What Is the Role of the Executive Leadership Team?

What the ELT Does

The ELT sets the strategic direction for the company. The core responsibilities:

• Strategic planning and vision setting
• Organizational culture and values
• Financial oversight and resource allocation
• Risk management and compliance
• Performance management and accountability

While each member is responsible for a functional area of the business, your role at the ELT table is bigger than your department. It is to provide counsel, solve the company’s problems, and see around corners for unintended consequences at departmental intersections.

ELT decisions are often challenging and uncertain. You have limited information and the decisions must be made quickly. They are best vetted through a structured decision-making process that injects logic and works to remove emotion and recency bias. You also need alignment on authority and responsibility between departmental issues and global ELT issues so the organization can move fast. The trick is to be responsive without being reactive: agile enough to chart new paths, disciplined enough to keep pursuing the company’s objectives.

How to Ace Executive Leadership: The 5 A’s

From a practical perspective, the job of the ELT is to drive five A’s for the company:

1. Alignment with the strategic direction.
2. Action. Drive bold and decisive action in your functional area. Your team is clear on the objectives and has the Tools, Time, Training, Talent and Tenacity to achieve them.
3. Accountability. Cultivate an accountable, performance-driven culture where your team executes and achieves the company’s goals through metrics and KPIs.
4. Assess. Ruthlessly assess individual, departmental, and executive performance. Determine what is working, what isn’t, and most importantly, why.
5. Adjust. Adjust the strategic plan and human resources, re-create alignment, communicate, and then go again.

Threat #1: Communication Breaks Down

Communication is the most critical threat to growing companies. As an organization grows, its communication structures don’t mature with it. Tribal knowledge lives inside legacy employees. It gets diluted with each new hire, then lost when key players leave. Employees remember when you used to stand up and yell across the small one-room office, “Payment went through. Ship the package.” That doesn’t work anymore. Unfortunately, the whisper-down-the-lane behavior hasn’t changed.

Consider: by the time you have 50 people in the organization, there are 1,225 lines of communication. Do you see why upgrading your communication mechanisms and clarifying goals and objectives are so important?

Here is how to upgrade the structure:

Written strategic plan. Clear goal, objectives, projects and tasks. Presented and accessible to everyone in the organization.

Monthly company all-hands. Recorded and made available. Start with data, look for insights. Continual alignment. Each functional executive presents for ownership.

Weekly 90-minute ELT meeting. Manage by exception, guided by the data. Review progress on the objectives. Solve problems.

Weekly 30-45 minute departmental meeting. Review objectives. Remove barriers.

Bi-weekly 15-30 minute 1:1. It’s your direct report’s meeting. Require them to bring an agenda. Focus on removing barriers.

And a discipline that underpins all of it: documentation. Documentation scales. Growth only happens when you can replace yourself.

Threat #2: Lack of Discipline

A strategic plan should be well thought out. ELTs must dedicate time to develop, vet, and align on a plan and objectives. Without a well-thought-out plan, there can be no conviction. Undisciplined changes happen because there is no conviction in the plan, and new ideas quickly displace the objectives. This herky-jerky environment kills clarity and alignment, because decisions get made in a vacuum and produce unforeseen issues at the intersections of the business.

That unpredictability causes leadership quicksand:

Lack of consistency leads to confusion, which leads to frustration, which leads to awful relationships, which leads to a lack of trust, which leads to a total lack of performance.

Great leadership starts with you showing up consistently, having a plan, and staying focused to execute.

Threat #3: You Stop Celebrating Your People

This failure comes in two flavors: you stop celebrating because you’re growing, or you never upgrade your recognition. It matters most at Stage 3, when employees start separating career success from company success. Recognition is a tool to bolster culture and celebrate the behaviors you want to see in a performance-driven company. No participation trophies or fake awards. Look for ways to honor the legacy of the company.

Threat #4: The Culture Dilutes

Without careful consideration, each new employee can dilute the culture. The faster you grow and add employees, the faster the dilution happens. Soulless organizations happen surprisingly quickly.

Find ways to embrace and indoctrinate new employees into the vision, values, and standards that create your culture. Don’t leave it to chance. Without clearly architecting the culture, the space between leaders and contributors changes and culture takes on a life of its own.

As companies grow, employees wane for “the old days.” Be careful how you navigate this. Honor your past while embracing new growth challenges. You’re not going back to the old days. Those words signal one of two things: the employee is not adapting to the new realities of the business, or the culture has diluted and the standards are not being upheld. Pay attention to both cases.

As an ELT, you have to decide whether you will define culture or let it happen. In my experience, culture is generally “in place” by about 20 employees. By then, cultural norms take hold and are difficult to change. Change management simply gets harder. Pressing projects can relegate culture to a second seat. Be careful here; companies can become soulless at this stage, and by definition, less compelling.

Building the Leadership Team

Leadership transitions are hard, especially in growing companies. People get promoted before they’re ready. The great “doing leaders” aren’t necessarily the “coaching leaders” the business now requires. Intellectual horsepower matters more as strategy supplants the daily tactical grind. You can no longer impose your will on the company. Leaders move from tactical task lists to managing objectives and projects. Some won’t make the transition.

It’s a classic “what got you here won’t get you there.” Leaders go from knowing everything to not knowing everything. Personal ego, imposter syndrome, and trust issues hinder the transition. The hallmarks of the shift:

• Knowing everything → functional departmental leadership and trusting other leaders
• Doing → coaching and leading through people
• Accidental communication in the hallway → formalized communication structures
• Verbal communication → documentation culture
• Swoop in and fix → communicate, coach and build accountability

Previously, the company’s limited resources meant hiring whom it could afford. The primary reason companies get stuck, and founders stay stressed, is an inadequate leadership team at every level.

Build talent density. It is required to accelerate the business forward. Open up the company’s wallet to build a great team. High-performance talent will demand it. Don’t be stupid, but don’t be cheap.

And ask the hard question: is your company worth joining? As a company, you borrow employees’ time and talent. The greatest gift you can give “10s” is other “10s” to work with. If you want to be a company worth joining, pay attention to the company’s point of view (vision, values, objectives), your leadership style, the leadership team, your compensation philosophy, and culture (not perks, culture). Then answer honestly: “If I was this talented, would I join my company?”

Instill a GSD, FSO Mentality

Problem identifiers suck the life out of companies, and leaders. There’s nothing more annoying than someone sitting and pointing at all the wrong things in the company. Hire for and cultivate a “GSD, FSO” mentality: Get Stuff Done, Figure Stuff Out. Demand that your people move from problem identifiers to problem solvers.

Provide clear direction through the objectives and metrics, along with the agency and autonomy to make decisions. The person closest to the problem typically has the best ideas. Demand solutions to the issues identified. This is the Tenacity piece of the 5Ts of Execution.

Debate Inside, Align Outside

Conflict is necessary in leadership, and the most effective teams run it through a standard we call Positive Constructive Conflict: unflinching hard conversations in the room, powered by trust, mission alignment, and a fierce desire to win. Then, when the team decides, you align. Inside the room, debate. Outside the room, align. Anything other than alignment outside of the ELT is grounds for termination. The full standard has its own page; it is load-bearing for everything else in this guide.

Watch the Intersections

Businesses and traffic both have issues at intersections. On the road, the intersection is where the serious accidents happen, and the number one cause is not giving the right of way. The same is true in business.

As ELTs, we prioritize how we allocate resources and who has the authority and responsibility to make decisions. We determine the right of way in business to avoid accidents. The ELT must align first, then communicate across the organization to eliminate blind spots and determine when to yield to a teammate.

One more thing. In every business there are mavericks willing to push the line, the red light runners. Know who they are; celebrate them, and keep an eye on them.

Are You a Leader Worth Following?

A majority (59%) agree with the statement, “I don’t see any leaders at my company today that I aspire to be.” (US News and Harris Poll)

Extreme ownership is a core tenet of great leaders. When I hear statements like “My people won’t listen…” or “Just trust me…”, I usually find weak leaders. It’s not them. It is you.

Who Sits on the ELT?

As your company scales, the demands change, and the composition of your team changes too. Be prepared for hard conversations where previous members of the ELT no longer serve the same role in the company.

The functional head of each department should have a seat at the table. Normally: Marketing, Sales, Operations, Finance, IT, HR, COO and CEO.