Every Monday morning C-suite colleagues gather. They review metrics, share updates, debate priorities, and leave with action items. The CEO calls them the leadership team but many executive teams aren't actually teams at all.
They're committees. Collections of talented individuals running their own kingdoms, meeting periodically to coordinate and compete for resources. The distinction matters more than semantics suggest. Research in team psychology reveals that genuine teams produce fundamentally different outcomes than working groups, and the gap between these two models may explain why so many organizational transformations stall at the executive level.
The Working Group Masquerading as a Team
Katzenbach and Smith's seminal research distinguishes between working groups and true teams with precision that should make every leader pause (Katzenbach & Smith, 1993). Working groups share information and make decisions, but members are evaluated primarily on individual contributions. True teams, by contrast, hold themselves collectively accountable for outcomes that require integrated effort.
Most C-suites operate as working groups. The CFO owns financial performance. The CRO owns the sales number. The CTO owns technology delivery. They coordinate at their boundaries, certainly the CRO needs pricing flexibility from Finance, the CTO needs requirements from product, but each leader's success or failure is fundamentally individual. When the company misses its quarterly target, fingers point to whichever function fell short. The team dissects the failure but rarely owns it collectively.
Often, senior leadership teams exist in the twilight zone, not quite working groups, not quite real teams (Wageman et al., 2008). These hybrid structures capture neither the efficiency of clear individual accountability nor the power of genuine collective work. Instead, they create ambiguity, diffuse responsibility, and political maneuvering.
The Cost of Working Groups
The consequences of maintaining a working group while expecting team performance extend beyond missed collaboration opportunities. There are specific, measurable costs.
Strategic incoherence and slower execution. A meta-analysis of top management team effectiveness found that working group structures correlate with fragmented strategy implementation (Richter et al., 2006). When functional leaders optimize for their domains rather than enterprise outcomes, strategic initiatives require extensive negotiation and CEO intervention at every integration point. What should be collaborative problem-solving becomes sequential hand-offs, each transition point introducing delay and friction.
Increased organizational politics and resource competition. Research on coordination mechanisms shows that working groups default to competitive rather than collaborative resource allocation (Malone & Crowston, 1994). When executives aren't collectively accountable for integrated outcomes, budget cycles become zero-sum games. Leaders hoard talent, duplicate capabilities across functions, and resist resource sharing that might optimize enterprise performance at the expense of functional metrics.
Poor organizational learning and innovation. Organizations with executive working groups show significantly lower rates of cross-functional learning and innovation (Argote & Miron-Spektor, 2011). Breakthrough innovations typically emerge at the intersection of disciplines, but working group structures create boundaries that knowledge doesn't easily cross. The CMO's insights about customer behavior don't inform product development; engineering innovations don't reshape go-to-market strategy.
Leadership talent attrition. High-potential leaders who observe executive working group dynamics often become disillusioned. Talented leaders are particularly sensitive to organizational hypocrisy, the gap between espoused values of collaboration and observed behaviors of siloed competition (Goffee & Jones, 2000). When the executive team models political maneuvering rather than collective problem-solving, the organization's best future leaders seek environments with real collaboration.
Cultural fragmentation cascading through the organization. As Schein documented, organizational culture flows from leadership behavior, not stated values (Schein, 2010). When executives operate as competing functions rather than a unified team, that fragmentation replicates at every level. Cross-functional collaboration becomes a platitude leaders espouse but don't model, creating cynicism and turf protection throughout the organization.
The Team Advantage: What Genuine Teams Achieve
Superior strategic decisions through cognitive diversity. Genuine teams harness diverse perspectives more effectively than working groups (Rich, 2000). When executives truly collaborate rather than simply coordinate, they challenge each other's assumptions, surface blind spots, and integrate insights that no single functional perspective could generate. The team becomes cognitively smarter than its smartest member.
The most powerful teams achieve collective intelligence that exceeds what individual members could produce even working in parallel (Malone & Bernstein, 2015). Groups solving complex problems can outperform their best individual members by 20-40% when structured for genuine collaboration rather than additive contribution.
Faster, more agile execution. Executive teams with genuine collective accountability execute faster than working groups because they eliminate sequential approval processes (Eisenhardt, 1989). When executives share responsibility for outcomes, they can make real-time trade-offs and adjustments without escalating every cross-functional issue to the CEO.
Enhanced organizational resilience. Longitudinal studies of top management teams show that genuine teams navigate crises and disruption more effectively than working groups (West, 2012). When unexpected challenges emerge, real teams can rapidly reorganize effort, reallocate resources, and integrate responses without requiring top-down restructuring. The team itself becomes the adaptive mechanism.
Accelerated leadership development. Executives in genuine teams develop broader strategic capabilities faster than those in working groups (Wageman et al., 2008). Daily exposure to peer expertise across functions, combined with collective problem-solving on enterprise challenges, builds general management capability that functional leadership roles alone cannot provide. Real teams create their own succession pipeline.
The Three Tests of a Real Team
How can leaders assess whether their executive team has crossed the threshold from working group to genuine team? Three criteria provide clarity.
First, interdependent goals that require collective effort. Real teams need tasks that cannot be accomplished through individual contributions alone (Hackman, 2002). For most C-suites, the honest answer is that executive team members could succeed in their functional roles even if the team functioned poorly. The CMO can build a strong brand, the CFO can optimize the balance sheet, and the CTO can modernize infrastructure, all while barely collaborating beyond information sharing.
Compare this to genuinely interdependent work. When Amazon's leadership team restructured around customer-centric services rather than functional silos, they created true interdependence, no single leader could deliver customer outcomes without deep integration across traditional boundaries (Stone, 2013). The goal structure forced real teamwork rather than polite coordination.
Second, collective accountability measured through shared outcomes. Team accountability means members hold each other responsible for collective commitments, not just the CEO holding individuals accountable for functional results (Lencioni, 2002).
In practice, examine how your executive team discusses performance. When revenue falls short, does the conversation focus on "what the sales team needs to fix" or on "how we as a leadership team failed to create the conditions for success"? The language reveals the mental model. Research on psychological ownership shows that teams develop collective accountability only when members perceive shared responsibility for outcomes (Pierce & Jussila, 2010).
Third, team-based rewards that matter. Senior teams rarely structure meaningful consequences around collective performance (Nadler & Tushman, 1997). Individual bonuses typically depend 70-80% on functional metrics and only 20-30% on overall company performance, and that company metric is the same for everyone, requiring no team collaboration to achieve. There's often no reward specifically for how well the executive team works together.
Contrast this with models where significant compensation depends on peer evaluation of collaborative contribution, or where team members share equally in a collective bonus pool that varies based on team effectiveness metrics. Such structures remain rare in C-suites, revealing an uncomfortable truth: we don't actually believe executive team collaboration matters enough to pay for it.
Why Teams Resist Becoming Teams
If genuine executive teams produce better outcomes, why do so many C-suites resist the shift? The answer lies in the rational self-interest of functional leaders.
Senior executives are typically promoted because of deep functional expertise and a track record of delivering functional results. Their power base, their reputation, and often their next career move depend on demonstrating clear individual impact. Senior leaders often perceive collective accountability as diluting their individual visibility (Wageman et al., 2008).
Furthermore, real teamwork at the executive level threatens functional autonomy. If the leadership team genuinely collaborates on strategy execution, the CMO might find that brand decisions require input from operations, or the CTO might need to compromise technical architecture for business agility. This isn't coordination, it's genuine constraint on functional decision-making.
Humans have deeply ingrained tendencies toward individual recognition and competitive achievement (Malone & Bernstein, 2015). Even when we intellectually understand the value of collaboration, our psychological wiring pushes us toward demonstrating personal competence and claiming individual credit. Executive teams must actively counteract these tendencies through deliberate structural choices.
Organizational design reinforces these incentives. Most companies structure accountability vertically through functions rather than horizontally across the executive team. These reporting lines make functional excellence the primary currency, rendering executive team collaboration a secondary concern.
Six Questions That Reveal the Truth
For leaders seeking honest assessment of their executive team's reality, ask these six questions:
1. Could we name three critical outcomes that require genuine integration across functions to achieve, outcomes where we would genuinely succeed or fail together? If the honest answer is "our functional goals ladder up to company goals, and we each deliver our part," you have a working group.
2. In the past quarter, has our executive team made a decision that required a functional leader to accept a suboptimal outcome for their area in service of a collective goal? Real teams make trade-offs together. Working groups negotiate and escalate to the CEO.
3. Do we spend more meeting time on information sharing and updates, or on collaborative problem-solving that requires our collective expertise? Research on meeting time allocation shows that working groups spend 60-70% of time on updates, while genuine teams spend comparable time on integrative work (Rogelberg, Leach, Warr, & Burnfield, 2006).
4. If the company misses a major goal, would executive team members feel they had personally failed, or would they assess which function underperformed? The locus of accountability reveals team reality.
5. Do we have conflicts that we work through to resolution, or do we smooth over disagreements and resolve them through bilateral conversations or CEO intervention? Edmondson's work on psychological safety shows that genuine teams surface and work through conflict directly, while working groups avoid it (Edmondson, 1999).
6. If we asked each executive team member to list their top three priorities, how much overlap would we find? Research suggests that real teams show 60-70% overlap in perceived priorities, while working groups often show less than 30% (Wageman et al., 2008).
When Teams Should Stay Working Groups
Here's where the analysis demands nuance: not every collective of leaders should become a genuine team. Team structures suit organizations facing complex, integrated challenges that require collective leadership wisdom and coordinated action across functions.
Conglomerates running independent business units may function perfectly well with a working group of divisional leaders who coordinate lightly. Companies in stable industries with well-understood functional boundaries might optimize for functional excellence rather than integration. Working groups can be entirely appropriate structures when the task is primarily about information sharing and individual accountability (Katzenbach & Smith, 1993).
The delusion isn't in choosing the working group model, it's in calling it a team, expecting team behaviors, and then wondering why true collaboration isn't happening. Leaders serve their organizations by confronting this choice explicitly rather than drifting in the ambiguous middle.
Building a Genuine Team: The Integration Imperative
For organizations that genuinely need executive team integration, those facing transformation, market disruption, or strategic challenges that transcend functional boundaries, what does the shift require?
Restructure accountability. This means identifying enterprise outcomes that no single function owns and making the leadership team collectively accountable. Not company revenue that rolls up from functions, but outcomes like customer lifetime value or speed of innovation that require cross-functional integration to move.
Redesign goals and incentives. If half of each executive's compensation depends on how well the leadership team functions, measured through peer assessment, collaborative outcome metrics, or team effectiveness indicators, behavior would change. Research on psychological ownership demonstrates that meaningful consequences shift mental models from my function to our enterprise (Pierce & Jussila, 2010).
Invest in genuine team development. This includes clarifying team purpose and goals, establishing team norms for decision-making and conflict resolution, and creating systems for real-time team performance feedback (Hackman, 2002). Effective teams require enabling conditions, the right mix of people, clear goals, appropriate resources, and supportive organizational context (Malone & Bernstein, 2015). Team development isn't primarily about interpersonal bonding; it's about deliberately engineering these conditions.
Change how time is spent. If the leadership team meeting remains primarily a show-and-tell of functional updates, the team model won't take root. Real teams spend collective time on problems that require collective intelligence: strategic challenges, complex trade-offs, integrative innovation efforts.
Every Leader's Responsibility
The executive team delusion isn't just the CEO's problem to solve. Every member of the leadership team has agency and responsibility.
For functional/regional leaders: Ask yourself whether you're genuinely committed to collective success or primarily protecting functional/regional autonomy. Are you willing to have your performance evaluated partly on how well you contribute to the team's effectiveness? Can you accept constraints on local decisions when team priorities require it?
For the CEO: Examine whether you've created incentives for genuine teamwork or just called a working group a team. Have you structured goals, rewards, and accountability to make collaboration rational rather than rhetorical? Are you willing to cede some decision authority to the collective team rather than serving as the integration point for all cross-functional issues?
For board members: Consider whether your committee structure and reporting relationships inadvertently reinforce functional silos rather than team accountability. Are you measuring and rewarding executive team effectiveness, or only individual functional performance?
The deepest value may lie in giving permission for honesty. Many C-suites maintain the fiction of teamwork because naming its absence feels threatening or an admission of failure. There's no shame in being a well-functioning working group if that's what the organization needs. The shame lies in pretending to be something you're not and wondering why it doesn't work.
To learn more about our work with executive teams, contact info@mindsopen.co
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