Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, Chief Information
Officer, Chief Digital Officer, Chief Happiness Officer…phew! The executive team is expanding
rapidly. Although the trend has been happening since the ‘70s, executive teams are growing
faster today than ever.
Of course, having specialized functional experts on the executive team can be useful. These
individuals can help make decisions based on their role and perspective of the company, taking
pressure off the CEO. Further, executive team members can coordinate across departments,
and advise the CEO.
However, according to the Harvard Business Review, a large team can actually end up
hindering the CEO and company more than helping them. To learn how this phenomenon
occurs, read on.
What Are the Problems with Having a Large Executive Team?
Once you have a large executive team, you essentially end up having a lot of “cooks in the
kitchen.” As a result, the company and CEO could face the following issues:
- The CEO acts as “referee.” Since having an executive role lends to making top-level decisions for the whole company, sometimes these decisions or perspectives will be in conflict. So, the CEO’s role now involves navigating conflicting agendas in addition to the CEO’s own role.
- Risk of reduced interdepartmental cooperation. The executive-level employees are watched closely by their department and the whole company. Further, more C-suite employees are connected with their own departments. With more executive roles, more departments are likely to be aware of conflict at the top and be likely to be hostile to other “warring” departments.
- Executive-level disengagement. The C-suite is seen as “making it” or “having a seat at the table.” However, the role becomes less special with more people — and there is less decision-making power with more people at the top.
Do these situations sound like your team? Don’t worry, there are solutions your company can implement.
How Can You Reduce Your Executive Team Size?
- Consider purpose. Does each member of your team have a role where they are truly contributing to the executive team — not just what they “should” be doing or what you want them to do? Is each member doing things that both “add value and can’t otherwise be achieved more effectively”?
- Downsize. Removing members from your team can be a very difficult task, as it regards elevated status and compensation. However, the benefits of removing executive team members can outweigh the discomfort. Ensure that you do not remove “counterbalancing” members, though (for example, legal affairs and sales).
- Create an “executive committee sub-committee.” Creating a more exclusive group of advisors can be demotivating to other team members. However, you can approach the task as focusing on the content of meeting time. Your executive sub-committee focuses on the things most covered in executive meeting times, and you can create other committees for the other operations, but are more focused on those issues than the whole group working on less relevant projects.
- Realign the inner cabinet. Most CEOs have a private “inner cabinet” of one to three most trusted confidants. Although these confidants do not have an official title, and their role is usually secret, they are very important. As you downsize your executive team, consider who your advisors are and make sure you are getting balanced advice.
Any company whose executive team has grown too large can implement these steps. However,
getting started can seem intimidating.
If your company would like to consolidate its executive team to avoid the downfalls of a large
team, but would like help, contact Boston Business Growth. We specialize in helping teams like
yours by using the Entrepreneurial Operating System (EOS).
Downsizing an executive team can involve strategic thinking and hard conversations. Although it
might be a difficult process, we can help you through every step so your business can emerge
stronger, more confident and better able to make good decisions.