This year, we’ve been focusing on uncommon growth – how to unlock, create and execute it. Our latest insights confirmed something we’ve always known: leadership is fundamental to successful, sustainable growth. But the wrong kind of leadership can be disastrous.

Take WeWork, for example. Poor governance and erratic leadership resulted in poor decision-making, ultimately costing the company $1.9 billion in revenue. At the Royal Bank of Scotland, a lack of banking experience and attention to risk led to a balance sheet that ballooned to £2.2 trillion (larger than the GDP of the UK) before collapsing.  

On the flip side, Adobe’s leadership transformation sparked innovation, doubling its stock performance between 2018 and 2021. Shantanu Narayen’s vision and the capabilities of his team led to continuous improvement and growth. Similarly, LEGO’s focus on culture and capabilities turned an $800 million debt into $600 million in profits. Even in sports, the All Blacks’ leadership has driven them to win 75% of their games. 

The takeaway? Leadership impacts an organization’s performance more than anything else. However, most are “teams of leaders” rather than true “leadership teams.” Our research shows that to drive sustainable growth, organizations need cohesive leadership teams, not just individual leaders. After years of working with teams at all levels, we’ve distilled key insights on how to shape effective leadership teams that can sustain growth.

1. Leadership Teams Need Continuous Nurturing and Development 

Leadership teams, like people, are living systems that require constant care. Our annual Catalyst Change research found that successful transformations are built on true collaboration, where enterprise and individual interests are integrated. Effective teams shift from an individual focus to a shared team mindset. Figure 1 illustrates this shift from a “team of leaders” to a “leadership team,” with shared goals and genuine collaboration at its core. 

Figure 1: Moving from a team of leaders to a leadership team 

In today’s rapidly changing business landscape, leadership teams must understand their needs and ensure their mindset, purpose and goals remain aligned with organizational and stakeholder needs. Our research reveals that leadership teams failing to champion collaboration and shared goals risk fragmentation and siloed operations, leading to a 3.5-fold increase in the time it takes for strategic decision-making compared to teams with integrated structures. Gallup research also found that leaders who focus on development and use their strengths effectively are 6x more likely to be engaged, 7.8% more productive and 3x more likely to report a good quality of life. It was with this understanding that we helped the executive team of a 2,000-strong leading agricultural vehicle manufacturer optimize performance by shifting from an “I” mentality to a “we” mentality, driving success through effective teamwork that bridged functional divides and fostering both internal and external growth.  

2. Address All Dimensions of the Human-Centered Leadership Team Effectiveness Model 

Prophet’s Human-Centered Transformation Model (HCTM) is a proven holistic and people-centered approach to driving growth across organizations. The model is built on the idea that organizations reflect the same makeup as a human including the DNA, mind, body and soul. Effective leadership teams need to follow a similar model that not only builds trust and effective ways of working but aligns individual members to a shared enterprise goal. The Human-Centered Leadership Team Effectiveness Model (Figure 2) shows that addressing all dimensions of the human system is essential for empowering effective outcomes.

Figure 2: Prophet’s Human-Centered Leadership Team Effectiveness Model 

Questions that should be asked include:

• DNA: What is our focus and shared ambition that drives the work of our team?​
• Mind: What new skills are required for the team to drive change?​
• Body: What might need to change in our operating model to enable team performance?​  
• Soul: How might we ignite belief in the change to foster trust and productive relationships?​  

As Figure 3 illustrates, if any of these elements from the model are missing, this has a knock-on effect on leadership teams, increasing the risk of falling short on goals due to a lack of commitment, poor focus and low-quality work. 

Figure 3: What happens when part of the leadership system is missing 

3. Sustain Leadership Team Effectiveness Through Actionable Development 

Continuing with the human system analogy, leadership team development requires establishing “healthy rhythms” of working and meeting. Figure 4 shows how these rhythms can propel an existing leadership team towards high performance and effectiveness. 

Figure 4: Actionable approach to leadership team development  

This approach combines both “art and science” to shape team dynamics, capabilities, identity and culture of the leadership team. It involves:  

1. Conducting a leadership team diagnostic to help the team (and other stakeholders) identify opportunities for improvement based on how the team currently functions.   
2. Early alignment of the team’s purpose, ambition and role within the wider organization, so it can provide both clear leadership and staff empowerment by knowing its distinct contribution to success.   
3. Ensuring psychological safety through trust-building workshops. The team narrative and behavior workshops help teams build trust through sharing their whole selves, the meaning they derive from their work and committing to the behaviors to sustain trust.    
4. Prioritizing trust, healthy conflict and accountability to align the team’s success over individual ego. To uncover this a team strengths and priorities workshop helps sets OKRs and leans into the strengths of the leadership team.   
5. Systematically defining ways of working and decision-making processes. In a session around ways of working, the team can shape the purpose of leadership meetings, how decision-making works and define an effective cadence of meetings.   
6. Focusing on both individual and team learning to sustain growth and development. This typically involves team check-ins (potentially with an observer to feedback on process), re-running of the team diagnostic, team and individual coaching and continuation of individual development.  

Leadership teams are the driving force behind an organization’s performance, especially in today’s rapidly changing world. The key challenge lies not just in the competence of individual leaders but in the collective effectiveness of the leadership team. Like individuals, leadership teams require nurturing and careful development. Breaking free from functional silos requires a rhythm that fuses a human-centered approach with both art and science, creating a sustainable and highly effective team.

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Earlier this year, Meta, Facebook’s parent company, completed its second round of layoffs in 2023, with a third wave planned for May.  

Meta is not alone. Alphabet, Google’s parent company, laid off 12,000 people this year, its largest reduction ever. Amazon has eliminated 27,000 jobs. And Disney plans to reduce its total workforce by 7,000. Some experts anticipate that one out of three companies plans to cut 30% or more of their people in 2023. 

Downsizing isn’t just rough on those who are laid off. Researchers found that `survivors‘ in companies with reductions experienced a 41% decline in job satisfaction, a 36% dip in organizational commitment and a 20% drop in job performance. 

Yet, the talent war still rages in other areas of the economy. “In 2023, talent will become one of our top priorities,” said a large accounting firm recently.  

“Our leadership focus will be on ensuring we have a clear employer value proposition, on providing the right learning culture, offering the necessary flexibility, and on leading with purpose.”  

Growth in the renewable energy sector is outstripping the leadership talent pool, forcing companies into more imaginative talent strategies. Healthcare, too, faces a worsening shortage.  

Regardless of whether your company is hiring or in retention mode, your Employee Value Proposition (EVP) attracts employees, gives them a reason to stay and is critically important to future growth. And some companies are sitting on a secret weapon: Their environmental, social and governance (ESG) policies. 

ESG Plays a Crucial Role in Employee Engagement 

While most businesses know how vital an EVP is, with 86% of human resources executives naming it a top priority in a recent study, many are missing the opportunity to include ESG policies. 

ESG elements are a significant factor in employees’ decision to join, stay or leave a company: 

• 58% of employees consider a company’s social and environmental commitments when deciding where to work.  
• Employees are three times more likely to stay and 1.4 times more engaged at what they consider purpose-driven organizations. 
• 93% of employees who believe their company is making a strong positive impact on the world say they plan to stay in their jobs. Of workers who disagree with that statement, only 43% plan to remain with their employer. 

And integrating ESG and goals into an organization’s EVP can also help employers gain the upper hand in acquiring and retaining Gen Z and Millennial employees.  

For example, 64% of Gen Z workers say the companies they work for must act on environmental issues. For Millennials, 96% cite sustainability as a key issue, and one in four say they’d quit if they found out their company had a poor environmental record. Women, people with higher incomes and those with higher levels of education are also significantly more likely to choose ethical employers.  

Three Ways to Infuse ESG Strategies Into Your EVP 

1. Put your ESG goals and achievements center stage  

Companies can do more to communicate sustainability achievements via social media and websites, increasing visibility to current and future employees. 

Starbucks anchors its EVP on the commitment to “inspire positive change in the world while you grow in your career and in your community.” One way it demonstrates that is by offering the Starbucks Greener Apron program, a partnership with Arizona State University. This program helps employees learn about global sustainability practices and create personal pledges to support them. 

2. Make ESG part of the candidate’s experience  

Companies can show how they bring ESG initiatives to life by connecting prospective talent with employees deeply engaged in sustainability and social programs. They can also infuse interview guides with questions that test affinity to ESG goals or dedicate time in the “pitch” materials to highlight ESG opportunities for perspectives.  

Slack, for instance, focuses on how it has reworked and implemented diversity, equity and inclusion policies into the candidate experience. It started by sharing the company’s current ethnic and gender makeup and strategies for improvement. 

 Slack implemented some of these experiences to rework and promote more equitable hiring practices, including revising job descriptions with more inclusive phrases like “care deeply” and “build relationships,” eliminating whiteboard interviews and replacing them with blind code reviews and using co-worker role-plays for anyone conducting interviews. 

3. Make your employees part of your ESG program 

Organizations can mobilize initiatives to engage existing employees in contributing to ESG goals and celebrate those “from the front lines” stories, especially via social media.  

Chipotle delivers its “Cultivate a Better World” EVP to employees all the time, including using more local produce in restaurants. Employee-led organizations provide millions of fresh food to local food banks. It funds fledgling Agri-Tech businesses, encourages micro-producers and helps provide meals for food-insecure members of the LGBTQIA community. It further fosters accountability by linking executives’ annual bonuses to ESG strides. This compensation plan is another way it hopes to champion responsible leadership and sustainable solutions. 

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