Stephen A. Miles & Nathan Bennett
Among the many responsibilities facing CEOs is building and leading an effective top management team (TMT). That effort is becoming ever more challenging. As business leaders increasingly characterize their operating environments as volatile, uncertain, complex, and ambiguous (VUCA), the diversity and intensity of issues requiring attention at the top has grown. In response to increasing demands on the TMT, the C-suite has expanded to include titles well beyond the traditional CFO, COO, and CIO. This expansion has looked different by company, but not too long ago, C-suite specialists appeared in areas such as human resources, legal, marketing, and strategy. More recently, C-suites may include executives responsible for areas ranging from diversity, safety, and data to user experience, culture, and happiness. It won’t be long before the widespread adoption of Chief Artificial Intelligence Officers takes place.
Each newly created C-suite position is an acknowledgement by the CEO that business complexity is increasing and that further differentiation among executives is necessary to address it. And with each new member, coordinating the TMT’s efforts becomes more difficult. We aim to provide leaders with a way to recognize and preempt the inevitable challenges confronting today’s more complex C-suite. We do this by examining the central challenge – balancing the two essential requirements for effective C-suite performance: Differentiation and coordination. We use an afternoon at a university swimming pool as a metaphor where three sporting events illustrate the nature of differentiation and coordination.
“The hallmark of a high-performing team is its members’ ability to leverage healthy friction regarding the best path forward without tolerating corrosive interpersonal friction.”
Differentiation and Coordination
The primary reason people organize is to accomplish something each cannot do alone. By working together, individuals can achieve more significant goals. Working together means everyone must understand who does what, when, and to what end. The TMT operates this way, too. The complex nature of leadership requires tasks to be broken into manageable pieces and allocated to experts who each focus on their piece, with distractions minimized. However, the benefit of differentiation comes at a cost – anything broken down into smaller parts needs coordination and aggregation to become complete work. Goals are achieved only through effective differentiation of activity and coordination of output. As the task of differentiating responsibility among members in an expanding C-suite becomes more complicated, so, too, does the thoughtfulness and discipline necessary to coordinate the TMT’s effort.
Envisioning a busy day at a university’s swimming pool provides images to efficiently communicate the challenging nature of TMT differentiation and coordination. Imagine one afternoon the university is hosting a swim meet among several universities. In individual races, swimmers are assigned a lane. At the sound of the starting gun, each athlete expends their energy, talent, training, and attention to swim fast. What happens in other lanes has little bearing beyond as a source of performance feedback and motivation. In such events, there is differentiation across swimmers (strokes, distances), but there is no requirement for coordination among them. However, consider the next event: a medley relay – a race involving a sequence of swimmers, each swimming a different stroke. The four strokes – back, breast, butterfly, and freestyle – reflect differentiation. In this relay, the slight coordination required at the transition between each leg of the race is a critical but minor feature of the performance. Without successful coordination, the differentiated efforts of each swimmer have no value, no matter how outstanding they are, because the team would be disqualified.
These two swim meet metaphors represent some of the work of TMT members and the resulting need to attend to differentiation and coordination. At times, executives perform independently and are themselves responsible for performance. At other times, executives require limited coordination with others to produce the organization’s desired outcome.
Now imagine that evening the university water polo team is hosting their cross-town rival for a match. The swim lane marker buoys are reeled in, water polo goals are floated into place, the teams warm up, and the match begins. As was true earlier at the swim meet, the participants are all powerful in the water. How they deploy that strength to accomplish victory, however, is different. Water polo players do not simply dive into their lane at the sound of the starting gun and swim. Water polo requires much more from swimmers than speed through the water; it requires considerable real-time management of differentiation and coordination.
Though there are established positions in water polo, play is fluid. During the match, swimmers may find themselves behind the play in a defensive position or driving the ball for an offensive attack. The team can’t win if everyone drives to the net to score or hangs back at the mid-pool, ready to defend. Throughout the match, swimmers must understand how to leverage their presence while recognizing how to adjust based on what everyone on both teams is doing. Winning relies heavily on how well each swimmer has executed both differentiation and coordination in supporting or leveraging the play of others.
Understanding the differentiation and coordination associated with each executive’s responsibilities challenges the CEO, especially as the C-suite continues to expand in response to ever more complex business conditions. In simpler times, the structure of C-suite work more closely resembled a swim meet. Here, executive work is highly differentiated and requires little coordination. As a result, selecting the best candidate is straightforward – the fastest is best. When the required collaboration is minimal – as in a relay – the selection metric is nearly as simple. However, when tasks are highly interdependent and performed in a rapidly changing environment, the ‘best athlete’ is no longer easy to identify. This is the challenge faced by today’s CEO. Increasingly, it is necessary to consider whether prospective TMT members have demonstrated an ability to recognize and respond positively to the demands of differentiation and coordination and to do it in a way that is characterized by positive interactions among the team.
“Understanding the differentiation and coordination associated with each executive’s responsibilities challenges the CEO, especially as the C-suite continues to expand in response to ever more complex business conditions.”
When the Game is Water Polo, Friction is The Threat to Differentiation and Coordination
Whenever people work together, some level of interpersonal tension is to be expected. On the one hand, we understand tension is a key driver of progress in all walks of life – musicians, coders, comedy writers, and executives will all acknowledge that many inspired achievements are the results of what they might call ‘creative conflict.’ On the other hand, we also understand that sometimes, instead of providing an energizing force, tension feeds friction that erodes trust, destroys communication, and prevents any breakthrough progress. Nowhere are these two faces of tension more critical to manage than among a group of achievers charged with the high-stakes task of leading an organization.
Interpersonal friction becomes much more challenging to manage when the needs for differentiation and coordination are both high, as they are in a water polo match. Kobe Bryant, a longtime superstar for the Los Angeles Lakers basketball team, was never shy in expressing his view that some teammates had not earned the right to be passed the ball. He pointed to what he felt was their insufficient work ethic; that lack of effort meant they could not be trusted. This lack of trust is what puts differentiation and coordination at risk when interpersonal friction sets in between members of the C-suite. Fortunately for the Lakers, there were many instances where Bryant was capable of scoring points without much help from teammates. From an organizational structure standpoint, he was able to play effectively with one or two teammates and still prevail in his efforts to score against five defenders. Perhaps there are some C-suite teams that can succeed while only leveraging a fraction of their members, but that is unlikely to be the case among most. When work is this interdependent, cordoning off the friction-prone executive will likely overwhelm other team members. Failing to do so will breed discontent.
Many pundits warn leaders never to tolerate executives who cause friction – such executives may be referred to colloquially as ‘jerks.’ This isn’t necessarily bad advice, but because it is an oversimplification, it would be easy to find taking the advice too constraining. What makes someone a jerk is subjective, situationally dependent, and variable over time. To me, your jerk may be an interesting provocateur. Some industry or organizational cultures support and even reward aggressive or assertive behavior that in a different workplace would create friction.
The hallmark of a high-performing team is its members’ ability to leverage healthy friction regarding the best path forward without tolerating corrosive interpersonal friction. One CEO explained that a top management team succeeds when members’ go hard on ideas and light on people.’ For CEOs, the ongoing challenge is the ability to manage friction while understanding the risks it poses to a TMT that sometimes participates in a swim meet and other times plays water polo. And to do so as the number of active players grows and grows, increasing the complexity of both differentiation and coordination.
Conclusion
Today’s growing TMT operates in a tumultuous business environment. If complexity rises, the need to create a more highly differentiated TMT will continue. More and more of the team’s work will resemble water polo, not swim meets. Managing differentiation and coordination in a fluid and high-stakes environment means friction can less likely be managed by simply sending a team member off to swim in their lane. Thus, CEOs face two challenges. First, they must understand when the TMT needs to operate as a swim team or a water polo team and to deftly orchestrate ‘changeovers’ from one to another, just like the staff at the university pool. Second, CEOs must quickly recognize when efforts to manage differentiation and coordination create unproductive friction among C-suite members. Not every top management team will succeed despite friction the way Kobe Bryant’s Lakers often did.
Biographies
Stephen A. Miles is the founder and CEO of The Miles Group, headquartered in New York, NY.
Nathan Bennett is a Professor at Georgia State University’s Robinson College of Business in Atlanta, GA.
