An organization is only as strong as its senior leadership team. In fact, a recent Bain & Company study of 1,250 companies found that organizations with highly effective executive teams achieve revenue growth, profitability, and total shareholder returns that are three times higher than the average.
Yet, many executive teams fall short—often to the detriment of the entire company. According to a 2020 survey by the Center for Creative Leadership, 65% of senior executives feel their top team is ineffective.
It’s completely understandable. Executive teams bear the weight of solving nearly existential organizational challenges, often intensified by internal dynamics and a disproportionate focus on individual rather than collective development.
Instead of silently struggling or reshuffling team members, the more effective path is to build a strong, cohesive team that operates as one unified force. In studying hundreds of companies spanning 11 industries and six continents, my colleagues have uncovered five key traits that define the most successful leadership teams: direction, discipline, drive, dynamism, and collaboration.
Direction
A leadership group’s effectiveness starts with how well its members collaborate to define and maintain the organization’s direction. This means committing to a clear purpose, vision, and strategy.
Misalignment can derail an organization. For example, at a rapidly growing tech company in Southeast Asia, leaders had a bold long-term vision to achieve unicorn status but suffered from a lack of alignment on short-term priorities. Internal divisions cropped up as executives jockeyed to fund their own strategies, hindering collaboration and growth.
The solution? The team identified and agreed on their five most critical priorities. Through clear communication and active listening, they formed a shared understanding of how individual and team goals connect to the broader business strategy. This alignment ended the discretionary funding of isolated initiatives and unified their efforts.
Discipline
Discipline is essential for top teams to make consistent decisions, hold productive meetings, and maintain healthy routines. Yet a lack of clarity around roles and responsibilities can undermine discipline. Many CEOs are surprised to learn that their team members don’t fully understand each other’s strategies, objectives, and deliverables—hampering support and cooperation.
One practical way to instill discipline is to establish a structured meeting process. At Root Capital, a nonprofit investment firm, leaders made a simple yet powerful change: rotating the responsibility of leading meetings among team members. This shift fostered a greater sense of shared ownership and ensured that decisions were better aligned with the firm’s overall strategy.
Drive
Teams with drive are marked by their resilience. They aren’t afraid of doing the hard work, particularly during hard times. They debate constructively and surmount obstacles collectively—crucial skills in a crisis.
For instance, one life sciences company faced a Securities and Exchange Commission (SEC) investigation. Certain there had been no wrongdoing, the top team developed a plan to tackle the situation head-on, immediately, and with optimism. They worked together to address SEC requests with careful attention to detail, which ultimately led to the SEC clearing the company of any violations. The process also instilled a mindset and behaviors that enabled the team to overcome future challenges.
Dynamism
Top teams don’t just have the drive to mitigate or resolve the tough issues in front of them. They are also forward-thinking, actively seeking opportunities and heading off challenges.
Dynamic teams don’t view change as a threat. Rather, they invest in innovation and protect those initiatives from anything that might undermine them. These teams are flexible, fast, and willing to adjust their plans as needed. Their companies often have incentives for risk-taking and don’t penalize failure.
In contrast, most executive teams shy away from risk. In their high-stakes world, failure is a terrifying prospect. But as a result, their organizations become stagnant, unable to adapt to changing circumstances.
One pharmaceutical company’s approach to embracing failure as a learning opportunity illustrates the power of dynamism. Leaders dedicate 15 minutes in meetings to discuss a “failure of the month.” This practice fosters a constructive, judgment-free environment where everyone views failure as a source of positive change.
Collaboration
Collaboration is at the core of effective teamwork. It involves developing strong personal relationships, fostering inclusion, and cultivating trust among team members. Collaborative teams excel at active listening, giving and receiving feedback, brainstorming solutions, and holding each other accountable.
Building collaboration can be particularly challenging in multicultural environments or after mergers. For example, after an Asian technology firm acquired a European competitor, the newly appointed regional CEO inherited a fragmented team. To improve cooperation, the CEO initiated a series of off-site meetings designed to nurture personal relationships and mutual empathy. During “team moments,” when members openly discussed their behaviors, the CEO modeled vulnerability by sharing areas for personal improvement.
These five traits are not just individual attributes but collective behaviors that transform a loose affiliation of leaders into a cohesive, powerful unit. Cultivating and sustaining these behaviors takes time, but the rewards—including enhanced decision making, communication, and, most importantly, company performance—are well worth it.