Driving Company Value: The Power of a Strong Leadership Team and How to Build One

Most successful business owners know the value of a strong leadership team. They understand that they can’t personally be in charge of everything, at least not effectively. But what many owners don’t realize is the significant impact that an effective leadership team has on driving a company’s value. 

Effective leadership teams positively impact company growth by helping to drive strategy and remove bottlenecks that are caused when a company is over-reliant on the owner. They can shape a positive company culture and bring a variety of skills and perspectives to the table. 

Not only is a leadership team essential for the company to prosper, but both investors and acquirers place great importance on the leadership team because of the many benefits it provides. Investors understand that the growth potential of a company is in direct proportion to a strong leadership team, and acquirers want to know that the company will thrive, not just survive, once you have stepped away. 

If you’re an owner who’s relying on a lucrative exit from your business someday, building a high-performing leadership team is crucial, and it takes time. Don’t wait to get started growing or improving the effectiveness of your team. 

Characteristics of an Effective Leadership Team

Effective Strategy Execution

One key indicator of a leadership team’s effectiveness is its ability to execute the company’s growth strategy with high levels of autonomy. Each individual on the team is responsible for key goals and metrics, and works with a high level of independence to drive their own direct reports and projects towards the agreed upon goals. And though each leader takes responsibility for independent goals, they all contribute to the overall alignment of the team, making sure that their work is in sync with one another. They work to reduce redundancies, collaborate effectively where needed, and move forward as a united front. They’re individually competent, effective and trustworthy, and also work to instill these same attributes within and across the entire organization. 

The ability of each leadership team member to work independently as a high performer depends on the business owner or CEO’s ability to make smart hires, clarify roles and responsibilities, hold people accountable, and take extreme ownership for the dynamics of this team. It all starts at the very top. Always. 

Developing Talent

Another characteristic of an effective leadership team is its ability to develop the company’s talent. True leaders are always looking for opportunities to help their direct reports grow. They understand the difference between management and leadership and can transition between these two modalities as necessary. 

They do not micromanage and do not become the bottlenecks of the departments, projects, or divisions that they run. They stay focused on growing people, rather than doing the work themselves, and recognize that this is the only way to scale sustainably and win. 

Leadership team members model the behaviors they want in the people they are helping to grow. Just as it's the responsibility of the owner or CEO to set the leadership team members up to be empowered go-getters, it's also the role of each leadership team member to do the same for the people that they lead. Everyone must take ownership and accountability for their own actions and for the actions of those they lead. 

Performance Management

Effective leadership teams, at both the team and individual level, value accountability and put systems in place to manage performance. They know how to hold themselves accountable to high expectations as individuals and which helps them contribute to achieving team goals. They do this by being clear about expectations, having measurable goals and they regularly and methodically track performance to the agreed upon plan. Even more importantly, they provide the support and training that people need to be successful, and coach their staff through challenges rather than jumping in and taking over. 

Effective leadership team members aren’t conflict-avoidant and they aren’t jerks, either. They understand that the role of a leader is to help others grow. They are responsive, rather than reactive when mistakes happen, and view mistakes as opportunities for everyone to learn - including themselves.

Ambassadors of a Peak Performing Culture

One of the key components of a successful leadership team is rooted in the establishment of a high-performance culture. When you cultivate a standard of excellence, you are able to recruit and retain top-performing talent throughout an organization. This can only happen if leaders themselves value and model excellence in all that they do.

A peak performance culture within an organization is characterized by a high degree of accountability not just for the completion of tasks, but for completion with quality, autonomy and a solutions oriented mindset.

This kind of company culture fosters inspiration, motivation, encouragement, and pride in one’s work rather than fear or over-reliance on leadership. By instilling a high performance standard across the board, the talent attracted to these roles will continuously increase in quality over time.

Identifying Key Leadership Roles and Responsibilities

There are several critical leadership roles that need to be filled within any successful organization. These include Strategic Planning, Talent Acquisition, Financial Management, Risk Management, Operations & Service Delivery, and Revenue Development. 

Below you will find tips on attributes of those who are high performers in these various roles. Day-to-day job responsibilities are always shifting, which is why knowing the attributes required for these roles is essential when filling these seats - if indeed you want to develop an effective leadership team.

Strategic Planning

The strategic planning role is imperative as it dictates the direction of the business. Someone on the leadership team won’t likely have an official title that includes the word “strategy,” but will have the skillset and desire to create the roadmap from current state to the future vision.

This role requires attributes and a skill set that includes the ability to:

• Translate the founder’s vision into goals and key metrics
• Outline detailed action steps to hit those goals and measure progress
• Consider short-term and long-term implications across the company
• Be flexible and adaptable in a rapidly changing environment
• Collaborate and communicate effectively across all levels of the organization
• Provide strong leadership by inspiring, motivating and delegating
• Keep everyone focused on results
• Put systems in place to keep the growth strategy moving forward

It’s rare that founders carry these attributes themselves, as they are often either visionaries or practitioners who’ve built a company around their subject matter expertise. If this is true for you, it’s essential that you find someone who can fulfill this role in order to scale and drive company value. And remember, it doesn’t necessarily have to be a new team member. This talent may already be employed at your company. 

Talent Acquisition and Retention

The role of Talent Acquisition and Retention on a company's leadership team cannot be understated when it comes to driving growth and increasing value. In today's competitive business landscape, attracting and retaining top talent is essential for success.

With their expertise in recruitment strategies, candidate assessment, and employer branding, Talent Managers possess the ability to identify and acquire the right individuals who not only can do the work, but also align with the company's vision and culture. 

A high-performer in this role is a continuous learner. They pay attention to market trends, human capital research, best practices and emerging technologies. They are highly collaborative and seek a deep understanding of each department's needs so that they can recruit successfully to fill those needs with the best candidates. They understand the role that hiring plays in overall retention and put together hiring and onboarding processes that increase the likelihood of a good fit and ultimately new-hire success.  

They’re agile, always adjusting recruitment strategies and tactics as needed to address challenges, seize opportunities and meet the evolving demands of the company. 

And of course, they are strong leaders. They effectively lead and manage recruiters, other human resource professionals and foster a positive work environment. They’re deeply aware of the role that company culture plays in talent acquisition and retention and are ambassadors for the company’s brand. 

Financial Management

Today’s Chief Finance Officer, or similar role, is different from decades past. Basic financial acumen including the ability to curate and analyze financial data, statements and metrics to make informed decisions is not enough. 

The business landscape is constantly evolving and CFO’s need to adapt quickly to changes. They must be agile in responding to market shifts, regulatory changes and emerging trends to make timely decisions that position the company for success.

They must act as partners with the founders and strategic planning role to align financial goals with the overall business strategy. They must also possess strong leadership and collaboration skills to work effectively across departments such as operations and marketing to align financial goals and drive cross-functional initiatives.

Today’s CFO must adopt the technologies necessary to streamline finance operations, improve efficiency, and enhance reporting accuracy. They should automate routine tasks, enabling them to focus on more value-added activities such as strategic planning and analysis.

And last, but certainly not least, they must be influential and effective communicators. They must be able to break down and communicate complex financial information to various stakeholders with compelling data-driven narratives in order to ensure the best decisions and investments are being made.

The requirements for this role have evolved significantly over the last five years from a traditional finance focused role to a strategic partner driving growth, leveraging data and technology, managing risks and ensuring financial transparency. Spend time when assessing candidates for this role to ensure you set yourself up for sustained success and maximum value.

Operations & Service Delivery

The Chief of Operations, or similar role, is crucial in driving operational efficiency, scalability and overall success.  

They must possess a strategic mindset and the ability to align operational strategies with the company’s overall goals. This role requires a deep understanding of how the business operates at each level, in order to increase efficiency across the board while driving customer satisfaction and retention. They do this by streamlining workflows, enhancing productivity and maintaining high-quality standards.

Like every other leadership position in today’s rapidly changing environment, they must also embrace technology, and help assess the opportunities for leveraging technology to improve the processes for getting work done and delivered efficiently and with the best customer experience possible.

It’s essential that they are highly adaptive to feedback from those on the front lines. They must create feedback loops up and down the company to make sure that the proposed changes are being implemented, and continuously improved with the gathering of new information from those who are implementing and communicating most directly with your customers.

They must also be effective communicators. Their recommendations require behavior and habit change, which is difficult for humans. They must understand that just because an edict is given does not mean the change will occur. They must understand how the adoption process works, the psychological impact of change, and how to support people through the changes required.

Revenue Development

This role comes with a variety of titles: Vice President or Director of Business Development, Sales Director, or Chief Revenue Officer to name a few. The responsibilities may vary depending on company size, but the attributes required are the same.

Like many of the other senior roles, a high performer in this position carries a strategic mindset. They have a keen ability to align revenue generation to overall business goals as well as market dynamics. They’re also exceptional leaders, who are able to inspire and motivate sales teams and foster a high-performance culture.

They must also carry the mindset of an innovator. Yes, they should have expertise in sales and marketing on their resume, but they must be forward thinking, with recognition that the strategies that worked yesterday, won’t always work tomorrow. They must not just be comfortable with the fast-pace of change, but thrive in the rapidly changing landscape of marketing and sales, so that they can create strategies that keep your company ahead of your competition. 

They must also embrace data, craft KPIs and hold their teams accountable for tracking, measuring and reporting on the KPIs weekly, and even daily. They must be systems thinkers, and understand the interconnectedness of marketing and sales and work to ensure that cross-functional collaboration is effective. 

Many boot-strapped founders are hesitant to fully fund this position with someone who will excel, and instead duct-tape together their marketing and sales strategies in hopes of saving a buck. That mindset will prevent a company from being able to actually scale and decrease its value in the long run.

Hiring for Leadership Qualities and Skills

So now that the key roles have been established, how do you hire the right people?

One way to improve this process is to use data versus instinct, resumes and lackluster hiring processes. There are a number of fantastic tools available to assess candidates for both aptitude and cultural fit. We recommend partnering with Culture Index or using the Kolbe A assessment for team performance. Both of which will help you select the best candidate for the role prior to making an official offer. This saves time and money in the long run.

But first, start with the existing team. Using assessments to understand the skillsets of the current team will help you identify exactly where the gaps are and help you understand if it’s even possible for a particular candidate to be successful in the role you want to fill. Begin with constructing the optimal organization chart. Then determine if the players you have fit into the roles you need. You are then much more likely to build a reliable and dependable, A+ team.

Success in any role goes beyond knowledge and skill. It’s also about natural tendencies and how one approaches the work. Fit isn’t just about candidate-to-company. It’s also about candidate-to-role. Resumes, interviews and even performance tasks will never be able to provide the level of insight needed alone to make a great hire with a high chance of success. Investigate the tools that can help you hire quality candidates and assess your current team.

Developing Leadership Skills

While it’s true that some are simply natural born leaders, it’s also important to note that strong leadership ability can be cultivated in those who already possess high levels of emotional intelligence, but may be lacking in leadership experience.

The first step to developing new leaders is to get crystal clear on their role and responsibilities. Laying out the goals, tasks, and intention of the role in a clear and concise manner is important in terms of communicating what is required and what is expected. No one can hit a target if they can’t see where it is.

• How does this role impact the whole?
• How does it impact goals, operations, and other teams?
• What is the day-to-day responsibility of a leader in this position?
• What are the decision-making responsibilities of this leader?
• What is autonomous, and what requires input or approval?

Being clear on expectations and metrics for success can help candidates to be fully prepared for what the role entails both day-to-day and long term.

Training and mentorship is also essential in fostering an environment in which a newly appointed leader can thrive. While it may seem that trusting in their ability to fulfill the function of the role would be sufficient, it’s important to recognize that not everyone shares the same experience. This could be the candidate’s first time in a significant position of influence and/or leadership and it’s important to remember that everyone, owners included, started somewhere. Using the experience of current leadership and encouraging an attitude of knowledge-seeking will go a long way towards setting new leaders up for success.

Effective Leadership Team Processes

Establishing effective processes for the leadership team is essential for creating a consistent, measurable, and reliable workflow to drive the business growth strategy forward. 

Metrics are important as both a standard of measurement to be met (or exceeded) as well as in creating clear and concise standards of performance for the function of the role. Tangible goals will help to determine the effectiveness of leadership and the processes that are currently in place. Seeing how these metrics compare against benchmarks, established goals, and industry standards will help to determine what changes need to be made for improvement. 

Creating a weekly agenda and establishing protocols are also important processes. Determining and prioritizing tasks, as well as establishing consistent action items, supports the growth of the business and helps to maintain what is already working.  

Clear decision making frameworks are also essential. When teams aren’t clear about who holds decision making rights on each initiative, who needs to give input, how and when to get that feedback, teams get bogged down and frustrated and business growth is hindered. This is a simple, yet often overlooked problem to solve. There are many great decision making frameworks out there. Pick one that resonates, teach it to your team and use it consistently.  

Finally, a clearly defined approach towards dealing with conflict is key to minimizing disruption, keeping the work culture and environment positive, and ensuring leaders retain buy-in. It is inevitable that conflict will arise. Whether caused by personality differences, process disagreements, or power dynamics, there is no shortage of reasons for tempers to flare.  

A primary responsibility of any strong leader is in dealing with the issue head-on and resolving it to the best of their ability and to the benefit of those involved. Not all scenarios will yield a win-win result, so it’s imperative to be able to maintain honesty, integrity, and understanding in times of conflict resolution. Be on the lookout for conflict avoidant behaviors that allow resentment to fester and insist that your team address challenges with one another head on in a respectful and professional manner.  

Maintaining a Strong Leadership Team

Turnover can be highly disruptive to any organization or business. From the recruitment and hiring process, to the loss of legacy knowledge, to training, the process of constantly filling a role can prove highly detrimental to your business success. 

One way to help maintain leaders within your organization is to give peak performers a high degree of autonomy, with the caveat that they are expected to meet high expectations. In allowing and trusting those you have placed within these roles the independence to perform to the company’s standards and exceed expectations, you will foster a sense of pride, determination, and a killer work ethic. No one likes to be micromanaged. Give them real ownership for their work and the results they produce. It is only then that these leaders will take their position and the success of the business seriously.

Additionally, it is imperative to recognize when there is a weak link within the leadership chain. A single weak leader has the ability to sabotage the overall performance of the entire company. A willingness to let people go, once it’s clear that they will always underperform, is critical in terms of maintaining the standard of excellence of the organization. Also note, keeping under performers in positions of leadership will make your high performing leaders want to leave. High performers have no tolerance for those who don’t pull their own weight.

Another effective tool in terms of leadership retention lies in incentivizing achievements. The research on performance pay is mixed. Some studies claim that for those making over $70,000 USD per year, more money does not impact performance. Our decades of experience, however, make us question this conclusion.

When the leadership team has had input into how the incentive package is structured, it can be a powerful motivator for maintaining a culture of excellence within the company. There’s no one size fits all program. Your best bet is to draft some options, bring it to your team for input, and tweak it until it's enticing.

Conclusion

Building a strong leadership team takes time and effort. It starts with hiring the right people who have the skills, experience, natural attributes and mindset to lead. It also involves providing them with the resources and support they need to succeed, including training, mentoring, and coaching.

The most successful leadership teams are those that are diverse in terms of skills, backgrounds, and perspectives. This diversity allows for different ideas and approaches to be brought to the table, which can lead to better decision-making and problem-solving all around.

Ultimately, a strong leadership team is one that is committed to the success of the company and its employees. They are able to communicate the company's vision, values, and goals effectively, and they are able to inspire and motivate employees to achieve them.

With a strong leadership team in place, a company is well-positioned to drive value and achieve long-term success.

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