The most important factor behind the success – or failure – of a small business boils down to the effectiveness of its leadership team, interactions among team members and the strategic plan that is driving the business forward.

A lot can be said about team health just by looking at how team members within a company interact with one another. For instance, do they spend time socializing together as a group, or are they more likely to work independently with little interaction? Are healthy conflict and open communication encouraged? Or have office politics, gossip and backstabbing become the norm?

The way a team is led can have an enormous impact on a company’s employees, ultimately becoming evident in their levels of productivity and engagement. That’s why it’s so important to have the right people in the right seats – a key aspect of the Entrepreneurial Operating System® (EOS) methodology. With a solid leadership team in place, small-business owners can help to cultivate team health and drive the success of their business.

Below are three tools that small-business owners can use to assess their leadership team:

1. Take the Kolbe Index Test

A key tool in the EOS methodology, the Kolbe Index is an assessment that can be used to build better management teams. It does not test for intelligence, personality or social style. Instead, it allows business leaders to measure the conative, or instinctive, ways they take action when striving toward a goal.

On a basic level, the Kolbe Index tests for four innate strengths:

  • Fact Finder – an individual’s need to gather information, or the level of detail needed when gathering information
  • Follow Through – an individual’s need to organize information, or the preferred method of organizing that information
  • Quick Start – an individual’s need to deal with unknowns when making a decision, or the amount of risk a person will take when dealing with unknowns
  • Implementor – an individual’s need to deal with tangibles

“The results of this assessment can help business leaders identify how their innate strengths should be leveraged to maximize their potential and improve their productivity,” says Alex Freytag, a certified EOS implementer and partner at ProfitWorks, LLC. “Ultimately, this helps to drives the growth and success of their business.”

2. Use the Trust Pyramid

Another great resource for small-business leaders is The Five Dysfunctions of a Team by Patrick Lencioni, a leadership fable that dives into the complex world of team health. It outlines the root causes behind the office politics and dysfunction that often emerge in a team setting, and the key ways that leaders can overcome them in order to build a cohesive, effective team.

It’s based on a “trust pyramid” model of five main dysfunctions that can cripple even the best teams:

  • Absence of Trust – a fear of being vulnerable with team members prevents the building of trust within a team
  • Fear of Conflict – a desire to preserve artificial harmony stifles the occurrence of productive ideological conflict
  • Lack of Commitment – a lack of clarity or buy-in prevents team members from making and committing to decisions
  • Avoidance of Accountability – a need to avoid interpersonal discomfort prevents team members from holding one another accountable
  • Inattention to Results – a pursuit of individual goals and personal status erodes the focus on collective success

Essentially, it demonstrates how each dysfunction has a cascading effect on the next. In the absence of trust, management teams avoid conflict and, by avoiding conflict, they lack commitment. When they lack commitment, no one wants to be held accountable and, when no one is held accountable, there is a general lack of attention to results.

“Effective leaders practice vulnerability-based trust by acknowledging their mistakes, taking accountability and then working to resolve them,” says Freytag. “And they hold each of their team members to the same standard.”

It also contains several exercises that can help small-business owners assess their own team health. After reading the book, team members should take the time to reflect on where they score in each of the dysfunctions. Although this is fairly subjective, he says, it does provide a great starting point for a candid discussion.

3. Conduct Leadership Personality Assessments

Personality tests, such as Myers Briggs or DiSC, can be a huge asset in getting to the root of who a person really is. In addition to assessing an individual’s personality, they can be used to evaluate a variety of other traits, including problem-solving skills, analytical thinking, motivation, emotional intelligence, leadership capacity and even cultural fit.

“This allows business leaders to develop a deeper awareness and understanding of their own unique traits, as well as those of their team members, and how those traits might help or hinder their performance in the workplace,” explains Freytag.

In turn, the insight gained from these types of personality tests can help to create a springboard from which small-business leaders can further build and improve their skills, abilities and knowledge.

By taking the time to assess the effectiveness of its leadership team, small-business owners can create a culture of transparency and accountability in the workplace. Ultimately, this will lead to one of the greatest competitive advantages – a fully aligned and trusting team.

And in the words of acclaimed author Patrick Lencioni, “If you could get all the people in an organization rowing in the same direction, you could dominate any industry, in any market, against any competition, at any time.”

Jeffrey Kadlic

Author Jeffrey Kadlic

Jeffrey Kadlic is a Founding Partner of Evolution Capital Partners, a nationally recognized and award-winning private equity firm dedicated to driving small business transformational success. His passion is simple: arm and inspire entrepreneurs today with the operational leadership, capital management, and success drivers that competitive markets demand. He is a creator of Evolution’s Five Fundamentals, the systematic organizational change agent that transforms the challenges small businesses face into sustainable and profitable growth.

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