Integrity is Essential: The True Mark of an Executive

The success or failure of a company largely hinges on its executive team. Hiring the right executives means half the battle is won; hiring the wrong ones could spell disaster.

Consider this: in foreign companies, only 21% of executives are truly outstanding, 42% are poor performers, and the remaining 37% are mediocre. For a genuinely high-performing team, a true executive is like a fish in water. In contrast, a false executive may cause team disintegration and talent loss.

So, what defines a "true" executive team? How can we build such a team? What should a CEO do in this process? This article delves into what it takes to create an authentic executive team.

Through my consulting experience, I have observed an interesting phenomenon: many founders are ambitious, yet their companies remain lackluster and never reach their full potential. While this can be partly attributed to the product itself or the business model, the core issue often lies in delayed executive team building.

These companies lack a true executive team and often depend solely on the founder to drive everything. For a company to thrive, the primary task is to build a genuine executive team—a "true" executive team.

1. Success in Business Relies on Teams, Not Individuals

An African proverb says, "If you want to go fast, go alone. If you want to go far, go together." This means that while an individual, focused on their own work, can make rapid progress, achieving long-term success requires a group of like-minded people leveraging each other's knowledge, experience, and resources to face challenges together.

A high-quality executive team can significantly enhance a company's development, while a poor executive team can create numerous problems that profoundly impact a company's trajectory. For example, during decision-making, a poor team might either blindly agree with the boss without understanding or understand the issue but fail to provide suggestions, resulting in compromised execution. Additionally, a lack of trust and poor collaboration among team members can lead to a failure to set a positive example for overall corporate cohesion. Most critically, a poor executive team can become a barrier to the company's cultural and value-based execution and, in extreme cases, determine the company's very survival.

A study by OfficeGo of 101 failed startups showed that one of the top three reasons for failure was the lack of a suitable team. These insights are valuable lessons for anyone in the corporate ecosystem. Ultimately, the effectiveness of an executive team largely determines the speed and quality of a company's development.

What is an executive team?

In most companies, the executive team consists of the CEO and their direct subordinates. In larger companies, this includes the CEO and the C-suite (CXOs). In smaller companies, it might be the CEO and the heads of various departments, such as mid-level managers or directors.

2. Standards of a True Executive Team

Jack Ma has often spoken about two of the greatest teams in Chinese history: Liu Bei’s team from the Three Kingdoms and the team of Tang Monk from the Journey to the West. However, he most admires the Tang Monk team because, unlike Liu Bei's perfect and once-in-a-millennium team, the Tang Monk team is more realistic. The team members have distinct personalities, frequently quarrel, and even consider splitting up occasionally, but they share common goals, values, and complementary abilities, ultimately forming a perfect combination.

While poor teams are diverse in their flaws, outstanding teams often share four core characteristics:

1. Clear Consensus on Goals Goals are the foundation of action. Without goals, individuals become lazy, and organizations become disorganized. The executive team is the source of a company's goals. Without clear and firm goals, efforts are directionless, and it is impossible to create positive synergy.
2. Complementary Abilities and Personalities Returning to the example of the Tang Monk team: imagine if Tang Monk had taken three Monkey Kings instead. Though each Monkey King is mighty in battle, they would lack someone to handle logistics, and against trickster demons like the White Bone Spirit, their strength might be in vain. The team would collapse without a mediator like Pigsy to reconcile their differences.
3. Mutual Trust Based on Core Values In a famous toast in 1994, Ren Zhengfei stated, "Celebrate victory with a toast, and fight for your life in defeat." This inspiring motto has a crucial prerequisite: trust! A highly effective team is unified in spirit. When employees do not follow their own ideas, reflect on whether they truly trust you.
4. Accurate and Effective Role Recognition "Knowing others is intelligence; knowing oneself is true wisdom." Understanding others may be clever, but understanding oneself is the real wisdom. As an executive, every decision and judgment will have a decisive impact on the company. Without a clear understanding of your position and role, forming an effective executive team is difficult.

3. To Build a Continuously Growing Executive Team, CEOs Must Do 7 Things

How can a CEO cultivate a professional management temperament? The book "Management Innovation" outlines seven management principles:

1. Self-Breakthrough and Beware of the Advantage Trap Over-reliance on one’s strengths can limit an organization's development. CEOs should learn to delegate and avoid stifling their team’s ability to think independently and take responsibility.
2. Focus on External Opportunities, Not Just Internal Management Many leaders lack an external perspective, focusing too much on internal management. CEOs should direct their energy toward future opportunities and external growth.
3. Evaluate Based on Performance, Not Personal Preferences Management should be objective. Decisions should be based on standards, not personal biases. When leaders allow their preferences to dictate decisions, employees waste energy trying to read the boss’s mind instead of focusing on performance.
4. Leverage Strengths, Not Perfection As Peter Drucker suggests, effective leaders focus on strengths, not weaknesses. No one is perfect; the key is to make the most of everyone’s abilities.
5. Encourage Dissent, Not a Monolithic Voice High-quality decisions often come from debate and disagreement. CEOs should encourage diverse opinions to make well-rounded decisions.
6. Make Difficult Decisions Based on Facts and the Future The most crucial decisions should be fact-based and forward-looking. CEOs must assess current situations to determine the best path forward to achieve long-term goals.
7. Lead by Example to Shape Company Values The CEO must embody the company's culture and values and set an example for others to follow.

4. How to Build an Entrepreneurial Executive Team?

Based on past management practices, I have summarized three key characteristics:

1. Embrace Change, Lead Transformation, and Create the Future Many mid-level and senior management teams are reluctant to embrace change, preferring to stick to familiar tasks. This can lead to complacency, missing out on opportunities for growth. Companies need to challenge this mindset by setting innovation targets and focusing on market insights.
2. Prioritize Responsibility and Contribution Over Power The mindset within the executive team shapes the outcome. A value-driven mindset focuses on what responsibilities to take and what contributions to make, while a power-driven mindset focuses on maintaining control.
3. Balance Whole and Part, Present and Future The executive team should think dialectically, understanding the primary conflicts and challenges at different stages. A clear understanding of present and future challenges, as well as overall and specific challenges, is crucial to achieving goals effectively and strategically.

Summary

A company's success is fundamentally linked to the quality of its executive team.

A true executive team is built on clear goals, complementary skills, mutual trust, and accurate role recognition.

To develop such a team, CEOs must focus on self-improvement, prioritize external opportunities, and make objective, fact-based decisions. They should leverage their team's strengths, encourage diverse opinions, and lead by example to embody the company's values.

Building a successful executive team also requires embracing change, prioritizing responsibility and contribution, and balancing current challenges with future opportunities.

By fostering these qualities, a company can cultivate an executive team with an entrepreneurial spirit, driving sustained growth and success.