A great leadership team and the right leadership team aren’t always the same thing. Finding what is the purpose of a leadership team and how to fill it is difficult for many agency owners. Often, business leaders think they can fill executive positions with their best employees. Sometimes that works, but most of the time these teams of super-producers fail to replicate their success in the C-suite.

Companies do not need their best employees at the top; they need their best leaders running the show. Unfortunately, Deloitte’s Global Human Capital Trends 2016 report reveals only seven percent of polled executives put their rising millennial talent through leadership development programs.

To build a more successful company, leaders must rethink how they build a leadership team.

As You Build a Leadership Team, Who Belongs at the Top?

Usually, young companies build a leadership team by developing informally and oftentimes too soon. Someone stands out as the go-to person for solutions, and that person gradually has more say in how the business operates. As the business grows, this informal arrangement becomes insufficient to meet the company’s evolving needs. Although growth necessitates formalized leadership roles, too many leaders get hung up on titles. They default to promoting department heads, elevating everyone without consideration for their circumstances.

Does a department head who supervises just one person deserve a spot at the table? Maybe they do, but it depends on the skills and drive of the individual—not his or her current title.

  • Who puts the team first?
  • Which person considers the bigger picture when making decisions?
  • Among the team, who offers innovative solutions and demonstrates personal accountability?
  • What is the purpose of a leadership team head in general?

Perhaps department heads embody those characteristics, but if someone young and hungry proves to be invaluable, don’t lose them to other opportunities by overlooking talent for tenure.

To build a leadership team within your agency, follow these five steps.

Start with Mentorships

Set up candidates for leadership with opportunities to mentor other rising talents in the company. Coach them on how to coach others, and then step back and see how they do. These arrangements provide a preview of how the person will act in a larger leadership capacity. The right candidates differentiate themselves by demonstrating their desire to learn. They want to go beyond day-to-day tasks to understand how to run a successful business. They want to influence company culture and contribute to its vision.

According to a recent report from the Human Resources Professionals Association, 71 percent of millennial employees want to leave their jobs within two years because they lack opportunities to progress. Keep great talent in-house by providing those opportunities, and build a leadership team that allows for that growth.

Don’t Hand Out Raises and Titles

Leaders deserve raises and promotions but don’t make those perks the primary incentives for advancement. Instead, as you build a leadership team, find people who want to help the company grow. Whittle down that candidate pool by choosing people with the most aptitude for leadership. And while you could get away with throwing titles at leaders such as “in-house philosopher,” “chief flavor officer,” or “executive sensei,” please don’t. They’re worthless if the job is meaningless and the employee is unhappy to fulfill it.

Choose People You Like

You’re still the person in charge, so don’t choose a team of people you don’t like being around. Consider their personalities. Will this potential team gel, or will personality clashes limit their effectiveness? Whether you need to build a leadership team for the long haul or a successor to your corner office, account for culture fit before offering these positions.

Keep it Small

As Jeff Bezos famously said, if you can’t feed your leadership team with two pizzas, it’s too big. Small companies shouldn’t have half the team in positions of leadership. Keep the ratio of employees-to-leaders high. Limit the top offices to two or three people and up to six for larger companies. By limiting leadership roles, you ensure enough voices exist in the room to help you guide company strategy without taking time away from day-to-day productivity to do so.

At Agency Management Institute, our leadership team consists of four people. Because we have only 12 company employees, it doesn’t make sense to have more than a third of our entire organization on the leadership team. Beyond that, four is an efficient number. It allows for enough perspective and thinkers around the table without being cumbersome. Additionally, four people allow for responsibility to be shared in a way that is not burdensome or a huge time-suck on any one person. And because we do such different things within the company, there’s always one of us who’s a good fit for any new task or responsibility.

With the leadership team set, help new members understand their new roles. These people are art directors and marketing directors as well, and they need to learn how to balance those responsibilities with their new strategic roles.

Treat Them Like Grown-Ups

I’m lucky to say the average tenure of an individual staffer is a little more than 16 years. When I started the agency, I vowed to treat everyone who worked for me as an adult. I would hold them accountable and capable until they proved otherwise. That has allowed me to avoid micromanaging and instead coach and encourage. I’m a firm believer that you are a reflection of the people you spend the most time with. So it’s extremely important that I hire people I genuinely like, learn from, and would organically spend time with.

The Bottom Line of the Purpose of a Leadership Team

Per the Brandon Hall Group, 77 percent of organizations have leadership gaps, but the number drops to 49 percent in companies with mature leadership development strategies. Follow these tips to identify, train, and build a leadership team.

What strategy have you used to find what is the purpose of a leadership team for your agency?

This article first appeared on SpinSucks.

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