As I speak with entrepreneurs and business owners, one of the most common questions I ask is “Who is on your leadership team?”.
I’m often met with a wry look, and the answer is “Well, I’m not really sure.” Or they start trying to justify and make excuses as they explain who they think it may be. “Well, it should be this, but I may have too many people.” Typically they’re not clear and unsure.
One of the greatest challenges faced by growing businesses is identifying who the best leaders are – those who are capable of leading the business to the next level of growth.
Without the right leadership team a company can stagnate, lack clarity and innovation and be unable to get things done.
One of the fundamental considerations for establishing the right leadership team is ensuring the team is the right size.
There have been many studies conducted into how many leaders should be on a leadership team. The general consensus is the optimal number is three to seven leaders at the helm of the organisation, no matter the size of the business.
One of the things that I’ve observed with my clients is the bigger the company the smaller the leadership team.
Smaller, more streamlined teams ensure the number of individual, one-on-one relationships within the group are kept to a minimum, meaning there is less social complexity and jockeying for position.
In context, understand that a team size of five has 10 of these social links, while a team of seven has 21. The addition of just two team members more than doubles the number of interpersonal relationships involved.
Due to complexity, it is more difficult to get alignment and unity, and the dynamics of the entire team can be compromised.
As a general rule, the more people you add into the group, the less each of those members actually contribute to the overall leadership team.
Rightsizing and getting the right people on the leadership team is one of the first things we work on when implementing EOS.
Over the two-year people of implementing it, rule of thumb is 80% of the time the leadership team changes – one, a few, or the majority of people.
Often, the problem is the business has outgrown the leader, but they stay at the helm because they have seniority.
Perhaps they have been there since the very beginning and there is a sense of loyalty that keeps them in place. Perhaps the issue is that the current state of the business means they just aren’t able to perform.
Whatever the case, my job is to help uncover any issues with team members in their current position and help them discover the right role, so they can contribute and feel good about the job they’re doing.
By moving people around within the business, and/or hiring, we can help find the right people to build an effective leadership team and get things moving in the right direction.
So what does ‘good’ look like?
Every successful company has a team of good leaders at its core, making the right decisions.
When implementing EOS we believe you must structure the leadership team without consideration of any individuals.
We “hypothetically” fire everyone, and then work together without any egos or subjectivity to say what the leadership should look like six-12 months in the future.
Once we have consensus on the right structure, then we use a tool to match the team’s skill-set to the role and responsibilities. This makes sure that we have the right people in the right seats.
This sounds easy, but in practice you have to have an open, honest, vulnerable team. They need to be prepared to eliminate silos and politics and are working for the greater good of the business and not for individual gain.
This all assumes that the people you are considering for the leadership team match the core values of the company, and have the experience and skills to fulfil the role.
All of the above should enter the equation when assembling effective leadership teams.
Here is some additional advice and resources to help you right-size your leadership team.
At Bold Clarity, we focus on helping entrepreneurs have a healthier, easier business to lead and manage. We work with them to implement the Entrepreneurial Operating System (EOS). This is a proven system of success for entrepreneurs in any sector or industry.
If you want information about EOS, contact us today on +44 (0)7795 667480 for a complimentary 90 minute meeting to introduce it to you and your leadership team.
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