Why Teams Matter

Why Teams Matter

While the book Why Teams Matter by Jon Katzenbach and Douglas Smith was written twenty years ago, the principles contained in the excerpt reproduced here remain sound. While teams are critically important to organisations, the construct ‘team’ is overused and poorly understood. This article focuses on how we might understand teams better, in particular the difference between a team and a collection of individuals working together.

An excerpt from The Wisdom of Teams: Creating the High-Performance Organization

Effective teams, not abstract commitments to teamwork or empowerment, are the real drivers of top-flight organizational performance.

In their private lives, managers know that real teams can produce extraordinary performance results — results way beyond the reach of separate individuals or less cohesive groups. At work, however, turning this private knowledge to the advantage of their organizations has often proven difficult. It is not always clear when to use teams or how best to support them. Nor is it clear what, precisely, it is that makes a team a team. Drawn both from the authors’ long experience working with organizations to improve their performance and from a detailed study of some 50 or so different teams of executives in 30 different companies, this excerpt from The Wisdom of Teams describes in close detail what teams are, which attributes set them apart from other kinds of groups, and — most important — why they are the essential organizational units for achieving performance results as well as accelerating personal growth.

SAVVY MANAGERS have always known that real teams — not just groups of people with a label attached — will invariably outperform the same set of individuals operating in a non-team mode, particularly where multiple skills, experiences, and judgments determine performance. Being more flexible than larger organizational groupings, they can be more quickly and effectively assembled, deployed, refocused, and disbanded. And being more firmly and mutually committed to tangible performance results, they can more readily leverage their combined skills to achieve objectives beyond the reach of less tightly-bound collections of individuals.

None of this is new. Ancient generals understood the wisdom of teams no less than do modern corporate leaders. What makes that wisdom of such importance now — and so worth the urgent attention of top management –is not novelty but the proven link between teams, individual behavioral change, and high-performance. Building organizations that consistently outperform their competitors, as well as the expectations of their key constituencies (customers, shareholders, and employees), over an extended period of time requires lasting behavioral change. And experience shows that the same team dynamics that boost performance also enable such change — and do so far more effectively than can larger organizational units or individuals left to their own devices.

Change has always been a top management challenge. But until recently, when executives spoke of managing change, they usually referred to normal change — that is, adapting to new circumstances where demands fall well within the scope of existing management approaches. Today, however, these demands often extend to “major” change, which requires people at all levels of a company to become very good at behaviors and skills they are not very good at now. As Jack Welch, Lawrence Bossidy, and Edward Hood of General Electric note, “Every effort of every man and woman in the company is focused on satisfying customers’ needs. Internal functions begin to blur. Customer service? It’s not somebody’s job. It’s everybody’s job.”

This is, of course, a much more difficult challenge — one that cannot be met solely through top-down, command-and-control organizational responses. Change on this scale depends on teams because behavioral change occurs more readily in teams. Their collective commitment keeps members from being as threatened by change as individuals left to fend for themselves. Their flexibility offers members more room for growth. And their focus on performance motivates, challenges, rewards, and supports members who try to alter the way they do things.

The lesson seems clear: only teams can make hierarchy responsive without weakening it, energize processes across organizational boundaries without distorting them, and bring multiple capabilities to bear on difficult issues without undermining them.

In fact, most models of the so-called “organization of the future” that we have heard about — “networked,” “clustered,” “non-hierarchical,” “horizontal,” and the like — are premised on teams surpassing individuals as the primary unit of performance. When managers seek faster, better ways to match resources with customer need or competitive challenge, the critical building block is — and will increasingly be –at the team, not the individual, level.

When do groups become teams?

If teams provide such a critical lever of performance, why is it that so many managers remain confused about what — exactly — they are? Some mentally lump them together with taskforces, committees, departments, and other forms of groups. Others think of them not in organizational terms but as the embodiment of values such as teamwork or cooperation or empowerment. Still others believe that merely calling a group a team makes it one. It does not.

There is a threshold below which an extremely dedicated group of people working together to accomplish something of great importance to themselves remains just that — an extremely dedicated group of people. It has not crossed the threshold. A team, a real team, is something different.

Based on our and our colleagues’ work with both corporate and other kinds of organizations in all parts of the world, we have come to think of a team more precisely as a small number of people with complementary skills who are committed to a common purpose, performance goals, and approach for which they hold themselves mutually accountable.

Each part of this definition — or, better, this essential mode of organizational discipline — is worth closer attention:

…A small number of people

Virtually all the real teams we have met, read, heard about, or been members of, have ranged between two and twenty-five people. Most numbered less than ten. Size, of course, differs from the other key attributes of teams — meaningful purpose, specific performance goals, common approach, complementary skills, and mutual accountability — in that they are absolute necessities. “Small number” is more of a pragmatic guide. A larger number of people, say 50 or more, can theoretically become a team, but groups of such size usually break into subteams rather than function as a single unit.

Why? Because large numbers of people — by virtue of their size — have trouble interacting constructively as a group, much less agreeing on specific, actionable tasks. Ten people are far more likely than 50 to work successfully through their individual, functional, and hierarchical differences toward a common plan — or to hold themselves jointly accountable for the results.

Large groups face not only logistical issues like finding enough physical space and time to meet together. They also face more complex constraints, like “crowd” or “herd” behaviors, that prevent the open, intense sharing of viewpoints needed to build a team. As a result, such groups tend to settle for fuzzy statements of purpose, which usually get set by the hierarchical leaders, and some vague reliance on the value of teamwork as their working approach. Thus, when purpose or approach breaks down, it is easy for the groups to revert to formal hierarchy, structure, policies, and procedures.

…Complementary skills

Real teams develop the right mix of complementary skills necessary to do the team’s job. These requirements fall into three categories:

  1. Technical or functional expertise. It would make little sense for a group of doctors to litigate an employment discrimination case in a court of law. Yet teams of doctors and lawyers often try medical malpractice or personal injury cases. Likewise, product development groups that include only marketers or only engineers are less likely to succeed than those with the complementary skills of both.
  2. Problem-solving and decision-making skills, Teams must be able to identify the problems and opportunities they face, evaluate the options they have for moving forward, and then make the necessary tradeoffs and decisions about how to proceed.
  3. Interpersonal skills. Common understanding and purpose cannot arise without effective communication and constructive conflict. These, in turn, depend on such interpersonal skills as risk taking, helpful criticism, objectivity, active listening, giving the benefit of the doubt, support, and recognizing the interests and achievements of others.

Common sense tells us that it is a mistake to ignore the mix of skills when selecting a team. No team can get started without some minimum complement of skills. Nor can it achieve its purpose without developing all the skills required. Still, it is surprising how many people assemble teams primarily on the basis of personal compatibility or formal position in an organization.

…Commitment to common purpose and performance goals

A team’s purpose and performance goals go together. Indeed, we have yet to find a real team without both. If near-term goals do not relate directly to overall purpose, team members become confused, pull apart, and revert to mediocre performance behaviors.

There are several reasons for this. First, working to shape common, meaningful purpose sets the tone and aspiration by which teams develop direction, momentum, and commitment. Building ownership and commitment to purpose, however, is not incompatible with taking initial direction from outside the team. The often-asserted view that a team cannot “own” its purpose unless top management keeps their hands completely off is seriously misleading. It is the exceptional case — true entrepreneurial situations, for example — when a team actually creates a purpose entirely on its own.

Direction from top management helps teams get started by broadly framing some kind of “team charter” within the performance requirements of the company. This is what Bob Waterman and Tom Peters in In Search of Excellence call defining a “solution space” — that is, defining the boundaries and scope of authority clearly enough to indicate direction, but flexibly enough to allow the modification required for commitment to develop.[a]

Exhibit 1 is one of the best illustrations we know of such a charter or set of management guidelines for teams. Developed at Procter & Gamble during their impressive major change and performance turnaround between 1985 and 1991, it makes clear the charter, the rationale, and the performance challenge for the team, but leaves plenty of solution space for the choice of specific goals, timing, and approach.

The best teams invest a tremendous amount of time and effort exploring, shaping, and agreeing on a purpose that belongs to them both collectively and individually. In fact, real teams never stop this “purposing” activity because of its value in clarifying the aspirations of, and in providing a fundamental reason for, their extra effort.

Second, specific performance goals are an integral part of a team’s purpose. Transforming broad directives into concrete, measurable performance goals is the surest first step in a team’s shaping of a common purpose that is meaningful to its members. Specific goals — like getting a new product to market in less than half the normal time, responding to all customers within 24 hours, or achieving a zero defect rate while simultaneously cutting costs by 40 percent — provide clear and tangible footholds.

Moreover, such goals define a team work-product that is different from both an organization-wide mission and the summation of individual job objectives. To be effective, these work-products must require roughly equivalent contributions from all team members to make something specific happen that, in and of itself, will add real value to company results.

The specificity of performance objectives has another benefit: facilitating clear communications and constructive conflict within the team. For example, one plant-level team at Sealed Air Corporation, a high-performing producer of packaging materials and systems, set a goal of averaging two hours for machine changeover. The clarity of that goal forced the team to concentrate on what it would take to achieve it –or, alternatively, on whether the goal should be changed. When goals are clear, team discussions can focus on how, exactly, to pursue them or whether to change them. When they are ambiguous or nonexistent, no such focus is possible.

A third reason for linking purpose with specific performance goals is that the latter help teams concentrate on getting results. A product-development team at Eli Lilly’s Peripheral Systems Division set definite yardsticks for the market introduction of an ultrasonic probe, which would help doctors locate clogged arteries in patients. The probe had to have an audible signal through a specified depth of tissue, be manufacturable at a rate of 100 per day, have a unit cost less than a pre-established amount, and get developed in less than half the time the Lilly division usually took.

Because each of these objectives was attainable and measurable, the team always knew where it stood. At any given moment, it was achieving its goals or it was not. Until it did, there was no question where energy and attention had to focus. Moreover, the specificity of the goals allowed the team to achieve small wins along the way, which were invaluable in building its members’ commitment and determination to overcome the inevitable obstacles they faced.

Still another reason, as Outward Bound and other teambuilding programs illustrate, specific objectives have a leveling effect conducive to effective team behavior. When a small group of people challenge themselves to get over a wall or up a mountain or through a desert — or to reduce cycle time by 50 percent — their respective titles, perks, and other “stripes” fade into the background. The teams that succeed evaluate what and how each individual can best contribute to the general goal. More importantly, they do so in terms of the performance objective itself, rather than any individual’s status or personality.

Performance goals are compelling. They provide drama, urgency, and a healthy fear of failure. They challenge the people on a team to commit themselves, as a team, to make a difference. At Lilly, all members of the medical probe team put their pride on the line when they actually committed to getting the new product to market in record time. No one beyond the team could make it happen. It was their challenge.

…Commitment to a common working approach

Teams also need to develop a common approach to how they will work together to accomplish their purpose. Crafting such an approach takes just as large an investment of time and effort as the shaping of purpose. It must include economic and administrative, as well as social, dimensions. Every member of a team must do equivalent amounts of real work. And everyone must agree on who will do which jobs, how schedules will be set and adhered to, which skills need to be developed, how continuing membership is to be earned, and how the group will make and modify decisions.

An approach that confines all real work to a few members (or staff outsiders) and allocates joint effort only to review and discussion meetings cannot achieve team levels of performance. This is, in large measure, because there is no collective workproduct to supplement individual performance. Moreover, this approach treats the social aspect of work as unrelated to performance. Effective teams, however, always have team members who, over time, assume important social as well as leadership roles, challenging, interpreting, supporting, integrating, remembering, and summarizing the work of others. These roles help promote the mutual trust and constructive conflict necessary to success but they are always an integral part of performance efforts, not ends in themselves.

Because, in the best teams, each member assumes different social roles depending on the situation, each team develops its own unique processes for energizing and supporting one another and for keeping each other honest and on track. These roles evolve over time to meet performance needs. It is a troublesome, though common, mistake to go down some generic checklist of useful social roles, as a way of assembling a team that, at the beginning, has “all the right parts.”

…Mutual accountability

No group ever becomes a team until it can hold itself accountable as a team. This is a demanding test. Think, for example, of the subtle but critical difference between “The boss holds me accountable” and “We hold ourselves accountable.” The first case can lead to the second; but without the second, there can be no team.

At its core, team accountability has to do with the sincere promises we make to ourselves and to others, promises that underpin two critical aspects of teams: commitment and trust. By promising to hold ourselves accountable to the team’s goals, we each earn the right to express our own views about all aspects of the team’s effort and to have our views receive a fair and constructive hearing. By following through on such promises, we preserve and extend the trust on which any real team must be built.

Most of us enter a potential team situation cautiously; ingrained individualism discourages us from putting our fates too easily in the hands of others. Teams do not succeed by ignoring or wishing array such behavior. Mutual accountability cannot be coerced any more than people can be made to trust one another. But trust does tend to grow as a natural counterpart to the development of common team purpose, performance goals, and approach.

Accountability arises from — and reinforces — the time, energy, and action invested in figuring out what a team is trying to accomplish and how best to get it done. When a group of people all do real work together toward a common objective, trust and commitment follow. Consequently, teams enjoying a strong common purpose and approach inevitably hold themselves, individually and collectively, responsible for the whole team’s performance.

Despite the fact that most of us are familiar with teams, we are often imprecise in thinking about them. That is why gaining a clear understanding of what a team is and is not — and, particularly, of how teams and performance depend on each other — can provide useful insights about how to strengthen group performance.

Imprecise or ambiguous talk, however, pales in comparison with the lack of discipline most of us bring to potential team situations. Teams do not spring up by magic. Nor does personal chemistry matter as much as most people believe. Focusing on performance and accountability — not chemistry or teamwork or good communications or good feelings — is what makes teams happen.

The team performance curve

The discipline of this multipart definition is what top managers need to understand and enforce if they are to capture the potential of real team performance at critical spots in their organizations. First, however, they must give equally disciplined attention to the question of whether — and when — real teams are appropriate. There are tradeoffs between relying on individuals, working groups, and teams. In what circumstances are teams the right answer?

Consider, for example, the situation of the Cosmo Products executive group who were perceived by employees as not being enough of a team:

“Those kinds of comments are pretty hard to ignore. Obviously, the people in this company don’t think we’re a very cohesive team. I guess we don’t work together as well as we might. But I didn’t realize it was of that much concern to the rest of the organization. What should we do about it?”

The president of Cosmo was talking informally with his top executive group. They had just finished listening to disguised excerpts from taped interviews with more than one hundred employees, who had been asked for their views about the progress of a recently-launched change effort — a major undertaking aimed at changing the behaviors of literally thousands of people throughout the company.

Many of the comments were to be expected. The employees understood that Cosmo Products’ strategy and performance had declined significantly during the previous five years. The company no longer consistently beat the competition to market with the right products at the right time. Nor did its salesforce perform as well as it once had.

There were many explanations: product proliferation, quality problems, shifting consumer preferences, more aggressive competitors, demographic changes in the salesforce. And there was deep concern: the overall market had leveled, sales and share were down, and profits had fallen so much that analysts and the business press openly criticized the company. Morale and confidence were clearly shaken, and everyone knew that a great deal of change was required.

So it was not surprising to Cosmo’s executives, although it was painful, to hear their employees recount the top group’s earlier failures to correct the situation. They knew the current effort had better be different. Yes, the employees understood and agreed with the company’s new vision. Yes, they shared its sense of urgency. And yes, they were ready to participate in the various efforts being mounted in key functions and operating units.

But something had to be different this time. This time, the taped comments insisted over and over, the top group had to become a real team. The message was inescapably clear: “You guys are all pulling in different directions. If you don’t get your act together, nothing will change.”

The critical choice

In our terms, Cosmo’s top executives had to decide whether to concentrate on improving their effectiveness as a de facto working group or to try to become a real team. In the eyes of their employees, they were, as a group, working at cross purposes. Simply clarifying direction and role did not require them to become a team. Indeed, in many situations, particularly at the top of multibusiness companies, a structured working group makes the best sense. All too often, however, the choice between working group and team is neither recognized nor consciously made.

The basic distinction here turns on performance. A working group relies primarily on the sum total of the individual contributions of its members to boost group performance; a team multiplies the impact of individuals by requiring collective workproducts. The choice depends largely on whether the aggregation of individual achievements can meet overall performance aspirations, or whether truly collective efforts, skills, work-products, and mutual accountability are needed.

Working groups tend to thrive in those hierarchical structures where individual accountability counts the most. The best of them come together to share information, perspectives, and insights, to make decisions that help each person do his or her own job better, and to reinforce each other’s individual performance standards. But their focus is always on individual performance goals and accountabilities.

An effective working group, like a team, benefits from a clear purpose and common understanding of how performance will be evaluated. (The Cosmo executives had neither.) Unlike a team, however, a working group uses its purpose solely to delineate individual roles, tasks, and responsibilities, which typically match up quite well with formal organizational positions.

To get their assigned tasks done, working group members, especially at senior levels, usually delegate the real work to others beyond the group. This is consistent with their paying attention only to individual outcomes and results. True, members may compete with one another in their pursuit of individual performance targets. They may even provide counsel and insights to each other and become concerned when any among them falters. But they do not take responsibility for results other than their own. Nor do they try to develop performance contributions requiring the combined, real work of two or more group members.

Teams are different. They require both individual and mutual accountability. They rely on more than group discussion, debate, and decision; on more than sharing information and best practice perspectives; on more than a mutual reinforcing of performance standards. What they produce they produce jointly. The performance they contribute is more than the sum of its parts.

These higher performance levels carry with them, of course, greater risk. The deep-seated values of individualism and the natural reluctance to trust one’s fate to the performance of others make commitment to a team a leap of faith. Even the most rugged individuals — and there are many, especially at the top — cannot contribute to real team performance without taking responsibility for their peers and letting their peers assume responsibility for them. But there are people who instinctively believe that “if you want a job done right, do it yourself.” It is against their nature to rely on others for the really important tasks in life.

The price of faking this leap of faith is also high. When teams fail, members get diverted from their individual goals, what they produce does not add significant value, costs outweigh benefits, and people resent the imposition on their time and priorities. By contrast, working groups present fewer risks. They need waste little time in shaping their purpose, objectives, and approach since the leader usually establishes them. Meetings are run against well-prioritized agendas and are efficient in the use of members’ time. Decisions get implemented through specific, individual assignments and accountabilities.

Most of the time, therefore, if cumulative performance aspirations can be met simply by enabling individuals to do their respective jobs well, the working group approach is more comfortable, less risky, and less disruptive than stretching to reach the higher performance levels of real teams. Indeed, if there is no strict performance need that teams alone can satisfy, efforts to improve the effectiveness of a working group make much more sense than does floundering around trying to become a team.

From group to team

To help managers understand the choice facing such groups as the executives of Cosmo Products, as well as the risks and performance potential involved in that choice, we find it useful to refer to a simple framework we call the “performance curve” (see Exhibit 2). There are five key points along the curve:

  1. Working group. This is a collection of individuals for whom there is no significant incremental performance need or opportunity requiring their mutual transformation into a team. Members interact primarily to share information, best practices, or perspectives and to make decisions that help each individual perform well within his or her own area of responsibility. But there is no deep common purpose nor any general wish for one, no common “stretch” performance goals, and no common workproducts that call for collective skills and mutual accountability.
  2. Pseudo team. This is a collection of individuals for whom there could be a significant performance need or opportunity, but who have not focused on collective performance and are not really trying to achieve it. There is no group interest in shaping a common purpose or set of performance goals, even though the group may call itself — or think of itself as — a team. They are concerned about togetherness, not performance.Pseudo teams are the weakest arrangements of all in terms of performance impact. They almost always contribute less to a company’s performance needs than do working groups because their interactions detract from each member’s individual performance without delivering any joint benefit. On pseudo teams, the whole is less than the sum of the potential of the individual parts.
  3. Potential team. This is a collection of individuals for whom there is a clear, significant performance need — and who really are trying to improve their performance impact. Typically, however, they lack clarity about purpose, goals, or joint work-products, as well as the discipline to hammer out a common working approach. Nor have they established mutual accountability.Our experience suggests that potential teams abound in organizations. This should be of concern to managers because the greatest possibility for improved performance anywhere on the curve usually comes between potential teams and real teams.
  4. Real team. This, as we have already argued, is a small number of people with complementary skills who are equally committed to a common purpose, goals, and working approach for which they hold themselves mutually accountable.
  5. High-performance team. This is a group that meets all the conditions of real teams — and whose members are also deeply committed, even beyond the team setting, to one another’s personal growth and success. The high-performance team significantly outperforms not only all other teams but also all reasonable expectations, given its membership.

Why Cosmo failed

Cosmo’s senior managers certainly had the potential to become the kind of team their employees hoped for. The performance challenge they faced called for a team. They were a small number of people with the right skill mix. Given the problems they faced, it should have been possible for them to establish a common purpose, performance goals, and approach for which they held themselves mutually accountable.

Prior to listening to the interview tapes, however, these managers did not even constitute a good working group. Instead, they were only a pseudo team — that is, they referred to themselves as a team but made no serious effort to establish collective purpose, performance goals, or approach. As they worked together, considerations of politics almost always overshadowed those of performance.

What Cosmo’s president called the “pretty hard to ignore” message of the tapes spurred the group to want to move from pseudo team to real team. Indeed, they decided that becoming a team was, in and of itself, critically important if they were to have any chance of leading a transformation at Cosmo. What they, as many groups like them, did not do was to give serious consideration to the alternative goal of becoming a more effective working group. Nor did they look beyond the self-imposed task of becoming a team to focus on the real heart of the challenge facing them: boosting company performance beyond the results achievable in their roles as individuals.

Most of the group’s meetings were marked by the candor necessary to team building — and by diligent efforts to grapple with the issues critical to managing the kind of broad-based change they thought was necessary. “The vision is too abstract,” they told themselves, for example, “We’ve got to be clearer on what we want our vision to mean to employees and customers. Everything has become a priority around here. We have to find a way to get things into better focus before we create a system overload.”

And they recognized the consequences if they failed: “Our people don’t really understand what is expected of them. We need to communicate specifically what and how we want them to change, and then get them working on it.” At the heart of the problem, however, was their mutual acknowledgment that “We still don’t really trust one another. We need to keep having these meetings, maybe even a special retreat, to work on that issue.” They were focused on togetherness, not performance.

Discussions like these went on sporadically for a few months after the employee feedback session. Out of them, the group emerged with a stronger sense of vision and purpose for the company, a better understanding of how to set company priorities, an intention to communicate more clearly with employees, and a firmer basis for trust among themselves. There was, however, no clarification of purpose or vision for the group itself, nor any agreement on specific performance goals to pursue as a team.

Such objectives were possible. As both the employees and executives knew, for example, Cosmo Products was introducing far too many products of varying quality every year. The senior executives could have taken on the challenge, as a team, to cut the number of new offerings by 50 percent while simultaneously designing a process to get them to market on time and within established quality standards. Or they might have committed themselves, as a team, to strengthen the account relationship skills of the traditionally part-time sales-force. Had the group defined such goals, it would have had something concrete and measurable to do as a team.

But without any mutually agreed-on performance objectives, the senior executives found no way to engage as a team in pursuit of their nobler aspirations. They did discuss and debate at length the urgency of the situation they faced as well as their desire to do something about it. But because they never translated this desire into specific team goals, these team-building sessions deteriorated into nothing more than frustrated and frustrating talk.

Three years after the launch of its major change program, Cosmo Products still had not developed the fundamentally different skills, values, and behaviors required for future competitive success. Instead, the company endured continuing financial disappointments, major takeover battles, key business divestitures, disturbing top management changes, and wrenching cost-cutting drives. The employee warnings had been right: the performance potential of the top managers becoming a real team was as enormous as their ultimate failure was disastrous — that is, their failure both to choose, explicitly, between being a working group and being a team and to support either choice with a rugged, disciplined eye on performance.

Most of us have belonged, at one time or another, to pseudo teams like the one at Cosmo Products. They exist in many parts and levels of most organizations. And most of us have experienced their confusion over purpose, their reluctance to focus, their inability to handle personal animosity or ambition, and their reliance on hierarchical ritual to avoid, rather than engage, one another. Worse, people throughout an organization always recognize these pseudo teams for the sham they are. The net result is always the same: discomfort, disunity, and dysfunction — and ultimately disrespect.

The cycle of reinforcement at Motorola

As experience at all points along the performance curve attests, significant performance challenges — the demands, say, of customer service or total quality or continuous improvement or innovation — do more than anything else to foster the development of real teams. The issue is not whether such challenges exist; every organization faces them. It is whether established managerial-values and behaviors — what we call a company’s “performance ethic” — help or harm the team-inducing effects of these performance challenges.

We see a mutually reenforcing relationship between the strength of a company’s performance ethic and the number and performance of its teams. Companies that have a commanding performance ethic actively seek out the kinds of performance challenges that favor teams, which, in turn, deliver results that help sustain the overall performance ethic. The decisions, actions, and events that mark any group’s evolution toward the status of real team will more likely occur inside a strongly performance-oriented company.

The reverse is also true. Companies with a weak performance ethic obscure or even destroy team performance opportunities in the endless shuffle of turf, politics, “not invented here,” and “business as usual.” And these lost opportunities, especially the more visible ones, further weaken the performance ethic.

The “Connectors” team at Motorola grew out of an effort by the company’s Government Equipment Group (GEG) to partner more effectively with suppliers. This followed a 1989 decision to shift supply management from a decentralized, functional organization, dependent on the expertise and performance of individuals, to a centralized, process-oriented organization that depended primarily on teams.

The performance goal in this strongly performance-oriented company was to get both external and internal customers the supplies and materials they needed when they needed them at the lowest total cost. To do this, GEG’s leadership team knew it had to move away from an organization emphasizing individual and functional accountability to one that focused on developing teams that began with suppliers and finished with customers.

GEG’s formal designation of teams in late 1989 was just that — namely, the creation of organization units that were called teams but were not. Two years later, many of these potential teams had become real teams –thanks, in large measure, to the reenforcing effects of the company’s strong performance culture.
Starting the cycle

Like the other potential teams in GEG, the Connectors team was charged with the general goal of boosting customer satisfaction. It was also expected to measure itself against five specific criteria: reject rate, number of corrective actions, cycle time, late deliveries, and number of suppliers. When members of the group first got together in January 1990, they agreed on a number of concrete performance goals — for example, reducing the percentage of defective components from 3.5 percent to 1 percent by the end of the year. They also discussed how to overcome the conflict between the two sets of experts involved in purchasing: engineers and purchasers.

Several of the engineers, who were responsible for specifying and inspecting products, believed that purchasers did little more than read catalogs and call suppliers. The purchasers, who selected, ordered, and paid for products, thought engineers had tunnel vision and routinely created unnecessary obstacles that prevented efficient purchasing. Not surprisingly, purchasers and engineers differed in their respective views of how best to improve the function’s performance.

This conflict dominated the Connectors group as it struggled to set priorities, figure out how to work together, and build confidence in one another. Throughout this period, the group’s leader, Sandy Hopkins, kept it focused on improving quality, cycle time, and cost. But she refused to make all decisions herself, and instead actively involved others in attacking and resolving problems. She also regularly held team meetings and tried to build camaraderie through pizza lunches, cocktail hours, and parties that included families. She did not, however, focus on team building exercises per se.

Reassessment

By October, engineers and purchasers were at least working together, and overall performance had improved. Yet, the Connectors team was still not a real team. It had clear performance goals and had begun to develop common aspirations, particularly around its own empowerment and skill development. But it still had not developed the common team approach or the full sense of mutual accountability that lead to real commitment.

Furthermore, discontent was growing due to a gap between talk about empowerment and the nonempowering roles of two key managerial positions: the engineering manager and the purchasing manager. In effect, the group’s members were still feeling each other out to discover how serious they all were about achieving their joint goals.

To break this logjam, Sandy asked the group to reassess its goals and objectives, decide how the work effort should be organized, and lay out a fair and effective approach for evaluating both team and individual performance. This turned out to be a key event in the group’s emergence as a team. As a result of these discussions and analyses, the team members rededicated themselves to specific performance goals in improving quality, cycle time, and cost.

For example, they committed themselves to halving the defective component rate to 0.5 percent by the end of 1991. But they also began to articulate among themselves a broader, more meaningful sense of shared purpose. “We were the pilot for the team concept in the new supply management organization, and we wanted to achieve results,” said one team member. “Other teams at Motorola were in the production area, and there was a feeling going around that teams wouldn’t work in a service area like supply. We had something to prove.”

A common approach

The team made several decisions that solidified its common approach and sense of mutual accountability. First, it set some rules. Everyone on the team had to identify two others who could serve as backups during vacation periods and sick days. To eradicate the attitude of “it’s not my job,” it was agreed that whenever anyone needed help, the person asked had to respond even if the activity was not in his or her area of expertise. The team also agreed on a peer appraisal system that gave everyone the opportunity to evaluate everyone else and, through Sandy, feed the results back to the person being evaluated.

Second, the team eliminated the two managerial positions that had limited empowerment. This effectively modified the membership of the team because only one of the two managers whose jobs were eliminated chose to stay. The other believed he could not take a perceived demotion and left. By January 1991, the Connectors team was a dramatically more effective group of people than it had been on its formation a year earlier.

New aspirations

Energy and enthusiasm reached still higher levels as the team started pushing itself harder and in more innovative ways. One of the engineers, for example, decided to become completely qualified as a purchaser as well. Instead of being threatened, the purchasers on the team worked hard to teach her the basics of the job. Moreover, the peer review approach worked so well that the team agreed on the additional — and, for many teams, difficult — step of directly providing each other feedback instead of relying on the team leader for this task.

The team then challenged a longstanding GEG policy by recommending that suppliers be trusted to do their own inspections, arguing that both quality and cycle time would improve dramatically if suppliers were made full partners in meeting the team’s specific performance goals. The team asked management to allow it to qualify certain suppliers for self-inspection. Management said no, it was too risky.

The team did not give up. It worked hard to address management’s concerns, brought the recommendation back for a second hearing, and was rewarded with approval. The fact that the team was able to regroup and overcome its initial “defeat” only added to its growth and level of commitment. By mid-1991, it had developed all the earmarks of real team performance — significant performance impacts, increasing personal commitment to one another, multiple skill development, dedication to purpose and goals, and shared leadership roles. The strong performance culture at Motorola nurtured the development of the Connectors team in a number of specific ways:

  • Because everyone knew that performance comes first at Motorola, the team instinctively set clear goals at the beginning and never lost sight of them. In many organizations, when potential teams first gather, they lack a clear idea about which objectives matter the most. This was not so here.When reorganizing the supply management activity, the leaders of GEG had pinpointed the importance of reject rates, on-time deliveries, number of corrections, cycletime reduction, and number of suppliers. The critical nature of these objectives was, in turn, reenforced by such corporate-wide initiatives as “Six Sigma Quality” and “Total Cycle-Time Reduction.” Accordingly, the Connectors team was able to move quickly beyond agreeing on common goals to tackling how its members would work together to accomplish them.
  • Because Motorola and GEG practised values of cooperation and involvement — a “constant respect for people” and “becoming best in class in people” — the team leader instinctively involved all members in establishing the team’s purpose, performance goals, and approach. Moreover, several GEG leaders personified these values through their own actions. The head of GEG, for example, made it clear that he wanted, needed, and expected people throughout the Group to help the division become “the best.” As a result, Sandy Hopkins had many reassuring role models for sharing solution space with the people who reported to her and could, with confidence, involve all of them in decision making.
  • Because GEG’s own management team had taken a bold step in streamlining the Group’s supply management structure, the Connectors team had a strong precedent and example to follow when it acted to eliminate the two managerial positions it believed were retarding team performance. During the streamlining process, GEG’s leaders had reduced the number of levels in the hierarchy from seven to four in order to improve both the speed and effectiveness of decision making. In doing so, they demonstrated that performance and contribution to performance were the critical yardsticks by which any managerial position should be evaluated. They also demonstrated their deep belief that teams were to be the basic unit of performance.
  • Because Motorola encouraged open challenges to established policy in the service of achieving better performance, the team was not — and was not perceived to be — “out of line” in questioning GEG’s longstanding policy against supplier self-inspection. GEG’s reorganization of the supply-management activity explicitly addressed the link between the division’s performance and the performance of its suppliers. Indeed, its vision of “transforming the contributions of suppliers into the satisfaction of customers” grew out of a desire to replace adversarial relations with partner-like relations. Although the idea of self-inspection might have taken a bit of getting used to, it was perfectly in keeping with established values and aspirations that are the core of Motorola’s “performance ethic.”

Each of the separate decisions, approaches, and events that helped move the Connectors group from a potential team to a real team could happen in a company with a less robust performance ethic. But they are less likely to happen there. When mediocre performance is accepted and tolerated, groups are less likely to establish clear performance goals, managers appointed as team leaders are less likely to share decision-making control, groups are less likely to restructure themselves by removing jobs, and established policies on “the way we do things around here” are less likely to get challenged.

A place to begin

Concrete performance results — that’s what teams are all about. When the goals of a team do not define specific results that are important to overall company goals, team accomplishments will rarely be very powerful. After all, performance challenges are what create real teams to begin with. If a strong performance ethic is lacking or if a company’s overall goals are unclear or confused, teams either will not form or, if they do, will fall significantly short of their potential. In organizations like Motorola, it is the existence of a strong performance ethic that gives people both the confidence and the capability to figure out for themselves the best way to go after specific performance opportunities — and to convince themselves that results matter more than politics.

By contrast, potential teams in companies with a weak performance ethic will be much less certain about, or even indifferent to, performance. They will have far more difficulty agreeing on team basics and will be far less likely to pursue their tasks with confidence. Instead of looking squarely ahead at a job to get done, they will constantly be looking over their shoulders.

When real teams do emerge in such environments, the need to overcome strong obstacles tends to make them more resilient, more conspicuous –even more heroic. As a result, they can have a disproportionately positive influence on a company’s performance ethic and on the environment for teams that follow them. Such teams are among the brightest hopes those organizations have for pulling themselves out of their stagnation.

Leaders even in companies like Cosmo can often make a major difference simply by identifying a few key performance challenges and getting potential teams to pursue them. Time and again, we have found that, despite the effects of a weak performance ethic, there are often plenty of unsung heros around who, if asked, will suspend their disbelief and try again. The opportunity to make a difference does that to people: it keeps them coming back for more even when experience cautions them to do otherwise.

But if leaders do not demand — and then relentlessly support — a fearless pursuit of performance by their teams, such efforts will produce nothing except more cynicism, more frustration, more risk aversion, and more “playing it safe.” But if only one of these teams succeeds, the fact of its triumph can help an indifferent or confused company begin to clarify its direction and recover its sense of performance. For successful companies, as well as for those in trouble, this is why teams matter.

This article is excerpted from The Wisdom of Teams by Jon R. Katzenbach and Douglas K. Smith, to be published in December by Harvard Business School Press, Boston. Reprinted by special permission of the publisher.

The Leadership Sphere is the trusted business partner to many of Australia’s largest and most respected companies across a range of industries. We specialise in Leadership DevelopmentCorporate Team Development and Culture Change.