Summary

While attractive in marketing brochures, long tenure and close relationships in leadership teams can sometimes harm a company.

• Long tenure can lead to mediocrity, insecurity, and bias.

• Close relationships can lead to cover-ups, lack of diversity, and groupthink

Robust processes and self-awareness can help leadership teams guard themselves from turning into coteries.

When companies highlight their leadership teams, they mention a few characteristics. 

• To the outside world, they boast about the average tenure of that group. The longer, the better.

• To insiders, they say that they’re a “close-knit” group who know each other very well. The implication is that being close-knit makes them a better team.

Tenure and camaraderie have advantages but can also be traps, especially in leadership groups. Allow me to present a counterview.

The tenure trap

Is tenure always a proxy for loyalty? Or could it mean that your leaders are redundant in the market? Are they here simply because they can’t make it anywhere else? If your leaders are in the company because of a lack of other options, then by definition, they’re average, or worse, mediocre. How will they foster excellence amongst the people they lead and represent?

Mediocrity and insecurity are also close cousins. Mediocre people often keep smarter people at bay. They promote people who don’t pose a threat. The insecurity gets more threatening as companies grow. As Guy Kawasaki famously said, 

“A players hire A players. But B players hire C players, and C players hire D players. It doesn't take long to get to F players. This trickle-down effect causes bozo explosions in companies.”

We also use tenure as a proxy for how well leaders understand a company. But does such an understanding make them too wedded to a status quo of their liking? Does longevity make them beholden to a fixed notion of what the company should be like? What happens when a company stagnates due to the deep-set biases of a tenured leadership team?

When leaders become too close to each other for the company's greater good, the problems of mediocrity and bias worsen.

The camaraderie trap

I am ambivalent about BFFs at work. There are benefits to working with friends, but it’s also hard to be objective when a friend is screwing up. Screw-ups are fine as long as people give each other honest feedback and find a way for the team to learn from it. The trouble begins when people cover up blunders only because their friends are responsible. When you don’t acknowledge mistakes, you also don’t institute mitigating processes to avoid them in the future. Things only get worse from this point.

The more senior a team of friends is, the more likely such cover-ups will hurt the company. Bigger egos are at play. People in leadership teams want to look decisive. Being vulnerable, even human, can often feel like a “weak” look. So when someone is wrong, there’s already a lot of incentive to hide the error. It gets worse when a BFF makes a mistake. You don’t want to push your friend under the bus, do you? 

When mediocre people with deep-set biases start covering up each other’s mistakes, you don’t get a high-performing team — you get a cabal instead.

Camaraderie can also come at the cost of diversity. After all, we are most likely to be friends with people who are similar to us.

“The greatest basis of liking an attraction that psychology has ever documented is similarity. We like people who are like us. And because we think positive things about ourselves, someone who's like us is very likely to get respect because what a brilliant and loving person that person is.” - Alison Fragale

If a leadership team is full of people like each other, it becomes an echo chamber. Critical debate is rare. Groupthink becomes commonplace. Leaders may look different and even hit the right notes on gender, caste, and BIPOC representation, but beyond superficial differences, diversity won’t count for much.

Leadership should never be a “generic” job. The primary job of the top dogs is to make a company better. The bigger the company, the harder this challenge is. So, as a company grows, tenure and camaraderie can’t be fig leaves to cover up leadership inadequacies. If you’re part of a leadership team, or better still, responsible for constituting one, ask yourself a few hard questions.

1. What real job are you still excellent at? Bullshit jobs don’t count. If your skills have fallen off a cliff, it may be time to take a break from leadership and go polish your craft. It’ll help you be confident in your skin, identify top talent, and understand your people well since you’ve resumed walking miles in their shoes.

2. What are your biases? How do you guard against them? This level of self-awareness is non-negotiable for leaders. Only when you know your biases will you institute processes to counteract them and seek diverse perspectives that cancel out your biases. Only A people are secure enough to challenge themselves, so don’t forget question #1 above.

3. If you have a leadership position open, what are the key competencies and skills the role needs? Instead of looking for people in your immediate vicinity (often your friends), design a process to identify the best candidate. Allow anyone to apply to the role and use a set of objective metrics to judge candidates. Promise to respect your framework. Avoiding this rigour risks turning your leadership group into a cabal. 

4. How easy is it for an outsider to join your leadership group? If it’s only down to people leaving, retiring or disappearing, you’re building a clique, not a high-performing team. If you’re joining a leadership group, don’t plan to sit there forever. Decide when you’ll revisit question #1. If you’re up for it, schedule a step-down date so someone new can bring in a fresh perspective. When a leadership team abounds with fresh perspectives, the organisation has a guardrail against stagnation.

5. When was the last time someone called out your bullshit? Or when did you last call out someone else’s bullshit? If your leadership group only has superficial, evasive conversations about difficult topics, even when you see screwups, you may be more of a clique than a team. Consider this a warning sign. You can step down and free up your position for an outsider, or if you have the influence, rotate a few leadership roles to bring in new, critical thinkers. 

I don’t mean to imply that leaders shouldn’t be friends with each other or that our similarity and liking biases always lead us astray. Friendship is ok. So is liking. But only as long as professionalism trumps both these sentiments when the rubber hits the road. We’re often blind to our biases, and that’s where the hard questions above and a strong set of processes become a safeguard. 

So I hope you can see through the “our close-knit leadership group has an average tenure of 18 years” spiel. That spiel is like a perfume masking some unpleasant odours. The best companies identify and address these smells instead of concealing them.