Leadership Teams Are Often Blind to Their Own Dysfunction — And The Effects Can Be Devastating

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When I start coaching a new client, I spend the first few weeks gathering information and meeting with stakeholders to get the lay of the land. 

I want to hear it straight from the workers themselves — be they front-line, managers, or leadership folks. 

And even then, even in those early days when I’ve still got so much to learn about an organization, I’m on the lookout for red flags that show me there’s misalignment (or worse, dysfunction) at the highest levels. 

I’ve done this long enough to know that upper-level dysfunction creates effects that ripple out much farther than the executive boardroom.

It can harm the whole organization.

And here’s the worst thing: the very leadership team that’s in charge of setting direction, creating culture, and solving problems is often blind to its own challenges.

At any given business, I’m looking for two major signs of dysfunction at the highest levels: 

• Lack of psychological safety
• An out-of-touch leader

Here’s what both look like in practice — and how you can fight against them.

First sign of misalignment: Lack of psychological safety

Healthy team dynamics are wonderful to observe. There’s energy, excitement, and discussion. There’s productive debate. 

This can only happen, though, if there’s psychological safety. This means people feel comfortable speaking up and sharing their ideas, concerns, or misgivings.

Psychological safety needs to come from the top: a clear indication that everyone’s voice matters and no one’s ideas are beyond reproach. 

If I observe a leadership meeting where this isn’t the case, it can be almost cringeworthy. People sit on their hands and avoid eye-contact. There’s a lot of surface-level agreement and very little debate. It’s clear that allegiance is what’s expected and valued.

These teams are unhealthy, and the blame almost always goes to the person at the top.

Second sign of misalignment: An out-of-touch CEO

When I start coaching a new company, I always want to hear from the CEO to understand the challenges he or she believes the company is facing. And this is where I look for the second red flag: a CEO who is out of touch with the rest of the company.

This can manifest in a few different ways, but I often see it as CEOs who don’t know what’s actually happening in their company. They’ve got a sunny outlook that doesn't match the realities on the ground. In other words, they think everything’s fine when it’s not.

These are often the same CEOs who love to hear themselves talk. The same ones who scorn debate. They don’t look for feedback or guidance, they look for confirmation and allegiance — and they’re convinced their vision is infallible. 

These leaders have not built a culture where it’s okay to disagree and debate.

Now, there are a number of reasons these out-of-touch CEOs exist. 

Sometimes it’s just an ego thing. But it often comes back to something deeper. A false mythology we have in modern business about how great things actually get done. 

The myth of the ‘all-knowing CEO’

Too often, leaders think they’re being dynamic and brilliant when in fact they’ve just misread the histories of our greatest business leaders. I call this “The myth of the all-knowing CEO.”

We have this dangerous myth in America of the brilliant, all-knowing CEO who leads with a singular vision and never deviates. This goes back at least to Henry Ford — and probably earlier — and the best business books today tell stories of business leaders so famous that you probably only have to read their first names to know who they are: Steve, Mark, Bill, and so on.

But here’s the thing, these leaders were certainly brilliant, but they did not accomplish anything on their own, and they certainly didn’t stifle disagreement. They hired great people who brought energy and debate to leadership meetings.

There’s a famous anecdote about Steve Jobs in which he was talking with some members of his leadership team about his idea for a certain new iPhone feature. The team discussed a few other opinions, but Jobs was convinced his idea was the best. 

Eventually, Jobs was angry when developers came back and his idea wasn’t as great as he had hoped. He was furious with his team for letting such a bad idea go through. “But Steve,” they said, “that was your idea!” 

“I know,” replied Jobs. “And it’s your fault you let such a bad idea go through. You need to squash bad ideas — even when they’re mine.”

Jobs knew that success at Apple depended on assembling a great team of brilliant, driven, outspoken leaders. 

And he knew that he himself was a flawed individual. 

Jobs famously worked with acclaimed coach John Mattone. According to Mattone, Jobs was intensely focused on his own limitations so he could improve his leadership style.

When CEOs look to Jobs for inspiration, they shouldn’t just think of him as a brilliant leader (which he was), but also as someone who: 

• Knew that he needed input from his team to be successful
• Knew that his own abilities were limited

And that’s why he was among the greatest business leaders of the modern era.

When we dispel the myth of the all-knowing CEO we can start to solve the internal problems holding back our leadership teams. 

Here’s how.

How leadership teams can recognize and solve their dysfunction

Whether you’re the CEO or another member of the leadership team, there are tangible steps you can take to break free of dysfunction and establish a healthy team dynamic. 

For the CEO

Learn to encourage debate: You need to reorient your thinking to see that debate is productive. Whether it’s you or someone else, make sure there’s someone playing the role that gets people thinking, talking, and discussing.

In The 5 Dysfunctions of a Team, Patrick Lencioni uses the phrase “mining for conflict,” which I’ve always liked. Conflict and disagreement are healthy. In fact, they’re essential. You can only get to the best ideas if people raise objections and top leaders encourage debate.

If your leadership team is not used to this kind of meeting culture, get someone on the team to play the role of conflict seeker. Now, they’re not picking fights or being uselessly contrarian, but they should start asking “why?” and “how?” and “why now?” a lot more than before.

By doing so, they’ll bring other voices into the conversation as well. If you’ve got that quiet team member who tends to nod and go along with the group, now’s the time to get that person to speak up and share. All voices matter.

For all leaders

Talk to your CEO about psychological safety: Your CEO needs to make the group feels comfortable disagreeing. If that’s not the case, someone needs to bring it up. 

Set aside some time during a 1:1 or another meeting where you can bring up the idea of psychological safety. Explain how debate and discussion result in better strategy. 

Be honest about challenges: Out-of-touch CEOs are created when they get fed a steady diet of platitudes and rosy reports from VPs and team members. If you want a healthy leadership team, start being honest. I get it, no one wants to deliver bad news, but it’s much worse to have an Emperor's New Clothes situation where no one’s comfortable telling the truth.

Instead of “everything’s great,” be comfortable saying “Here’s what’s challenging right now — and here’s how we’re trying to solve it.”

Utilize a coach or consultant: We all have blindspots. An outsider who’s trained in group dynamics and team communication can help your leadership team see the limitations it can’t see on its own.

Just like Steve Jobs working with John Mattone, great leaders and leadership teams value outside expertise that can hold up a mirror and prompt true growth. 

The long-reaching effects of a misaligned leadership team

A dysfunctional leadership team casts a long shadow over a business. If C-level and VP-level employees can’t disagree with each other, the same thing will happen all the way down the ladder. 

Healthy companies commit themselves to good communication practices that exhibit transparency and candor — and this needs to start at the top.

CEOs must stay on the lookout for the two big signs of leadership team dysfunction, and must actively work against sliding into these ruts. Make it clear that it’s okay for other members of the leadership team to disagree with you.

In fact, it’s essential.