How to Build a High Performance Leadership Team

Much of the advice on leadership is designed for individuals, and the steps they must take to grow into a good leader. But it’s more important that those individuals are able to function well as a team, or else performance will drop and talent may look elsewhere. This article is all about building leadership teams, which with the right characteristics – such as diversity, balance, behavioural complementarity and relevant experience – can become greater than the sum of their parts.

A high-performance leadership team is crucial for achieving both short- and long-term success. By incorporating effective strategies and building a solid foundation, organisations can create a leadership team that excels in various aspects of business management.

The responsibilities of a leadership team

What is the function of a leadership team? A high-performance leadership team is crucial to an organisation's success. It is their responsibility to guide and direct the company's operations, ensuring that goals are met and everyone is working together effectively.?

• Setting the strategic direction: This involves defining the company's vision, mission, and long-term objectives, then translating these into actionable plans and strategies. Regularly reviewing and updating these plans is necessary to ensure they remain aligned with changing market conditions and organisational needs.
• Team empowerment: Effective leadership teams instil a culture of autonomy and trust within the organisation, providing team members with the necessary resources, authority, and support to pursue their individual tasks and responsibilities. This encourages employees to take ownership of their work and contribute proactively to the organisation's success.
• Communicating clearly and effectively: Regularly sharing information on the company's overall performance, as well as providing updates on strategic initiatives, progress, and any significant changes. Transparent communication ensures that everyone is on the same page and avoids creating uncertainty or confusion within the organisation.
• Fostering a culture of continuous learning and development: Identifying skill gaps within the company and ensuring employees have access to relevant training and development opportunities.?
• A strong focus on results and accountability: This is critical to the success of a leadership team. It requires setting realistic but challenging performance targets and regularly monitoring progress against them. Regularly reviewing performance data helps leaders identify any setbacks or areas for improvement early on, enabling them to adapt strategies and work practices.

The evolution from a group to a team

Before “high-performance” is even an option, a company must know how to turn a group of people into a team. It’s crucial for an organisation to differentiate between a group and a team, as each has its unique characteristics. Generally speaking, a group consists of individuals brought together for a shared purpose or goal, but doesn’t necessarily work together. On the other hand, a team consists of members who collaborate, cooperate and rely on one another to accomplish a common objective.

The transformation process from a group to a high performance team can be broken down into a few key steps:

1. Defining the common goal: Clarifying team objectives is the first step in fostering team commitment. Goals should be 'SMART': Specific, Measurable, Achievable, Relevant and Time-bound.
2. Establishing clear roles and responsibilities: Every team member must have a well-defined role that aligns with their skills and contributes to the team's success. This ensures each member knows their duties and avoids confusion or overlap.
3. Building trust: Trust is the foundation of any strong team. Open communication, transparency and reliability among team members are essential in developing trust.
4. Promoting a culture of collaboration: Encouraging collaborative problem-solving and effective communication channels allows team members to leverage each other's strengths and expertise.
5. Committing to continuous improvement: A high-performance team continuously analyses their performance, learns from their mistakes and implements strategies to improve their collaboration and efficiently achieve goals.

Qualities of an effective leader

Each individual possessing key leadership qualities is vital to the success of the team, such as the ability to inspire and motivate others, demonstrate integrity, and remain adaptable to change. A leadership team with members who exhibit these qualities can have a significant positive impact on the organisation, setting an example for all employees to follow.

Emotional intelligence is key. Being a team player is crucial for anyone in a leadership role, as they must be able to collaborate effectively with others. This involves the ability to compromise, to show empathy for the concerns and feelings of fellow team members. Creating an environment based on mutual respect and support can significantly contribute to overall team success.

With this in mind, the top leadership qualities (behaviours) can be interpreted as the following:

1. Lead by example
2. Show self-awareness
3. Adapt to challenges
4. Know your audience
5. Consider multiple perspectives
6. Adopt a growth mindset

These leadership qualities stem from research into high-performing leadership behaviours by our sister company within The LCap Group house of brands - Leadership Dynamics. With psychologists from UCL, Leadership Dynamics has developed the PACE behavioural analytics model. The model is broken down into 14 behaviours that sit within four overarching behaviours of Pragmatism, Agility, Curiosity and Execution. These have been matched against the behaviours of senior executives in 10 years’ worth of successful private equity exits, the only leadership assessment to use precisely relevant data.?

So, while the top 6 listed above are important, there is much more to it. PACE goes much deeper than personality traits, and even models the best mix of complementary behaviours in a team dynamic, i.e. how well leaders will work together on the team.

Qualities of an effective leadership team

How do you achieve the right mix of people at the top? First, understand what qualities you are aiming for in a team.

Having a group of talented individuals is a minimum prerequisite for an effective leadership team. What’s often missing are qualities that stretch across a team dynamic.?

The two key characteristics are: diversity and sustainability.

Specifically cognitive diversity. This refers to the range of thinking styles and perspectives present within the group, which can help the team solve complex problems more effectively. By including individuals with different backgrounds, experiences, and expertise, a leadership team can benefit from a wider variety of innovative ideas and strategies.?

This kind of diversity leads to a balanced behavioural profile across the c-suite. Balance across behaviours is essential for ensuring all aspects of a team's responsibilities are met. This includes a mix of analytical thinkers, creative problem-solvers, and individuals with strong interpersonal skills. Balancing these behaviours within a leadership team enables them to make informed decisions, while also valuing the input of each team member.

Leadership sustainability is critical for a company that is on a timeline. In a private equity context, this means the leadership team needs to be able to achieve the targets of the value creation plan, at every moment in the journey. A team that is able to evolve, through new hires or development programmes, will acquire the skill sets, behaviours and experience necessary to be its very best in year one, two, three and beyond. It is good governance to ensure the right people are at the top at every stage.

Importance of emotional intelligence

In our top leadership qualities list, which is based on our research into the PACE behaviours, number two was “show self-awareness”. This is a key component of emotional intelligence, which leaders need in order to understand their emotions as well as connect with and understand the emotions of others. Good communication comes from good emotional intelligence

The best outcomes derive from a diversity of skills, competencies, personality types and behaviours; and a diversity of emotional intelligence is critical to the functioning of a high performing leadership team

However, we must be aware that while emotional intelligence is good for individuals, it is best when everyone on the team has a different EQ (the measure of emotional intelligence). As we mentioned earlier, cognitive diversity is critical for a well-functioning leadership team, and that includes their emotional intelligence. There needs to be a balance between those with high EQ, lower EQ and middling EQ.

As with any team that is not cognitively diverse in any aspect, a team with only high EQ is in danger of veering into group think. This stifles creativity, problem solving and innovation because there are no opposing views, and high EQ leaders either do not want to “rock the boat” or do not trust that their voices will be heard.

How to achieve the right mix of people

So now we’ve identified the top individual leadership qualities and behaviours and the key requirements for an effective team dynamic, how do we get the people we need?

• Hire in external talent
• Develop the behaviours and competencies of your high potential employee

It is often simpler and easier to bring in a new hire who already has the skills, experience and complementary behaviours you are looking for. But if you have the time and a list of existing high-potential employees, fast tracking talented internal candidates can be good for culture.

Objective assessment is critical

It is critical to get the assessment criteria perfected. Whether hiring internally or externally, it is no longer sufficient to understand future performance through a CV, interviews and records of past performance.?

Knowing a person’s behaviours is key; they are the best predictor of future performance. Behaviours are dynamic so they can tell us how a leader will act in a given situation, while personality only tells us what a person is like “at rest”.?

But the only way to successfully assess those behaviours is through objective data, removing bias and emotion from the process. With cold data, you can hold up a mirror to the organisation that shows a pathway to an objectively high-performing leadership team.

Always have a succession plan in place

Succession planning is good for any kind of company, but it is crucial for those adhering to a time-sensitive value creation plan. While it de-risks the potential for an unplanned leadership exit, it is more important as a strategy for ensuring the right people are in power for every stage of the plan.?

Any gap that appears in the leadership team – either in terms of a leader or a lack of correct skills – is likely to cause a drop in performance. In fact, on average, an unplanned CEO change will typically add 18 months to an investment timeline and delay or diminish the desired returns.

If anything, succession planning is an exercise that helps a company think about its future. It surfaces high-potential talent, prepares for the unexpected and readies teams for rapid change.

If you'd like to know more about how you can access PACE via the Altus Partners network then please do get in touch with our team: https://www.altus-partners.com/contact