How many people should be on your leadership team?

I help agencies to overhaul (or sometimes initially build) their leadership teams and make them more productive, so here are some general rules about team size to get you thinking.

• The leadership team(s) should have fewer than about 8 people because there needs to be a difference between advocacy and enquiry: larger teams have less time per person in a meeting and less opportunity to share, so they tend to make statements instead of asking questions
• I say leadership teams, plural, because there is generally a board of directors (people with some skin in the game, plus their advisors, who meet to make decisions about the future of the business) and a management team (people who may or may not have equity - and some of whom may also be on the board) who manage the day to day
• One reason leadership teams get too large is because the owners want to appear inclusive and try to tick as many boxes as possible. It’s important to send the right message to staff (and potential buyers), but you still need the team to be lean enough to be effective
• Network agencies on the acquisition trail might be more interested in your agency if the management team is diverse if the plan is to integrate the team into their own and quickly fix a gender pay gap or other diversity deficiency. However, it’s less likely now that a network agency will be the buyer for your agency (massive consolidation and cost cutting); corporates (which networks are) simply care less about DEI than they did 2-3 years ago (which is sad); and the gender pay gap has closed substantially versus a few years back, so it’s less of a risk for them (which is good?)
• Remember, it isn’t a glass ceiling so much as a glass meeting room wall: if everyone can see that there’s nobody like them in the room (and feel like there never will be), it’s going to lead to churn
• Another reason leadership teams get too big is that agency owners use a space on the leadership team as a reward for people who have provided good service: someone who’s gone above and beyond over a number of years might get a seat at the big table in lieu of a deserved pay rise. Nothing inherently wrong with that - you probably have a high degree of trust in this person - but just consider that this is one of your slots used up; and that you might be subconsciously trying to get out of rewarding this person financially, which sometimes they may prefer
• A third reason why agency leadership teams get too big is because they want to make a hire and a space on the top team is the only way to entice them to join. The hire might be worth a slot, but if you do that more than a couple of times in quick succession, you’ll quickly have a bunch of strangers on board with you. You need to be able to trust this team implicitly
• If you have the head of one particular type of work on your management team and not the others (e.g. a Head of Design but no Head of Development), it creates a feeling of inequality between the teams, which can result in staff churn: people leave to join an agency where they themselves are represented. You might do this on purpose because you want one team to run the show e.g. everything must lead with Strategy, so your Strategy Director is there without your Creative Leader; or you need to be more customer centric, so your Head of Client Services is at the highest level
• Arguably, though, the most common reason the agency leadership team is bigger than it should be is because the agency has outgrown one of its managers and the owners don’t feel comfortable or brave enough to remove them from their position because of the good service they gave in the past; they may even be a close friend now
• When people are on the management team for the wrong reasons it creates confusion across the agency about what the management team is there to do…and wild speculation about just how much value they might be adding
• There are some roles that need to be represented at the top table (which may be fulfilled by you, the owner): one is finance (because you need someone to tell everyone whether they can or can’t spend); one is client interest, which could be sales or client services or both (because most of your strategic decisions should be based on real feedback from customers and prospects); it’s probably a good idea to have someone in charge of the people as a whole, which is usually operations, because you want to be able to talk about the general risks to the workforce and changes it needs to make (this might be HR, but I’ve seen very few agencies where the HR lead is able to walk this line); finally, you need the decision maker (CEO/MD or similar). It’s the job of the agency leader to balance the needs of finance, employees and clients, making sure that initiatives keep the highest possible number of stakeholders happy. Remember, the more people you add, the more people want to know how a decision benefits them and the more needs you have to balance!