Don’t Worry, Be Happy

The success or failure of top management may hinge on something few of us ever consider. That is the range of temperaments across the senior team. Team composition has been sliced and diced across every conceivable dimension of age, sex, race, national origin, tenure and function, but it turns out that one important contributor to team success is something altogether different: a common attitude toward life.

Recent research appearing in Administrative Science Quarterly convincingly demonstrates that teams sharing the same level of “positive affect” (disposition) work together better. In fact, companies that had top teams made up of people with similar temperaments enjoyed 4% to 6% higher market-adjusted earnings per share than companies that did not. The study included 301 top executives at 62 major U.S. organizations, selected from among the Fortune 500, the 100 largest privately held companies, leading nonprofits and a few newsworthy emerging growth companies.

The researchers surveyed the executives' levels of enthusiasm, mental alertness, energy and determination. Highly positive-affect people scored high on survey questions such as “I always seem to have something pleasant to look forward to,” “I often feel happy and satisfied for no particular reason” and “Most days, I have moments of real fun and joy.” People who scored low on those questions were typically sluggish, dour and sedate — and were labeled as having low positive affect.

The researchers then tested whether companies did better when they had a team of executives who displayed a variety of different temperaments or when all the leaders shared the same basic affective orientation. They found that team members on more homogeneous teams felt more satisfaction, experienced a greater sense of personal influence with other team members, and enjoyed greater cooperation and less conflict than more heterogeneous teams. Interestingly, CEOs of affectively homogeneous teams also tended to use a more participative decision-making style, involving team members more frequently and more meaningfully in business decisions.

Robert Galford, a managing partner of the Center for Executive Development in Boston and co-author of “The Trusted Advisor” (a book outlining ways trust is built in consulting relationships), wasn't surprised by the findings: “When you get to the top of the house, intellect and experience are a given. Everyone is smart and seasoned. What makes the difference from the point of view of a highly functioning team is the ability to build intimacy with each other.

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