54. Change Only Sticks If It Starts At The Top: Resetting Your Executive Team
49m 56s
The podcast discusses how executive leadership teams (ELTs) can be redesigned to thrive amid change, introducing the "ELT Reset" concept. The hosts, Rodney and Sam, share personal leadership origin stories, linking them to the need for adaptable, collective leadership. They argue that ELTs often fail because members act as representatives of their own functions, negotiating for resources rather than steering the organization as a unified "first team." Key problems identified include poor prioritization—often done too infrequently to handle dynamic opportunities—excessive time spent on board preparation and follow-up, and unclear roles and decision rights, which lead to slow decisions and finger-pointing. The solution involves explicit conversations about a team charter, defining what the ELT is accountable for, and adopting a "two hats" approach: members switch between their functional expert role and their broader ELT role, allowing them to contribute opinions on any part of the business. This clarity reduces latent tension and encourages smarter, collective problem-solving. Additional red flags include centralized authority (where only the CEO or CFO makes decisions) and reliance on a "backstop" person who handles operational chaos, which masks the need for better systems and routines. The hosts emphasize that without buy-in from the top, change initiatives won't stick, making ELT resets the most potent starting point for organizational transformation.
It's like half the time. They're either like prepping for the board meeting, doing the board meeting, or doing the follow up from the board meeting. And I'm like, is the board doing something helpful for you guys that you're spending this much time on the board? I hope so. Hey everybody, this is Outwork with the Ready, a podcast about work design and how organizations can be built to benefit from change. I'm Rodney Evans and I'm here with my buddy, my co-steward, my very good friend, Sam Rothkoff. Companies are facing more change than they were built for, and the problem is organizations are still running on management ideas from a completely different era. Rodney and I work with leaders and teams who are redesigning how work actually gets done, so change becomes fuel in the tank instead of sand in the gears. So today, rather than going back to the old pattern format, Sam and I are gonna continue to explore real moves, like what it really means to be built to benefit from change. And the thing we're gonna talk about today is an idea that Sam came up with actually before even joining the ready that really was like how we talk about the work that we do with the leadership team and how we get really clear on it. And so we call it the ELT reset. That stands for executive leadership team, but before we get into that, we are gonna do a checking round 'cause we always do. Sam, do you have a question for us today? What was the first time you remember where you felt like you were leading something? Like you cognitively thought in your little baby brain, maybe you were older than that, but like I'm in charge now. The first time I really felt like I was leading something, I was a counselor at a day camp for several summers when I was really young, like one summer before I could even drive and then two summers before I went to college. And so there was really no structure at all. They just gave me a group of like 12, six year olds. I was 15 years old. They gave me a group of 12, six year olds. It started at like 7.45 in the morning and I just had them until like 3.30 in the afternoon to amuse. And there was some programming, like there was arts and crafts time, but there were a lot of hours where it was just like me and this kids. I definitely had the feeling the first week of that camp when they sort of all gathered around and kind of just like all looked up at me like, now what? I was like, uh oh. Your favorites are gone and I am fully in charge of you. Is this a great idea? But then it also I think was such a ultimately really formative experience for me because I ended up really investing a lot in sort of like the ways of working of that job to make it fun for me and fun for those kids and realizing that like if I didn't make it awesome, no one else was gonna make it awesome. And yeah, it was a real moment of like sort of looking over my shoulder and being like, oh, I'm the adult. Oh, okay. Got it. Let's figure this out. Yeah. What about you? Kind of a similar one. I think it's interesting because I was trying to think of examples from even earlier on then kind of late teens, but I actually don't know if I ever felt in charge before I was 17 years old of anything and even then it was kind of a lie. Or is anyone ever really in charge of anything? But I think the first time I remember feeling like, oh, I'm the captain now is when I was the captain of my field hockey team in high school. Right. And Sam's a drunk, you guys. Sam's a chock. No big deal. And I think what with a reason I felt like a leader in that is that I was elected to it by the team and that felt like a big deal. So it was I was kind of like these people have chosen me to shepherd them through to get to safe finals and win obviously. Obviously. But I think what was so funny is that I feel like my leadership style then I was definitely more bad cop than good cop. And I was the kind of player that was ejected from a lot of games and played a little dirty and had very high expectations of folks. And I wasn't very coddling. And maybe some people have worked with me feel like that's right on. But I feel like others would think that's pretty wild. So but yeah, the first leadership traits that came out for me were definitely more on the lead by example spectrum. Someday we should do an episode of this show about the good cop bad cop stuff that you and I have been talking about because I think it's so interesting. And I think it's particularly interesting for people with very adaptable skill sets, how we can like have been flow in and out of that. And that does sort of relate to what we're going to be talking about today, which is how a leadership team kind of like sets itself up to be built to benefit from change so that the organization can also be windmill like. So the first question I want to ask you is, why is it a reset and why is it important? Yeah, I mean, I think one of the big haas as I was doing the research to kind of get to our positioning and product portfolio was looking at where we've had the biggest impact in organizations. We've worked in so many different parts of an organization. Sometimes we'll start at the ELT. Sometimes we'll start in HR. Sometimes we start with product. But the places where it's actually been able to stick and make the biggest impact in change has been when there is some kind of an engagement with the ELT. And there is just this epiphany. And maybe in hindsight, it's 2020, but it's epiphany that if you don't have buy-in from the executive group and the steering body of the organization to work differently, it's not going to stick. The grassroots concepts. And you and Sam talked about this a bit in the ways of working, consulting episode. But if you don't have the top dogs on board, it's just almost impossible to make change last and stick. So that was why we decided to kind of codify it as a concept and try to start there with as many people as we can because we know that it's the most potent place to start and the place where the longevity of the change is possible. So that's the kind of need. But I also think the concept of first team and bringing groups of leaders together that each are in charge of a different line of business, but looking at each other as an actual team and not just as a representative of their own faction has been something in this, I guess, for a very long time. But it's just more important than ever. And I think there are also so many critical transition points right now as the ELT gets turned over faster. I think that it ever has before, where there are moments to have a real reset as a group, and that that is going to really pay dividends to being able to execute on your strategy and move quickly and benefit from the change all around us. Yes. My mind was also going to the first team place. And I think to relate it very specifically to being built to benefit most executive leadership teams. And there are a lot of people who listen to this podcast that aren't on one and have never been on one. So maybe you guys don't totally know this. I didn't know all of this until I was on one. This idea of really being the person who represents your function takes care of the agenda of your function. So in a lot of executive teams, I am showing up there to negotiate for my organization so that I can win. And so the ELT, in that case, has a posture kind of of coordination, sort of balancing the scales between the folks. And it's like, OK, we have to have a riff. So it's two from HR and it's 100 from product, and it's 500 from growth. And this is how it's going to go. It can be very like how we slice up the pie is the ELT's job. That is not a great way of working in times of rapid change. So what we want the ELT to be able to do is as a group steer the whole organization. And I've stewarded a few of these ELT resets. I still have a couple of them going on right now. And one of the things that I always say is in terms of this first team posture, like when you're in this room, you have two roles. You have your functional hat and you have your ELT hat. And actually, I mostly invite you to play from your ELT role. And what that means, one is we play as a collective and we do what's right for the business, not for our function. That's sort of like duh. But the more important one actually is, I expect you to have an opinion on this business, regardless of your function. So a lot of times in the ELT, like the chief legal officer will be like, will they set the strategy? And then I make sure that the transactions happen correctly or the acquisition goes through or the diligence is right or the risk points are close. And I'm like, you know as much about this business as anybody else in this room, you should have an ELT hat where you are opinionated about the strategy of this company. And that's really important both from the perspective of skin in the game, but also because with the rapidity and the frank difficulty of the world moving, we just need a bunch of smart people investigating these problems together. Like we just sort of can't be like, it's just the product person and the CEO and the revenue person and they talk about it and beat it up. Like that's actually kind of insufficient now. You kind of need all of the heads around the table.
in my opinion to be able to make and then iterate great strategy and execution. So is that like when you're getting into it starting with an ELT, is that an explicit conversation that you have is like there are two hats and I'm going to ask you sometimes to be putting one on and sometimes the other? Yes and a lot of times where it shows up is a lot of ELTs don't have a charter and it sounds so simple but the conversation of that group saying what is this team accountable for and what are the decisions that this team makes as a team is usually skipped and so if an ELT charter has some accountabilities in it that's really like the first team role that says like these are the things that this team delivers and we are all responsible for these things. So it is a very explicit conversation and frankly with most ELTs that I have been around I haven't found it to be particularly difficult it's just a little bit of a mindset shift. Yeah because most people who get there right are smart and experienced and capable of systems thinking and thinking beyond their direct skill set. Yes I don't really have any dumb clients. No I don't have any dumb clients definitely at that level they're all really really smart and I also think and you've said this to me in various ways if they've invited me to be in the room they are already a little bit primed to be thinking with the first team concept they just haven't figured out how to operationalize it yet. So if I'm there having this conversation to begin with they're probably not going to fight me on this idea because I wouldn't be there if they were that kind of ELT. Right and what are the main issues that you're seeing when you first get into an ELT like what are the sort of couple of things that are happening every time that need to get rectified or that are common I guess in a dysfunctional ELT. There are three things I always see. One is a failure to prioritize. Every ELT that I work with knows that they should be prioritizing. I have not met an ELT yet that goes like no no no we're trying to bite off just the right amount of work. They're very aware that the organization is overloaded and that the cognitive cost of switching is very high and that it's getting in the way of fast execution and loops but they don't have good ways to prioritize and if they do have a reasonable prioritization process it's usually too infrequent to be helpful. So it's like yeah yeah yeah we prioritize in January and then in between like three strategic partnerships, two acquisition possibilities and an IPO came across the desk as possibilities and it's like okay well you're not just going to say like well we're going to wait till July to talk about those things so where do they go in the stack? That's number one. Number two is I don't know if they would all complain about this but I think it's bad so I'm going to say it out loud. Way too much time spent around the board. Way too much like stop drop and roll when it's board time and like board meetings happen a lot and so it's like I feel like the ELT's I work with like it's like half the time they're either like prepping for the board meeting doing the board meeting or doing the follow-up from the board meeting and I'm like is the board doing something helpful for you guys that you're spending this much time on the board? I hope so. I hope so and like I'm not saying boards aren't important or they're not a good accountability mechanism but it always feels a little like chaotic and a little heavy the prep and then I think the first one is. So we're doing this for the first time ever we've never done this and it's like this happens literally every quarter how are we not anyway I'm with you. Yeah I'll be really curious to hear because you've been part of that process more than I have and then the third one which we've talked about a million times but I do think that role clarity and attendant decision rights is really important. I think especially there are some like triads within most executive teams where it's very unclear so it's like I see a lot of merceness between sales and marketing, see a lot of merceness between like product and growth in terms of like who's deciding the road map and who's deciding what we build. Stuff like that where it's like it's not just about what the job is it's about who makes the final call on stuff and then a lot of it just like it ends up being the CEO making the final call and they don't really want to and they probably shouldn't but it's just unclear so everything sort of like gets popped up. I think those are the three like and the symptom of that is decisions take too long and it takes too much like negotiation and talking to make one. Do those sound familiar to you as someone who's sat on these teams? Yeah absolutely especially the what is this team's charter what are we doing together versus what are we doing within our own spheres of influence and and the role clarity because I think without role clarity there's just so much room for finger pointing and stepping on toes and people trying to take credit. It's just open such a can of worms and I mean in order to have not clear roles which I think is possible I feel like you have to have so much trust and be working as such a first team if you're not going to have super super defined roles and what's nice I think about your point on like we need to make sure the two hats are visible is that what you're saying when you say sometimes we need to have the ELT hat on is sometimes you are allowed to have commentary on other people's spheres of influence 100% and we're actively asking you in this moment and then sometimes we're not like sometimes I'm calling upon you as an expert in finance sometimes I'm calling upon you as an expert in engineering and sometimes I actually do want you to be thinking more broadly because I think being really explicit about when those hats are on or off also lets people's guards down in different ways because having been someone you know in the marketing role at that ELT level a lot of times I'd say they're thinking like look Charles you've never like written a piece of copy in your life or like you have no idea what I'm talking about right why are you why are you telling me that this should cost one sixteenth of what it actually costs right and sometimes I wish that it wouldn't just be crickets all the time when I had a really gnarly thing I was trying to get after yes but no one was making it explicit what hat are you wearing today and what do I need from you in this moment so I think even something as simple as let's talk about what hat we're wearing every time we're in a meeting together or like if we want to change hats even in the meeting yes get rid of a lot of the tension that's just like latent in these teams I literally once did an exercise with an HR leadership team some of their are probably listening to this where I did like a hats exercise there were actually more than the two and one was like expert and one was like feedback giver and one was like advocate because because it it does all sort of get munched together and then it creates these dynamics where you sort of fluctuate between like just trust me bro and could somebody like give me some help and advice here I'm struggling and it's like in a small team with high trust it goes better but still I think then the lack of clarity and sort of like running on vibes still creates more overhead and more sludge than if you just say like you don't need to worry about marketing spend within my budget like within my budget that you give me I am not interested in feedback so we will not be oh not be taking questions at this time you know like I think that actually is like quite freeing because otherwise it can feel like okay well if I'm the CFO like maybe I feel like well I should be looking at what various marketing metrics are costing and what like the cat is and like you know what I mean and it's and that's fair but it but if we make it super clear that like we do resource allocation we do it once a quarter within that resource allocation we leave Sam alone then everybody can relax everybody can ask so I think those are the three that mainly come up to me I'm curious if there are any other symptoms you've seen that you want to talk about the other one that you didn't mention that feels really clear to me is when there's really only one person who actually has authority to make decisions and every decision actually has to go up through I've only really seen it be either the CEO or the CFO yeah sometimes sometimes the CEO is not in charge but I think that when it's clear that there's a jockeying happening all the time because there's only the only person who actually has authority is one person yeah it just leads to tons of dysfunction and leads to this other symptom which I think is who's talked to that person last and you're always last in a room such a thing you're always trying to be the person who's talked to that person last it leads to a lot of strife you know and the worst yeah that's a really good one I think that leads me to a couple of others like that are very related which is just anytime in in an executive team anytime there's too much focus on one individual or the individual
individual as the problem or as the solution, my like antenna goes up. So what I mean by that is like, I definitely have worked with executive teams where there's like one sort of backstop on the team. That's the maker sure that everything happens. And it's kind of like, uh, it's kind of like an octopus and it's kind of like in everybody's stuff just enough to coordinate and like save the CEO from pain and frustration and tension and a lot of things go through that person. That person is often not the CEO. It's often someone like a COO or a chief staff or a CFO. Um, it is often a woman. It is the person who mobs up behind the chaos. And I think that a lot of times what will happen is that person is very effective in being the sort of operating layer that's missing. And so then people go, well, let's resource that person. Let's get her a helper. Let's just get more hers. And it's like, no, no, no, she shouldn't exist. That's not a job. You guys need routines so that that person doesn't have to do that all day. And she can go do like important stuff. So like that is one symptom. Like if you have like a backstop in your executive team, we're like, they're making sure that the team is functioning instead of doing their functional role or they're making sure the team is functioning by triaging all of the things rather than building systems. That's a problem that I do not love. And then very relatedly, anytime I'm talking to an ELT member who's basically just like, Oh, yeah, like our people suck. The people on the team just like are not good. And we just need to replace them all. I'm like, it might help. But what you're telling me is you just need heroes that can overcome a broken system. And you don't have enough heroes on this team to rise above the dysfunction that they are swimming in. And I mean, that's a way to do it. It's just a really expensive way to do it. And it's a fragile way to do it because heroes get tired of operating a broken system. So they leave. Yeah. So that that kind of brings us to a little bit of like, what are the elements of an ELT reset and the things that kind of need to be put in place first and what it actually even looks like to you talked about charting a little bit already. But what are the most important things for a leadership team to like have in place in order to be more successful? This is one of those things where if you had asked me this a year ago, I would have very confidently been like, it's always these. And my opinion has changed a little bit. And the reason is like, I think it depends on whether you have a professional CEO in the room. I think it's different if you are in a founder led company. In a founder led company, I think the ELT reset often looks more like parsing out what all the jobs the founder is doing actually are understanding what authority they hold and reallocating it among the team in very clear ways. And then honestly, a lot of like very foundational work for everybody to understand the business. Because what I find with founders is like, they just understand like, Oh, this is a death. And I know what kinds of screws are in there. And I know how many drawers it has. And I know where you order the handles from. And it takes time to get a leadership team to like sort of shift from like everything being held within this one source to like, we all understand the metrics of the drive this business and the levers we have to pull and the work to be done. And so like, that looks very different to me than the ELT reasons I've done with a professional CEO. And with the founder led thing, I think it starts really with strategy that's written down that's not like shooting from the hip. I got an idea this morning. This is our strategy now. I think it really starts there. And with the professional CEOs, I think it can still really start with a clarified strategy. But I feel like a lot of them have one of those and with them a lot of times it's chartering. It's like, let's get clear. The three ingredients that I think are always necessary in an ELT reset are a strategy rhythm quarterly strategy stack, an operating rhythm. I want to talk more about operative for an ELT because it looks different. And chartering. I think that now my preference is to start with the strategy work because AI is so good at taking the content of strategy and recommending what operating rhythm you need and recommending a first draft of a charter based on what you're trying to do that now I really like to start there. I used to not necessarily because if a team was like, really mega dysfunctional, they often weren't capable of creating strategy, but also now you can bring a strong man of strategy. It's just like, it's easier. So those are my big three. And generally I want to start with strategy, but it feels different when it's founder versus pro CEO. Yeah, that checks out. And also just it feels like, and I know we've talked about, we've talked about strategy a lot, but strategy is such a season in organizations. And it's oftentimes like a four month season. I've been in companies where it takes four, sometimes up to six months to land the strategic plan for the year. No. And then, you know, one quarter into that, like half your O.K.Rs are already read. And it's just demoralizing and debilitating. No one's ever even looking at it. And you've like, cascade of the O.K.R system down. And it almost becomes this exercise where you're in O.K.R season for the whole year. So I think that like reframing what we mean by strategy, it almost makes it feel like sometimes we need a different word for what we're talking about, because it's so different actually from the strategy of old. Yeah. It's at a much higher interval and like far more tactical in a lot of ways and and real and connects to people's jobs and actually their day to day. And is put into a rhythm, which strategy never is the strategy rhythm at an organization is normally like, yeah, a season and then put on the shelf until you have to talk to the board about how you're doing against the strategy. So I just get a really different. Yeah. It's like, wow, that was a lofty idea. Interesting. So I do think that that all makes sense. And I really like the idea of doing strategy first because it is easier to get to the kinds of strategy that we're talking about now than it used to be. And it really should set depending on the strategy, probably do need a different operative. Right. So do you have to us a little bit about ELT operative and what you've seen work in the last year or so? Yeah. I mean, to that point very specifically, I think that it depends a lot on what the focus of the business is at that time functionally. You know, businesses go through seasons where it's like all eyes on product, all eyes on go to market on workforce or talent because like whatever the crisis, Dejora is now it's, you know, it's kindergarten soccer everywhere. We're like, okay, we got to do AI stuff, you know, and that's not wrong. Like I actually think that it is adaptive to not say every function is equal in every strategy in every season because it shouldn't be because it should be in response to what's going on both externally and internally. So like, I have a client right now that's very focused on basically rebuilding their go to market organization, not like from the ground up, but like not not from the ground up. And so there are beats in their ELT operative that are just go to market focused that are for the chief revenue officer, the CEO and the CFO only. And they're meant to dig a lot further into the numbers and into the pipeline and into the metrics of go to market, then the overall weekly executive team meeting. There's a very smart team. They're going to sort this out. I would imagine six months from now, all eyes will not be on go to market. It will probably be like on product instead. But right now the strategy is very heavily weighted to the rebuilding of the go to market engine. And so the opera them reflects that. And it's an intentional choice because I think the easy answer or the instinct can be, well, if go to market is so important, why not have the whole executive team look at it? And the way I look at that is like every member of the executive team does not need to be waste deep in the details of the pipeline. And so it's like, let's not make everybody sit through that executive team time. It's very precious. Let's like keep them at a different slightly different altitude. And then let's like carve out this space specifically. So that's one example of like how it shifts and changes. Whereas I've had ELTs that like, for example, there was a subset that had a roadmap meeting because prioritization of the product roadmap was creating a ton of ton of tension. And that was much more like CEO, CRO, Chief Product Officer, Chief Technology Officer really looking kind of like month on month in a deep dive at what the market was doing and how they should reprioritize.
and digitalized engineering resources and sequencing of build against it. So that's what I mean when I say it shifts and the thing to keep in mind that I don't think people think about enough is like maybe you need a roadmap meeting where you're re-prioritizing things once a month because you're in a period of volatility and your product is falling short of your competitors. But once you are sort of back on top, don't just keep doing that. Like once you're out of the woods on sales forecast, don't keep having that pipeline meeting. Like the strategy should shift and then the operative should shift so that the attention is on execution. That's interesting because it leads me to another question, which is because I think this is a huge source of attention across executive groups is like who should be in the ELT and what and it's part of the chartering I guess is like what is the purpose and who needs to be here for that purpose. But I know you've seen a ton of different configurations, you've worked with companies that are 50 people to 500,000. 300,000. Yeah. What do you think the configuration of that group should look like? I'm equally curious for your answer to this because I don't think I have the right answer. But I have a hypothesis based on what I've seen, which is that most ELTs are two teams smushed together. I think there's one team that's like the market facing team. And there's one team that's like the internal facing team. And there are lots of ways that people talk about this in publicly held companies. But it's like, I think product tech growth tends to sort of be like one triangle and like legal HR finance sort of tends to be another triangle. And within those triangles, there's a lot more decisions to be made than across them. But mostly ELTs have all of those people in them. Like I would love to see an ELT operam where even if that is technically the composition of the team, the meeting rhythm breaks those out really consistently. Because it's like the legal person probably doesn't need to be in the roadmap meeting. And like the product person probably doesn't need to be in the like due diligence meeting about the acquisition. Like maybe at various points, but probably not in everyone. And I think as a result, like these teams are too big and they're too slow because they're trying to cover too much surface area with too many people. Yeah. I think that's my take. But like that's not really, that's a real hand wave at an answer. What do you think? I mean, I think that you're spot on in the sense that there's definitely different executives who are more naturally grouped together and their things because their things are more connected. And internal versus external is like an easy way to do that. Even though of course there's connectivity across those things. And I think that there are reasons to get that whole group together sometimes. In fact, I feel like sometimes when you're leaving like a people leader or an ops leader out of a product development strategy discussion, you are only going to be thinking of possible strategies to solve your problems that are within your sphere of influence. Of course. And oftentimes there are other kinds of solves that you're not thinking about. Yes. So I think that when it comes to the development of like high level business strategy and sort of getting to what are our bets or whatever the heck you call them. Having representation from the different parts of the organization can push you into places that you never thought about because oh yeah, maybe if we actually did do an employee hackathon that got all of our rising stars together to talk about that thing, that would kill three birds with one stone because you're like hitting so many different. And that's like something that you know ahead of marketing might never think about because they're not in charge of culture or you know, like rising stars in the organization. That's just like one small example, but there are places where it's really interesting to have people wearing that functional hat within a larger strategy discussion. But once you know what you've got to do, I feel like it's much less useful to have everybody together to talk about it. Maybe this sort of like design principle that we're circling around is like going back to the first team conversation of like that ELT hat and divergent thinking and multiple perspectives to make creative decisions is like whole group for quarterly strategy rhythm. Mm hmm. Maybe whole group for like the weekly shorter action meeting because I do think you want the whole group looking at the metrics of the business together. And like there's no reason to do that in multiple places. Like whatever your high level sort of state of the business dashboard is, I think you want all of those people once a week going like, yo, what happened to like margin this week? You know, and sort of having that. And then probably like, you know, the usual action meeting like what are like the couple of big things that we want to keep an eye on a little reminder of what our quarterly strategy is and some triage. And then maybe the rest of it, whatever the rest of it is, are really more execution oriented meetings that depend on what you're trying to do that quarter. And that assume different configurations of the group and not total participation across. Yeah. Yeah. That makes a lot of sense to me. You know, I've talked to a lot of clients about their employee engagement scores and that like trust in leadership is down, especially in the e-later, like they don't understand the decision making process or like those that's where all of the decisions get made or there's like, there's two sides of it. Even if the ELT is together too much of the time and running too much of the business or the ELT obviously haste each other and it's just like a thief to mount there and they only care about their group and like never. It's so hard to get something in the center. Do you have any thoughts or builds on like, you know, because people immediately are like, well, it's a comms problem or we're not, you know, we're not talking about it in the right way or. Yeah. We have this one person who's the issue but I do see that as like when it comes to the broader system as the two very, you know, very different complaints that they'll have about the group. Yeah. The polarity is like two connected to insular, too much concentrated authority or two independent, dysfunctional, don't like each other, fiefdoms. Mm-hmm. I have ideas about how to do it right. I've seen it done really well but I think in businesses in America in particular, like we are a very individualistic society and like we like celebrities and we like heroes and we like, you know, one throat to choke, one chest to poke, one neck to hug, whatever your favorite it thing is. And, you know, we love individual rewards. Like we're a very, you know, capitalism is like a, it's a solo, it is not a team sport, it is a solo game. And as a result of that, I think when you're working in an organization and this was certain they true for me when I worked four big companies, not as a consultant, I felt like real allegiance to my executive. And I was not aware of who was on the executive team. I did not care who was on the executive team. I was like, this is my person and this is who decides my bonus and decides my fate and who I want to like get face time with and impress and whatever. And so I only say that because I think it's very difficult for most of the workforce to orient to a leadership team as a group. I think we have a real natural tendency in organizations and in this country to be like, who is the person and especially with leadership teams to be like, well, the CFO is great, but the CEO is a moron and the chief revenue officer is the one who's really calling the shots and the HR persons NPC and like, everybody loves Game of Thrones, you know, and we love to apply it to leadership teams. And so I don't totally know what the right answer is in terms of how to shift the feedback loop from executive leader through organization to workforce to executive team. But I think that's the shift that we would like to see. Yeah, absolutely. I mean, I remember in my first, the first time I got onto an ELT, I was so jazzed about it and I happened to be actually 20 years younger than anybody else on the team. And I had gotten to that place in the exact and the very capitalistic way that you're talking about by like tooth and nail, growing out, throwing bows was nobody's favorite person in the organization except for the people who worked for me. And I came in with like a huge amount of vibrato. And one of the first things that I had to do is like a circle 360 like comprehensive review where you know, there's like a big survey that a lot of people take about you that you take about yourself and then the night that I was working my first executive coach at the time and she you know, interviewed I think 25.
different people in the organization and then came to me with my circle. And it was like so clear that I had like an allegiance of people who would follow me out of the building who came up with me, who I built, who are like a small faction of the organization that was driving a huge amount of growth and that my peers hated me. Same. We talked about this that literally the exact same thing happened to me and it was a leadership circle profile and my reviews from my peers were like garbage. They were like she is maybe Satan incarnate and the people who worked for me was like she's the greatest thing that ever happened. And the CEO also liked me because my team got so much done. Yeah, exact same. And I think I also was a lot younger. Weird. We have a lot of parallels that we've never talked about. That's so interesting. Carry on. So interesting. But I think you know so much of it was related to the fact that I hadn't been thinking about like the different hats that you need to be wearing and the different roles that you plan, different teams. And I personally didn't see my peers as competitors and I wanted I wanted to impress them. And I wanted to help them by pushing on the things that they were saying and thinking. And that was perceived as like Sam comes in and post holes and everything that I'm saying. You know, and doesn't understand how the ecosystem works. And I think that in some ways they were right. Like I don't think I was having a real enterprise lens as a member of an ELT. I was still playing the consultant role being like, well, this is how I help my clients. And so I'm going to show up here for you all. And I was just like, yeah, 25. So what are you going to do? But there's a lot to learn about different group dynamics. But it was there's really interesting. And I think like helped me in some ways. But I do feel like when you're bringing new leaders into an ELT to like, what is it time to do one of these things? Like we've seen the symptoms. But are there like certain moments where it's like particularly potent to set some time aside to reset and charter? I mean, look, any time's the right time if any of these symptoms sound familiar to you. But definitely when there is a new person, like what a great time to clarify the rules of the road so that like, you don't have little Sam and Rodney is like just showing up and making dysfunction happen all over the place that then somebody has to probably clean up behind them. Founder led to CEO led is a great time. I think significant new strategy, which a lot of people like anybody going through a dual transformation needs an ELT reset for sure. And I would say no one listening to this should be thinking about this from like an individual lens. Like you don't need an ELT reset. Like because people don't like each other because people don't trust each other. Like that might be true. That is a symptom of this missing sort of operational layer for this team. And so I would just encourage people to look beyond like we just need to like do some teaming and improve the vibes and to think about whether the routines and habits that a leadership team needs in order to set strategy and monitor execution is in place. And if it's not, you should do this work. Yeah. If there's a big moment of transition, whether it's personnel or business model or like something that is going to marketly change the direction the company needs to go in. Like this team needs to get reset first. And oftentimes, yes, it's like the last place that people go to. I think that's exactly right. And one thing I wanted to make sure to say about this, I had a conversation recently with the CEO that I thought was very, I think he's just really smart. They're making really big changes right now. And we were talking about attrition. We were talking very philosophically about attrition and like is attrition bad. And I think too often when a big change is underway of any kind, the ELT will like kind of soft pedal it through their functions so that it's not like polarizing or alienating. And I actually think that ELT's job is to get like really clear and really crisp on what the thing is that's new that they're trying to do and then let the chips fall. And I'm not saying like, you know, push a bunch of people out or like create an adverse reaction, but I am saying give people the information for real about where you're headed. And then let them decide if they want to be part of the future rather than letting every executive team member tell whatever story they think is going to keep people in their chairs because people are so worried about retention. And so I think like to your point, everything we're talking about in an ELT reset is about this group being so clear and so sharp and so convicted and so like no daylight in between them. And if they don't have that, it's very hard to telegraph to the rest of the organization in a way that is like clear and stabilizing. Absolutely. All right. I know we're we're winded down here. We've had a lot to talk about on the ELT reset. Is there any like final things you want to make sure our listeners hear any final nuggets of wisdom on this concept? Final nuggets. I mean, I think the thing that I'll say and like I'll throw it back to you as well is I'm hoping that people feel like the connection between being built to benefit from change and this conversation, but to put a really fine point on it. What we are talking about in terms of ELT work and behavior and routines are the things required to investigate and decide and then largely monitor movement like not so much do all of the moving themselves, but say we've done the sky work to know what's up. We've made the decisions around our strategy and our direction so that we can be really clear. And now we have the operating rhythm to see how the move goes and to steer it between now and the next quarterly strategy refresh. And if those rhythms and habits aren't in place, first of all, execution will overtake strategy in a conversation or meeting every single time. Everybody loves to just be like, did we sign the offer letter for that? It's like, bro, we cannot. Like when you go out to dinner with your husband, it's like it takes a second of effort to like make interesting conversation and have an interesting topic to discuss. And it's so much easier to just be like, so if you like watched any good TV lately, that's what meetings are like. That's what executive team meetings are like. They're just like, are you are you watching legends on Netflix? It's good. Also, it is good. You should watch it. So what we're talking about is what the sort of always on routines are that keep an ELT knees bent ready for the next change coming so that they can be the beneficiary of it. An ELT reset is not like a three day off site where everybody starts getting along again. That's not how you get built to benefit from change. Right? Like that's it's important to have trust and respect and deep understanding of who people are as humans for sure. But it's more important actually that you're putting a strategy rhythm together and that you're you're coming back to it quarterly and that you're putting yourself in a position to investigate, decide and move. And if that doesn't start at the top, it most likely won't be happening elsewhere. And if it is, it will only be happening for a sprint and not in the long term. All right, Sam, have we done it? We've done it. Nice. Thank you for coming and joining me again. This was so fun. This show is edited and mixed by Taylor Marvin at Coupe Studios and produced by our buddy Jack Van Amber at work with The Ready is created by The Ready where we help organizations around the world change the way they work. Thank you for listening.
Podcast Summary
Key Points:
The podcast introduces the "ELT Reset" concept, focusing on executive leadership teams (ELTs) redesigning how they work to benefit from change.
Key issues in dysfunctional ELTs include failure to prioritize, excessive time spent on board-related activities, and unclear roles/decision rights.
The "first team" mindset is emphasized
The "two hats" approach helps clarify when members act as functional experts versus broader ELT contributors, reducing tension and improving collaboration.
Additional symptoms include centralized decision-making (often with the CEO/CFO) and reliance on a single "backstop" person, which masks missing systems and routines.
Summary:
The podcast discusses how executive leadership teams (ELTs) can be redesigned to thrive amid change, introducing the "ELT Reset" concept. The hosts, Rodney and Sam, share personal leadership origin stories, linking them to the need for adaptable, collective leadership. " Key problems identified include poor prioritization—often done too infrequently to handle dynamic opportunities—excessive time spent on board preparation and follow-up, and unclear roles and decision rights, which lead to slow decisions and finger-pointing.
The solution involves explicit conversations about a team charter, defining what the ELT is accountable for, and adopting a "two hats" approach: members switch between their functional expert role and their broader ELT role, allowing them to contribute opinions on any part of the business. This clarity reduces latent tension and encourages smarter, collective problem-solving. Additional red flags include centralized authority (where only the CEO or CFO makes decisions) and reliance on a "backstop" person who handles operational chaos, which masks the need for better systems and routines.
The hosts emphasize that without buy-in from the top, change initiatives won't stick, making ELT resets the most potent starting point for organizational transformation.
FAQs
An ELT reset is a process to realign the executive leadership team, focusing on the 'first team' concept where members act as a collective steering the organization rather than just representing their own functions. It involves clarifying the team's charter, roles, and decision rights to improve execution and adaptability to change.
It's crucial because without buy-in and alignment from the executive team, change initiatives don't stick. Engaging the ELT ensures that the organization can benefit from change by having a unified leadership that prioritizes effectively and makes decisions quickly.
The 'two hats' concept means each ELT member has a functional hat (representing their department) and an ELT hat (thinking about the whole business). The ELT hat is often prioritized, encouraging members to have opinions on all aspects of the business, not just their own area.
Common issues include failure to prioritize effectively, spending too much time on board-related activities, and lack of role clarity and decision rights, leading to slow decision-making and finger-pointing.
ELTs need to prioritize more frequently than annually, as new opportunities like partnerships or acquisitions arise. They should develop a dynamic process to integrate new priorities without disrupting existing plans, ensuring the team can adapt to change.
A charter defines what the ELT is accountable for and what decisions it makes as a team. It's often skipped, but having one clarifies the team's purpose and reinforces the first team role, ensuring all members are responsible for collective outcomes.
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