Leaders make better decisions when they’re aware and informed, but in many cases they’re not. Many leaders live in a bubble, insulated from the truth. They surround themselves with people who tell them what they want to hear and who are afraid of them. They ignore telltale signs of trouble. They remove themselves from the front lines. They stop engaging with customers. They hide in their offices, on golf courses or on their boats, pretending everything is fine when deep down they know it isn’t.
Cohesive leadership teams seek the truth. They proactively engage with their people at all levels to monitor the state of affairs within the organization. In addition, they engage with customers to have an unfiltered viewpoint from those who are paying the bills. Finally, they engage with vendors, strategic partners, advisors and others outside the organization to keep their pulse on the world around them. They refuse to live in a bubble.
There are many tools available for accomplishing this level of engagement. Engagement with employees may take the form of one-on-one meetings, town hall-style meetings, touring the front lines, 360-degree surveys, or any number of other formats. The key is to be proactive and committed to whichever approach you choose to implement. The last thing people need is another project of the month.
Engagement with customers typically involves periodic in-person meetings, phone calls or surveys. Being proactive and committed is also important here. The “Ultimate Question” is an excellent way to gauge customer satisfaction. Other good questions to ask customers are “How have we been doing?” and “What can we be doing better?”
Vendors and others outside the organization often bring different perspectives and new information, as well as challenge our thinking in a good way. Leaders who take time to engage with these folks reap the rewards of greater awareness of external issues, as well as greater self-awareness.
Cohesive leadership teams also seek the truth in terms of data. As the saying goes, numbers don’t lie. Leadership teams need data to make good decisions. Consider sales. Are sales up or down compared to last year? How about compared to budget? How do sales look by service category and customer segment? How is each person with sales responsibilities performing according to their goals? How strong is your sales pipeline? On average, how many days is it taking to produce a proposal? Which sales activities are working well? Which aren’t? Is your closing rate improving? Is your average sale improving? The list of questions could go on and on.
Without data, a leadership team can’t even begin to assess results, identify issues and make improvements. Without data, all you can do is guess, which is not a smart way to conduct business. Without data, you are operating in a fog, unable to detect what might be only a few feet from your nose. Reliable and timely data is essential.
Cohesive leadership teams are focused on both financial and nonfinancial results. On a regular basis, they measure and report the performance of key indicators to assess progress toward goal achievement in several areas with a balanced approach. Because of this, they’re able to recognize problems quickly and take corrective action.
We have been promoting the balanced scorecard for a number of years. The balanced scorecard is a management tool popularized in the 1990s by Robert S. Kaplan and David P. Norton. It’s used to organize, track and report data from four different perspectives: financial, customer, internal business process, and learning and growth.
Armed with a balanced scorecard and awareness of key issues and opportunities, the cohesive leadership team is well-equipped to develop strategy and action plans. In addition, team members are motivated to go above and beyond by committing to projects on a quarterly basis and by holding each other accountable for these projects. Because of this, results are enhanced, and typically the rest of the organization is inspired by the example set by their leaders as they see progress being made.
On my bookcase, I have a collection of business books from the 1920s that was passed down from my grandfather. One would think these books would be filled with outdated theories and concepts, but guess what? They’re not. Basic principles of business success never change. What was important yesterday was important 100 years ago, and the same principles will be important tomorrow and 100 years from now.
Leadership teams don’t become cohesive overnight. It takes hard work, but it’s well worth the effort. It requires the right design, people, material and dedicated effort. Take a moment right now and ask yourself the following questions: How cohesive is your leadership team? What aspects need improvement? What is in place and what is not?
Right now is the best time to refocus on your leadership team and implement some of the changes you recognize are important. Now, go forth.
Editor’s note: This article was originally published in July 2014 and has been updated.