Transformational Leaders Think Beyond their Function

The world has changed. Businesses haven't. For decades, organizations have operated in a hub-and-spoke system with the CEO firmly at the center, with C-suite leaders working in functional silos, focused on their geography or discipline and ensuring their alignment with the hub. With this system, the CEO is the only integration point—where decisions flow down from and information flows up to.

The CFO advocates for finance. The CMO champions marketing. The CHRO defends talent priorities. Each executive views challenges through their specialized lens, competing for resources rather than collaborating on solutions.

The result is an organizational structure fundamentally at odds with today's business challenges. Problems like shifting policies, global tariff changes, and geopolitical tensions no longer present neatly within functional boundaries—they cascade across the enterprise ecosystem with increasing interconnectedness.

Consider the evidence: digital transformation initiatives fail at a rate of 75% despite significant investment.

Why? Often because they're treated as technology projects rather than enterprise-wide reinventions. Supply chain disruptions don't just affect operations—they ripple through finance, sales, marketing, and customer experience. Sustainability isn't an isolated corporate responsibility initiative—it requires integration across product development, manufacturing, and supplier relationships.

Horizontal work in a vertical organization is akin to swimming upstream—possible, but exhausting and inefficient. Meanwhile, the pace of change continues to accelerate. Market conditions shift weekly. Consumer preferences evolve daily. Competitive threats emerge hourly.

The ‘first team’ mentality

To break free from this transformation trap, CEOs must orchestrate a mindset shift in their C-suite: they must view their executive team—not their functional colleagues—as their ‘first team.’ Every CEO know how important this shift is, but few know how to transform C-suite mindsets.

In an RRA book published last year on how new CEOs can succeed, Winnie Park, CEO at Five Below, talks about this fundamental shift: "As a cross-functional team with individuals who have grown up in functional silos, they need to see each other as their first team. You respond to each other's requests first; you talk all the time; you have each other's backs." When functional leaders prioritize their horizontal relationships with peers over their vertical relationships with direct reports, they begin to operate as a unified leadership body rather than a collection of functional representatives.

The shift is subtle but profound: executives no longer arrive at leadership meetings to advocate for functional priorities, but to collectively solve enterprise challenges. Resource allocation becomes an exercise in optimization rather than negotiation. Trade-offs become expressions of strategy rather than political compromises.

Once this first team mentality is established, identifying and nurturing the right leadership capabilities becomes essential for sustaining enterprise-wide transformation.

The five dimensions of enterprise leadership

How can you find and develop leaders with enterprise-wide thinking? We share the five characteristics that differentiate enterprise leaders from functional leaders:

The enterprise leadership advantage

By dismantling functional silos and fostering horizontal collaboration, decision-making accelerates, as executives operate from a place of shared understanding rather than individual perspectives. The often-endless cycle of alignment meetings and reconciliation processes gives way to decisive action.

The benefits extend beyond efficiencies. Enterprise leadership fundamentally alters how organizations process and respond to market intelligence. When insights from customers and competitors reach decision-makers without functional filtering, adaptation becomes nimble and responsive. Simultaneously, innovation flourishes as previously separate capabilities combine in novel ways.

One of the most enduring advantages is the self-reinforcing nature of this approach. When executives model enterprise thinking, they create a ripple effect throughout the organization. Over time, transformation becomes less of an initiative, and more of an operating system—embedded in how the organization works rather than what it occasionally does.

From exception to expectation

The transition to enterprise leadership isn't easy. It challenges deeply ingrained assumptions about expertise, authority, and organizational design. It requires executives to relinquish functional identity without abandoning functional knowledge. It demands new skills, new mindsets, and new measures of success.

But the alternative—continuing to address horizontal challenges through vertical structures—is becoming increasingly untenable. As complexity grows, the gap between functional leadership and enterprise leadership widens. Organizations that fail to close this gap find themselves perpetually behind—fighting yesterday's battles with yesterday's weapons.

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Authors

Bob Marcus is a senior member of Russell Reynolds Associates’ Leadership Advisory practice. He is based in New York.
Sean Dineen is a senior member of Russell Reynolds Associates’ Leadership Advisory practice. He is based in Boston.
Jennifer Flock leads Russell Reynolds Associates’ Inclusion and Culture capability in Europe. She is based in Paris.
Hetty Pye is a senior member of Russell Reynolds Associates’ Board & CEO Advisory practice, and is the co-founder of RRA Artemis. She is based in London.