Editorial
An organization’s executive team sets strategy, scales operations and ultimately determines the trajectory of the business. The right leaders inspire and rally teams around a common mission, make critical decisions about the future of the business and develop the next generation of leaders. In short, a high-performing executive team is a necessary ingredient in the recipe for business success.
Selecting the wrong executives, however, can be nothing short of catastrophic. Research shows that excessive turnover at the top destroys close to $1 trillion in value annually among the S&P 1500. Misaligned leadership can derail strategic priorities, undermine trust and cultural cohesion, and erode investor confidence. The question, then, is: How do you build an executive team that propels growth and maximizes enterprise value?
Align Leadership With Growth Phase and Strategic Needs
An organization’s growth stage and strategic priorities should inform the composition of its executive team. A pre-IPO company requires different leadership than an early-stage startup, and a turnaround necessitates a different skillset than a company focused on aggressive expansion.
For example, a CFO in a high-growth company may need to be skilled at advising the CEO and leadership team on capital allocation for scaling operations, geographic expansion and even driving inorganic growth through acquisitions. On the other hand, a CFO in a turnaround situation may lead efforts to reduce costs or streamline operations — this may include shuttering under-performing parts of the business, reorganizing teams or rethinking operating models. The leadership team must be fit-for-purpose, tailored to the company’s business needs and context.
Conduct a Holistic Skills Assessment of the Leadership Team and Board
Think of the management team and board as a single, integrated leadership body. Create a skills inventory to identify the competencies necessary for success in the industry and growth phase. Map these against the existing capabilities within the executive team and board to determine gaps.
One common mistake is over-indexing on industry experience when hiring executives. While industry expertise and relationships are critical for certain roles like a Chief Sales Officer, excessive reliance on industry veterans can stifle fresh perspectives and diversity of thought. In fact, hiring from the same industry can be limiting. For example, if a healthcare company undergoing a digital transformation is looking for a Chief Technology Officer, hiring someone from an industry already at the forefront of innovation (such as e-commerce or fintech) may be more beneficial than hiring someone from another legacy healthcare firm.
Prioritize Seasoned Leaders With Strong People Management Skills
One of the biggest pitfalls in high-growth organizations is appointing executives who excel in functional expertise but lack leadership acumen. Executives must be adept at building high-performing teams, setting clear expectations, providing actionable feedback and developing future leaders. In short, seasoned leaders at the top foster a healthy culture. Inexperienced leaders, on the other hand, have the opposite effect on culture — they struggle with managing performance, holding people accountable and making tough decisions when needed.
Beyond technical expertise, CEOs must prioritize soft skills — or “power skills” — such as resilience, empathy and change management. In the AI era, where technical skills are increasingly commoditized, these power skills will differentiate high-impact executives.
Set Executives Up for Success
Hiring and onboarding the right executives is just the beginning. To unlock the full potential of their executive team, CEOs must foster a culture of trust, collaboration and accountability within the C-Suite.
- Establish Team Norms: High-functioning teams operate with clearly defined norms and behavioral expectations. CEOs and CHROs should work with their leadership teams to establish norms that promote trust, candid feedback and effective decision-making.
- Ensure Board Sponsorship: Many executives fail not due to lack of competence but because of a lack of sponsorship from and alignment with the board. CEOs must proactively secure board support for key hires and invite select board members to weigh in on role expectations and key priorities, especially during the first 12 months.
- Facilitate Critical Relationships: While all executives within a leadership team must endeavor to build and nurture relationships with one another, certain executive relationships are particularly pivotal. For example, in technology organizations, the Chief Technology Officer and Chief Product Officer must be tightly aligned on the product roadmap and execution. Similarly, the Chief People Office and Chief Financial Officer must collaborate on workforce planning, compensation strategy and organizational design. Dysfunction in these critical relationships can significantly impair business performance.
Foster a Culture of Continuous Learning at the Top
The most effective executive teams are those that embrace continuous learning and agility. As evidenced by the recent AI revolution, markets shift, technologies evolve and competitive landscapes rapidly change. Consequently, executives must be committed to ongoing professional development to ensure the organization remains ahead of the curve.
- Encourage Ongoing Education: More than ever, executive teams need to be lifelong learners. Executive teams should regularly engage in a combination of leadership development programs, industry conferences,and peer learning networks to stay informed about best practices.
- Promote Intellectual Curiosity: CEOs must encourage leaders to challenge conventional thinking, ask tough questions, conduct regular competitive intelligence reviews and experiment with new approaches to problem-solving. Intellectual curiosity at the top can help organizations stay ahead of emerging market trends by anticipating disruptions and seizing opportunities.
- Lead With Agility: A leadership team that resists change can stifle innovation. One of the most well-known cautionary tales in corporate history is Blockbuster’s failure to adapt to market shifts. Blockbuster executives had multiple opportunities to acquire Netflix in its early days but dismissed the emerging digital rental model. Meanwhile, Netflix capitalized on the shift toward streaming, ultimately rendering Blockbuster obsolete. The example underscores the importance of having executives who not only recognize market trends, but act decisively to pivot strategy accordingly.
Build a Leadership Team That Embodies Company Culture
A high-performing executive team must not only drive financial results but also exhibit the values of the organization in their everyday behaviors. Culture starts at the top, and executives set the tone for the entire employee population. To that end, CEOs must, in partnership with the CHRO, define cultural non-negotiables — the behaviors, values and mindsets that define the organization’s culture — and accept no less than exemplary behavior from the senior team. When executives role model the behaviors they seek in others, they uphold and protect the values of the organization. When they consistently bend the rules, however, they undermine the company culture and values.
In addition to embodying company culture, executives must also endeavor to continuously improve it. Instead of hiring for “culture fit,” CEOs must look for executives who are “culture adds” — leaders who enhance the existing culture by drawing on their diverse perspectives and experiences. These are executives who have a proven track record of building highly engaged and productive teams as well as creating work environments that foster psychological safety and employee wellbeing.
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The Art and Science of Executive Team Building
Building a winning executive team is an art and a science. It’s not a one and done exercise; it is an ongoing process. Even when the team is operating at peak performance, succession planning must remain a priority. CEOs and CHROs must continuously evaluate employee retention risks for critical roles and develop contingency plans to mitigate potential disruptions to the business.
The best executive teams are not merely collections of highly talented individuals; they are cohesive units that operate with strategic alignment, trust and a shared commitment to the organization’s mission. While there is no definitive playbook for building an executive team, following this guide can help CEOs position their organizations for long-term success, navigating complexity with a leadership team that is both resilient and forward-thinking.
Read more on critical leadership trends:
- Are You Setting Your CHRO Up for Success? — Organizations that invest in their CHROs will reap the benefits and gain a competitive advantage as they navigate the turbulent future of work.
- How to Identify Your Leadership Style — Explore common leadership styles to determine which one will work best in your role or organization.
- Leadership at a Crossroads: Thriving Through Change in 2025 — The pressure to invest in technological innovations might lead you to believe it should come at the expense of workforce investments. That's a false dichotomy.
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