Leadership Teams
How a formalized structure of leadership helps team members understand how decisions are made
Within a growing organization, those decisions can get pushed deeper into the organization allowing more focused groups to contribute to decisions that impact them. In the early days, this structure is likely relaxed and informal. Over time there becomes an increased need to communicate more clearly.
Experiencing Team Growth
A few years into our business, when the team was growing and new problems were popping up left and right, everything seemed reactive. Something would crop up and we would need to chat through how to handle it. There weren’t many policies or procedures.
Once we formed a leadership team, with a weekly meeting cadence, we eventually got ahead of the issues. From there, we were able to start looking forward and addressing smaller issues sooner. While ascribing to a structure was great, the consistency was ultimately what made the greatest impact. There is a tendency to only meet when needed, but that is similar to only visiting the doctor when you are in pain. Without regular visits, you miss the chance to catch problems before they hurt.
In the early days, the only leadership team consisted of the founders. The act of meeting weekly, even when it seems too soon, starts a pattern of proactivity. Resisting the urge to put out fires, the focus of this time should be working on higher-level issues. Working ‘on the business’ not ‘in the business’.
Invite the right people
As the team grows, it’s unlikely the founders will possess enough skills, experience, or insight to meet organizational needs. As we arrived at this point with Polar Notion, we found it crucial to invite outside perspectives. It was important to not just include anyone, rather those who brought unique value and insight.
A leadership team should connect and get along, but the greatest value to the business is diverse ideas and perspectives. It’s crucial to avoid an echo chamber and cultivate a place where ideas can flow freely.
Managing the Meeting
Start by writing out the issues list for the organization. This should be a running list that gets added to as new problems arise. Since it’s unlikely the list will get discussed in its entirety, we developed a process for selecting which items we discuss. We’ve used the following 3 questions to determine which topic should be discussed each week:
• Which problems have the highest Impact? High Impact items are those which present substantial cost, unsustainable inefficiencies, or significant opportunities. A problem around company culture, for instance, runs the risk of affecting every part of the business.
• Which have the highest frequency? High-Frequency problems are felt on a regular and recurring basis. Assuming all things are equal, pains felt daily are more important than those felt yearly.
• Which have the highest volume? High Volume problems impact multiple people. While it’s important to address problems of all sizes, the cost is much greater when felt by a lot of people.
We also adopted a meeting agenda from the Entrepreneurs Operating System, EOS. This includes the steps for each meeting to make sure it doesn’t take more than 90 minutes.
Teams of Teams
As growth continues, departments or segments of the business will start to contain many roles with added complexity. This isn’t necessarily hierarchy, but certain people end up tackling unique challenges on behalf of each part of the organization. From there, it’s worth exploring Leadership teams for each segment of the business. To avoid making leadership feel too exclusive, we opted to change the title of the original leadership team to Executive Team and name Leadership Teams for each department. While seemingly trivial, words matter and can shape the thoughts and actions of a team.
It is rare that these meetings need a full 90 minutes, so we came up with a modified agenda:
- Everyone brings 1–2 problems and proposed solutions
- Each person shares problems
- Nominate a ‘winner’ based on the highest value to the organization
- The chosen problem is then unpacked in more detail along with the proposed solutions*
- The remainder of the time is used identifying and discussing solutions
*Solution should include:
- A classification of the problem (people problem, strategy problem, cash problem, execution problem, etc.)
- A proposed action?
- Who is needed?
- What does success look like?
Depth of Leadership
We’ve seen consistent growth and success with pushing leadership deeper into the organization. Wherever possible, we want to invite people to step up and take charge. Rather than hoarding authority, empowering people to make key decisions can lead to increased buy-in and a greater commitment to the organization.
Invariably, this form of leadership will lead to mistakes being made. However, it will also reduce the weight any one team member must carry. Over time, it truly allows the organization to scale and continue improving.
As owners, distributed power deduces our Key Man Risk. Key Man Risk is the disproportionate value created by a few members within an organization. Businesses that carry a heightened level of Key Man Risk are less valuable and riskier. A business that’s capable of delivering value independent of any one person will ultimately be more stable.
