An ideal senior leadership team: a group of individuals who are very talented and complementary to each other and can work as a true team. The different roles in the team complement and collaborate to drive continuous growth and change in the organization by sharing strategic leadership tasks.
One
Starbucks' leadership team
1. Execute key strategic tasks as a team
At Starbucks, each member of the core senior leadership team, including Howard Schultz, Howard Bihar and Orin Smith, has a formal role for each member of the core senior leadership team, including Howard Schultz, Howard Bihar and Orin Smith, as a collective unit, rather than a group of individuals, to implement the five key strategic leadership tasks: Strategic Vision, Corporate Culture Management, Operations, Organizational Development and Systems, and Innovation and Change Management. Schultz is the CEO, Biha is the head of retail operations, and Smith is the CFO. The formal role is a misnomer that only partially reflects (and partially obscures) the actual role of each of the three men.
Each team member, in fact, is primarily, but not exclusively, responsible for the strategic leadership function.
Howard Schultz is primarily (but not exclusively) responsible for Starbucks' corporate vision and culture, and is also involved to some extent in Starbucks' operations and systems.
As senior vice president and head of retail operations, Howard Biha was primarily responsible for the retail business (which accounted for about 95 percent of Starbucks' revenue in 1994 as observed). However, he was also involved in some way in creating Starbucks' corporate vision and corporate culture and its systems.
Finally, as the official CFO, Smith was involved in the development of the main systems required by Starbucks — not just the financial system, but also the information systems, planning systems, human resource management systems, and other systems. He was also involved in shaping Starbucks' corporate vision and culture, and to some extent involved in operations. All three are involved in Starbucks' innovation and change efforts.
In summary, Schultz, Biha, and Smith do not play separate roles as a separate group, but as a real team (not just a team in name) that performs a complementary but somewhat overlapping set of job responsibilities. They constitute what we call leaders.
2. Catalyst for leading molecular construction
At the beginning of 1994, when Starbucks was still a relatively small company, I was invited to train three senior Starbucks leaders, including Howard Schultz, Howard Biha, and Orin Smith. The initial task was to train each of them individually and work with them to defuse the pressures and conflicts and disagreements that arise with the rapid construction of the company. After this initial work, they became a very effective leadership team. I came to see them as an ideal senior leadership team: a group of individuals who were very talented and complementary to each other and could work as a true team.
The catalyst for the origin of the concept of the leader molecule was the observation that within Starbucks, people referred to the three of them as "H2O," or "water," with clever use of the first letters of each name: H, H, and O. Obviously, at Starbucks, people see these three people as one team, not just three people running a company.
The name reminded one of the authors, Framhauts, of the teams observed in other companies: some were nicknamed "The Three Musketeers", "The Troika", "The Four Robbers", "Batman and Robin", and "Ghosts and Darkness". He recognizes that nicknames can serve as a "mark" or signboard for a true leadership team.
After his initial observations of this phenomenon, he began to study it more systematically. Based on an analysis of hundreds of companies, those with "real teams" tend to perform very well; And companies that lack a "real team" tend to perform poorly, or even very badly. This gave rise to concepts such as the leader molecule model and the leader hypothesis.
Two
The emergence and development of leaders in the organization
Leadership often emerges as a function in the development (growth) phase of a company. In the initial entrepreneurial phase, the leader usually performs all the necessary strategic leadership functions on his or her own (either a man or a woman). This can happen regardless of whether a single person has the skills to carry out these leadership tasks.
As the organization grows, there is a need to specialize management and develop a group of people to perform these functions, rather than one person doing everything. Even if one person has the ability to perform all leadership tasks, it becomes increasingly difficult to exercise all functions as the organization grows in size.
As a result, a group of people emerge to perform these tasks, one of whom typically focuses on the vision and cultural mission, another who is responsible for operations, a third person who focuses on system development, and the team as a whole who work together to carry out the task of innovation and change. If this group of people does not operate as a team, then each person is an independent "atom". Sometimes, this group of individuals becomes a real team with overlapping and complementary responsibilities. It is only when this group of individual atoms is transformed into a real team or "molecule" that it can be called a leading molecule.
1. The central role of the leader
As mentioned above, leadership consists of certain core roles that involve the implementation of a single strategic leadership task or a combination of strategic tasks. As the Starbucks case illustrates, these core roles tend to combine certain strategic leadership tasks. In addition, aspects of a given strategic leadership task can be carried out by multiple people. As a result, the individuals who make up the leadership often overlap with each other, as shown in Figure 1.
Figure 1 The classic form of the leader
Vision and cultural roles
A classic central role is that someone executes both the "vision" and "culture" missions, which is often (but not always) implemented by the company's CEO. Sometimes the vision and culture are not implemented by the same person, depending on their abilities and character (to some extent). However, it is often the CEO who fulfills both the vision and the cultural mission.
Operational roles
Another classic core role is "operations", which may be the role of the COO or the role of another senior executive who oversees day-to-day operations. For example, Howard Biha, who is in charge of Starbucks retail stores, is a member of the leadership team responsible for operations, although he has never served as COO.
System roles
The third classic core role is "system", which involves initiating the development requirements of various operational systems and management systems, and the responsibility for overseeing this system. The system covers everything from budgeting and planning systems to human resource management systems and logistics systems. This role never even appears in an organizational chart, but it exists in informal organizations and leaders. It is often done by the CFO because they tend to think through a systems lens. It is also often held by the Senior Vice President of Human Resources, and sometimes there are other candidates. This role does not necessarily refer to the designer of the system, but may also refer to the person responsible for overseeing the development of the system.
We predict that more formal roles in the system leadership function will emerge in the next few years. This role will be filled by a person with a strong technical background and abilities.
In 2015, for example, Starbucks announced that it had hired Kevin Johnson, the former CEO of Juniper Networks and a former Microsoft company, as president. Johnson is a member of the board of directors of Starbucks Inc. and has been involved in the company's digital operations. As President, he oversees digital operations, as well as information technology and supply chain operations. This is in line with Starbucks' view that the company must "move everything from food to apparel to online sourcing, helping consumers reach the Starbucks brand and purchase its products by discovering new digital strategies."
The role of innovation and change
This is not a specifically defined role for the innovation and change function, but rather rather it is often filled by the leadership as a whole.
2. Structural changes (forms) of leading molecules
Just like any molecule in nature, a wide variety of structural forms can be produced in tissues. While the most common structure is a leader in a group of three, "3" is not the magic number. Sometimes there are two people in a team, and occasionally there are four people.
When the molecule is made up of two people, it is called the "dynamic duo", a term that originated from the story of Batman and Robin. Microsoft's Bill and Steve Ballmer's duo is a good example. Another example is the duo of Google founders Sergey Brin and Larry Page.
Although theoretically a leader can consist of five or more people, we have never observed this in practice. Most commonly, a core team of 3 people performs 5 key strategic leadership tasks. In light of this, we consider the three-man leadership to be a "classical" form or structure.
In this classic format, the first four strategic leadership tasks (vision, culture, operations, and systems) are performed by these three individuals as a single unit. The fifth strategic leadership task, innovation and change, is not demonstrated (as shown by the classic leadership molecule in Figure 1) because it requires the team to perform as a whole, rather than the primary focus of a single individual. Starbucks' H2O molecule is a classic example of this form.
Another example of the trio molecule is the operation of Google Inc. Created by founders Sergey Brin, Larry Page and CEO Eric Schmidt, the company is known as the "Troika" (derived from the Russian-style three-horse sled).
Unlike the leaders shown in Figure 1, many times, the three of them form a "group" of senior leaders (but not a real team). Figure 2 illustrates this, where the three people form a "triatom that is looking for a molecule".
Figure 2 is looking for the leader triatom of the molecule
When the three atoms are not one "molecule" and the three atoms are not together as one molecule, it has a significant impact on the efficiency of the tissue, and the degree of tissue success is diminished. The absence of a single molecule can lead to major conflicts not only among the members of the senior leadership team, but also among the people of the organization as a whole. Due to the lack of alignment among the three "organizational giants", people tend to be cautious. They don't want to confront or offend anyone on the senior leadership team, and in turn tend to keep quiet and err on the side of caution. Obviously, this will lead to less innovation across the organization, and will also lead to political behavior or "organizational factions" (silos).
There is also a culture of "well water does not interfere with river water", which leads to a lack of coordination and cooperation in the organization, as well as a lack of communication within the organization. Given the danger of "crossfire" by organized giants, people will resist change. These symptoms are self-inflicted, but they are also symptoms of a deep, systemic problem, the lack of a cohesive leader.
We have observed some real-world cases related to this phenomenon. In one instance, the chairman and the CFO are on the same page, while the CEO takes a position on his own. He was eventually squeezed out of the organization. In another case, the founder and CEO was siloed by two other senior leaders – the COO and the CFO. The two were later referred to by the members of the group as "Ghosts and Nights", figuratively named after the nicknames of two man-eating lions in the Tsavo region of Kenya, known as the film of the same name, Ghosts of the Night.
3. Complete leadership
We believe that in order to be most effective, leadership must include people who perform five key leadership tasks or functions. However, a single molecule is not required to perform all the key leadership tasks, and some of the key tasks can be performed by a two-person unit.
Apple, for example, was founded by Steve Jobs and Steve Wozniak. Steve Jobs is a vision and culture leader, and Wozniak is a developer of Apple computer technology, and he is neither an operations person nor a systems person. As a result, Apple does not have a real or complete leadership molecule, which is called an "incomplete molecule" and cannot perform at its best. Similarly, at Ben and Jerry's Ice Cream, Ben and Jerry are entrepreneurial types, dreamers and product junkies, who don't have the other skills needed to form leaders in a complete sense.
Author: Eric S. G. Framhauts, President of Management Systems Consulting
Source: Growing Pains: Roadmaps and Tools for Building a Sustainable and Successful Organization (5th Edition)