Management Assessment – Team Dynamics
Why do some executive teams, with good individuals, underperform? With NextSteps Research, you can make insightful judgements about management teams based on years of research, not just resumes or instincts.
Our research has defined four styles of management, represented on the graph adjoining with a description of how each style is most likely to function. Excellent teams are a blend of styles with people in each of the management quadrants. Problems occur when too many executives have the same style, or fall into incompatible quadrants. For example, a "group-think" environment is more likely to occur when too many executives have the same management style. Miscommunication is likely, particularly in times of crisi, among teammates with diagonally opposed management styles.
The Management Assessment report provides a description of the main characteristics of each team member's style and recommends that the team have at least three styles, ranked by order of importance. In some cases, we recommened certain styles more strongly based on the type of venture or project being undertaken by the team. For example, a team involved with a highly people- or service-oriented venture would benefit from having several individuals with diplomatic and logistical styles.
Understanding the styles of your executives helps to make sense of conflicts and potential blind spots on the team. Combining management styles with complementary strengths in vital business areas makes a venture more successful.
Our research shows that the make-up of the executive team can be the "make or break" factor in a business. Here are some facts we uncovered:
45% of surveyed private equity investors stated that poor management was the leading factor in their least successful investment.
A 2002 survey of corporate leaders found that less than 25% of their top managers were capable of leading an organization.
27% of investors surveyed by Integre Partners believed their ability to hire outstanding executives was inconsistent or unsatisfactory. However, only 8% rated themselves as consistently high in their ability to hire the right people.
In the same survey, 81% had been involved in a flawed CEO selection as members of a board. 35% estimated the recrutiing, relocation, severance, turnover, and lost opportunity costs to their investors had exceeded $5 million in a single incident.
An entrepreneurial venture can improve its likelihood of success by as much as 65% when its management team represents all four management styles.
Three or more people on the founding management team increases the success rate of a new venture by 35%.
Research studies have shown that in all ventures, but particularly technology-oriented ventures, having a sales person ont he founding team can improve the success rate of the venture by as much as 300%.
Having a management team member with at least two years of employee management experience improves the likelihood of success of the entire venture by 150%.
Experience of three years or more by a management team member in the venture's market segment improves success likelihood by 55%.