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Why Can’t the Company’s “First Team” Be Built?

Why Can’t the Company’s “First Team” Be Built?

What does the company’s “first team” mean? Simply put, it refers to the senior management team, including the top executive. There are various terms used in the market, such as EMT (Executive Management Team) and TMT (Top Management Team), which all represent similar concepts.

It’s important to emphasize that a truly efficient “first team” is not centered around the CEO in a “one-to-many” executive group (as shown in the bottom left image), but rather consists of the CEO and core executive members who are centered around the company’s mission, vision, values, and common goals/strategies. This “collaborative and complementary” team structure (as shown in the bottom right image) involves each member playing their respective roles while supporting and complementing each other.

Why Build the First Team?

In the early stages of a company’s development, the top executive (often the founder in many private enterprises) can effectively manage and lead the organization. However, as the company grows larger, the complexity of its business and organization increases exponentially, and one person’s intellectual, emotional, or physical capacity may no longer suffice.

Specialization is key. It is a rare event for an outstanding product manager to also excel in finance, or for a branding and marketing expert to be an HR specialist at the same time. Moreover, certain positions within a company are designed for necessary checks and balances. For example, if the head of procurement is asked to oversee internal auditing due to a lack of manpower, it can lead to chaotic outcomes.

Therefore, when a company reaches a certain stage of development, it needs a dedicated team to take on challenges and collectively propel the organization to new heights.

Some might argue that we are in a VUCA (Volatile, Uncertain, Complex, Ambiguous) era and that promoting self-organization and employee empowerment from the bottom up is the way forward. They may find the term “first team” bureaucratic and contradictory to the trends in organizational development.

Form should serve the purpose. Pursuing form without a clear purpose is not advisable. Running a business is not about following trends. Before delving into the complex issue of whether employees can exercise subjectivity, it’s essential to understand the basics. Implementing various organizational innovations without a clear understanding of the fundamentals can be risky. For example, in recent years, many companies have followed the trend of building central platforms (middleware) and continuously “innovating” on top of them. They create their own small middle platforms for convenience, and the “authentic” central platform either gets marginalized or is too busy prioritizing front-end demands to focus on its actual responsibilities. In the end, efficiency does not improve, and the organization keeps expanding, moving away from its original intent.

What Is the “First Team” in a Company?

How to determine this? Look at the actions and behaviors of team members. Do they prioritize the interests of their respective departments or the interests of the company as a whole? Additionally, consider the year-end bonuses of team members. Are they closely tied to their department’s KPIs or more aligned with the overall company performance?

The composition of the team is crucial as well. Research suggests that a core team of 7-9 members is most effective. However, what should be done if the top executive’s immediate subordinates number between 15-20? How do you make the right choices? Is it based on relationships or abilities? Are you willing to let go of some “brothers” who are no longer suitable for the first team? Furthermore, for effective teamwork, you may need to include diverse members because diverse capabilities and viewpoints within the team can lead to better results. This indeed tests the top executive’s abilities. It requires not just wisdom but also courage and an open mind.

Most importantly, this team should have measurable goals and tasks. What tasks must the team handle themselves, where they cannot pass the buck? The first team is responsible for many tasks, such as determining whether a strategic or organizational upgrade is necessary, deciding on product or service iterations, or leading the team in a significant initiative. Through collaborative efforts, the team is likely to make better decisions or achieve better results than if the top executive tried to make these decisions alone.

Of course, the team can also set some enjoyable goals together, such as going on an adventure, exploring mountains, or crossing meadows. Shared experiences or achievements within the team can foster camaraderie and deepen mutual trust. After all, in addition to changing the world, life should also be fun.

However, based on my limited understanding, it seems that only a few teams genuinely fulfill the role of the “first team.”

Why is it so challenging to establish an effective “first team”?

The first reason is that most executive members are still “pseudo-executives” with insufficient capabilities to take on such responsibilities. Many companies, especially in their early stages, may have hired individuals based on title rather than genuine qualifications due to budget constraints. If this is the case, it’s better not to establish a nominal “first team.” The top executive needs to work on attracting suitable individuals to join the team, setting the stage before focusing on building the first team.

The second reason is the prevalence of voices in the market against “team collaboration,” which has led many to overlook the necessity and role of teams. For instance, there’s a belief that encouraging competition between departments and teams, using terms like “running horses” and “racing horses,” can lead to unexpectedly good business results.

Without making judgments about whether such beliefs are based on selective interpretations or generalizations, it’s important to recognize that different business models and stages of company development require tailored approaches. Adopting a one-size-fits-all approach from other organizations can often lead to unexpected consequences. Moreover, under the influence of such trends, the darker side of human nature can be significantly amplified. Minor differences in performance can lead to resentment and intense competition among colleagues.

Additionally, many executives who have held high positions for years may no longer be receptive to management. They enjoy being the boss in their own departments, with a team of dedicated subordinates. They lead a comfortable and carefree life. Besides, they have already become accustomed to a “one-man show” where they make all the decisions. If something goes wrong in the company’s operations, it’s their responsibility to handle it, so they resist transitioning to a more collaborative approach.

The final reason is that the top executive might not be willing to change. After years of being in charge, transitioning to a more hands-on role with performance metrics can be challenging. The feeling of being all-powerful and having absolute authority is appealing. Sitting in their office, controlling information and decisions, communicating with subordinates through phone calls, WeChat, or video tools, and even avoiding regular team meetings – this is the style they prefer. As for interactions among high-ranking executives, they’d prefer to keep them to a minimum.

In summary, these behaviors can be associated with autocratic leadership and may be effective in maintaining a position through information asymmetry. However, in today’s world, communication doesn’t rely on fast horses or carrier pigeons anymore. The wisdom from thousands of years ago might not be as applicable today. With the ease of forming chat groups and freely sharing information, it’s not realistic to believe that control can be maintained. It might be more beneficial to adopt a different approach, lower one’s ego, and exercise some self-restraint. This could lead to personal and team growth and potentially benefit both individuals and the organization.

The above points provide a superficial analysis of the characteristics of the first team and some reasons why it may not be formed effectively. If one wishes for the first team to fulfill its function effectively, merely achieving a “visible” presence may not be sufficient. The team needs to engage in collective learning, deep discussions, and continuously establish and refine corresponding regulations, processes, and operational mechanisms to be both tangible and effective.

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