Teamwork - A Better Way

Christian Napier
00:13 - 00:27
Well, hello everyone, and welcome to another episode of Teamwork, A Better Way. I am Christian Apier, and I am joined by my always eternal springtime host, Spencer Hohn. Spencer, how you doing? Great.

Spencer Horn
00:27 - 00:28
Welcome to

Christian Napier
00:28 - 00:28
spring.

Spencer Horn
00:29 - 00:43
Yeah, I was out mountain bike riding this morning with a friend, and saw like a herd of 12 deer, and it wasn't too soggy, it was just right, still nice and cool, snow in the mountains, but just gorgeous. So how are you doing?

Christian Napier
00:44 - 01:00
Doing well. Here we are going through March Madness, right? And so there's a lot of basketball, college basketball on television, although I didn't watch any of the games. I do have employees that are very invested in their brackets. And so I don't know if you've been following it at all.

Spencer Horn
01:01 - 01:08
I have, especially we have a local team that's made the Sweet 16. So that's very, very exciting.

Christian Napier
01:09 - 01:33
Yeah, shout out to BYU for making it to the Sweet 16 of the tournament. Congratulations to them. Well, Spencer, I don't want to take too much time with banter because we've got a guest that's been, well, gosh, he's got over 30 years of experience consulting some of the most important organizations on the planet. I'm turning it over to you to introduce him.

Spencer Horn
01:33 - 02:11
Yeah, I'm going to pop his face up on the screen while I read a little bit about him. We have Ricardo J. Vargas with us. He's a number one international Amazon bestselling author. And with his fifth book, I've got a copy of it up on Apple Books right now, Chief Executive Team, the Transformation of Leadership. And he's going to talk a little bit about that, I hope. And he is a work with organizations, a psychologist, and is an expert in leadership development and change management. with research published on self-leadership, which is so important. It always has to start with yourself.

Spencer Horn
02:11 - 02:56
And Ricardo is currently the only person in the world with three globally recognized professional certifications, including Certified Management Consultant, Certified Speaking Professional, and a Professional Certified Coach. Put all those together and he's pretty dynamic. And he is the founder and CEO of Consulting House, a European-based firm focused on empowering leaders for transformation, has managed consulting companies in different countries and delivered projects in 20 countries on five continents. Today, he's here to talk to us about why executive teams suck and what to do about it. Ricardo, welcome. We're so glad to have you on Teamwork a Better Way.

Ricardo Vargas
02:57 - 03:03
Thank you guys. It's a pleasure and I'm grateful for the opportunity. I'm excited about our conversation today.

Spencer Horn
03:03 - 03:21
Well, hopefully we'll have a few people jump in with questions and I'll be looking at social media for that because we want to ask you questions. We want our listeners to be able to ask you questions just to get to know how amazing you are. I had the opportunity to meet you in Minneapolis. When was it? In December.

Spencer Horn
03:22 - 03:22
And

Spencer Horn
03:22 - 03:47
that was the first time I met you. We spent a couple of days together working very, very closely, and I was just incredibly impressed and was so excited when you agreed to come on the show. With your work with executive teams, I mean, talk to us about the genesis of that. Where did that come from? Why do you start there? What drew you to this work and ultimately to this book that you have written?

Ricardo Vargas
03:48 - 04:38
Oh, right. Around 25 years ago, I was, uh, working in, um, pharma mostly as a sales trainer at that time. And, um, something interesting happened. I got a phone call from a HR executive from a operating company of a big Swiss firm. We are talking top 10 global. We are talking billions. We are talking a household name for all pharmacies. And this guy starts a conversation with me saying that his CEO and himself, they had this team of aces, people from the best universities, extremely successful professionals, competent, but somehow they were not able to teamwork.

Ricardo Vargas
04:39 - 05:28
They were not able to come together to, to, to reach this ambitious common goal. Everybody was minding their own business. And they had tried different approaches. We are talking second half of the 90s, 1990s. And they had tried everything that was the staple of the day back then, right? Experiential learning, outdoor training, activities together, climbing, cooking, orientation. They had tried some courses and workshops in the best universities. They had tried teamwork training, profiling of the individuals and all of that. But somehow they were lagging behind what the CEO and the HR exec thought was achievable for this team.

Ricardo Vargas
05:30 - 05:37
So as I had trained the sales team, they at the time asked me for a conversation.

Spencer Horn
05:38 - 05:38
And I

Ricardo Vargas
05:38 - 06:24
explained to them that with my expertise, because I had a master's degree in systemic family therapy, I could at least diagnose the team and understand what was going on. And maybe if they allow me, design a project for the intervention with them. And so they decided to hire me. This is the best part of the story for me. And with that, I got three things. I got individual interviews. I got the opportunity to be present, quiet, sitting at the corner of one of their team meetings and the one workshop day. I go through the individual interviews and they were telling me all the niceties about each other.

Ricardo Vargas
06:24 - 07:02
So they loved each other. They knew that everybody else was the best and all of that. So I got basically nothing from those individual interviews. And then we got to the team meeting. I sat down with a piece of paper. just with the initials of each of the team members around the table. And I used this process from family therapy and systems group therapy where I was mapping not the content of the conversations, anyway that was confidential, but I was mapping and jotting down the effect and impact that each person's communication had on each other.

Ricardo Vargas
07:02 - 07:40
So for example, if someone was saying something and there was an attack, a challenge, a support or whatever, I was mapping those kinds of interventions. And by the end of the meeting, I had this piece of paper full of arrows and circles and dotted lines and squares, including different people and excluding others. And when the team meeting finishes, the HR exec comes to me, he looks at the piece of paper and he's shocked and he's in horror. He's like, did I get a madman to watch our our team meeting, what is this guy going to do with this piece of paper?

Ricardo Vargas
07:41 - 07:56
And I told him, you know what? These are the team dynamics. Now I have everything I need to design the workshop. To cut a long story short, I could see on that piece of paper, that's what the other consultants have

Spencer Horn
07:56 - 07:57
missed

Ricardo Vargas
07:57 - 08:41
in the previous interventions. I could see the team dynamics playing. Who was an ally of whom? Which were the subgroups that were confronting each other? What was the role of the CEO with individual team members or with each of the subgroups? I could map all of that in one piece of paper. So I designed the one workshop day that was the agreement. And that was so successful that we went on to have regular support from me to them over three years, through which eventually they climbed from number eight to number one. So that was the beginning of my huge interest in executive teams.

Ricardo Vargas
08:41 - 09:03
Fast forward 30 years, and I could basically design a process through my experience of working with leaders in 126 different industries in 20 countries, I could map a process and test a process and an assessment tool specifically for these executive teams.

Spencer Horn
09:05 - 09:41
So this is fascinating, and I'm interested, really, you basically identify the team system. Every team is a system of how they operate. And so through your observation, you identified that. I'm curious, you said you were you were basically identifying the impact that their communication had. How did you identify that? Was it just a visual observation? I mean, how do you ultimately identify what somebody says and how that impacts them? Is it by their response? I mean, how do you do that as a psychologist?

Ricardo Vargas
09:43 - 10:43
Well, actually, I was trained in two dimensions of psychology. I'm originally a work organizational psychologist, so expert in companies, basically. But I also work in hospital settings in clinical psychology systems thinking, so family therapy. with drug addicts, anorexic patients and psychotic patients. So we design the systems, the impact of the person's behavior based on pure observation of content and reaction. So if someone, if Christian says something and each time that Christian makes a proposal of something that we are going to do together as a group of friends or as a team, And any intervention of Christian is met by a challenge by Spencer and a denial or a devaluation of the content.

Ricardo Vargas
10:44 - 11:24
I don't do that. What are you talking about? No, of course not. It's just an example. But if that happens, I can see on Christian's face the reaction. I can see that he's not liking. I can map the sequence and patterns of behavior. So what we are looking for is, repeated patterns of behavior. Anyone can challenge anyone, anyone can support anyone and anyone can validate anyone. But if I'm always validating the same person and I'm always undermining the efforts of someone else, those are patterns. What we say in systems is that once is an event, twice is a tendency, three times is a pattern.

Ricardo Vargas
11:26 - 11:31
So whenever you have a behavior repeated like that, you have a pattern of interaction and then you map that.

Christian Napier
11:33 - 12:18
All right, so I've got a million questions, but I'll start with this one. In the lead up to our conversation today, you made a post on LinkedIn that said the following, dysfunction in executive teams is not inevitable. So two questions related to this. Number one, in the 30 years of work that you've done with organizations around the globe, Is dysfunction the norm? I mean, how pervasive is executive team dysfunction? And taking into consideration that yes, every organization is different, have you been able to identify a certain set of root causes for this dysfunction that you see?

Ricardo Vargas
12:20 - 13:05
Yeah. I usually say that there's an elephant in the room with these teams, which is the executive team is usually the worst team in the company, exactly where you need it to have the best one. And that's the elephant in the room because no one in that circle wants to address that. If you look at teams inside a business unit, inside any department, inside any functional area, you have the marketing team, the finance team, the sales team, the HR team, those teams share goals, they share processes, they share language, they share jargon, they share common interests and ways to approach reality.

Ricardo Vargas
13:07 - 13:15
Now, when you get to the executive team, you get a bunch of people that don't share common goals. Very

Ricardo Vargas
13:15 - 13:15
often,

Ricardo Vargas
13:16 - 14:12
my goals are conflicting with your goals. They don't share reporting. Very often, you have matrix reporting. So I'm actually, my boss is someone sitting at a different country or a region. And I have a dotted line to my CEO. And I'm supposed to teamwork with people that are actually not part of my team. But we are called the executive team. Another dimension that fails or that makes it more difficult for these teams to teamwork is, for example, shareholder or board interference. there's a direct instruction very often for some of the team members to behave in specific ways to support special interests of shareholders or board members.

Ricardo Vargas
14:13 - 15:14
There's also, of course, corporate politics is played at the highest level of expertise at this level. So people tend to become more deceiving, hypocritical, playing corporate politics at these levels. There's in, Another dimension, which is very, very harming is what I call the runner-up syndrome. So you get a CEO that is either promoted from inside of the team or coming from outside, usually different geography of the same company. But this person will be managing two or three people that wanted that job. And those two or three people are wondering why is this person on the job of the CEO when I am completely competent and deserving of this job?

Ricardo Vargas
15:16 - 16:06
So this generates what I call the runner-up syndrome where the attitude of each of these two or three members supporting the CEO will be very low. So there's a lot of different things on the side of the scale that provokes this dysfunction. There's a study of the National Bureau of Statistics in the US that says that a survey of over 13,000 venture capitalists says that the executive team is the biggest liability in startups, is the biggest cause of startup failure. And even with all this data, with all these root causes for dysfunction, this is not the most common and addressed issue in a company.

Ricardo Vargas
16:07 - 16:26
If you think that one team has the power to support, to amplify, or to delete the work, the impact of any other team in the company, it's this one. This is the most important team in the company, and it's usually the worst team at team working.

Spencer Horn
16:39 - 17:21
Ricardo, I love that, what you just talked about, the runner-up syndrome. You know, I do a lot of work with teams, and in my experience working with an organization called Team Coaching International, they've done almost as long as you and I have been working in the work world, they found that high-performing teams are about 10 to 12%. And I think about a year ago, a study that was done, reported on in the Harvard Business Review said, 8.9% of teams were high performing. And I love your focus that there's so much dysfunction there and yet that's not where the focus of all the efforts are.

Spencer Horn
17:22 - 17:55
You described in the beginning when you started about observing that first team on the pharmaceutical team as everybody was talking well of each other. That's what's called the open culture, right? This is what we say our culture is. But you discovered the hidden culture. And what happens at the lower levels of the organization, once somebody comes in the organization, they said, hey, here's our open culture. Here's who we are. This is who our founders, our CEO, and everybody else. And then the people at lower down say, hey, come here. Let me tell you how things really work around here.

Spencer Horn
17:56 - 18:30
And that's this hidden culture that you identified. And every team is a reflection of the leadership of the top teams. And I love this idea of runner-up syndrome because I'm dealing with an executive team with that exact dynamic. And you're so right. I mean, I love that you call it that. We have a couple of shout outs, if you don't mind. And I have a comment that's quite long. I'm going to throw it up on the screen and see if you want to answer that. But we've got Chandrama Vishwakarma, just absolutely thrilled to see you on the show.

Spencer Horn
18:30 - 18:46
I don't know if you know who he is. Dee Langston, transforming executive teams is crucial. What strategies have you seen that work best to rebuild the C-suite? So that's from Dee Langston, and then I'll throw up one other comment on.

Ricardo Vargas
18:49 - 19:50
Yeah, I can start with that. So what I did in these last 30 years was, I'm a psychologist and I'm a researcher, right? I have some research published in self-leadership. But concerning executive teams, there's a lot of stuff published, peer-reviewed science, especially in the last three decades. So I was reviewing all this literature and actually that's the basis for my book and I was designing an intervention to tackle the biggest, the most important dimensions that make or break an executive team. So there's fundamentally 22 dimensions. We are talking about, for example, something that afterwards became fashionable to speak about, psychological safety, trust, potency of the team.

Ricardo Vargas
19:50 - 20:30
So how much do we believe we are able to reach together? For example, task orientation, the ability to comply. So compliance, how much do we comply with the agreements made to each other? the clarity of legacy. So there's some 22 dimensions and over 130 items that can be evaluated and assessed with this team. So I developed an assessment tool. Now, of course, for the intervention part, what it 130 items in 22 dimensions is just too chaotic. So what I did was bottom up from the evidence. So it's not a model that came from my mind.

Ricardo Vargas
20:32 - 21:31
It comes from the evidence. I grouped and clustered these 22 dimensions into six main areas of work that I do with executive teams. So I call it the six piece of executive teams just to make it easier to memorize. But again, they come from clustering the data. So it's the P for purpose. So purpose, processes, people, problems, potential, and possibilities. Sorry, possibilities and potential. So coming from the core of the company, which is the executive team inner circle, to the external impact in the market, so the potential impact in the market, what I do is to structure the executive team based on these six areas that comprise the 22 dimensions that are reported in the scientific literature as the main drivers of impact of an executive team.

Ricardo Vargas
21:31 - 22:13
So I designed an approach that takes the team from purpose to potential through the six Ps a long time. And this can take one year, can take two years. Sometimes I support teams for shorter periods of time or longer periods of time. As long as they find useful, I'm there. As long as they still did not reach the goal and find it useful, I'm there. So what we need is to understand that the interactions, what we call teamwork or not teamwork, Very often, it's just the tip of the iceberg. These are the visible interactions. When you look below the waterline, you have what I call the team structure.

Ricardo Vargas
22:13 - 22:32
The team structure are these 22 dimensions clustered in the six piece of executive teams. So I do a mix of consulting, workshopping, coaching. I do advisory to the CEO through the process, but help them to structure what's under the water level. so that the interactions change.

Spencer Horn
22:32 - 23:18
OK. So I love that. And I know Christian's got a question. Let me just throw up two. Here's a question from Kevin Martin, who's a regular listener to our show. I don't know if you can read that, but the political and adversarial organizational practice of high competition is the antithesis of corporate collaboration. In many organizations, the top leader sets the culture based on citing a scale of competition versus collaboration. I lived in a Fortune 100 company for 33 years and watched the ebb and flow year after year and the damage that has done. That was done standard for customer service and corporate growth.

Spencer Horn
23:18 - 23:47
So, wow, there's some pain out there. And I've got one other just comment that is exactly similar to that. And here's what James says. Unfortunately, James, like I said, I mean, if 90% of teams out there are struggling with lower performance, it starts with this sucky, if I may say, executive team.

Ricardo Vargas
23:51 - 24:37
Yeah, so Kevin's example was, I think, very clear. When you get a real leader, you get really ahead. Now, this is the shift and the transformation of leadership that is needed to be done. What I say is that we have been looking at leadership as an individual sport, but at executive level, leadership is a team sport. So you need to be able to play it as a team. The impact of having an executive team working together for the design and execution of the company strategy is incomparably better than any competition-led team that fractures the team in subgroups, whatever.

Ricardo Vargas
24:37 - 25:19
It just doesn't work. So the problem is usually how to make this transformation. The CEOs are... are very often, as in both examples of these viewers, they mentioned that the CEOs are very harsh on the side of competition. This is an old way of looking at things because it assumes that the CEO knows everything and is able to do everything. And I think we need to shift from the CEO as the know it all and do it all to a completely different approach based on, you know, leadership is a team sport. And that's the shift that needs to be made.

Christian Napier
25:32 - 26:34
Ricardo, I've got a question about the runner-up syndrome. So, In the examples given, it sounds like when a CEO has a departure, there's not a clear plan for who's going to succeed the CEO. And I can understand that there might be pros and cons to succession planning. Sometimes if you're kind of the designated future leader of the organization, other potential future leaders may jump ship because they think they have no chance. At the same time, you have some stability or at least perceived stability in the organization by having a successor named in advance. And so I was curious about this runner-up syndrome and how succession planning could potentially positively or negatively impact the runner-up syndrome.

Ricardo Vargas
26:35 - 27:26
Perfect, perfect. Yeah, there's nuances there, right? Because if you are the CEO that just joined the organization, the person best qualified for your job is going to be your best ally on designing and executing the best strategy for the company. So this is a mindset thing. My job is usually to move these people from contradiction and paradox to understand that psychologically, what we consider contradiction and paradox are only two layers of the same reality. So when people understand that we don't need to think black and white, we can think competition and collaboration at the same time.

Ricardo Vargas
27:28 - 28:30
And we can manage a level of competition on some dimensions and the level of collaboration on other dimensions. But this is part of an agreed plan, a work plan that we agree for the success of this company, of this operating company in country X or Y. And for the individual success of each of the team members, we get a real team. So in multinationals, this gets a bit easier because we can make agreements where the new CEO that kind of took, let's say, the job of two or three people inside the team, is also the person that can support these team members to move faster to the CEO place somewhere else in another operating company of the same company around the world, of the same brand.

Ricardo Vargas
28:32 - 29:24
So these are things that sometimes can be explicitly said. I'm not saying that I get them to agree on this because there's a level of explicit agreement on this that cannot be done, but I can lay the terms of the understanding of the juxtaposition of the two dimensions on the same reality in a way that everybody understands, that it's best for us to cooperate individually and as a team. And we can get ahead faster if we get along better. So we have getting along versus getting ahead. But if we juxtapose them, we have getting ahead faster by getting along better.

Ricardo Vargas
29:24 - 29:30
So same reality, different dimensions. So my work is about producing this mind shift with them.

Spencer Horn
29:32 - 30:15
Well, and that's an important mind shift because getting ahead sometimes is what's on that individual who got passed over his mind and they're bitter about it. And so they're not always Maybe they are looking to undermine the front runner and say, you know, I'm the better choice, I'm gonna prove that. Which leads us to trust, right? I mean, because that's got to undermine trust within an organization when, you know, your right-hand person, you know, woman or man is, you know, wants your job. And maybe cheering for you to make a decision that is, that is fatal, right?

Spencer Horn
30:15 - 30:26
And so how do those dynamics, how do you, how do you, how do you get to that get along environment to build that trust, which really sets the foundation of trust throughout the entire organization? Don't you think?

Ricardo Vargas
30:27 - 31:14
Yeah. Trust is the glue, right? Trust is the glue that binds the team members together. No trust, no team. When there's no trust, there's no team. There's a bunch of individuals that are just waiting for a mistake to stab someone in the back. It's just, it's just not a team. Now, We need to look at trust at this level. So trust is a rational and emotional process. And that bitterness is part of the emotional process of trust, right? As long as I'm bitter, as long as I'm resentful for not having this job, I will not be able to activate my rational understanding of the situation and what's a better strategy for me in these circumstances.

Ricardo Vargas
31:15 - 31:55
So we need to also understand that trust in executive teams plays a different role than with other teams. So there's trust between the CEO and the team members. That's the part that we started with, but there's also trust among the team members. And then there's a third level, which is the trustworthiness of the rest of the organization towards the executive team. So how trustworthy does the rest of the organization consider the executive team? These are three dimensions of trust that I assess with my assessment, and that allows us to map where the trust issues are.

Ricardo Vargas
31:57 - 32:52
I bring reality because we cannot make changes in the organization based on a false perception of reality. Everybody has a company on their mind that is completely different. As you mentioned a while ago, that's the open culture, the desire, the explicit, you know, wishing, wishful culture of the company. That's not the real culture. The same with trust, the same with executive team performance. So I map where there are trust issues, and then I bring this information to the team. And sometimes we get really heated up discussions. I've had once a team member just getting up, crossing, because I don't use tables when I do this.

Ricardo Vargas
32:53 - 32:58
It's kind of just, you know, I just use chairs that we can move around as we discuss things in smaller groups. That's so

Spencer Horn
32:58 - 33:03
important. It prevents barriers from people from protecting themselves. You're so smart.

Ricardo Vargas
33:04 - 33:27
And it's great, but sometimes it's very dangerous. So once, a guy just jumps from his chair and goes directly to the person across the circle and just bends down and screams at the face of the crowd. And they are so enraged, the level of mistrust and I don't know.

Spencer Horn
33:28 - 33:30
They don't behave like that in Europe, do they?

Ricardo Vargas
33:31 - 33:31
Yes,

Spencer Horn
33:31 - 33:32
this was in

Speaker 2
33:33 - 33:47
Europe. We also have humans in Europe, did you know that? Yeah, we have that, a lot of those, 500 million of those, irrational and stupid things. So the other

Ricardo Vargas
33:47 - 34:27
guy stands up, they scream at each other. Now, fast forward two years later, when we've been through the process and coaching them and supporting them with the team development. The team had changed two, three elements, but these two people were there. And during a workshop that I was facilitating, the same guy looks around, smiles and says, guys, do you remember two years ago how dysfunctionally aggressive we were? And the team answers to him, no, dude, you were dysfunctionally aggressive. And then he looks at me and says, I miss those times,

Speaker 2
34:27 - 34:34
you know. So that

Christian Napier
34:34 - 35:15
experience, Ricardo, that highlights something that's powerful, which is oftentimes when there is that level of dysfunction, We think it's unfixable. The people there, it's just not going to work. And so we just need to get rid of folks. We just need to fire this person and see if we can bring another person on. I'm curious in your experience working with teams, how often is firing somebody and replacing them the answer versus, you know what, we can actually make this work with the people that we have. We can

Spencer Horn
35:15 - 35:16
do remediation.

Ricardo Vargas
35:17 - 36:16
Yeah, great, Christian. It's really interesting because that's a major difference between the linear causality engineering approach and the systems approach. So If my computer breaks down because the battery is malfunctioning, I just replace the battery and the computer works perfectly. Because there's no special relationship between the battery that I have currently in my computer and any other battery with the same specifications. Now, with people, it just doesn't happen like that. If there's a family with a child that is a drug addict, you replace the child with a new child that is not a drug addict, you don't get the same family with a functioning child, you get a different family, it's a different configuration.

Ricardo Vargas
36:17 - 37:15
Now the same applies to teams, there are special types of relationships between people, which in the case of the family, it's parenting. So the relationship between the siblings, the relationship between father and mother and that specific child, those are irreplaceable. If you change one person, you don't only change the person, you change the relationships. Now, what happens? Usually, the immediate response is, let's fire this person. But the solution is changing the dynamics of the system. Because more often than not, you replace one person and you get the dysfunction either stays in the same person or in the same area, the same department, the same business unit, and the new person just assumes that dysfunction, or it moves somewhere else in the team.

Ricardo Vargas
37:16 - 37:29
So of course, there's trade-offs. Sometimes you do need to replace the person or people in the team. Sometimes it's needed. But it's never

Spencer Horn
37:30 - 37:30
enough

Ricardo Vargas
37:30 - 37:48
if you don't change the dynamics of the team. More important than changing the person is changing the dynamics. And then if the person doesn't adjust, then we change the person. So it is usually the first response. It doesn't solve the root cause of the problem, which is the team dynamics.

Spencer Horn
38:03 - 38:44
And I like that you are treating teams holistically. Again, that's the systems approach that you're taking and the system impacts itself. And so to address that is not necessarily a linear approach. Now, I'm sure you do coaching individually as well, but the team coaching is what can really move things very quickly. Now, we have more comments. Kevin had another comment. Sorry, Kevin, if I don't put everyone on, but here's one. He says, ask a team, who do you trust? Watch the unspoken behavior and body language to assess dysfunction on the team. So thanks for listening.

Spencer Horn
38:44 - 39:23
And we've had up to about 75 people watching and just really excited to have you here. I personally am interested in your proprietary assessment. I mean, I'd actually love to be able to see that and see how that works. I want to learn more about that. I use one that's different. And I'm actually very excited to learn about that. I'm interested to know how your clients react when they get the data. Do they obfuscate? Do they deny? That's not who we are. I mean, how do they respond when they get the results?

Ricardo Vargas
39:25 - 39:44
Yeah, it depends on how different the perception is from reality, right? You can only start the path where you are. You cannot start somewhere else. And when the understanding of where you are is different from reality, You will not design the best strategies.

Spencer Horn
39:44 - 39:52
Okay. So how do you deal with that? That's another issue. Do you do like an outside 360, have the company do a 360 of the executive team? No,

Ricardo Vargas
39:52 - 40:33
no. My assessment is, is my, my assessment is, uh, uh, can be used in, in both ways, right? Under data, uh, 200 cents. So I, I, I assess the three levels. The CEO assesses the team, the team assesses itself and, and the, the people below assess, assess the team. So there's three different perceptions on the executive team. And when we compare, there's all types of reactions. There's shock. There's like, seriously, this cannot be us. Whom are our team members, the employees of the company seeing? It's not us. We are so perfect. We are such a great team.

Ricardo Vargas
40:33 - 40:35
We reach all the results. Yeah.

Spencer Horn
40:35 - 40:36
In our own minds.

Ricardo Vargas
40:36 - 41:30
And they actually might be reaching the results. But what they don't know, and the people tell me through the assessment, is that they are lying to each other. So one C-level person asks their team members to prepare a presentation for the board. But they also give some instructions on, let's say, how to highlight and massage the data in order for this presentation to show whatever we want it to show. Now, their team members now know that the rest of the executive team that will be seeing this presentation are being lied to. Not only they know, They talk to their colleagues and friends that work in the same company on those other areas, managed by those other people, and they share information.

Ricardo Vargas
41:31 - 41:43
So everybody knows that the emperor has no clothes, except the emperor. So these people are lying to each other, and they think that no one sees, and 800 people are seeing it.

Spencer Horn
41:43 - 41:47
Is that what Daniel Goleman calls the CEO disease, kind of? What are some of the symptoms?

Ricardo Vargas
41:48 - 42:12
Yeah, we have a tunnel vision, right? Because we can only see the system from where we are. We cannot see the system from where other people are. And that's why I bring all these different viewpoints of the same reality so that people face reality. I tell them the truth. And I just had last week someone telling, saying that, you

Ricardo Vargas
42:12 - 42:12
know,

Ricardo Vargas
42:13 - 42:41
you are a very direct consultant, right? Very direct consultant. I tell them the reality. There's no way around that. And if they are lying to each other, I tell them, sorry, guys. I think that, you know, what your people are saying is that you're not telling the truth to each other. So when they face this reality, It's really powerful, right? It's kind of,

Ricardo Vargas
42:41 - 42:41
you know,

Ricardo Vargas
42:41 - 43:00
that truth will set you free moment. Now you are free to make the right choices to move forward. Now you are free to make the right choices to get ahead. So there's shock. There's very often some of the people in the team that already had the perception that they were trying to

Ricardo Vargas
43:00 - 43:00
warn

Ricardo Vargas
43:00 - 43:27
other team members that they were, you know, blocked from bringing the truth to each other. And they feel vindicated. They feel like, yeah, finally, finally, we can get this out in the open and solve it, right? Usually, there's different lines of self-perception between the CEO, the executive team, and the rest of the employees. I work with that.

Spencer Horn
43:28 - 43:43
Well, and if they don't solve it, that hope quickly gets worse than it was even before. I bet there's a lot of teams that resist this just because they don't want to be vulnerable. They want to stay in their beliefs that things are perfect.

Ricardo Vargas
43:44 - 44:03
That topic of vulnerability is interesting because we are used to see vulnerability as I expose myself in a kind of a sensitive slash fragile way to change. But

Spencer Horn
44:03 - 44:03
I

Ricardo Vargas
44:03 - 44:06
see, for example, the aggressive behavior of my previous

Spencer Horn
44:07 - 44:07
example

Ricardo Vargas
44:08 - 44:42
as a sort of vulnerability. So I work not with vulnerability per se, but I work with emotionality because when I see these heightened, very heated up emotions one way or the other of withdrawal or aggression, those are access points. And to your point before of the difficulties of change, if you've worked with drug addict families or with anorexic families, That's hard to change. There's a lot of

Spencer Horn
44:42 - 44:44
self-denial going on there, isn't

Ricardo Vargas
44:44 - 44:48
there? Right, because there's chemicals preventing you from seeing reality.

Christian Napier
45:00 - 45:51
So, Ricardo, I've got another question for you. Early on in the conversation, you mentioned that one of the reasons that executive teams are in some ways uniquely dysfunctional is that the members of those teams have conflicting goals, right? The person who oversees sales or revenue generation in the organization may have different objectives than the person who runs finance that has a different objective than the person who runs operations, et cetera. So you talk about this misalignment, and I'm curious how you go about resolving that. Because people are protective of their fiefdoms, especially if they have personal compensation on the line.

Christian Napier
45:53 - 46:15
How do you go about resolving that? restructuring, I don't know if restructuring is the right word, but re-envisioning how the team functions so that everybody is marching toward the same goals and they don't have this significant misalignment of objectives that causes all of this conflict.

Ricardo Vargas
46:17 - 47:04
Kind of like driving a car, right? You have the different pedals that do different things, and they all are useful. But if you press the three pedals at the same time, you're going to have a problem, right? The car will just do something that you're not intending to do. So all goals need to be reached in, let's say, a year or a quarter, but we need to accelerate or break or change gear during this period in a way that allows us all to reach the goals when they are due. It's more of an agreement of how to operate.

Ricardo Vargas
47:04 - 47:44
So I'm working on the dimension of the behaviors and patterns of behaviors of the executive team to make sure that they support each other, that they can go out of their way and out of their goals slash processes to support each other because they will get reciprocity afterwards or at the same time when they need it. So it's about doing what the team needs and the team needs all the goals. We cannot just say, yeah, let's cut finance and bridge sales and we just don't mind the costs and whatever, that doesn't work. This is the goal.

Ricardo Vargas
47:45 - 48:16
These are the KPIs. We need to reach this. How are we going to do this together as a team? And what I find and what my clients say is that it's such a better environment psychologically and for performance to do it as a team, to do it as a team sport, than just being completely stressed up looking over your shoulder, just, you know, guaranteeing that no one's going to stab you on the back.

Spencer Horn
48:18 - 48:41
You, you talk about how you've worked in how many countries? 20. 20 different countries. I'd love to know what you see as some of the differences culturally that happen in these different countries in terms of these executive teams and just how that impacts the dynamics that you're talking about and the work that you do with them.

Ricardo Vargas
48:42 - 49:33
Yeah, so mostly my clients are multinationals. So I go in different, supporting different operational companies of of different countries of the same company. And with this work, I always find multicultural teams. So usually there's two or three nationalities, on average three nationalities. There's some expat CFO, some expat CEO, some expat sales, you know, whatever, marketing executive. So the teams are usually, the teams that I get as clients are usually multicultural. So there's already some issues of different cultures inside the team. But then there's the adaptation of the multinational culture to the local market very often.

Ricardo Vargas
49:34 - 50:30
Where I see this playing is usually in decision-making. In some cultures, you go to a meeting to make a decision. So you go to the meeting to be informed. to argue, to discuss, to present data and reach a decision inside the meeting. In other cultures, you only go to the meeting to validate the decision that was reached and negotiated previously in interactions between the team members before the meeting. And there's other cultures where some of the people go to the meeting to make a decision and others already made the decision, just didn't inform, but there will be a process during the meeting to drive those people that were not making the decision to accept it.

Ricardo Vargas
50:32 - 51:16
Now, we need to understand how to deal with this diversity of decision-making because Executive teams are about making decisions. That's the biggest thing that they do. They make decisions and they execute them. If the decision is wrong or is reached in a way that part of the team, part of the organization feels that they were left behind, that the negotiation process to get to a decision or to get to an agreement was the wrong one, ethically, morally, according to their culture, we have problems. So I bring some clarity on the decision-making processes that the team is using and how they impact the rest of the organization.

Ricardo Vargas
51:18 - 51:57
Other things are very often communication and leadership styles that are accepted in the specific culture. So there's a bigger acceptance of authority in some countries than others. And this authority can be made very visible, very forcefully visible sometimes in some cultures, and that is completely not acceptable in other cultures. So it's around, mostly around communication, decision-making and, and the adaptation of those things to the, to the, to the, to the company in, in the, in the culture of the country.

Christian Napier
52:08 - 53:01
All right. Well, I'm going to ask my final question and then Spencer, you can ask your final question along with any other follow-up comments or questions from folks in our audience. For my final question is this. Sometimes you can have a team that gets along well, they seem to be collegial, but perhaps the business itself is kind of passing them by. The world is moving on and they do something very well, but the world has kind of moved on. And what do you do in situations where the team seems to get along? Maybe the C-suite is getting along okay, The writing is on the wall for this organization, and unless they make changes and adapt to the evolution of the market, they're going to find themselves in a difficult spot.

Christian Napier
53:01 - 53:15
So how do you get a team that's kind of in a complacent spot to get moving and keep that organization vibrant and not stagnant?

Ricardo Vargas
53:16 - 54:16
Yeah. I shock them usually. Now, my approach is that when I speak here and when I work with the teams about the effectiveness is about reaching goals. So an executive team is only a good team if they are good at making the right decisions and executing them for the business in the market. It's not about relationships. It's not about being friends. It's not about getting along very well. I prefer to have a team that negotiates a coexistence that is peaceful, aligned, and ambitious than a team of friends. It's nothing to do with each other. Now the first part of my work is the challenge.

Ricardo Vargas
54:16 - 55:14
It's what I call the P for Purpose. So I challenge this team on what is your highest ambition? What is the legacy? What is the transformation that you want to drive in this company in the next three to five years? This has nothing to do with the company vision, has nothing to do with the company mission, except for the fact that it cannot go against it, right? But they need to come up with something that is extremely ambitious that they want to create as a legacy for the company in three to five years. And when you support them in creating this image, this clear picture of the legacy that they want to create, and when you empower them, when you are there for them and you say, you know, guys, this is possible, I will support you with the team processes for you to reach this ambition.

Ricardo Vargas
55:14 - 56:00
you start seeing the energy releasing because it's energy that is being drained in emotional grudges that they hold against each other. It's been drained in blocking and counter blocking and maneuvers and decisions and politics. It's energy that has been drained because they have uncertainty about each other as there's no trust. When you solve all those issues, you have a liberation of a lot of energy that can be just put at the service of the goal of the company. And that's where it all starts. And I usually start with the sentence, no purpose, no team. When there's no purpose, there's no team.

Ricardo Vargas
56:01 - 56:21
And the purpose needs to be this higher order ambitious goal, a legacy, something that will transform the company, but that will require from all of us a level of teamwork that we are currently thinking it's not possible to achieve. And that's where I come in as a catalyst to make them believe and get them to do it.

Spencer Horn
56:23 - 56:35
Christian, that sounds like kind of what you experienced working on the 2002 Olympics, right? I mean, you had this legacy that you wanted to create to actually save those games and it released a lot of energy. I've heard you talk about that many times.

Christian Napier
56:37 - 56:42
It's true, it was an amazing experience, but we're getting close to the hour, Spencer.

Spencer Horn
56:42 - 56:43
I know, I know.

Christian Napier
56:45 - 56:48
We could sit here and talk with Ricardo for hours, for

Spencer Horn
56:48 - 57:19
sure. One last question, and sorry for those of you who had comments that I didn't share, but please forgive me. Let's talk about your book. We want our listeners to be able to hear about your book, The Chief Executive Team, and specifically, yes, right there, and I like the subtitle, The Transformation of Leadership. Talk about that. What is that transformation, if you can, just to wrap us up, and then we'll, sorry, if we go over an hour, our listeners, please hang in. This is great stuff, so keep going.

Ricardo Vargas
57:20 - 57:21
Thank you.

Ricardo Vargas
57:21 - 58:19
Yeah, so I was mentioning in two or three of your questions that I work with paradoxes and contradictions. Because in these teams, there's a lot of conflict due to the drivers of dysfunction that we mentioned before. These opposites like short-term versus long-term, doing versus learning, getting along versus getting ahead, me versus we, all of these paradoxes are inherent in any of those conflicts and discussions. So usually what people try to do is to change the behavior. So they do teamwork training where they train, let's learn how to communicate better. Let's learn how to address conflict and negotiate conflict.

Ricardo Vargas
58:19 - 59:13
Let's learn how to be better supportive team members. Now, when we are talking about behavior, that's something that changes, but when you are not there anymore, it goes back to where it was previously. So what I try to do is to change the perception. My work is about helping my clients to see that opposites are different layers of the same reality. And when they perceive, when they see reality as having different layers of things that they were considering opposites, but that they can be managed as part of the same reality, This activates different scripts for action.

Ricardo Vargas
59:13 - 59:49
That's something that comes from hypnosis, that comes from therapy, that comes from social psychology. We know that we all have scripts. Whenever we enter a situation, we have scripts. We have scripts for a conflict situation. We have scripts for going into a restaurant and ordering from the menu. We have scripts that guide a sequence. These are automatic sequences of actions. sudden change and transformation happens when you change the way people perceive reality. Because now they can go to the

Spencer Horn
59:49 - 59:50
inner

Ricardo Vargas
59:50 - 1:00:24
resources and choose different scripts to act on that reality. And that's my job. So it's getting them to a higher order reality that combines opposites on different layers of the same reality. This enables and empowers them to choose different behaviors in a way that is free of the previous emotions that they were feeling before. That's the therapist, the hypnotist, the social psychologist approach to sudden transformation and change. Ultimately, this is all to get to leadership is a team sport.

Spencer Horn
1:00:24 - 1:00:45
Yeah, that's great. And to me, when you're talking about that, I think of, for example, conflict, right? A lot of people have a script around conflict when it can be a very empowering, team-oriented. We can create better solutions when we actually disagree than if we agree about everything. I imagine that's kind of what you're talking about. Yeah.

Ricardo Vargas
1:00:46 - 1:00:49
Conflict is positive when you know how to manage it.

Spencer Horn
1:00:49 - 1:00:55
Exactly. Just change that script. And Christian? Well, this is a

Christian Napier
1:00:55 - 1:01:14
fantastic hour and one minute. Ricardo, thank you so much for taking time to join us today. We really appreciate it. If listeners and viewers, if they want to connect with you to see how you might be able to help their organizations, their executive teams, what's the best way for them to reach out and contact

Ricardo Vargas
1:01:14 - 1:01:21
you? You can contact me through my website, chief-executive.team or through LinkedIn, Ricardo J. Vargas.

Christian Napier
1:01:23 - 1:01:37
All right, fantastic. Thank you so much, Ricardo. And you've been spending decades helping build high-performing teams. And if people want to reach out and connect with you, how should they do that? Just

Spencer Horn
1:01:38 - 1:01:44
reach me on LinkedIn. That's the best way, easiest way. And you, Christian, how can people find you? Oh yeah, LinkedIn.

Christian Napier
1:01:44 - 1:02:04
I'll put in another thing in the hat there for LinkedIn. So yeah, not that we're paid to promote LinkedIn or anything, but yeah, that's a great place to find us all. Listeners, viewers, thank you so much for taking time out of your schedule to visit with us today. We really appreciate it. Please subscribe to our podcast and we'll catch you again soon.