When Functional Loyalty Undermines Enterprise Leadership

When I am working with a senior leadership team, I often start with a simple, semi-rhetorical question.

Think of your team. The one you feel most responsible for. The one you instinctively protect. Is it the team in this room?
The answer is rarely vocalised, but you can feel the unease. People shift in their seats, some smile knowingly. others go quiet.

That pause is revealing, because the question of which team comes first is not a philosophical one but a diagnostic. When the functional team comes first, it tells you something important about how leadership is being designed, led, and rewarded inside the organisation.

Most senior leaders will say that the leadership team is their first team. In practice, many behave as though their primary loyalty sits with the function they lead. This gap between intent and behaviour is rarely named, yet it shapes how decisions are made, how risk is carried, and how effectively organisations scale.

Why Clarity is Important

The roots of this idea sit most clearly in the work of J. Richard Hackman, whose research into senior leadership teams highlighted a persistent tension. Senior leaders almost always belong to multiple teams at once, yet organisations are often unclear which of those teams truly matters. Where that clarity is missing, leaders default to the place where accountability is visible, competence is recognised, and authority feels legitimate. For most, that place is their functional team.

Patrick Lencioni later translated the same practical reality into boardroom language through “team one accountability”. The framing differs, the underlying mechanism does not. Senior teams struggle when leaders remain primarily loyal to their function, particularly when that loyalty is reinforced by incentives, habit, and the structure of the CEO’s attention.

Where I See This Most Frequently

This pattern shows up most strongly in well-intentioned organisations. Senior leaders are promoted because they are excellent operators. They know how to deliver results, manage risk, build capability, and lead people through pressure. Their professional identity is anchored in functional success. The leadership team, by contrast, often exists in a more ambiguous space. Its purpose is loosely defined, meetings drift towards updates rather than decisions, and enterprise-level trade-offs are postponed or quietly reworked once people leave the room.

Over time, leaders learn where effort is rewarded and where it simply dissipates. Loyalty follows structure.

In one organisation I worked with, the executive team met regularly and appeared aligned. Decisions were reached in the room, yet weeks later the same issues resurfaced. Commitments had been softened, priorities reframed, capacity re-interpreted. Each leader had returned to their function and translated the decision through a local lens. The CEO described feeling permanently busy and oddly ineffective, carrying the integration work that no one else quite owned. On paper, the team was strong. In practice, the system was quietly fragmenting.

In another business, a senior people leader did something that stopped the room. They told the CEO that their team was too large. Delivery could improve and costs could fall, they argued, if the structure was reshaped. There was no defensiveness, no attempt to protect headcount or influence. This leader was thinking as a steward of the enterprise rather than an owner of a silo. The reaction from colleagues was telling. Respect, yes, but also surprise. Behaviour like this stands out precisely because it remains unusual.

What changes when the top team really is the first team

Where the leadership team becomes the first team in practice, the shift is visible and, in many cases, surprisingly quick.

Leaders bring the real information into the room, even when it complicates their position. Decisions are made once and then owned collectively. Leaders explain outcomes they did not personally advocate because they are protecting the enterprise, and their credibility depends on shared ownership. Trade-offs become discussable, so the CEO does less private arbitration. Trust rises because loyalty is predictable and transparent, and challenge stops being interpreted as threat.

This is the behaviour Lencioni was pointing towards, and it is the practical resolution of Hackman’s underlying insight: when primacy is clear and reinforced, the senior team starts behaving as a team rather than as representatives.

In organisations that achieve this, care for people does not disappear. It becomes more disciplined. Leaders stop expressing care through protectionism and start expressing it through clarity, context, and follow-through.

What CEOs must do differently

This does not improve through encouragement alone. Leaders will not prioritise the enterprise consistently if the system continually rewards functional optimisation.

The CEO’s role is to make the senior team real. That begins with clarity about what the leadership team exists to decide and what must not be decided elsewhere. It continues through incentives that recognise enterprise contribution, not only functional results. It requires a commitment to resolve fewer tensions privately, however efficient that feels in the moment, because private integration teaches public fragmentation. It also depends on a climate where disagreement is safe enough to be useful, so that trade-offs are made in the open, where they can be owned.

When those conditions are in place, the opening question becomes easier to answer. Leaders stop hesitating, because the leadership team becomes the team that genuinely holds the business.

That is when functional loyalty stops quietly undermining strategic leadership, and starts serving it.

References

Hackman, J. R. (2002). Leading Teams: Setting the Stage for Great Performances. Harvard Business School Press.

Lencioni, P. (2012). The Advantage: Why Organisational Health Trumps Everything Else in Business. Jossey-Bass.