Highlights:

• Most companies have smarts, but “healthy” is the game changer and is a massive multiplier.
• Why be healthy? Have more fun; be more productive; keep your best people.
• Vulnerable trust is the foundation for high performing teams, leaders need to be comfortable showing that while they may be 80% brilliant, they are probably 20% rubbish. As we all are.

Introduction:

An overarching challenger for any founder is how to become a better leader, build high performing teams and a smart and healthy organisation. Alan Millard is a Principal Consultant at The Table Group, one of the world’s leading authorities on high performance leadership. Patrick Lencioni, the founder of The Table Group, has written a series of very successful books such as The Five Dysfunctions of a Team and The Advantage. Before joining The Table Group, Alan was immersed in that world with 30 years of experience and a reputation of building highly motivated teams, inspired by the “smart and healthy” principles of The Table Group.  At The Table Group, Alan works with executives from all over the world (including the Notion Portfolio) applying those very same principles. He’s also the chairman of DueDil, a UK based FinTech and one of Notion’s portfolio companies. Prior to The Table Group, he was the COO of Hiscox and Chairman of the UK subsidiary. He also has a constant desire to challenge himself, particularly demonstrated by his experience in mountain climbing; he’s summited Manaslu, Everest, Matterhorn, Mont Blanc, Denali. He’s also a qualified skydiver with more than 30 solo jumps.

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What does it mean to be a smart and healthy organisation?

“Smart and Healthy” is the crucial underpinning element of what The Table Group does. Most companies are smart. They recruit good people who are trained up and qualified in their jobs: sales, finance operations, whatever it is, and they hold themselves accountable for the jobs they do. But the success of business is about the interaction and the alignment between those people and that skill and experience. That's the healthy bit.

Healthy is a multiplier of smart; it helps you get the best out of the people that you've recruited and that you've got around the table. To be more specific, there are two things that companies always need to do:

• Minimise confusion.

There's confusion every day, no matter how much time you spend trying to be clear about what your purpose is, what you're trying to achieve, what the priorities are. There’s always new information and new stuff happens every day. That can undermine or cause confusion for anybody in the organisation. So, as a leader, you have to work really, really hard to keep the clarity so that you reduce the confusion all the time. Repeat yourself a lot - you’ll know you're doing a good job if people can do a good impression of you.

• Minimise politics.

Some politics is good, such as the discussion and debate about where the priorities lie in your organisation: Where do you need to invest the most? What is the most important area? That's a good debate to have amongst functions and amongst leaders.

But if it gets out of control, or it becomes personally led, it's never really been wrestled down to the ground as to what the priorities are and that’s not good. So you have leaders fighting each other for resources or air time; that's out of control politics, that's bad politics.

If you can maximise alignment, minimise confusion and keep your politics to a discussion about priorities, you're in a great place, and you're starting to see the benefits of being healthy.

And we point to three things you will see:

• First up, it’s more fun!
  

People love working in an environment where you've got strong teams, you've got each other's back, you know what you're trying to do, and you're totally aligned - that's a great place to work.

• It’s more productive. This is the important one of course.

This stuff's not just tree-hugging, this isn't just the soft stuff, this actually improves the performance of your company. McKinsey has done an independent study on this, showing that companies, with same skills, same people and same kind of organisation, will grow twice as fast if they're healthy. But just by being healthy, you can grow twice as fast. That's the prize. That's why this is so important.

• And, you get to keep your stars.
  

Your best people will not tolerate a company that isn't aligned, that doesn't have clarity, that doesn't have great teamwork and a good environment and a good culture, they'll just go somewhere else. It doesn't matter how good your purpose is, no matter how good the people around them are, if the environment is not right, if you're not healthy, they'll just go elsewhere.

These principles underpin how you build a high performing team

A lot of people have read The Five Dysfunctions, it's a very well-known book, you should read it, if you haven't.  Pat Lencioni is a frustrated scriptwriter, so he doesn't write to be clever, he writes to entertain and engage. He tells stories, so it's one of the easiest business books you'll ever read.

It talks about five levels that build one on top of the other. And we'll move forward from the bottom to the top - the top is about results. So we are going to get there eventually.

• First level is vulnerable trust.

Everyone talks about teams building trust, but this is a very specific kind of trust that we're talking about, this is vulnerable trust. This is trusting the people in your team enough to be truly yourself. We all filter, we all try to sound good, sound intelligent, ask the right questions, have intellectual debates. But actually to show all of ourselves, to show when we make mistakes, to admit when we don't understand or if something's confusing, or someone's better than you, that’s vulnerable trust. And that kind of vulnerability takes time to build. The weird thing about teams is that just by being a team and sharing tasks, it doesn’t actually help you to build vulnerable trust, you have to work at it specifically. And that's what we help a lot of teams to do; we help them work through and quickly build that vulnerable trust that you need at that bottom layer. So that's the first step. Once you've got vulnerable trust, then you can have a real debate.

• Second level is conflict.

This is how companies and teams come together to think and make good decisions. To truly understand a situation, you have to have passionate, unfiltered debate. By passionate we don't mean waving arms around, shouting and getting emotional, but rather passionate about the important stuff. There are three things that need to be present for you to have passionate, unfiltered debate:

1. The stakes must be high;
2. You have to care about the outcome, be emotionally invested; and
3. There has to be a difference of opinion within the team.

That's a triangle, so make sure that every debate you have in the time you have together as leadership teams is always in that triangle. Don't do the simple stuff. Don't do the easy stuff. That can be done outside of the leadership meetings and can be delegated.

As leaders of companies, you need to focus on the most difficult stuff. So you need to know how to have conflict in a positive way and stay on topic. Sometimes you're going to get it wrong. Sometimes it's going to feel like a personal attack. And people can get quite heated and get off-topic. So as a team, you need to be able to self-regulate, stay on the topic and be curious about different people's perspectives.

We quite often give opinions that are just the sum of all our skills and experience when we say, "this is the answer". But to help understand different perspectives, when people are debating, you have to move down what we call ‘the ladder of inference.’  You have to start to explain how you got to your opinion.  What was the particular project that went well or failed or experience that you had that makes you feel so strongly about your opinion? Then if you compare those between you, you will find the common ground and you'll be able to figure out what the best solution is.  So passionate, unfiltered debate helps teams think and get the best out of everyone that is around the table.

• The third level is commitment.

Now at the commitment stage, we can all fall into the trap of intellectually agreeing to something. “Yes, I've understood the facts,” or “I have heard the debate.” But you are just committing on an intellectual level, when what you need is to buy in emotionally to each decision. So what we are looking for is, "Yes, I am in. I really believe in the decision we've made and I'll do everything I can to make that happen." That's another level of commitment altogether, which is often missed. If you don't have that emotional commitment, then when you leave the room it will start to unravel. So you really need everyone to emotionally commit in order to have longevity of the decisions you've made. To do that, there are two things you need; clarity and closure. Clarity means being really clear about the decisions you’ve made because everyone might have a slightly different view. And then there’s closure. To be clear I don't mean consensus; consensus is the most inefficient model in the world, you just need to look at the UN to see that. It's not consensus, but it's agreement. You can disagree and still commit to the decision. That's the most effective and efficient approach to running a business. So clarity and closure at that level are critical for commitment. Once you've made those decisions, you know what you're going to do, you're all aligned on those decisions and alignment is so powerful. That's where you need to make sure you stay true to the team, stick to the commitment and stay aligned. Otherwise, you start to create confusion, as we talked about earlier.

• Once you're out of the room, you then come to accountability.

Now again, this is a specific kind of accountability. This is not, “I'm accountable to do my job.” Most leaders have a high sense of personal accountability. This is about being accountable to each other, what we call peer-to-peer accountability. This means holding your teammates to account for the promises that they've made, when you make a decision. Not to do hill climbing, as we call it, not go to the boss, that's the worst way of working as a team. Go directly to each other, and hold each other accountable to the promises that you've made. Peer to peer accountability is much more effective. You need hierarchies to run an organisation, of course, but being hierarchical is totally wrong and very inefficient and slows you down. So avoid that.

• The top level is results.

There are two things needed to be great at this level. One is to treat your peers and your leadership team as your number one team. We so often stay in our safe place, such as the department or the area of the team that we run. It's a nice place to be, these are people that work for you; you've recruited them, you work with them, you know the name of their dog, you know how to work together, that's your safe space. And it's in an area where you are good at what you do. But the most difficult problems are multi-discipline problems across the organisation. So you need to change your emphasis to your peers to work more closely with them to solve the most complex problems in the organisation, the highest priorities. That's where you need to focus as a team. And you need to be motivated to win together or lose together, no one on the team should feel like they can win alone or apart from the team. You only win together, there's no other way.

Vulnerable trust paves the way for passionate unfiltered debate, which leads to true commitment – intellectual and emotional. Peer-to-peer accountability ensures the business delivers on its promises and they all work together to deliver shared results. It’s a simple, but powerful framework.

We have that high performing team, but how do we take that out of the room and create a smart, healthy wider organisation?

This is the real pay off, if you have a smart and healthy organisation you can move twice as fast. That's the power of alignment, but to create true alignment, you need real clarity in your organisation.

We talk about six things that need to do to create that clarity:

First, why do we exist?

People talk about vision or purpose or mission and we all think we know what they are. But in reality, we find it hard to differentiate between them. So we simplify that to, “why do we exist?” Simple as that. How do you make the world a slightly better place by existing or what would be missing if your company didn't exist? It's at that level. It's the inspirational level where we all want the world to be a better place. And we all work hard to achieve something we truly believe in. This is about something more than just getting paid and paying the mortgage, it's something that drives you, that makes you want to get up in the morning when that alarm goes off and work hard again, because you believe in what your company can do to make the world a better place.

Second, how do we behave?

This second question is about the kind of people you want to work with. What behaviours or values do you want each person in the organisation to hold and aspire to follow. Who we want around us when we're in the room is only powerful if at some point, it affects your business financially because you hold your values truer than the revenue or the profits you might want to make. So what would you sacrifice revenue for, or say no to a customer for, in defence of your values?  Would you get rid of that brilliant person in the organisation because they’re not holding true to the values? If no, then those values don't mean anything. They have to hold true even when it's tough, even when it might impact the business, I think it's the head of Netflix that says, "Get rid of the brilliant jerks." Whatever you do, don't tolerate those people who are amazing technically, but are toxic to your organisation. Hold true to your values in all circumstances.

Third, what do we do?

This is a simple description of the actual function of the business. What do you do and what are you trying to achieve? It's not the aspiration, it's just a perfunctory statement of the pure function. So, “We're a B2B SaaS business that services financial companies in the UK,” is an example of a descriptor.

Fourth, how do we succeed?

What differentiates us as an organisation from our competition? What are we better at than the competition? This is something that develops over time, it's about the capabilities you're going to over-invest in to make you better than the competition. If you try to invest in all functions, and all capabilities in your organisation, then you'll just be average at everything. If you spread your resources widely and prioritise everything, you'll be average at everything and average gets killed. You have to decide what you're going to be great at. And what are you just going to be okay, at? That's how you succeed?

Fifth, what's most important right now?

You can galvanise your whole organisation behind one project and that's hugely more powerful than 15 or 20 projects. At one client I worked with they had 67 priority projects, it was crazy and no one ever got anywhere doing that. That's one for every week of the year and some left over!

Sixth and last is, who does what?

This last one is about what clarity of roles and responsibilities that you will be held accountable for.

That's how you achieve clarity, by getting those six right and this is something you have to continually work at. But the people that work for you will love you for it.

Everyone in your organisation knows what you're trying to do. What that does is it moves decision making down the organisation, because people are comfortable with making decisions. They have the confidence that they can make the right decision, because you've given them clarity. And it makes the lives of leaders a lot easier.

If you are a leadership team and you find yourself doing everything that's on you, because you haven't spent time giving that clarity to the rest of your people in your organisation. They want to do a good job, they want to make decisions. They only refer back up to you if there's too much confusion and not enough clarity.

Common sense ideas implemented with uncommon discipline

We give this warning at the beginning when we work with companies, saying, "This is common sense. You're going to nod all the way through this as we explain it, because you're going to know it's right." But when we challenge them and say, “So it’s common sense, but are you doing these things?” Then people realise they’re actually not but it is tough to answer why that's the case. But I would point to busyness - we all like to be busy. We love the energy you get from being busy. We feel good if we've answered 150 emails, have done 10 meetings and feel like we're adding value. But those are type-one activities and what we are talking about is a type-two.

Type one is focusing on activities that are ‘important and urgent.’

Type two is focusing on activities that are ‘important but not urgent.’

Our stuff is in that area type two activities. These are activities that we have to deliberately take time to do. We have to be very intentional about doing them and avoid the busyness. Avoid those ‘important and urgent’ things and focus on this. That's the key reason.  

We call it organisational health, because it's like physical health. You know what you should do and it's really obvious when your Doctor tells you that you need to live a healthier life you of course say, "Yes, yes, of course," but do you do it all the time? No. And it's a bit like that with organisational health. So to be a great leader, you have to keep being reminded of this stuff. Personally, I love our model, because it's common sense and it's plain language. It gives you a language to talk about dynamics between people. And it gives you a structure and a framework that you can all follow. But it's not prescriptive. A lot of stuff you see is, "you must do this in this way," that tries to get to the total answer. What we are talking about here is a framework within which there's a lot of freedom and context that you can put into as a leader, building clarity and a framework for your team to work within. That's why I love it.

How can CEOs build vulnerable trust with their board?

When a CEO runs a startup they run two teams; the senior leadership team (SLT) and the board. Both teams have different functions: the SLT has to decide on a plan and then execute on that plan to be successful. While the board wants to know that that's going to happen, and give guidance where they can to help the SLT decide what's most important.

The CEO is the bridge and a buffer between the two and I would go as far as to say that they have to protect their leadership team from the investors. It's quite a hard role to play. But that's the way we talk to CEOs and tell them how to be effective between the two. So don't merge the two, don't try and meld the two, but actually treat them with respect and use the power of the perspectives that both teams have. Obviously, the CFO will often be a bit of a bridge too but the CFO is responsible for the performance of the company. The CEO is the one who's managing the relationship and the communications.

The other thing I would say to a CEO when dealing with the board, is to focus as much as you can on the strategic decisions. That's what investors and boards most want to talk about, “What are your strategic choices? Where are you going to invest? How are you going to win?” Some of those clarity questions we talked about. Get them involved in those conversations. Too often, I see boards focusing on performance. “Where are your metrics? Where are you at? What are you achieving?”. That kind of forensic assessment of short term performance isn't very useful. It's a safe place for investors to be because metrics are clear. And they can challenge, push and see what performance is happening. But those metrics are the results of decisions that have already been made about your priority and your strategy. So it's too late, as many of those metrics are lagging indicators and are therefore not helpful. You're already on the backfoot reacting to things that have already happened.

To get the most out of the board, focus on the future and on strategic decisions. Put those items first on your board agenda and put the metrics and the assessment of current performance last. You still need to do it because you want the forensic assessment and investigation from the investors but put it last to keep it within context. You get the key questions out but by putting it last you can time bound it and not get carried away with something that has already happened. Focus on the future.

Building trust with your board requires attention as you spend less time together

It must start outside the boardroom. A great way to do this is to get the NED or Chair involved directly with the business on their specific area of expertise or value. So if it's fundraising, they could work with the CFO. If it’s engineering with the CTO. If it’s a particular vertical or market access that they offer insight on or access to perhaps get them working with you and your sales leaders to unlock or unblock opportunities.

The board is a little bit of a ceremony, it's a bit of a process and doesn't always allow for an investor or non-exec to get close and understand what's going on, so actually it's not the best place to build trust. The best place is through projects or through particular investigations so they can get close to the people involved in the business and the details of the organisation.

Then the other element is the vulnerable trust level. Being vulnerable with the board as a CEO is not easy to do. But you should be ready and able to talk to them about the areas of the business you're worried about or things that you might need help with or even where you've made a mistake. Now the strange thing about that is people don't do that because they feel weak. What it actually does is it draws people close to you, if people can see that you need support, and you need help, then they will be drawn to you because they want to try and help.

Now, if you do that every time you meet them, then clearly that's different, that's a credibility issue. But given you're a competent CEO, you know what you're doing (at least most of the time), then you should share the times when things are not quite right or you are worried. That's what builds trust and a high performing board. Having proper debates starts to follow the same model in a board as with leadership teams. And the job of a leader with any team is to go first. Showing vulnerability starts at the top. If, as the CEO, every time you turn up at the board you’re saying, “everything's perfect, the plans are clear, everything's going fine,” but you're defensive about other things, people know that's not the truth. We're all 80% brilliant and 20% rubbish, your team needs to see the rubbish bit of you in order to know who you are and where you're coming from. Ten when you speak, or when you present something, it will be with authority, because they will know that if you are struggling or if there are problems. So when you tell them that everything is going fine and as a team you’re winning, they will believe you. Remember that, in order to trust each other, you have to see the rubbish bit.

The ripple down effect from with Senior Leadership Team to the rest of the business is vital

This has to be done deliberately, it won't just happen. Quite often there's an assumption that somehow, by osmosis, everyone in the organisation will know what’s going on. Interestingly, when we work with teams, they'll often express confidence about the leadership team, but it's kind of self-contained. There’s an environment of high performance, they get really close, they have passionate, unfiltered debate and they're committed to decisions, etc. And whilst that works well, you have to move that down through levels of the organisation. And you know, when a team's got it, when each individual leader on that team has the confidence to start spreading what high performance looks like and what clarity looks like with their own team, they all become ambassadors of organisational health. And that's the switch that lights up the whole business up.

As a leader, you not only have to be a great team player within your leadership team, you have to lead organisational health down to your teams and ask for the same focus on the five levels of high performance and to talk about what the clarity the leadership team has agreed on means to them within their function.

I read an article which said you can tell the strength and performance of an organisation by talking to the first level team leaders of the organisation, because they're the ones on the frontline. They're the ones who have people working for them that they're guiding, they're making decisions on. The most powerful place to check for organisational clarity and high performance is that first level team leadership. And that's quite difficult, because those are the guys with the least experience, they probably just been promoted to Team Leader, they're still figuring it out for themselves. So as well as them being the most important, they're also the least experienced, and probably the most vulnerable. The place I would look the most, if you've managed to get down through the layers of your organisation, is to check that first level team leadership.

COVID is definitely affecting all of these principles in a remote-first world, but it's mostly positive

We're exploring this as we work with teams, so let me go through the five levels and talk about what we've seen so far.

At the bottom level of high performing teams is vulnerable trust. The reason that's important is that it speeds you up, there's no surprises, you admit when you've made mistakes and you're honest in situations. Remotely, what we're finding is actually that it's a more relaxing environment, people are being more themselves and you see a bit of their home life. So we're finding that there's quite an equalising impact of being remote, everyone is more similar, they’re more horizontal facing and there are easier conversations. So vulnerable trust is, we believe, increasing in remote situations.

But with conflict, it’s the opposite. We don't like to have conflict remotely, because we can't put an arm around someone afterwards. Having an argument and then walking away when you're suddenly in your own house and you're not with those people anymore is awkward. You can't have the corridor conversation to make things right, have a cup of tea in the break, check in on each other or put an arm around each other. So because we haven't got any way of recovering, we tend to protect the meetings that we're having from conflict. You have to work harder at that. But then check in by phone afterwards, ring someone up afterwards and say, "was that okay?". I think that's harder and one to watch for the leader's job more than ever is to look for that conflict. We say it's ‘calling out the face’ which means calling out someone when they're screwing up their face and they're not happy. You can see that on zoom, just as easily as you can in real life. Conflict is harder, so watch out for that one.

Commitment is interesting. Let’s say you commit to a decision in an online meeting and everyone is bought in emotionally; in a remote environment it can unravel quicker, when there isn't that causal interaction.  When a decision is made, perhaps by two leaders in a meeting or just having a chat after the meeting, they need to confirm, clarify and engage after. So you need more structure, at the commitment level to make sure the clarity is there and the buy-in is there and sticking. You neeed tocheck in afterwards.

Next up is peer-to-peer accountability. This is definitely harder in a r