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Building a Leadership Team? Ensure Culture Fit with These Three Easy Tips

by Redpath and Company

Guest article by Mike Paton, Global Ambassador for EOS Worldwide

April 6, 2021 - What do you look for when finding a company leader? Rรฉsumรฉ? Revenue? References? If you're only looking at those, you're not getting the whole story โ€“ and you might not be getting the right leaders for your company.

There's more to a great leadership team than any one leaderโ€™s skills or experiences. Building a leadership team (and finding the right leaders) works best when you start by understanding the right structure for that team, and when you fill each โ€œseatโ€ on that team with leaders who will perpetuate the companyโ€™s culture. Any company that skips those steps is missing a vital piece of the puzzle.

The Right Leadership Team Structure

In his book The Advantage, Patrick Lencioni defines a leadership team as โ€œa small group of people who are collectively responsible for achieving a common objective.โ€ If you own or run an entrepreneurial company, these are the (typically) three to eight people you rely on most to run the business day-to-day. 

A company running on the Entrepreneurial Operating Systemยฎ (EOSยฎ) takes a โ€œstructure first, people secondโ€ approach to building a great leadership team. We ask the team to set people and history aside, and build the leadership team from scratch by focusing on the major functions of the business. What would the simplest and best structure be for this organization? This draws the teamโ€™s attention to what the business needs, rather than the people and structure it already has.

What results from this process is a leadership team with three distinct types of roles: 

  • Visionary: The big-picture, ideas person who likes to imagine whatโ€™s possible and then go make it happen. Typically the founder, this person is a creative problem solver who loves big relationships and building culture, but resists getting dragged into the day-to-day. 
  • Integrator: The leader who keeps the trains running on time; the โ€œharmonious integratorโ€ of the individual leaders and driver of accountability for the leadership team. 

Owners of major functions like sales & marketing, operations, and finance, for example, also comprise the leadership team. Theyโ€™re great builders, leaders and managers of teams, and as such accept full responsibility for their function being done well and achieving the desired result.

This structure first, people second helps you set standards and expectations for your leadership team based on what the company truly needs. Once those expectations are clear, itโ€™s then easier for you (and for THEM) to determine whether or not theyโ€™ll be able to consistently meet the companyโ€™s needs.

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This approach helps a rapidly growing company avoid the Peter principle, which holds that employees are often promoted until they reach (or exceed) the limit of their competence. They might be very good at what they do, but their ability to get you HERE doesnโ€™t always mean they can get you and your organization to the next level.

By thinking first about what you truly need, youโ€™ll be better able to have that honest conversation with your best people, make a fully informed decision about promoting them, and react more quickly if/when they begin to struggle. Failing to take that approach often leads to really good people leaving an organization and, worse yet, filling company leadership with people who just aren't up to the task.

This structure first approach clarifies the skills and experience you need from your leaders, but competency is only one qualifier for building a great leadership team. To ensure complete alignment, make sure there's a culture fit.

To Build a Strong Leadership Team, Start with Culture and Values

Poor โ€œculture fitโ€ is about 10 times more likely to be the reason a new leader fails than poor โ€œjob fit.โ€ However very few employers have cracked the code on attracting and retaining people who fit their companyโ€™s culture. Hereโ€™s how a company running on EOS does it:

  • Step 1: Discover and Define It. If you own or run a business, you can and should have the culture you want. That happens when everyone on the team shares a set of โ€œCore Valuesโ€ โ€“ characteristics or attributes (like โ€œself-motivatedโ€ or โ€œno dramaโ€) that define the kind of people you love spending time with and can truly count on. Your job as an owner or leader is to define those Core Values so clearly and talk about them so regularly and consistently that everyone in the organization knows what โ€œfitting our companyโ€™s cultureโ€ looks and feels like. Only when those standards are crystal clear can you use them to attract the people who fit your culture and repel everyone else. 
  • Step 2: Live and Breathe It. Once defined, Core Values must be used to hire, fire, review, reward and recognize people, day in and day out. People who exemplify the Core Values are recognized, rewarded and promoted, and people who don't are coached up (or coached out). No exceptions โ€“ even for (or especially for) the strong performers who think that being good at your job excuses bad behavior.

What kind of culture do you want in your organization? 

Have you discovered the answer to that question, defined it clearly and shared it with everyone in the organization? Are you and your leaders living and breathing those cultural pillars every day โ€“ using them to attract people who fit and repel people who donโ€™t? 

Carefully considering these two attributes of a great leader helps you define what Jim Collins refers to as a โ€œRight Personโ€ (someone who shares your Core Values) in the โ€œRight Seatโ€ (someone whoโ€™s consistently good at the job). You can now set out to fill your leadership team, and ultimately every seat in your organization, with โ€œright people in the right seats.โ€ 

Hiring Best Practices 

  1. Evaluate candidates for culture and job fit as separate ideas. This allows you to be very clear in setting expectations, evaluating candidates, and making a decision. You need a right person in the right seat โ€“ donโ€™t settle for one or the other, even in a tight labor market. 
  2. Consider using assessment tools like Kolbe, Insights, DISC, StrengthsFinder, or Culture Index, to mention just a few. These can be additional, empirical data points that confirm what youโ€™re seeing and hearing in interviews and reference checks โ€“ though like any tool, they are not foolproof.
  3. Ask open-ended questions, especially about Core Values. If you're interviewing a potential company leader with quantitative questions โ€“ ones that can be answered by a "yes," a "no," a number, a name-drop, or a line on a rรฉsumรฉ โ€“ you're not going to find out how they would fit with your company. For example:
    1. Instead of asking, โ€œOne of our Core Values is โ€˜Help First,โ€™ does that describe you?โ€ consider asking โ€What do you do to give back?โ€
    2. Consider asking a question like, โ€œTell me about a time you faced a moral dilemma at work. What happened, howโ€™d it turn out, and what did you learn?โ€
    3. โ€œHow would the people who know you best at work describe your best attributes?โ€ and โ€œIs there anything those people would say that you need to work on?โ€ 
    4. โ€œWhenโ€™s the last time you solved a puzzle?โ€
  4. Check records and references carefully. This should be a no-brainer, but busy hiring managers often skip this step and regret it later. 
  5. Deliver the โ€œScare 'Em Away Speech.โ€ You're about to make an offer to the next member of your leadership team. Before you pull the trigger, open a dialogue about your core values. This is where you can set the stakes: Let them know that if they're not comfortable being held to your company's core values, they may not make it very long (whether by their choice or yours). This last-round check makes it clear that culture fit is as important to your company as job fit โ€“ or maybe more so. Perhaps more importantly, it gives you permission to hit any early concerns head-on.

Conclusion

With a clearly defined culture, and a process for finding and keeping great people that share your Core Values, you can accomplish anything. My passion is helping entrepreneurs do just that โ€“ run a better business, achieve your vision, and live your ideal life. If this article helps even one reader along on that journey, it was well worth the time. 

Mike Paton is a speaker, author, Certified EOS Implementerยฎ with Achieve Traction, and Global Ambassador for EOS Worldwide.

Business Valuation

Redpath and Company

Redpath and Company

Redpath helps clients make more informed decisions that contribute to their financial well-being by providing proactive, innovative, and value-driven certified public accounting services for closely-held businesses, government entities, and not-for-profit organizations. Areas of service expertise include audit and attest; personal, business, and international tax; accounting services; entity structuring; mergers and acquisitions; valuations; succession and estate planning; state and local tax; and sales and use tax. The firm was founded in 1971 and is 100% employee owned (ESOP). With offices located in downtown St. Paul and White Bear Lake, Minnesota, the firm ranks as one of the top CPA firms in the Twin Cities with over 180 employees. Redpath is a member of HLB International, a global network of independent advisory and accounting firms. For more information, visit redpathcpas.com.