The executive team becomes a team when its members feel responsible not only for their functions, but for the performance of the enterprise.
Many executive teams are composed of impressive individuals. Each member brings experience, expertise and a record of achievement. Yet the collective can still underperform.
The reason is structural as much as interpersonal. Executives are appointed to lead functions or businesses, rewarded for results within those domains and surrounded by teams whose legitimate priority is their part of the organisation. They then enter the executive room and are expected to think and act as enterprise leaders.
That transition does not happen automatically.
McKinsey reports that companies with aligned and effective top teams are almost twice as likely to achieve above-median financial performance.[1] Separate research cited by Harvard Business Review found that only 20 per cent of 1,250 executive teams studied qualified as high performing.[2] The opportunity is substantial, but it requires more than periodic offsites or improved collegiality.
A working group is not necessarily an enterprise team
Some executive teams function mainly as reporting forums. Members provide updates, seek decisions from the CEO and return to their individual areas. Others operate as negotiating forums in which leaders compete for resources, attention and protection of their domain.
These activities may be necessary, but they do not constitute the highest-value work of an executive team.
The executive team exists to do work that no function can do alone:
- set and maintain enterprise direction;
- make cross-cutting choices and trade-offs;
- allocate resources against future value;
- shape culture and leadership expectations;
- manage enterprise risk and interdependence;
- build the leadership bench; and
- hold one another accountable for collective performance.
When that mandate is unclear, meetings become crowded with operational detail while difficult enterprise issues remain unresolved.
Talent is necessary, but not sufficient
My early experience in professional rugby shaped my understanding of teams long before I entered corporate leadership. A group can contain outstanding individual performers and still fail to operate as a coherent unit. Talent creates potential; shared purpose, role clarity, trust, standards and coordinated execution convert that potential into performance.
The same principle applies at executive level, with an additional complication: senior leaders have learned to succeed through autonomy, expertise and control. The behaviours that earned them a place on the executive team can become limitations if they remain territorial, withhold challenge or optimise their own area at the expense of the enterprise.
An effective executive team does not diminish functional accountability. It adds a second, equally important identity: enterprise leader.
Five conditions that enable collective performance
1. A clear team mandate
The team should agree on the work it uniquely owns. This disciplines the agenda and prevents the meeting from becoming a sequence of functional presentations.
A useful test is simple: if an issue could be resolved entirely within one executive's authority, does it require executive-team time? The room should be reserved for decisions, risks and opportunities that genuinely require collective attention.
2. Enterprise priorities above functional advocacy
Executives should bring their domain expertise into the room, but they should not remain advocates only for that domain. Collective accountability means being willing to support a decision that is right for the enterprise even when it creates difficulty for one's own function.
This requires clear shared outcomes. Without them, functional measures will dominate behaviour.
3. Candour with psychological safety
High-performing teams need challenge. They also need an environment in which concerns, errors and dissenting evidence can be raised without interpersonal punishment.
Amy Edmondson's foundational research defines psychological safety as a shared belief that a team is safe for interpersonal risk-taking and links it to learning behaviour.[3] It is frequently misunderstood as comfort or agreement. In an executive team, its value is almost the opposite: it makes difficult truth discussable.
Candour without respect becomes aggression. Collegiality without candour becomes avoidance. The leadership task is to create both safety and standards.
4. Explicit decision disciplines
Teams lose momentum when it is unclear whether they are discussing, recommending or deciding. They also lose trust when decisions are made outside the room or reopened through private lobbying.
For consequential issues, clarify:
- who owns the decision;
- whose perspectives are required;
- what criteria will be used;
- when the decision will be made; and
- how commitment will be maintained afterwards.
Agreement is useful. Commitment is essential. The team must be able to debate honestly and then move together.
5. An operating rhythm that matches the work
An executive team's calendar communicates its priorities. If meetings are consumed by retrospective reporting, the team has little capacity for strategic work, talent, future risk or organisational learning.
The rhythm should distinguish among operating reviews, strategic choices, people and succession discussions, and team-effectiveness reflection. It should also create follow-through: decisions recorded, actions owned and unresolved tensions returned to the room rather than allowed to migrate into the organisation.
The CEO shapes the conditions
Every member influences team effectiveness, but the CEO's behaviour carries disproportionate weight.
The CEO determines whether the team is a source of collective leadership or a group of direct reports. This happens through everyday choices:
- whether challenge is welcomed or punished;
- whether some voices consistently carry more weight;
- whether issues are decided transparently;
- whether functional optimisation is tolerated; and
- whether the CEO solves every problem or expects the team to work through interdependence.
The strongest CEOs know when to be decisive and when to create the space for the team to think. They do not confuse control with leadership, or participation with abdication.
Teams need to work on the team
Executive teams often invest considerable time reviewing the organisation and almost none reviewing their own effectiveness. Yet the team's behaviour is reproduced throughout the business. Fragmentation at the top becomes friction below. Avoidance at the top becomes silence below. Enterprise collaboration at the top makes cross-functional work more credible everywhere else.
A disciplined quarterly conversation can examine:
- Are we focused on the work only this team can do?
- Where are functional interests overriding enterprise priorities?
- Which issue are we avoiding?
- Are our decisions clear and followed through?
- What behaviour from us is creating unnecessary friction below?
This is not team development as an isolated activity. It is work on the organisation's highest-leverage leadership system.
Moving together
An executive team does not need uniform thinking. It needs shared direction and the capacity to use difference productively.
The objective is not harmony at all costs. It is a team able to challenge assumptions, make difficult trade-offs, commit to decisions and coordinate action across the enterprise.
When executives move together, the organisation experiences greater clarity. Priorities stop competing. Decisions travel faster. Collaboration becomes more than a value statement. Leadership becomes collective.
That is when a group of accomplished executives becomes an enterprise team.
Questions for an executive team
- What is the work that only this team can do?
- Which enterprise outcome do we own collectively?
- What important issue are we not discussing candidly?
- Where are functional measures driving enterprise fragmentation?
- Which aspect of our operating rhythm no longer serves us?
Sources and further reading
- McKinsey & Company (2025), Demystifying top-team performance: What every CEO needs to know. https://www.mckinsey.com/capabilities/strategy-and-corporate-finance/our-insights/demystifying-top-team-performance-what-every-ceo-needs-to-know
- Hagemann, B., & Conlin, J. (2024), “What the Best Leadership Teams Do Right,” Harvard Business Review. https://hbr.org/2024/10/what-the-best-leadership-teams-do-right
- Edmondson, A. C. (1999), “Psychological Safety and Learning Behavior in Work Teams,” Administrative Science Quarterly, 44(2), 350–383. https://doi.org/10.2307/2666999
- Frazier, M. L., et al. (2017), “Psychological safety: A meta-analytic review and extension,” Personnel Psychology, 70(1), 113–165. https://doi.org/10.1111/peps.12183
- McKinsey & Company (2024), Go, teams: When teams get healthier, the whole organization benefits. https://www.mckinsey.com/capabilities/people-and-organizational-performance/our-insights/go-teams-when-teams-get-healthier-the-whole-organization-benefits