Who's in the Room? E-Book

Bob Frisch

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 283

Veröffentlichungsjahr: 2011

Beschreibung

Is your company run by a team with no name? At the top of every organization chart lies a myth--that a Senior Management Team makes a company's critical decisions. The reality is that critical decisions are typically made by the boss and a small group of confidants--a "team with no name"--outside of formal processes. Meanwhile, other members of the management team wonder why they weren't in the room or even consulted ahead of time. The dysfunction that results from this gap between myth and reality has led to years of unproductive team building exercises. The problems, Frisch shows, are ones of process and structure, not psychology. In Who's in the Room? Bob Frisch provides a unique perspective to this widely misunderstood issue. Flying in the face of decades of organizational psychology, he argues that the solution lies not in addressing behaviors, but in unseating the senior management team as the epicenter of decision making. Using a broad portfolio of teams--large and small, permanent and temporary, formal and informal--great leaders match each decision to the appropriate team in a fluid, flexible approach that you won't find described in management textbooks. Who's in the Room? is based on interviews with CEOs at organizations ranging from MasterCard to Ticketmaster to The Red Cross. * Understand and embrace the way decision-making actually happens in their organizations * Use these "teams with no names" to best advantage * Engage the Senior Management Team in the three critical tasks for which it is ideally suited Organizations will get better decisions and superior results by unleashing the full potential of their Senior Management Teams. And bosses will see a dramatic drop-off in people coming into their offices asking, "Why wasn't I in the room?"

Leseprobe

Table of Contents

Endorsements

Title Page

Copyright

Introduction: Who's in the Room?

Part One: From Problem to Portfolio

Chapter 1: Most Companies Are Run by Teams with No Names

The Myth of the Top Team

Illusion and Reality

The Problem That Isn't There, But Won't Go Away

Chapter 2: Team Building Won't Solve the Problem

When the Shrinks Go Marching In

After the Shrinks Have Gone

Chapter 3: Don't Blame the Boss

In Search of the Ideal Leader

Inside the Box

Do the “Rights” Thing

Chapter 4: Four Fundamental Conflicts at the Heart of Senior Management Teams

Mission Control Versus Knights of the Round Table: Functional Specialists or Reflections of the CEO?

The Team Versus the Legislature: The Representative from Finance, the Senator from Operations

The House Versus the Senate: Are Some More Equal Than Others?

The Majority Versus the Majority: The Impossibility of Deciding

Maybe the Problem Is That There Is No Problem

Chapter 5: Case Study

The Past as Prologue

Moving from a Single Top Team to Multiple Teams

The Team That Sits Together Works Together

Tailoring the Structure to Suit Your Needs as a Leader

Chapter 6: Best Practices

The Three Centers of Gravity

Flexing in Five Dimensions

The Portfolio and the Payoff

Part Two: The Senior Management Team Unbound

Chapter 7: Engage the Senior Management Team in Three Critical Conversations No Other Team Can Have

Chapter 8: Align the Senior Management Team Around a Common View of the World

The Starting Point: Aligning Around Trends

Clustering Trends into Drivers of Change

Understanding Capabilities and Assets

Walking the Boundaries of the Company: Testing Walls and Fences

Defining and Selecting Opportunities

Chapter 9: Prioritize and Integrate Initiatives to Hit the Strategic Bull's-Eye

Asking the Nearly Impossible: Prioritizing Initiatives

The Real Source of the Difficulty

Changing the Conversation

It's All Relative

Hitting the Bull's-Eye: Making Initiatives Work Together

Chapter 10: Move from “Should We Do This?” to “How Do We Do This?”

It All Depends: Why Initiatives Fail

Putting on the Brakes: The Value of Parochialism

The American Red Cross: Managing Dependencies at the Speed of Disaster

Going from “Should” to “How”

Fixing What's Actually Broken

Chapter 11: Tailor Your Portfolio of Teams for Top Performance Now

Thinking It Through

Putting the New Approach into Motion

Repurposing the SMT

Who's in the Room?

Acknowledgments

The Author

Index

“Although there are some differences between managing nonprofit institutions and for-profit companies, a common set of unwritten rules defines decision making in the executive suite of almost any organization. Bob Frisch understands those rules, and in Who's in the Room? he clearly describes both why they are so pervasive and the detrimental impact they can have on your management team dynamics. More importantly, he presents a straightforward approach to making the rules of how your organization makes critical decisions more transparent and effective.”

—Charles Roussel, CEO, College of American Pathologists

“CEOs—and the people who work for them—are going to be talking about Who's in the Room? This important new book addresses how decisions really get made. It takes the issue of top team effectiveness out of the realm of traditional team building and into questions of process and structure and required flexibility. It provides a practical guide to raising your impact as a leader.”

—Gretchen W. McClain, CEO, Xylem Inc.

“Who's in the Room? offers executives unique insights into how executive decisions really happen. Frisch draws on his experience and shares stories of how senior leaders make decisions, use kitchen cabinets, and unleash employee energy. He also offers guidance on structures, processes, and roles for high-performing teams. The book is pragmatic and relevant for any executive who realizes that much of today's work has to be done through relationships and collaboration.”

—Dave Ulrich, professor, Ross School of Business, University of Michigan; and partner, The RBL Group

“Companies, and the numerous issues that arise around decision making, are always much more complex and dynamic than the whittled-down portraits typically offered by the media and in business school cases. Here, Bob Frisch does the opposite of that. Instead of over-simplifying reality to make solutions more accessible, he provides a more sophisticated and elegant set of frameworks to directly acknowledge the complexity of organizations, and specifically how people act within them. The result is a book which is engaging, and most importantly, practical.”

—Eric Korman, senior vice president, strategy and business development, Ralph Lauren Corporation

“Are you in the room when your company's important decisions are made? Do you have the right people in the room when you need advice on key decisions? Bob Frisch's deep experience and insightful analysis will help you build stronger teams and make better decisions. Who's in the Room? is essential reading for anyone in, or aspiring to, the senior executive suite.”

—Charles Fine, professor, MIT Sloan School of Management; and author, Clockspeed

Copyright © 2012 by John Wiley & Sons, Inc. All rights reserved.

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Some of the discussion in Chapter Four of executive teams as legislatures has been adapted from “Off-Sites That Work,” by Bob Frisch and Logan Chandler (Harvard Business Review, June 2006, pp. 117–126), and “When Teams Can't Decide,” by Bob Frisch (Harvard Business Review, November 2008, pp. 121–126).

Some of the discussion in Chapter Seven of testing walls and fences has been adapted from “When Teams Can't Decide,” by Bob Frisch (Harvard Business Review, November 2008, pp. 121–126).

Some of the material in the extended discussion of the Marquis de Condorcet's voting paradox in Chapter Four has been reprinted with permission from “When Teams Can't Decide,” by Bob Frisch (Harvard Business Review, November 2008, pp. 121–126). Copyright © 2008 by Harvard Business Publishing; all rights reserved.

Jossey-Bass books and products are available through most bookstores. To contact Jossey-Bass directly call our Customer Care Department within the U.S. at 800-956-7739, outside the U.S. at 317-572-3986, or fax [phone].

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Library of Congress Cataloging-in-Publication Data

Frisch, Bob.

Who's in the room: how great leaders structure and manage the teams around them / Bob Frisch. -1st ed.

p. cm.

Includes index.

ISBN 978-1-118-06787-1 (hardback); ISBN 978-1-118-17007-6 (ebk); ISBN 978-1-118-17008-3 (ebk); ISBN 978-1-118-17009-0 (ebk)

1.Decision making. 2.Senior leadership teams. 3.Chief executive officers. 4.Executives.I.Title.

HD30.23.F755 2012

658.4′022-dc23

2011039775

Introduction

Who's in the Room?

At the heart of every organization chart lies a myth.

At the top there's the boss. Directly beneath are the boss's direct reports—anywhere from five to fifteen people who meet regularly as the senior team. Whether at the corporate, divisional, functional, or departmental level, this team almost invariably has a name that suggests its lofty status: Executive Committee, Management Council, Operating Committee, Senior Management Team. Like the gods on Olympus, the members of this august body are presumed by most managers to spend their time together discussing profound thoughts and making all of the organization's truly momentous decisions.

The reality is that they don't—any more than they wear togas and sandals.

The senior team may be consulted or informed, but the most important decisions are rarely made by a group like this sitting around a conference table. Instead, the organization's leader typically calls in an inner core of intimate advisers—a kitchen cabinet—along with any other individuals who might shed light on a specific situation. It is this team with no name—ad hoc, unofficial, and flexible in makeup—that is the group in the room as the actual decisions get made. Yet we all persist in believing that the senior team should be the forum for decision making.

It can be a destructive belief.

I have spent the past twenty-nine years consulting to organizations of all kinds, from Fortune 500 companies to family-held businesses to the U.S. Department of State. I've earned over eight million American Airlines AAdvantage miles facilitating strategy discussions with senior executive teams in fourteen countries on five continents. Over and over during those years I have seen the confusion and conflict caused by the way decisions get made. Executives on the senior team resent the boss's end runs. They feel shut out of the big decisions, and this leads to doubts and insecurity about their own status. Will they be consulted before the next major decision is made or only informed after? Will their opinions be solicited, and how much weight will they carry?

Meanwhile, the boss is often frustrated by the apparent parochialism of individual team members and the seeming inability of subordinates to get anything done without having the boss sitting in on every discussion. The team is said to be dysfunctional. Blame is plentiful on all sides.

But this blame is misplaced. Most of the world's best executives make decisions in ways that don't show up on an organization chart or a process flow diagram. When it comes to critical decisions, they implicitly understand the inherent limitations of the formal executive team. They tacitly acknowledge that it's desirable for the boss to have the ability to vary who is in the room when major decisions are being made. And they instinctively know exactly whom they want with them in the room for each specific decision.

My purpose here is to make explicit how leaders of management teams actually work—and why they work in these particular ways. This book is grounded in a simple truth: having a small cadre of trusted advisers in the room when each big decision is made is the way most leaders run their organizations, and when the real nature of the executive team is fully understood it will also be clear that this approach is the best way.

Senior teams have undeniable strengths, and they are in a unique position to do things that no other group in the organization can do as well. Making big decisions isn't one of them—for very good reasons that will be dissected here. Unless the senior team's limitations are understood and its genuine strengths put to work, the blame and frustration on all sides will continue. The organization will have the approach half right: ad hoc decision making by the few. But it will also have the approach half wrong because it will fail to fully leverage the real power and competencies of the many.

My hope is that by understanding the nature of executive decision making, executives and the members of their senior teams can stop beating up themselves and each other. They can start improving the ad hoc decision-making process that probably already lies near at hand, and they can focus the executive team on what it does best. This outcome doesn't require organizational overhauls or irrelevant team-building exercises. It requires only an acceptance of reality and a willingness to refine that reality with a few simple steps that can be taken tomorrow.

For almost three decades, I've seen company after company trying to overcome what it sees as a lack of executive team effectiveness. Days, weeks, or even months of effort are wasted with little or no result. This book is meant to help you and your executive team—and similar teams at any level of your organization—to reframe the problem, to help you to stop seeing it as an issue of individual or group behavior and to start seeing what's really happening in both your formal team meetings around the leadership table and in your meetings with your kitchen cabinet. Once you do, it's unlikely you'll look at your team in the same way ever again.

It's time to send the psychologists packing. Time to stop hamstringing yourself and selling the members of your executive team short. And time to free decision making and decision makers throughout your organization from the tyranny of the organization chart.

The organization will get faster, better decisions and a higher level of organizational alignment in executing against those decisions. Team members, and the people who work under them, will achieve new levels of effectiveness—and even fulfillment—in being unleashed to do what they do best. And you and other leaders in the organization will see a dramatic drop-off in people coming into your offices and asking, “Why wasn't I in the room?”

Part One

From Problem to Portfolio

Chapter 1

Most Companies Are Run by Teams with No Names

The chief information officer (CIO) of a major industrial company—let's call him Dave—was frustrated. He had just come from the latest meeting of the company's Senior Management Team (SMT), consisting of the CEO, the presidents of the three divisions, and functional heads like him. Twelve people in all, and in his mind the team that ran the company. But now he was no longer sure exactly what the team did.

In preparation for the meeting, Dave had spent his Saturday evening reviewing a two-inch binder containing the business case for a major plant expansion in China. He was no expert on manufacturing or strategy, but he did know that some other major initiatives that would require significant information technology (IT) involvement were in the pipeline for later in the year. If the China expansion went ahead in the time frame outlined in the business case, it was going to be tough to come up with sufficient resources for all the projects already approved, let alone the ones yet to come in the next few quarters. When the time came to implement the plan, conflicts would inevitably arise and would compromise several other projects and possibly the China plant expansion itself. Dave had wanted to be prepared to discuss these potential resource conflicts intelligently when the business case came up on the SMT agenda on Monday morning.

Meanwhile, the week before, the CEO had met with the chief financial officer (CFO), the heads of Strategy and Operations, and the head of the Industrial Division, which wanted the plant expansion. For several intense hours the CEO had questioned this ad hoc group about the business case, which itself had been six months in the making. He concluded that the proposed expansion fit with the company's aggressive new strategy. The division knew how to navigate the tricky operating environment in China. The financials looked good. At the end of the meeting, the CEO decided that it was a go and said that he would have it put on the agenda for the next SMT meeting.

Bright and early Monday morning the SMT duly convened. The members finished up their coffee and muffins, the lights went down, the first PowerPoint slide came on the screen, and the business case team made its pitch. When the lights came back up the CEO said to the SMT members, “So, what do you all think?”

The head of Human Resources spoke up immediately, addressing the business case presenter: “At their quarterly review, the sales force said they needed to significantly ramp up the number of China region salespeople in the second and third quarters. But we have only a handful of Mandarin-speaking HR specialists to supplement our local partners. I'm just not sure we can staff up the sales force and bring on the additional personnel we're going to need at the same time. I know we provided you with local labor costs and job skills definitions, but I don't think we've adequately covered the HR support requirements from the perspective of a major staff increase.”

Before the presenter could respond, the CEO intervened. “That's a good point, Susan,” he said to the HR head. “But why don't you take that off-line and work it out with Operations. Today, I want everyone to look at this initiative from a company-wide perspective, not from a functional, parochial point of view.” He gazed around the conference table, looking at no one in particular. “Any other questions or comments?”

Susan fell silent. Dave, the CIO, swallowed his objections. “This train has left the station,” he thought, “and only an idiot would throw himself in front of a moving train.” When his turn to comment came he made some bland, complimentary remarks about the plan—as did most of the other SMT members.

Now, an hour later, he sat in his office thinking about what had just happened. Sure, some of Dave's people had contributed technical data during the development of the business case and validated some of its assumptions. But his team certainly hadn't been asked how this plant expansion would dovetail with all the other priority programs requiring significant IT involvement. That wasn't their job. Balancing resources across the overall project portfolio was Dave's job, and he felt he should have had a chance to review the trade-offs involved with his colleagues before the China plant approval came barreling down the track.

Dave knew that some of the other members of the SMT—Susan for one—felt the same way. Moreover, in his six months with the company, this was the third time a major decision had steamrollered its way through an SMT meeting. “What,” Dave wondered, “is the point of having an SMT if its highest purpose seems to be rubber-stamping done deals? Why do we bother to meet if the major decisions are all getting made before we even meet, with most of us out of the loop?”

The Myth of the Top Team

The CIO had fallen prey to one of the central myths of management: that a Senior Management Team, consisting of the boss and the boss's direct reports, makes the major decisions for the organization. This myth isn't restricted to Fortune 500 companies like Dave's. It permeates almost all organizations—for-profits and nonprofits, large corporations and small enterprises.

The reality is that in most of these organizations, and at most levels of management—divisional, business unit, regional, functional, departmental—major decisions are typically made by the leader, who consults with the same handful of people, perhaps joined by a few others with special knowledge of the issue, meeting together for that specific purpose. Despite the almost universal use of these informal teams—or kitchen cabinets—it's the rare company, division, or other unit that shows anything at the top of its organization chart except the boss and the boss's staff, constituting some sort of Senior Management Team.

The term kitchen cabinet has its origins in U.S. history. It began as a term of abuse used by the political opponents of President Andrew Jackson to describe the loose collection of advisers he used, in parallel with the official cabinet (the parlor cabinet), to make important decisions. In nineteenth-century American dwellings the kitchen was literally a smoke-filled room that was kept hidden from guests, whereas the parlor presented the publicly acceptable face of the home. As Jackson's bitter enemy Nicholas Biddle wrote of the administration, “The kitchen predominates over the parlor.” Today, of course, kitchen cabinet is applied to any leader's unofficial group of top advisers, but the term's contentious beginnings are worth keeping in mind.

Occasionally the top level of an organization will consist of an Office of the Chairman or Office of the CEO, with more than one member, but in the vast majority of cases—at every level of the enterprise—these very real and very critical decision-making inner circles are well known and yet invisible on the formal organization charts. Chris Callero, the president and chief operating officer (COO) of Experian, the global information company, says, “It's usually the CEO, the CFO, and I who directionally steer and shape critical decisions when necessary. We do this without formal meetings, and we don't have a name.”

At Berkshire Hathaway, it's Warren Buffett and Charlie Munger. At Microsoft, it was Bill Gates and Steve Ballmer. At Disney, it was Michael Eisner and Frank Wells. At the Property and Casualty Division of CIGNA, division president Gerry Isom had a standing weekend golf game with his chief lieutenants, Bill Palgutt and Dick Wratten. It was widely believed around the watercoolers that most major decisions were made by the time Gerry, Bill, and Dick took the clubhouse turn and that they spent the back nine making plans for the week ahead.

These ex officio groups aren't convened only by CEOs. Says the leader of a major conglomerate's portfolio of commercial businesses: “I see the SMT as a forum for briefing everyone. But if there's a specific decision coming, and we want to keep pressing forward, I'll go schedule a meeting with our CEO. I always invite the CFO because our CEO is going to look for the CFO to make a financial determination. Then if the issue has to do with IT or communications or some other particular area, I'll invite [the area head] as appropriate.”

All managers rely on a variety of groups at different levels to get things done—think of how many task forces, steering committees, and initiative teams exist today in your enterprise, in addition to the informal conversational groups that ebb and flow in the course of a week. Companies operate through an elaborate network of formal and informal teams, some permanent and others that may last only an hour. But if you ask most managers in most companies who has approval authority over the most important decisions, invariably they will say it's their local version of the SMT—whatever name it goes by and at whatever level of the organization such a formal team is found. It's the boss and the boss's staff—the top two levels on the organization chart.

Although the phrase kitchen cabinet comes from American history, the phenomenon it names isn't limited to the United States. Ajay Banga, the CEO of MasterCard, who has worked in Asia, Europe, and the United States, has seen it at many levels in a variety of cultures. When he was working in India for Nestlé the firm's managing director had an executive team of nine or ten people but made most decisions in concert with his factory manager and head of HR. “The managing director had once been factory manager, so he felt most comfortable with his current factory manager,” recalls Banga. “They understood each other and the guy had worked with him for years, so there was this mutual trust society.”

As president, John F. Kennedy surrounded himself with a team of people presumed to be among the best and brightest in public life, academia, and private enterprise. But his closest adviser by far was his brother Robert Kennedy. Faced with a momentous issue, JFK would certainly solicit the advice of key Cabinet members and other members of his leadership team, but when it came time to make a decision he would often confer with Bobby, alone. No one else in the administration enjoyed as much influence over virtually every area of policy.

The official White House photos taken during the Cuban missile crisis capture the two men standing, deep in conversation, with the fate of the world hanging in the balance. In his official role Bobby had no reason to be involved in the issue at all. His title was attorney general, not secretary of state or secretary of defense. But with kitchen cabinets titles don't matter—it's the trust the top leader places in the wisdom of the other people in the room. From that point of view, the attorney general's real title was “the president's brother Bobby.”

It is Bobby, after all, who is widely credited with coming up with the masterstroke—ignoring Soviet leader Nikita Khrushchev's second, more belligerent cable and responding to his first, more conciliatory one—that averted nuclear war during those thirteen tense days in October 1962.

Illusion and Reality

When I was a student one of the standard questions on literature exams was to discuss “illusion and reality” in Shakespeare's Hamlet. We would dutifully write about the distinction between the “playacting” of the characters and what they were really doing. The same distinction could be applied to the story of the plant expansion.

At Dave's company, the illusion is that on such-and-such a date the SMT approved a plant expansion in China, a decision that the CEO then took to the board of directors. That's how it appears in the records of the SMT and the minutes of the board, and that's how it looks on the organization's process flow chart. And that's what everyone in the organization believes, except for the people who know what really happened—the CEO and the members of the SMT themselves.

Like Hamlet, they know the reality behind the illusion: the decision was actually made by the CEO, meeting with a few advisers, in the week before the SMT convened. As one executive puts it about SMT meetings in general, using another theatrical reference, “Those meetings are as fine a piece of Kabuki as you will ever see.” Or as Jim Noble, senior vice president of IT & Business Services for Talisman Energy; former managing director, Global Technology, at Merrill Lynch; and former CIO at Altria, says, “The CEO looks around the table and another big decision gets nodded through.”

In a series of interviews, I asked top executives to estimate how often they have seen the discussion of a business case by their leadership team result in a project being rejected or substantially altered. In the aggregate, they said that it happens far less than 10 percent of the time. Typically, I received answers like “once or twice in the past five years.”

The leadership team has a purpose, but it is clearly not to pass judgment on business cases. “It's always unanimous,” says Experian's Chris Callero.

Says Ellyn McColgan, former president and chief operating officer of Morgan Stanley's Global Wealth Management Group, “Once you get to the highest level, the point of the meeting is to get out of the room without saying anything controversial, without raising an issue, and certainly not asking for help. Your job is to make your three minutes of airtime positive and good and then leave. That means that decision making happens somewhere else.”

At one level—the performance of the company—simply nodding through decisions can lead to problems with implementation down the road. In our example the concerns of the CIO and HR head about how the China project fits with other priorities and activities never made it to the surface. You can be sure that those concerns about resource constraints and pressures will emerge once the project is under way. When people wonder why more of a company's initiatives aren't more successful, the answer might very well go back to the very days and the very meetings in which the SMT nominally approved those initiatives.

But there is a more pervasive problem—the frustration that grows in the gap between the illusion and the reality. Members of executive teams become frustrated by the timing and quality of their involvement in major decisions. More corrosively, the gap can intensify turf wars and intramural politics, as top executives compete for the CEO's ear. Some may view the leader as an autocrat. Says a former Fortune 500 division head about his boss at the time, “Generally, only Finance and Legal were at the table with him when decisions were made. I felt disenfranchised, like my voice didn't matter, so I quit giving input.”

Says a Fortune 500 CEO of his experience with a former boss and that boss's kitchen cabinet: “It was a classic case of the executive team feeling that they had no role to play in the decision-making process—and, in fact, feeling insecure, threatened, and positively apprehensive at every meeting. Every guy on the team would talk to his people, in some way, about his concerns about this dysfunction.”

At the furthest extreme are those leaders who shut out their executive teams altogether. The chairman and CEO of a major international bank included in his kitchen cabinet his vice chairman, his CFO, and two outside consultants widely resented by other members of the SMT. Says one insider from that time: “He would bounce things off the members of that inner circle, and there was otherwise a revolving door on his executive team, with people constantly coming and going. As a result, his immediate management team was a bunch of empty, interchangeable suits. And it created a lack of management depth at the bank, which was very apparent, very quickly, at the senior-most levels. He would just reshuffle the deck every time he got tired of a guy's face, because he only cared about those two external consultants and the two insiders. Everyone else was expendable.”

Whether used wisely or poorly, kitchen cabinets are an ineradicable fact of organizational life. Their use is almost universal. Virtually every CEO I interviewed for this book and almost every CEO I've worked with—including some of the world's best—depend on a small group of trusted advisers that they consult about most major decisions. As the executive ultimately accountable to the board, the CEO has every right to consult anyone he or she pleases in making a major decision. Even a CEO who believes that the spread of kitchen cabinet management throughout his company was responsible for some of its troubles in the past finds himself being drawn back into it. “I think it just creates enormous bad behavior,” he says. “But we've gone back and forth—from a kitchen cabinet with a couple of internal and external people to an executive team of fifteen to eighteen people meeting together and no kitchen cabinet; and now back to a smaller executive team of eight or ten and a kitchen cabinet.”

The fact is that a kitchen cabinet offers advantages that almost no leader is willing to give up:

It enables the CEO to consult with precisely the right mix of advisers for a particular decision.Because it is a small, highly selective group, it preempts the problems of endless discussion, uneven qualifications, and competition over turf that plague larger, more representative teams.It frees the CEO from the organization chart, which describes reporting relationships, not decision processes or decision rights. Involving all of the CEO's direct reports in every decision is inefficient.It provides the CEO with the candor and the confidentiality that only a small, highly trusted group can provide and that is critical in making major decisions with far-reaching implications for the company internally and externally.

These unofficial, ad hoc groups are a powerful asset, and so leaders have employed them since the dawn of recorded history. Leaders are not only unlikely to give up kitchen cabinets, they shouldn't give them up. Ultimately, the issue is not whether the kitchen cabinet has supplanted the SMT or usurped its role, but how best to use each team.

The Problem That Isn't There, But Won't Go Away

The next time Dave sat down with the CEO, he was careful not to bring up his “parochial” reservations about the China project, and he was extremely reluctant to register his real concern about the SMT. Nevertheless, as diplomatically as possible, he suggested to the CEO that the SMT should have been more involved in the decision or at least brought into the decision-making process earlier.

Dave's reluctance is understandable. Like most executives, he knew the unwritten rules of behavior and the expectations of bosses: Bring me solutions, not problems. No surprises. Once a decision has been made, everyone needs to get on the bus. Dave didn't want to come across as petulant, a whiner. Nobody does.

It is precisely this reluctance to raise the problem that makes it so hard to address—or even see. I have listened to scores of executives express privately the kind of frustration that Dave felt and then, in the next breath, dismiss the problem with “that's the way it is.”

One boss who has thought long and hard about the problem is the CEO of a global industrial company. “My CFO, my head of Strategy and Business Development, and I sit in my office and make decisions, and then we bring them to the Senior Management Team,” he says. “The members of the team say, ‘Wait a minute, did our vote count or not, did our decision matter or not?’ That's up in the air right now. But I have asked whether we want to have the strategic discussion up front at the meeting in respect to our portfolio of businesses. For now, I've decided that it is something we should discuss as an SMT, though any decision is ultimately mine.”