Why Senior Teams Get Left Out
ASSOCIATIONS NOW, August 2012 , Feature
|Summary: CEOs regularly turn to their senior management teams to make smart, timely decisions, right? Actually, not so much. Research shows that more often, leaders quietly consult with trusted "kitchen cabinets," which frustrates and confuses senior managers. Leadership consultant Robert Frisch outlines why and how CEOs need to properly use their senior management teams. [Titled "Circle of Influence" in the print edition.]|
Great senior management teams do many things well. Great decision making isn't one of them.
The notion that senior management teams play a lead role in organizational decision making is a stubborn myth that we need to let go, says Robert Frisch, author of Who's in the Room? How Great Leaders Structure and Manage the Teams Around Them. And the worst perpetrators of that deception are CEOs, who overlook or even deny the reality of how they make the decisions on which their organizations' futures depend.
Frisch's research shows that CEOs weighing options or ideas often turn to a personal "kitchen cabinet" of diverse, deeply trusted confidantes who may not reside in any box—much less near the top—on the organizational chart. "Virtually every CEO I interviewed for this book and almost every CEO I've worked with—including some of the world's best—depends on a small group of trusted advisors that they consult about most major decisions," Frisch says.
To observant staff, this isn't news. Indeed, Frisch reports, they can name the people who are always in the vicinity of a key discussion. To senior managers or even the CEO, though, this informal core of advisors may not register as the dominant power source, and it can be a disconcerting surprise when it's pointed out.
"If you asked CEOs to think about their last four or five decisions and how they made them, the turning to that inner core in the later stages of that decision happened time after time, but they weren't entirely conscious that they were doing it as frequently and as blatantly as they were," he says.
Ignore the Org Chart
Frisch is quick to emphasize that a kitchen cabinet is neither wrong nor right. On the plus side, it is anchored on deep trust and discretion.
"You trust their judgment, that what you say will stay in the room, that you can float trial balloons and they'll never go anywhere beyond that group, that they truly have your best interests at heart, and that they do not have a complexity of agendas in that discussion," says Frisch, a managing partner of the Strategic Offsites Group. "When they give you an opinion, you can believe it is the best they can give you at the moment. People will never trade off the ability to do that. Almost every leader has confidantes they can turn to when they are pondering a big decision."
The minuses include the fact that a kitchen cabinet is not a fully representative body for the whole organization. "You don't necessarily have all the facts or the complexity of the organization there," he says. "Sometimes it's really good to have all the people at the table who are only worried about their particular perspective. And if you're going to do something bold, new, or risky, you want to have the whole organization around the table saying from the perspective of each part of the association, 'We are ready to go!' The kitchen cabinet can't do that for you."
Problems arise when CEOs are not explicit about the process. "It's muddy, so people are not quite sure of their role, but whatever it is, they aren't happy with it," says Frisch.
That's why, once a CEO is aware of a preference for kitchen-cabinet-style decision making, she needs to leave the "Land of Pretend" and stop telling the senior management team (SMT) that it plays a role in key decisions even though it doesn't. Instead, she should embrace the kitchen-cabinet model and rededicate the SMT to the three primary critical tasks at which it excels:
Setting direction. "If you've got eight to 12 people, each of whom is going to leave that meeting and make hundreds of decisions that will affect the organization, you want them to make those decisions with a common view of who we are, where we're going, and why we want to go there," Frisch says.
Prioritizing resources to drive strategic initiatives."It's very important that the portfolio of initiatives—those additional things above an individual function and department that require people to work cross-functionally—be designed by the senior team, and that where the organization is expending its energy is understood by the SMT, because they have to work together to make these initiatives happen," he says.
Executing and coordinating well. "The idea of having a place where the organization can coordinate itself is something we see SMTs as being uniquely good at," he says. "The SMT is critical because it's the senior-most place where the whole organization comes together."
Embrace the Reality of Decision Making
Frisch knows that some CEOs will push back on his research conclusions. However, as he writes in his book, the key issue is learning how to best use each team. "Why not … accept the reality that the use of kitchen cabinets points toward: CEOs need different configurations of people—different people in the room—for different types of decisions and tasks. Why not ... explicitly use a portfolio of teams to help you run your [organization]?"
It's a touchy topic, especially to those who have worked hard to be included in that powerful circle of influence. But Frisch concludes that more waste and inefficiency exist within the SMT than any other internal group, and at day's end, a decision must rest with an individual, not a team.
Frisch tries to reassure both groups. To managers who fear closed doors, he emphasizes that "candor in terms of how decision-making processes actually take place opens up the opportunity for much more inclusion. ... If you pretend to invite someone into a decision, but they don't feel they are part of the decision, that creates resentment"—and often a call to management coaches and consultants.
"A CEO instead could say, 'Look, I want to have lots of input from lots of people, but at the end of the day, it's really a small group of four of us who are going to make this decision, so let's just accept this reality [and] talk about whose input we need at what stage of the process. Then we can ensure we have all the opinions on the table when we actually make the decision,'" Frisch says. "People know when they don't have the votes. What they resent is when their opinions are not solicited."
Simply put, senior managers don't have much choice. Leaders are unlikely to change the intimate decision-making processes that have made them successful. They also are unlikely to phrase it that bluntly, although Frisch adds that an open conversation is exactly what's called for.
In addition to an SMT and kitchen cabinet, CEO decision making can benefit from a third group, once the leader "abandons the monolithic model that the SMT is the be-all end-all of decision making." Frisch calls it "all officers or directors of other large groups," and that involves the CEO tapping into different groups for input at different times. It can be as small as eight to 10 direct reports, or it can include some of their direct reports and expand to as many as 40 or 50 people with whom the CEO can brainstorm.
"I like to think of it as an accordion," Frisch says. "Sometimes you want it wide open—lots of people, sticky notes on the wall, messiness, opinions, and noise, very inclusive and creative. That's not a great way to make a decision, but it is a great way to get input. When you make a decision, it's like the accordion has narrowed down, three to four trusted people really helping you make the call."
Recognize the Root of the Problem
Frisch's research began after he spent years addressing the frustrations and confusion of executives at offsite strategy sessions while in leadership positions at Accenture, Gemini Consulting, Boston Consulting Group, Dial, and Sears.
He found that although an agenda might state that the goal of the session was to "make a decision on X," participants would complain privately about "foregone conclusions" and "just ratifying a decision that had been made already."
CEOs, meanwhile, overwhelmingly thought they were delegating much more than they were. "Delegating means you walk out of the room and whatever the people in that room decide is OK with you," says Frisch. "As long as the answer has to be approved by you, you never actually delegated anything. I don't think most bosses understand that."
This was often a revelation to the CEOs Frisch worked with, who honestly believed they had handed decisions over to their SMTs. But if the SMTs couldn't reach a decision, most CEOs said they would make the decision themselves, which Frisch says means the decision never left the CEO's hands.
"I was surprised at how frequently that happens, and it was a surprise to CEOs, because they didn't realize that was going on. However, it was no surprise to people sitting on those teams," he says. [See sidebar on below, "Why the Top Team Bottoms Out on Decisions"]
Transform SMT Effectiveness
While no universal structure fits every CEO's needs, Frisch says transforming a current or inherited SMT into a set of flexible, interrelated teams is key to long-term success.
That can be especially challenging for associations because, as Frisch acknowledges, the involvement of volunteer leaders can throw off the balance between SMTs and groups of staff advisory teams.
"Association CEOs don't have all the degrees of freedom to tailor the organizational suit to fit, because it not only has to fit them, but it also must fit the parallel structure of the elected leadership," he says. "However, far more leaders say they moved too slowly than too quickly [in transitioning an SMT to more appropriate tasks]. Often, new CEOs will just accept an SMT, and I'm not talking about the individuals in the boxes but the structures around them.
"What I'm advocating, for all CEOs, is getting away from decisions that really aren't decisions," says Frisch. "Sit down and talk about where SMTs can impact things, where there is great meaning, like dependency management, resource allocation, flanking conflicts of different parts of the organization, coordination. These are tasks at which the SMT is brilliant."
Kristin Clarke is a business journalist and editor for ASAE. Email: email@example.com
Consultant Robert Frisch, author of Who's in the Room? How Great Leaders Structure and Manage the Teams Around Them, identifies three questions that hinder good decision making by senior management teams (SMTs):
1. Am I in the Senate or the House? Dysfunction creeps in when senior managers cannot tell if they represent their departments with equal votes, like each state in the U.S. Senate, or if some departments have a greater voice than others, like the U.S. House of Representatives, in which California has more votes than Delaware, for instance.
"Sometimes the boss wants everyone to have an equal voice, and sometimes everybody realizes that the division heads—the head of sales, the head of operations—have a lot more say than their colleagues on a particular issue," Frisch says.
2. Where's my hat? SMT members wonder, "Am I supposed to be here in my functional role as head of marketing, or am I supposed to be one of the 'nine wise people' of the organization and leave all of my constituents out of the room and look at things from the CEO perspective?"
CEOs Frisch interviewed said they wanted SMT members to take the holistic overview—the CEO perspective—75 percent to 90 percent of the time and to leave functional hats out of the room. "The problem is when you do that, you take away the very reason why people are in the room in the first place," says Frisch.
3. Who breaks a tie? It's a "majority versus majority" mathematical draw that can make voting in large groups hard. "You need to have a tie-breaker in the room," he says.
Whatever the reason SMTs struggle, "everyone feels something is wrong, but people have a hard time pinning down what it is," Frisch says, and they end up addressing it the wrong way. "How many teams spend a huge amount of time doing teambuilding exercises?"
Frisch recommends using SMTs differently. "It's all very ritual, and rarely is a business case challenged or changed at that level of a meeting, so it's not a very good use of SMT time," he says. "What is effective is if the lights go on after the PowerPoint, and the boss turns and says, 'OK, there are a bunch of things HR has to do to make this business case successful. Are you lined up to do all those things? Operations, have you set aside resources to make this business case a success?'"
Sidebar: You Have a Kitchen Cabinet If …
Many CEOs have never mentally broken down their personal decision-making processes, and they are uncomfortable with the notion that they rely on an unofficial "kitchen cabinet" of top advisors, a concept defined by leadership consultant Robert Frisch.
However, in Frisch's research—which includes some association executives—CEOs estimated that they had seen projects rejected or substantially altered after discussions with senior management teams less than 10 percent of the time.
Frisch, author of Who's in the Room? How Great Leaders Structure and Manage the Teams Around Them, suggests this exercise to help leaders discover the truth about their decision making and the teams that influence it.
- Identify the last five major decisions that worked through the organization.
- Write the process flow for reaching each decision: all meetings, groups, events, and conversations that happened in the course of making those choices.
- Look at the processes and mark honestly where you as the decision maker got a lot of value and where an event or conversation may have been useful for participants but not you.
- Ask yourself, "What did I actually do as opposed to what the official process flow indicates?"
- Review your notes and ask, "Given the official process and given what I actually did, how do I modify this system to make it useful and customized for me?"
"People end up finding themselves with a great deal of insight," says Frisch. "You may realize that, 'Come to think of it, I picked up the phone and called a few key board members and went to my cohort at the Young Presidents Organization, and I mulled it over the weekend, chatted with my neighbor at the barbecue,' and decided. That's how it really happened.
"Once people become aware of how they're making decisions and using teams, they'll find themselves very capable of looking at what changes they need to make," he says. "They just tend to not be conscious of it" and may be reluctant to acknowledge how often they do go off-grid.
"You have to spend 10 hard minutes in front of the mirror saying, 'I guess this isn't a decision-making body,' and then once you and the SMT have coughed up that hairball, you can spend the rest of [your time] figuring out how to maximize this group. At the end of the day, you'll all find it all much more satisfying."
Sidebar: Feedback From ASAE Fellows
ASAE asked its 2012 class of ASAE Fellows to comment on author Robert Frisch's findings and recommendations. Here are their opinions:
Matthew D'Uva, CAE, president & CEO, SOCAP International:
"I do not think that a 'kitchen cabinet' diminishes the role of a senior management team (SMT). it acknowledges that certain skills and expertise are needed at certain moments. The CEO's job is to know the right mix to get to the best possible outcome.
"My kitchen cabinet is a mix of both volunteer leaders and staff who are imperative when difficult situations and opportunities arise. Each brings unique perspectives and lenses to the particular situation. My professional network of association executives is also a critical resource because of its specific expertise in association management; it is an opportunity to get direct, honest feedback. (Very direct at times!)
"It's important to build an SMT with diverse skill sets, expertise, and perspectives. This team should be focused on executing on the shared vision of the association (approved by the board) and a shared implementation strategy for the staff. As such, when difficult decisions need to be made, it is often important to have a smaller group of advisors (could be staff and volunteer leadership) who are needed to make an important decision. … Transparency and openness among the SMT is critical to ensure dialogue and partnerships."
Richard Yep, CAE, executive director & CEO, American Counseling Association:
"I agree with Frisch's overall point of view in regard to key tasks for the SMT, [but] CEOs who use a kitchen cabinet for key decisions are simply asking for dissent within the staff. I see this as a great way to demoralize those who serve as senior management and something I would not ascribe to in any manner.
"While a chief staff officer should scan his or her environment and seek a diversity of opinion in order to make the best possible decisions, it should never be done without the input of key senior staff who serve in critical management roles.
"And if the CEO gets a reputation for not including the SMT in key decisions, all the executive is doing is expediting the talent drain in their organization. On the other hand, if the CEO does not value the input of the SMT, you have to ask the question, 'Then why do you even have them on your team?'"
Larry Alexander, president & CEO, Detroit Metro Convention & Visitors Bureau:
"A lot comes down to the style of management of the CEO. Sometimes you get CEOs who don't want to let go, while others recognize the value of using the judgment and brain trust included in the SMT. I've got some strong, talented people in my SMT, so it's easy for me to allow them to recognize that they can make decisions as long as they recognize the strategic vision of the organization.
"… Aside from execution, I like my SMT to brainstorm. If there's an issue on the horizon or a new development, it's important to use the SMT's expertise to think outside the box about how we can address that.
"[My kitchen cabinet] is a blend. My internal kitchen cabinet is my SMT, but I have no problem talking to a manager or someone not at an executive level. They're closer to the decision. They have knowledge, and I think they should be challenged to help [resolve an] issue. I don't think my SMT has a problem with that. Outside, there are many people I'm able to go to depending on the situation. If it's an external issue, that's when I've used the talent base available in the market."
Antoinette A. Samuel, MPA, CAE, executive director, American Society for Public Administration:
"While I'm sure there are circumstances where this [kitchen cabinet] occurs, my experience has been just the opposite. I have always trusted, as well as entrusted, my senior staff with my confidence. I view my senior staff as partners with me in the fulfillment of my responsibility to the association. A CEO may have external advisors and confidantes, but the accountability is on a very different plane!
"I have professional colleagues and friends who form a community of interest. However, they do not by default 'execute on my behalf!'
"My SMT's primary task is for the strategic management of the association. They are the trustees of our successes and failures. I expect my team to think strategically and execute routinely."
Scott Wiley, CAE, executive director, Delta Sigma Phi:
"I agree with Frisch to an extent. CEOs need SMTs that they can count on to digest data, turn data into knowledge, and then ensure that decisions are made that help drive the strategies and tactics that make vision reality. At the same time, it is critical that CEOs in today's socially connected organizations stay plugged in, seek counsel from inside and outside the organization, distill what matters, and take decisive action to lead their organizations.
"I have my own kitchen cabinet of advisors, absolutely. But it depends on what you are cooking up to determine where in the kitchen you go to get what you need. More simply stated, do what it takes to ensure you have depth in your cabinet and strengthen areas where your or your team's competencies are not as robust."
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