Acknowledgement: Reproduced by kind permission of Matthew Syed Consulting Ltd.
Having the right leadership team in place is critical to the performance of your business. Your leadership team will help you decide on the right strategic direction, contribute expertise you may not have, and will help inspire and motivate your people to deliver on your business objectives. Without the right team behind you, it will be an uphill struggle to deliver the financial performance your investors are looking for.
Leaders are often recruited based on their years of experience and success in a similar role or industry, with less consideration given to whether they will bring new or unique perspectives to the team. The danger of this approach is that you can end up with a leadership team who think in a very similar way and share blind spots. In other words, as a group they are likely to be ‘blind’ to potential opportunities or problems because they share a relatively narrow set of experiences or a particular view of the world. Studies show that teams made up of people who are similar tend to feel good about working together, be more confident in their decisions, but make objectively worse decisions1. Conversely, companies with diverse executive teams are more likely to demonstrate higher profitability and outperform on measures of longer-term value creation2.
60% of first time CEOs don’t get the right team in place quick enough – this was the single most common mistake amongst first time CEOs3. When putting together your leadership team, it’s important to consider the overall makeup of the team. Do they have a diverse set of expertise and experience? Do they have different opinions and perspectives on key issues facing the business? Do they represent different types of customers? Creating a leadership team with diverse perspectives is likely to lead to more discussion and debate within the team, but widen the understanding and collective intelligence of the group.
Diversity of thought can feel uncomfortable at times, with conflicting ideas on how to do things and tension due to personal differences. But, managed well it can also lead to greater creativity, better decisions and ultimately stronger performance. To reap the benefits of diversity of thought in your leadership team, it’s critical to create a climate of trust where people are comfortable sharing and debating different approaches. Trust can be created by being open and transparent, seeking and listening to feedback, giving people equal opportunities to contribute, following through on commitments and encouraging the whole team to do the same.
Creating a leadership team with diverse experience and perspectives, and encouraging healthy debate will reduce the risk of blind spots that could be barriers to the success of your business. The power of diverse thinking could help your business thrive.
1 - Phillips, K.W., Liljenquist, K.A., & Neale, M.A. (2009). Is the pain worth the gain? Personality and Social Psychology Bulletin, 35, 336-350.
2 - Hunt, V., Prince, S., Dixon-Fyle, S., & Yee, L. (2018). Delivering through diversity. McKinsey & Company.
3 – Botelho, E. L, Rosenkoetter Powell, K., Kincaid, S., & Wang, D. (2017). What sets successful CEOs apart. Harvard Business Review, May-June.
Author: Matthew Syed Consulting