Title: CEO relational leadership and strategic decision quality in top management teams: The role
of team trust and learning from failure
Research by Abraham Carmeli, Asher Tishler, Amy C. Edmondson (2012)

Brief critical review of this research paper (this is a brief and highlights some points)

The way people lead and the decisions that they make can have long lasting impact on the
individuals that they manage and on the businesses that they are involved in. Leadership
methods can grow people and businesses and they can also damage them. Previous research,
‘has illustrated the power of the chief executive officer (CEO) leadership in driving
organizational performance.’ Leaders can help lead through change, challenge and failure. In
business, CEOs and other c-levels need to lead and make decisions. Trust is also an
Important element in human life, in how people work with each other. Trust can impact on
team relationships, direction, morale and the overall outcomes. Furthermore, in business,
failure is considered inevitable. As the researcher’s state in their study, ‘the complexity of the
strategic work that TMTs (top management team) must handle makes failures virtually
inevitable.’

The title of the study suggests that team trust may have a bearing on learning from team
failure. The purpose of this study was that the researchers wanted to understand how people
(TMTs) learn from failure and they wanted to explore, if ‘CEOs, who exhibit relational
leadership, may improve the quality of strategic decisions of their top management teams
(TMTs) by creating psychological conditions of trust and facilitating learning from failures in
their teams.’

The researcher addresses that, ‘while research on group learning has increased since the
1990s, evidence of contextual factors that facilitate or inhibit these processes is limited.’

They went on to explain that, ‘exploring this issue is essential because the extant literature
suggests that contextual factors such as a team’s learning climate and leader behaviour are
key in facilitating or inhibiting team learning processes, and thereby influence work
outcomes.’ This is why they have done this study.

They propose a potentially important point where CEOs can improve TMT strategic
decisions by building a better level of trust, which may help the team to learn from failures
which they believe would then have a positive outcome. Therefore, their audience is for those
who are either business academics or business practitioners looking to understand better, how
leadership and trust are factors in teams learning from failures. When people learn from
failure, they can go on and achieve more from their learning experience. I say that from
personal experience both in and out the workplace.

On the topic of trust, trust is an important topic of across different disciplines and not just in
business but different people view trust differently so there is some confusion about the
actual definition and peoples interpretation of it. Some scholars view trust as a behavioral
intention (Mayer, Davis 1995) and some may view as synonymous with trustworthiness. My
immediate emotional response was, ‘how are they defining trust,’ in this study? How will the
respondents respond to the trust questions? Considering the importance of trust, I think this is
a key consideration which I think could have been addressed deeper.

What the study doesn’t address is the negative side of ‘trusting.’ For example, if you have to
show a level of vulnerability to gain trust, and this is exploited, how does this impact on
decision making and the team learning from failure. Based on my own hypothesis mostly
based on my experiences including in the workplace I would suggest that broken trust at
work within a team can have detrimental impact on decisions, on a the team and the outcome.
If trust has been broken this can break down collaboration and communication in a team and
makes the team weaker.

How important is trust and does trust impact on decisions? The study discusses relational
leadership which is a type of leadership that focusses on shared leadership and
developing relational skills across the teams. The idea is that team members work together,
learn from each other, grow and develop and work towards the same goal. It’s about
collaboration. They also state that they know that businesses fail which is factually accurate
as we can see this in the real world! As a business person I can relate to this so it makes me
think they understand the issues and challenges in this area. The researches wanted to,
‘address a specific type of learning from experience, more specifically learning from failure –
thereby responding to calls for further research on learning from failures in the workplace,’
with trust and decision making being part of this. They suggested that previous studies
showed that TMTs often fail to achieve a level of synergy which could be related to how
much trust there may be in the team but again the topic of trust in broad and I don’t think this
study covers that enough. Could it also be due to stress levels or external factors? It can also
imply that some people in management roles find it harder to resolve conflict and problems if
there are low levels of trust.

The researchers suggested three hypothesis and assumptions in their study before carrying out
their research, they stated –
1: TMT learning from failures will be positively related to quality strategic decisions
2: TMT trust (trust among members of a TMT) will be positively related to TMT learning
from
3: The relationship between TMT trust (trust among members of a TMT) and quality
strategic decisions will be mediated by TMT learning from failures. There is no denying the
author’s subject knowledge here with these. I think I would come up with similar assumptions
based on work experience, so they are talking in my language and even without any academic
research we know the importance of trust and how this improves communications and
understandings even if we look at this on a personal level.

Their study indicated and found two things –
(1) the relationship between CEO relational
leadership and team learning from failures was mediated by trust between TMT members;
and
(2) that team learning from failures mediated the relationship between team trust and
strategic decision quality.’

They came to this finding by analysing the data from their methodology. They used a
structural equation model (SEM) and they conducted survey’s and analysed the data from 77
TMTs. They originally sent out 500 requests to previous students who were on executive
MBA programs in Israel to help them to access their firms’ CEOs and TMT members to
complete a structured questionnaire. As part of this they did a reverse score system on some
questions including, ‘TMT members are not always honest and truthful with each other.’

Despite this reverse score system being logical from a research perspective from working in
SMEs and with large brands, I can’t imagine everyone answering this truthfully. Also If you
were to ask different questions or ask non TMTs it could give way to exploring some
different findings.

The study though, was also, ‘supplemented by qualitative data from two TMTs. Doing this I
think was a wise idea as they aren’t just relying on responses from people but also their own
observations. This qualitative data exercise aimed to enhance their awareness of the topic.
The researches did state that, one of the staff members understood that ‘TMT members would
be reluctant to discuss failures.’ I think this highlights the issue with this study and the
reliability of the responses and their management behaviour whilst being observed for this
study, could be questioned.’ I would suggest however that only asking and observing CEOs
and TMTs may potentially weaken the study. Only interviewing TMTs is only showing you
their version from their eyes. What about those who may have impact and influence who
aren’t classed as CEO for example or a direct report to the CEO? I think this should be
looked at.

They also stated that their data provided suggestive evidence that when senior leadership
teams invest attention and understanding in learning from failure (which includes trust
building), the quality of their strategic decision-making will improve which may then
increase business performance overall. Whilst I agree on their findings and statement from a
business experience view point, and whilst I can see they have evidence to suggest their
findings, I would also argue that some TMTS, for example some people in management may
not be comfortable rating their teams performance on the sliding scale that they used
especially if it may relate mostly to the CEO who could also be the founder and the main
shareholder. Some may say they ‘trust, but they don’t. I would also like to know to what
level of trust makes a difference. Do you either trust someone on your team fully or you don’t
trust them at all? I think their study definitely opens up more questions that could be looked
into specifically from a psychological background.

Their study implies that the trust between the TMT members has a positive impact on CEO
relationship leadership and the team learning from any failure. I can see that. They also imply
that when the teams learn from failure this mediated, ‘the relationship between team trust and
strategic decision quality,’ which gives us the idea that trust enables collaboration and
provides better outcomes.

They also focused on the team learning from failures. I want to know what their definition of
failure is. The definition of this can be ambiguous across businesses. If you have high and
unrealistic expectations and you don’t hit them is this classed as a failure for example? There
are certain things I would like to ask the researchers that I don’t fully understand from the
study. What is failure to you for example? How do the researches define it and how do their
respondents define it?’ Someones analysis on how they dealt with failure or their view on
how someone else dealt with failure can be varying in degrees.

Do I believe in the appropriateness of the methodology used given the philosophical and
theoretical approach? I believe that the fact that they did a stage 2 exercise and observed and
interviewed those at 2 companies would help to strengthen their claim however I personally
think more could have been done on the trust aspect as this is quite a deep topic and I am not
sure if the methodology for that aspect is thorough enough especially as you’re relying on
opinions on if they trust and feel trusted for example.

Lack of trust can have a huge impact on growth in business and some argue that being to
trusting can also be a problem. An alternative theory that could have been used would have
been relating to how being overly trusting can negatively affect performance and give way
for manipulative behaviour. Some people may say that the richest most successful billionaire
CEOs in the world got there by some level of manipulation of taking advantage of the
vulnerable. What about the impact on other organisations like a charity or a political one?

How would their theory work here? What about in the government, the forces? How would
they learn from failure? How does trust work here? Their findings add to theory but I
wouldn’t say they are concrete across every sector.

I would also go on to argue that when those answering questions about failures, if they are
answering the questions based on a minor failure that happened years ago how they feel
about that now may be different to, if they answered the question at the time of struggle and
adversity.

I do agree though on my own experience that the element of trust is key in some business
relationships but how do you know for sure if you can trust someone, can it be based on a
feeling? If you haven’t been on the team with someone for a while what are you basing trust
on? A few conversations, a few dealings? How can this person know enough about the
business or the team in the early stages? What makes a person trust? Also, the term failure, a
big failure or a small failure, what about a person’s perception of failure – these can affect the
responses. There are more raised questions that haven’t been answered here and although
they argue that business performance and learning from failures is heavily based on trust – it
doesn’t to me pinpoint clearly enough on the trust side. If I am a new worker and I am asked,
‘to relate to each other with high sincerity,’ how can I do this, if I am new? What am I basing
my opinion on? I think the study should have looked at teams who may have longer standing
relationships also or make a separation between long standing trusting relationships and new
relationships where trust may not yet have been built or even fully tested over a longer period
of time. I also note that they decided in their study not to include samples from everyone as
some didn’t answer all the questions. I would have tried to find out why some of the
questions weren’t answered – are they worried about answering the question(s)? I think this
may have shed light on another angle.

Overall, this is a well thought out study and it adds to previous findings and research and
enhances the claims that strategic decision making, trust and performance all have a part to
play. The language and the tone is also a good fit for business practitioners. To further
validate this claim I would have liked to have seen more in depth data, and I would have
liked to have seen what the TMTs interpretations of trust and failure is. Furthermore, I’d like
to know how this would affect different types of organisations to what extent to see of the
pattern is consistent.

This content has been written by Faye Eldridge, director of FYAMI. You must not copy this information without permission. You can share for insight purposes with references to this post. This content forms part of doctorate (Doctor of business, PhD equivalent) studies by the director of FYAMI.COM

It is to be used for educational purposes.

Terms

CEO relational leadership and strategic decision quality in management teams: The role of team trust and learning from failure

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