The Dangers of a Fractured C-Suite
All for one and one for all – The Three Musketeers motto – Alexander Dumas
We all know the importance of teamwork and collaboration. Whatever the context, sports, business, military, and many other situations, teamwork and cooperation is essential to success. Our political system, however, is not a model for cooperation or bipartisanship. In the face of these tensions, it becomes harder to maintain a sense of teamwork, cooperation and joint achievements in other areas.
Business organizations, however, are not a democracy. My comment is separate from the idea of shareholder democracy. My focus here is on the board, senior management, middle management and employees. A business operates to maximize shareholder value, along with meeting demands from important stakeholders. The CEO sets the mission with board approval and executes the mission through the senior management team and so on throughout the levels of the organization.
To execute, a CEO demands loyalty, and rightfully so. A CEO who is subject to conflict, criticism or undermining by members of the senior executive team is doomed to fail. I am not suggesting that a CEO has to operate as a dictator. To the contrary, a leader should seek different viewpoints, listen to his/her executive staff and reach a decision after considering all viewpoints. A real leader solicits input from others, listens to these ideas and carefully considers other opinions before reaching a decision.
Like a general in the military, however, once the CEO reaches a decision, the senior leadership team should line up with the CEO to execute the CEO’s direction. I am not so naïve to think that this always occurs. Senior executives who have their own agendas and operate in conflict with the CEO present a serious danger to the company’s culture and ultimately, the company’s performance. When a CEO is subject to conflict from his/her team, the CEO and the company will suffer real harm.
The extent of harm to an organization rises exponentially as members of the senior executive team cooperate with each other in opposition to a CEO. Hopefully, a CEO will learn of this opposition and take steps to protect his/her leadership and execution. The longer the CEO ignores this problem or fails to respond this situation the worse for the CEO and the company.
This is not to suggest that senior executives jockey for position or accomplishments in their own right. That is normal for a high-performing executive team. But there is a fine line between competition among high-achieving executives and undermining a CEO.
CEOs need to appoint their own senior executive team. While there may be certain senior executives who have a long career with the company, the CEO has to decide whether such historical experience is needed to achieve the current objectives. It is the CEOs choice and corporate boards often defer to the CEO to put in place the leaders he/she needs to succeed.
The danger of a fractured C-Suite – when the CEO is undermined by members of the senior executive staff – is the inevitable flow down to middle management and employees. Internal politics and interactions resonate through an organization. What some consider “gossip,” can morph into messaging that undermines a company’s culture and performance. As more of this “information” flows down within the organization, middle managers and employees will slowly respond with increasing skepticism to internal messaging, procedures and internal controls. A counter-narrative will begin to harm the company’s organizational belief system.
C-Suite disarray can have a quick and devastating impact on employee morale and productivity. This usually translates into increases in employee misconduct. To avoid this result, a CEO has to ensure loyalty by leadership and consistent respect for the C-Suite team. Whenever the C-Suite starts to lose its teamwork mentality, CEOs have to respond quickly and appropriately before any harm and increased risks develop.