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UNITY STARTS IN THE C-SUITE

Top Team Behavior

for Winning Results
By ANNELOES RAES

I
magine the top management team (TMT)
of a large pharmaceutical company. The
team comprises nine experienced execu-
tives, each of whom has a strong track re-
cord in the organizational area for which he or
she is responsible, whether finance, a business
unit or a region of the world. They each pursue
relatively independent and extremely demand-
ing agendas in their respective realms.
Working as a real team, though a nice idea
in theory, is hardly feasible in practice – or so
the TMT members think. And why would it be
necessary in the first place? Is it not the CEO
whose job it is to listen to everyone, integrate
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all that information and then make the final
decision?
In a stable environment, this model may
perhaps serve the organization well. But the or-
ganization is facing some strategic challenges
ahead: key patents are due to expire, govern-
ment regulations are changing in certain coun-
tries and insurance companies are discussing
systemic reforms.
Such challenges cannot be faced by sim-
ply dividing and delegating them among team
members. To perform well in a turbulent en-
vironment like this requires not just the full
effort of every single TMT member, but the
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Competencies
For
Positive Top Team Behavior for Winning Results
Impact
When teams take targeted actions to develop certain
competencies, they can achieve positive results,
boosting the organization’s productive energy, and
increasing employee well-being as a result.
synergies that arise from a coordinated, well-
functioning team.
My research is dedicated to understanding
how top managers can develop and maintain
such high-performing TMTs.
The focus on teamwork among top manag-
ers may seem at odds with the widespread no-
tion of leadership as an individual act. In both
public opinion and business media, top man-
agers are treated as lone heroes when things
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go right or renegade villains when things go
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wrong.
And it’s not just a perception. This is, in
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fact, what happens in practice. Professor
Donald Hambrick of Penn State Smeal Col-
lege of Business once aptly noted that, in many
TMTs, individual members sometimes behave
as “semi-autonomous barons” rather than as
members of the same team.
This is a mistake. Research indicates that
a lack of TMT unity can have very serious
EXECUTIVE SUMMARY
It’s lonely at the top, or so say and what they do.
the saying goes. But this Studies by the author into
need not be the case. Indeed, this phenomenon highlight
those top management teams several competencies that
who manage to overcome contribute not only to the
their isolation and model smooth functioning of the
high levels of “teamness” C-suite but also to the
create positive ripple effects operational success of the
throughout the organization, entire organization.
boosting productive energy She poses several key
and job satisfaction, and questions to ask yourself,
lowering turnover intentions. aimed at improving your
What’s more, middle cognitive flexibility,
managers and other integrative bargaining,
employees reporting to them mutual influencing and
tend to integrate and align creativity in the pursuit of
their own goals with others, more fruitful interactions
as they perceive consistency between upper and middle
between what top managers management.
32 first QUARTER 2014 issue 20
ART-2499-E
organizational consequences, including a low-
er quality of strategic decisions and decreased
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financial performance.
My research indicates that the reverse is
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also true: When teams take targeted actions
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to develop certain competencies, they can
achieve positive results, boosting the orga-
nization’s productive energy, and increasing
employee well-being as a result.
Model Behavior at the Top
Does the “teamness” of a TMT have implica-
tions for employees? This question was the
start of a research project that I performed to-
gether with Simon B. De Jong, of Bath Univer-
sity in the United Kingdom, and Heike Bruch, of
the University of St. Gallen in Switzerland. We
included 191 TMT members and 5,048 employ-
ees from 63 small and medium-sized organiza-
tions in this study.
Some might argue that what goes on behind
the closed doors of the C-suite is of no concern
to rank-and-file employees. Indeed, employees
do not typically see whether the TMT works as
a team or not. Moreover, employees may not
seem to care about their TMT’s behavior, which
is so far removed from their daily work.
But this is not the case. TMT behavior does
leak out, and employees are highly interested in
the news and gossip they hear on the grapevine.
Given that teamwork is such an inherent part
of the design and culture of modern organiza-
tions, we expected that employees would be
highly sensitive to their TMT’s “teamness,” and
would use it as a model for their own behavior.
We found that when a TMT modeled a high
level of “teamness,” middle managers and other
employees were more excited about their work,
could better focus their thoughts on their work
and worked together more cooperatively. In
other words, these organizations had a higher
level of productive energy, which has been di-
rectly linked to higher organizational perfor-
mance in other work.
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 ART-2499-E
Competencies
For
Positive Top Team Behavior for Winning Results
Impact

So, even though few employees may have

exhibit 1
Team Competencies direct TMT contact, TMT behavior does ripple
down throughout the organization. What starts
That Matter as the opinion of a few may quickly infect col-
lective behavior. As such, the extent to which
Use this measurement scale to help you to focus on TMTs present a united front can have huge
where improvements may be needed. ramifications for the overall work climate, con-
ditioning whether lower-level managers and

T he University of Con-
necticut’s Zeki Simsek
et al. developed a reliable
Information Exchange
Think of situations when your
top management team made
employees freely cooperate with one another,
function well as teams, communicate openly
and are clear about what needs to be done.

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measure of TMT behav- important decisions regard- When employees have positive impressions
ioral integration, based on an ing your firm’s future. Using a of the TMT, they have greater cognitive capac-

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earlier conceptualization by five-point scale ranging from ity to focus on their work, dedicate more energy

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Donald Hambrick. We used
this construct to capture the
“teamness” of TMTs. Mea-
sure your own performance
to highlight areas of deficit
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1 (“low effectiveness”) to 5
(“high effectiveness”), assess
your team on:
1. Quantity of ideas
to constructive thinking, experience fewer has-
sles when solving work-related problems and
generally feel more uplifted in the work they do.
Conversely, TMTs that display fragmented
or inconsistent behavior trigger negative emo-

among your own teams, and 2. Quality of solutions tions, such as frustration, irritation and anger
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then take action to develop 3. Level of creativity and over the lack of direction and unity. These feel-
competencies as appropriate. innovation ings are exacerbated when TMTs say different
Order reference F341837

things at different times to different people.

Collaborative Behavior Joint Decision-Making Inevitably, employees will begin to perceive
Using a five-point scale Using a five-point scale conflicts among the multiple goals they are sup-
ranging from 1 (“strongly ranging from 1 (“strongly posed to achieve. Eventually, they become con-
disagree”) to 5 (“strongly disagree”) to 5 (“strongly fused as to which goals are the most important
agree”), assess the extent to agree”), assess the extent to and what they must do to achieve them. This
which you agree with the fol- which you agree with the fol- results in a loss of energy, not to mention all
lowing statements regarding lowing statements regarding the time wasted on idle speculation as to the
the behavior of your team: the behavior of your team: direction in which the TMT actually wants to
take the organization.
1. “When a team member is 1. “Team members usually let If TMT unity is so important, not only for
busy, other team members each other know when their the smooth functioning of the C-suite but also
often volunteer to help actions affect another team for the operational success of the entire organi-
manage the workload.” member’s work.” zation, then how can senior managers achieve
2. “Team members are 2. “Team members have a such unity? The following three competencies
flexible about switching clear understanding of the emerged from our research (see Exhibit 1).
responsibilities to make joint problems and needs of
things easier for each other team members.” 1. COLLABORATIVE BEHAVIOR. TMTs that openly
other.” 3. “Team members usually share information and opinions, and carry out
3. “Team members are discuss their expectations their work collectively, outperform TMTs that
willing to help each other of each other.” do not. Multiple studies support the finding that
complete jobs and meet behavioral integration has important knock-on
deadlines.” effects for the quality of decisions made, as well
as on organizational performance.
SOURCES: “Modeling the Multilevel Determinants of Top Management Openly sharing information and opinions
Team Behavioral Integration” by Z. Simsek, J.F. Veiga, M.H. Lubatkin and within the TMT should be strongly encouraged.
R.N. Dino (Academy of Management Journal, 2005). Also, “Top Manage-
The alternative is that TMT members operate
ment Groups: A Conceptual Integration and Reconsideration of the ‘Team’
Label” (Research in Organizational Behavior, 1994) and “Fragmentation in separate spheres without much contact or
and the Other Problems CEOs Have With Their Top Management Teams” information sharing. They may also seek to in-
(California Management Review, 1995) both by D.C. Hambrick. fluence decisions by politicking, and thereby
inhibit true collaboration.

ieseinsight issue 20 FIRST QUARTER 2014 33


Competencies
For
Positive Top Team Behavior for Winning Results
Impact
When a decision is arrived at jointly, a real sense
of unity emerges, as opposed to a forced sense of
obligation. In this way, conflict is dealt with in a
healthy manner and is not allowed to fester.
Ask Yourself:
What is the level of “teamness” in my
TMT?
Do the members of my TMT function
as a behaviorally integrated unit or as a
fragmented group of “semi-autonomous
barons”?
2. INFORMATION EXCHANGE. Functioning as a
behaviorally integrated unit implies that TMT
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ing with one another. Admittedly, this can be
challenging, given the multitude of responsi-
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bilities resting on the TMT’s shoulders, which
limits the amount of time and energy TMT
members are able to devote to each task.
However, information exchange is not so
much a question of frequency of communica-
tion as it is about quality. In fact, one study
suggests that very frequent communication in
the TMT may mask time-consuming conflicts
and ineffective decision-making processes,
and relates to lower organizational perfor-
mance.
Instead, TMTs should try to focus on op-
timizing the quality of their communications
during the moments when they do convene.
ABOUT THE AUTHOR
Anneloes Raes is an assis- son School of Management, as
tant professor of Managing well as Harvard University. Her
People in Organizations at work has been published in
IESE. She obtained a PhD in top academic journals, and she
organizational behavior at received a pioneering research
Maastricht University and award from the Organizational
a master’s in psychology at Development and Change Di-
Radboud University Nijmegen vision of the Academy of Man-
in the Netherlands. Prior to agement and Healthways. Her
joining IESE, she worked at book, Top Management Teams,
the University of St. Gallen in reveals how to have successful
Switzerland, and held visiting interactions between top and
scholarships at UCLA’s Ander- middle managers.
34 first QUARTER 2014 issue 20
ART-2499-E
Ask Yourself:
Do we have the right communication struc-
Purchased for use on the Organizational Behaviour, at RSM Erasmus Graduate School of Business.
ture in place to ensure adequate information
exchange?
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Do we make optimal use of our moments of
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face-to-face interaction?
3. JOINT DECISION-MAKING. Another key facet of
decision-making, besides effective collabora-
tion and quality communication, is the TMT’s
ability to make decisions jointly. And key to
that is the TMT’s ability to handle conflict.
Conflict refers to disagreements among
TMT members about the task being per-
formed, including differences in viewpoints,
ideas and opinions. As counterintuitive as
it may seem, conflict between TMT mem-
bers can actually be beneficial. As some re-
search has shown, the more task conflict in
the C-suite, the more comprehensive the
decision-making process. TMT members’
understanding and acceptance of decisions
also increases, as does their commitment to
implement those decisions.
When a decision is arrived at jointly – that
is, after everyone has honestly grappled with
the issues, genuinely listened to all points
of view and felt heard – a real sense of uni-
ty emerges, as opposed to a forced sense of
obligation. In this way, the conflict is dealt
with in a healthy manner, and is not allowed
to fester and contaminate the rest of the
organization.
This implies that TMTs must also take
steps to ensure that differences of opinion do
not spill over into bitter personal rivalries.
This requires a high level of trust between
TMT members, so that the TMT reaps the full
benefits of task conflict while avoiding detri-
mental relationship conflict. One study high-
lighted that when there is a high level of trust
in a TMT, task conflicts stay contained, with
discussions focused on matters of content
rather than personalized attacks.
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Competencies
For
Positive Top Team Behavior for Winning Results
Impact
TMT unity is not, in and of itself, enough to achieve
high performance across the organization. For that,
one needs to carefully manage the relationships
between the TMT and middle managers.
Ask Yourself:
Does my TMT leverage the beneficial
aspects of task conflict and avoid dysfunc-
tional relationship conflict?
Which dynamics do I want to optimize or
minimize to facilitate joint TMT decision-
making?
Beyond the C-Suite
Once the causes of TMT disunity are identi-
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fied, you can start to correct them. But TMT
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unity is not, in and of itself, enough to achieve
high performance across the organization. For
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that, something more needs to happen, as I
discovered through research I conducted with
colleagues from Maastricht University in the
Netherlands – Mariëlle Heijltjes, Ursula Glunk
and Rob Roe – in which we examined the TMT
of a Dutch organization.
During our observations of the weekly
board meetings of this TMT, the first thing that
struck us was how much they worked as a high-
performing team. Their discussions were in-
tense but task-related, with few interpersonal
conflicts. Each member openly exchanged in-
formation and opinions, eschewing political
games or backroom wheeling and dealing. The
TMT even held special monthly sessions to re-
flect on its functioning and processes, as well as
annual three-day retreats for strategy building.
In short, this TMT was everything you would
want it to be.
In spite of this, TMT members were strug-
gling to get their strategic decisions to work
in the organization. From our observations, it
became clear that the source of the problem
lay not inside the C-suite, but rather outside
it – and more specifically, in the relationships
between the TMT and middle managers.
Time and again, TMT members would vent
their frustration about middle managers drag-
ging their feet, digging in their heels or even
intentionally sabotaging the TMT’s carefully
laid plans.
ieseinsight
ART-2499-E
As we have since discovered, these are com-
mon complaints at the top of many organiza-
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tions. TMTs have the formal power base to
steer their middle managers, but to do so effec-
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tively, they need to be experts in orchestrating
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these relationships. As K.E. Weick noted in The
Social Psychology of Organizing, “It is the pat-
tern of relationships within organizations, not
the fact that ‘great men’ sit at the top of them,
which makes it possible to exert influence and
enhance organizational performance.”
Although it is evident that relationships
with others play an essential role in the perfor-
mance of TMTs, little research so far has ad-
dressed these relationships. Researchers have
studied, for example, TMT composition or in-
ternal processes. These factors are important,
but they are not enough to fully understand
what TMTs can do about their own behavior to
influence their organization’s performance.
Not surprisingly, this research stream has
produced some inconclusive findings so far.
It is as if the TMT were a wholly independent,
omnipotent entity that directly influences or-
ganizational performance without any inter-
mediaries. Any experienced senior executive
would find this laughable, knowing as they do
that getting things done demands the support
and participation of middle managers.
Complementary Competencies
For optimal organizational outcomes, middle
managers make up the other half of the equa-
tion. They create alignment – synthesizing
information, championing alternatives and
selling ideas – and exert a strong influence on
organizational performance, since they and
their team members are the ones responsible
for putting the TMT’s strategies into action.
When middle managers lack commitment,
they can create obstacles or even sabotage the
TMT’s carefully laid plans. This often occurs
in situations where their self-interests are at
stake, when they perceive a strategy to be flawed
issue 20 FIRST QUARTER 2014 35

Competencies
Positive
Impact
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36
For
Top Team Behavior for Winning Results
Trust between the TMT and middle managers
becomes the glue holding these two parties
together. Building this trust requires a second set of
competencies for TMTs and middle managers alike.
or when they are incapable of implementing it.
To build commitment, top managers must
win the trust, or at least the compliance, of
middle managers. This is easier said than done,
primarily due to the asymmetries in power, in-
formation and interests of the two parties. By
virtue of its organizational position, the TMT
holds more of the cards.
But just because the TMT has the formal
power to hire or fire, it knows, too, that the
formation and implementation of strategy de-
pends on the close collaboration of the orga-
nization’s middle managers, who serve as the
link between the TMT and those business units
whose interests are not necessarily in line with
those of the TMT.
The result is that each party experiences a
certain amount of risk: the TMT, through its
reliance on information from middle manag-
ers, which may reflect the business unit’s in-
terests rather than those of the organization as
a whole; and middle managers encounter risk
through their sharing of information and per-
spectives with the TMT, which may use that
information to the advantage or disadvantage
of middle managers and the business units for
which they are responsible.
When risk and independence coexist, trust
becomes the glue holding the two parties to-
gether. Since it is impossible for the TMT and
middle managers to monitor each other’s
movements and actions constantly, their trust
in each other becomes vital. Building this trust
requires a second set of competencies for TMTs
and middle managers alike.
1. COGNITIVE FLEXIBILITY. This relates to forms of
information sharing characterized by reflect-
ing, reviewing information, taking into con-
sideration different perspectives, being open
to hearing each other out, being able to change
opinions and developing a broad variety of in-
terpretations.
When cognitive flexibility is high, interac-
first QUARTER 2014 issue 20
ART-2499-E
tions between the TMT and middle managers
are much more productive. First, more diverse
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information is taken into account. Second, the
complexities of the cause-and-effect relation-
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ships inherent in the strategy process will be
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better understood. This, in turn, enables the
TMT and middle managers to make clearer
sense of the information obtained from the en-
vironment.
Finally, cognitive flexibility increases the
creativity with which information is interpret-
ed and the alternatives generated. This may
induce cognitive shifts in interpretation that
facilitate positive change.
The TMT and middle managers can achieve
greater cognitive flexibility by explicitly ask-
ing for information, providing both solicited
and unsolicited information, and critically
reviewing that information. Above all, both
parties must learn not to let their inherent
power differences inhibit the open sharing of
information.
Ask Yourself:
To what extent is cognitive flexibility appar-
ent during information sharing between the
TMT and middle managers?
How can I increase it?
2. INTEGRATIVE BARGAINING. TMTs and middle
managers are constantly engaged in a myriad of
influence processes toward each other. TMTs
exert influence on middle managers in an effort
to generate commitment and understanding
of the corporate strategy, as well as instilling
in middle managers a strong sense of organiza-
tional recognition, ownership and motivation
for decision implementation. For their part,
middle managers seek to gain resources for im-
plementation, have their input acknowledged
and get new ideas accepted.
Mutual influencing is a two-way street: One
party tries to influence the other, who articu-
lates a reaction to that influence attempt, with
ieseinsight
 ART-2499-E
Competencies
For
Positive Top Team Behavior for Winning Results
Impact

both parties having to reach a satisfactory com-
promise. Either party may seek to influence and
be influenced by the other.
In this dance, the collaboration between
TMTs and middle managers sometimes resem-
bles a multiparty, mixed-motive negotiation,
due to the asymmetry of information, influ-
ence and interests. As such, the competency of
integrative bargaining can be a helpful way for
TMTs and middle managers to reach coopera-
tive arrangements in which both parties create
Second, middle managers usually have bet-
ter and more realistic insights into what effec-
tive implementation entails. By taking their in-
put into consideration, integrative bargaining
should result in a better allocation of resources.
Last but not least, integrative bargaining
can yield more creative ideas and solutions,
for the simple reason that achieving a win-win
result by nature entails more dynamic think-
ing than merely imposing TMT mandates on
middle managers.

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shared value.
Integrative bargaining improves implemen- Ask Yourself:

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tation quality for several reasons. First, it takes To what extent is the mutual influencing

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the interests of both parties equally seriously.
If middle managers perceive an alignment be-
tween their interests and the strategic decision
being taken, then they will be more committed
to the implementation.
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process with middle managers character-
ized by integrative bargaining?
What could I do to increase it?
3. USING EVERY CONTACT AS A WINDOW OF OPPOR-

TUNITY. Heavy restrictions on everyone’s time

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can make contact between TMTs and middle

managers rather sporadic. This is an inescap-
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exhibit 2
Change Starts able fact of modern working life, but accepting
at the Top there will be a scarcity of contact need not define
predetermined outcomes. Instead, both parties
TMT “TEAMNESS” IS FELT THROUGHOUT
must make a concerted effort to overcome such
THE ORGANIZATION.
obstacles and make the most of their rare inter-
action opportunities.
Contact may be formal, through scheduled
meetings with fixed agendas and protocols. But
there is also informal contact, through phone
calls and spontaneous encounters in hallways
or before meetings. Any contact can serve as an
opportune moment to discuss recent develop-
ments, and to coordinate and adapt behavior for
“Teamness” of the periods when there is no contact.
This is especially important bearing in mind
Top Management Team
my earlier remarks concerning the asymmetrical
Direct Effect
Indirect Effect

Indirect Effect

relationship between TMTs and middle manag-

ers by virtue of their different organizational
functions and the diverse ways in which they in-
terpret organizational events. If we accept that
information exchanges are necessary for the
smooth running of the organization, in terms
of the quality of strategic decisions and their
Productive Energy implementation, then both parties will need to
pursue and leverage every contact as an oppor-
tunity to ask for, give and review information on
a periodic basis.

Ask Yourself:
Job Turnover
When are the moments of contact between
Satisfaction Intentions
TMTs and middle managers?

ieseinsight issue 20 FIRST QUARTER 2014 37


Competencies
Positive
Impact
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38
For
Top Team Behavior for Winning Results
In developing all these competencies, the aim is to
create a more participative form of leadership that
seeks effective interaction to obtain information and
uses that information as a basis for strategy.
Are they formal or informal, planned or
spontaneous, short or long?
How can I use these moments of contact
more effectively?
Dimensions of Success
In developing all these competencies, the aim
is to create a more participative form of lead-
ership that values information, seeks frequent
and effective interaction to obtain information,
and uses that information as a basis for strategy.
Granted, participative leadership does car-
ry risks. It increases the TMT’s vulnerability
by reducing its control over the outcomes of
strategic decision-making. By extension, it in-
creases the chances of middle managers abus-
ing their power.
However, such risks are significantly out-
weighed by the potential benefits. These in-
clude improved cognitive flexibility, a more
balanced mutual influencing process, greater
use of creativity in the pursuit of integrative so-
lutions, and more frequent and more valuable
interactions overall between the two levels of
management.
Another study that we have done among the
middle managers of hundreds of international
firms revealed five dimensions along which
TMTs could measure their success at achiev-
ing this kind of participative leadership. When
it comes to the first three – company results,
strategic leadership and TMT unity – some
companies may feel that their work has been
done. Yet, can they say the same when it comes
to the other two dimensions of connectedness
and moral leadership?
As we found in our study, the middle manag-
ers regarded company results as a less impor-
tant aspect of TMT performance, while they
had much higher expectations for the TMT’s
moral leadership, which they felt was wanting.
Such discrepancies should serve as a timely
reminder of the need to better understand
and take into consideration the feelings and
first QUARTER 2014 issue 20
ART-2499-E
opinions of strategic stakeholders such as
middle managers. To do that, TMTs will need
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to stop seeing themselves as independent, om-
nipotent entities, and begin looking far beyond
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the boardroom for solutions to the challenges
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their organizations face.
As Exhibit 2 from our original study shows,
if the top management team is able to model the
right competencies, there will be positive ripple
effects on an organization’s productive energy
and on employees’ job satisfaction and turn-
over intentions as a result. And as boardroom
leaks go, that is worth gossiping about.
to know more
n Raes, A.M.L., H. Bruch and S.B. De Jong. “How
Top Management Team Behavioral Integration
Can Impact Employee Work Outcomes: Theory
Development and First Empirical Tests.” Human
Relations 66, no. 2 (2013): 167-92.
n Raes, A.M.L., M.G. Heijltjes, U. Glunk and R.A.
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