team of stars. Conflict is everywhere in a shark tank, and the only way to settle things down is to locate the source—which often will turn out to be just one or two people who are engaging in self-serving behaviors that turn collaboration into cutthroat competition. If you discover that this is the case, you’ll need to confront the individuals and make them aware of the effects of their behavior. You can start by giving them direction and offering coaching, but if they aren’t willing or able to work with you on changing their behavior, you may simply need to remove them from the team. This can feel wrong if they’re high performers, but given the detrimental effect that they are having on the whole team, it will be the right move in the long run—and the sooner you make it, the better.

That’s what Adel Al-Saleh did at T-Systems, a division of Deutsche Telekom. Not long after starting as CEO, he tried to get his top team to work more collaboratively but found that some of his executives were openly resisting his efforts, with predictably disruptive results. So he removed them. This had a calming effect and enabled the team to do its work more productively.

If you want to not only control but also prevent shark-tank behaviors, you’ll need to clearly define for your team what behaviors are desirable, acceptable, and unacceptable. Leaders of senior teams do this far too infrequently, but we have come across some who have adopted effective approaches. Morten Wierod, the CEO of ABB, a Swiss-Swedish multinational, explicitly discusses the expected behaviors with every person who joins his leadership team. Some CEOs and executives tie compensation to how well team members meet expectations and how productively they work together on key projects. For instance, John Hinshaw, the COO at the banking giant HSBC, uses 360-degree reviews to ensure that his team members’ behaviors align with defined norms.

Role modeling is vital for driving behavioral change. When you engage in shark-tank behaviors yourself, you’re obviously setting an example for the team. So carefully analyze your interactions with your team and adopt a deliberate approach to modeling desirable behaviors. When we asked Greg Poux-Guillaume, the CEO of the Dutch chemicals company Akzo Nobel, how he avoids overly competitive behavior, he told us, “I try not to use information in tactical ways. I give everybody the same information. And I filter very little. That takes a lot of politics out of the team.” In doing so, he is signaling that he endorses open and collaborative behaviors.

Providing regular feedback is also important in defusing rampant competition. Once you’ve made clear which behaviors are desirable—and you’re modeling those behaviors yourself—you need to provide positive reinforcement to those who engage in them, and negative reinforcement to those who don’t. Sara Mella, the head of personal banking at Nordea, the largest bank in the Nordic region, methodically identifies the people who consistently engage in healthy debate and prioritize team goals over personal gain. She then encourages them to steer the team more, thereby gradually removing herself from the process and institutionalizing the behaviors.

From petting zoo to synergistic team. Changing behaviors in a petting zoo requires a different approach from what’s required in a shark tank: You need to encourage more conflict among members of the leadership team, in the form of constructively critical debate. But you’ll only be able to manage that if you can first create a foundation of trust and psychological safety. Everybody on the team must feel comfortable bringing problems to the table without worrying about how other team members or the CEO might react or even exploit the situation.

One way to help your team engage productively in difficult conversations is to ensure that good data is available to everybody. That helps root debate in fact, not opinion. One CEO we interviewed told us that when he began working with his leadership team, none of the unit or functional heads presented detailed operational, sales, and profitability data at meetings, which made it difficult for the senior team to neutrally evaluate performance and identify problems. So as a first step the CEO introduced monthly review meetings and insisted that detailed data be shared before each meeting. This allowed everybody to focus on analyzing and discussing the numbers in a neutral, data-driven way. Team members could raise questions for discussion or debate without seeming to attack one another personally.

Another way to counter the petting-zoo mentality is to monitor and improve the quality of the discussion that you and your team engage in. “Initially,” Mario Greco, the CEO of Zurich Insurance, told us, “people did not want to talk openly. Everybody had their defenses, and people would not automatically speak up and discuss. Some would even bring consultants to our meetings.” To address that problem, Greco shifted the focus of executive meetings from questions of policies and procedures to the interpretation of purpose and principles. During the biweekly executive committee meetings, he carefully followed how much discussion was happening, how many people were speaking up and raising issues or challenging colleagues, and how accepting team members were of being challenged by colleagues. These meetings, Greco said, have become a way for him to regularly take a temperature check of how well the team is functioning.

More debate, of course, can mean less consensus in the decision-making process. To members of a petting zoo, that can feel all wrong—but it’s not. It’s the job of a company’s top managers to discuss, debate, and disagree, and it’s the job of a leader to preside over the process, facilitating decision-making and acting as a tiebreaker when no clear consensus emerges.

From mediocracy to a set of high performers. If you find that most of your leaders are ill-suited for their roles or not up to the task, you may need to significantly remake your team. That’s what Jonathan Lewis did when he took over the CEO role at Capita, a UK-based business-process services provider, in 2017. He removed everybody from the team and hired new executives on the basis of not only their management skills but also how well they aligned with the purpose, values, and strategic commitments he had defined for the company. With the new team in place, Lewis was able to completely rebuild the company during the global pandemic, which hit its customer-facing business hard. He increased the company’s focus on its customers, improved its public image and Net Promoter Scores, and turned around financial performance.

In rebuilding your team, you’ll need to strike the right balance between competition and collaboration, which means hiring people whose talents and styles are different but complementary. Dave Fredrickson, the executive vice president in charge of the oncology business unit at AstraZeneca, prioritizes this idea of balance when he thinks about the makeup of his team. “I want to have planners and dreamers,” he said, “mixed with hard-nosed deliverers.” He added that he considers it vital to set clear behavioral expectations. He tells everybody that at times natural collaborators will need to act competitively, and at times natural competitors will need to act collaboratively. So he leads by example, modeling the mode of behavior that’s most desirable in a given situation.

When mixing different types of personalities, it can be helpful to define in which domains collaborative or competitive behaviors should dominate. For instance, Erwin Mayr, the CEO of Wieland Group, a global leader in copper products, has made clear to his team that in some domains (such as IT, sustainability, and procurement), he expects a focus on coordination and collaborative problem-solving, whereas in others (such as product portfolio and pricing decisions in individual markets), he feels a more competitive approach is called for—one that gives each business unit decision-making freedom. This approach helps avoid confusion and creates much greater accountability among members of the team.

The Steps to High-Performing Teams

Our research suggests that it’s often a lack of clarity—strategic, operational, and behavioral—that paves the way for leadership-team dysfunction. Without clearly defined expectations, team members struggle to understand their roles and how their efforts contribute to the bigger picture.

No matter what kind of dysfunction a company may need to address, there are several general steps that all leaders should take to ensure the health of their teams:

Develop a clear vision and purpose. Articulate a compelling vision for your tenure that provides a road map for decision-making and creates a sense of shared purpose.

Focus on alignment. Populate your team with people whose skills and temperament align with your vision and purpose. Make sure they possess backgrounds, experiences, and strengths that will contribute to the team’s collective success.

Outline responsibilities. Clearly define goals, roles, and decision-making authority in order to avoid confusion and wasted effort.

Establish behavioral norms. Make clear what norms you expect your team to observe, and encourage members to do so through coaching, role modeling, and giving individual and team feedback.

. . .

Admittedly, addressing dysfunction on your leadership team can be fraught, because it requires making hard choices about the people you work most closely with. But for that reason, it’s critical that you set aside your preferences and opinions and follow the kind of analytical approach that we recommend in this article—first diagnosing which specific pattern of dysfunction afflicts your team and then adopting a targeted approach to address it. Only then will you be able to lead a team that is capable of lifting your organization to a new performance level.

Copyright 2024 Harvard Business School Publishing Corporation. Distributed by The New York Times Syndicate.

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