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CONTEXT: THE FOUNDATION OF TEAM EFFECTIVENESS
Several years ago, we were asked to consult with a large financial institution that was having difficulty implementing a new marketing program. The president of the company defined the problem this way: “We're trying to get our people in our branch offices to be more assertive in offering our products and services. Rather than just passively attending to our customers' current needs, we'd like our employees to actively assess the future needs of our clients and recommend products that would meet those needs. Unfortunately, we've not seen much success since we rolled out this new program six months ago.” He then asked: “Can you help us find out what's wrong and what to do about it?”
We agreed to help him, and decided that our first order of business would be to interview the branch managers as well as a select number of branch employees throughout the company. As we conducted the interviews, we asked why they were having such difficulty implementing the program. Some of the more common answers were: “I think we're here to provide service—not to be salesmen”; “I don't really understand how the program works—more training would be helpful”; and “I'm not sure there are enough incentives to get us to do this new program.”
After hearing these reports, we then asked the branch managers what they were doing to help their employees work through these issues. We often heard answers like this: “We'd like to work through these issues with our team of employees in our branch, but we don't have time to work with them and deal with the problems we face. The branch opens at 9 a.m. and we arrive about 8:30 a.m. to get prepared for the day. Then the branch closes at 5 p.m. and we take about a half hour to finish up and leave. We're only paid from 8:30 a.m. until 5:30 p.m., and we don't want to spend time off the clock to work on these issues. However, if we were paid to spend an hour or so a week to solve problems in the branch—maybe we could meet early in the morning or after work one day a week—then I think we could get something done. Having a branch team meeting once a week is a good idea, but the president wouldn't pay us to do it. He's a bit of a miser.”
Armed with this information, we met with the president and gave him this feedback. He asked: “Do you think we'll see improvement if we pay our employees to meet once a week for an hour?” We told him, “You likely won't see any improvement in the implementation of this program unless your branch teams are incentivized to meet each week and address the problems they face implementing the program.” The president agreed to start paying his employees to spend time at team meetings each week addressing not only the implementation of this program, but other problems they were experiencing.
Most teams decided to meet before work started on Monday morning. Not surprisingly, performance in the branches began to improve, and the new marketing initiative began to be implemented more effectively. Moreover, based on feedback from employees generated during these meetings the president also decided that he need to launch a more aggressive television advertising campaign to further support the marketing efforts of his employees in the branches. In short, the branch teams, now rewarded for having team meetings, and receiving more support from the corporate office, were much more effective than they had been in the past.
The Importance of Context
What we have learned from our own experience in consulting with teams over the years is this: context matters! Without a team-supportive organizational context, creating effective teams is difficult, even impossible. The president of the financial institution couldn't get the teams in his branches to even meet together for any length of time because the context didn't support teamwork—there were no incentives for the teams to meet on a regular basis. To create an organizational context that will support teamwork, the team needs to consider a variety of factors which we will address in this chapter.
How Important Is Teamwork for the Team to Succeed?
Although all teams represent a collection of people who must collaborate to some degree to achieve common goals, some tasks require more collaboration than others. Figure 2.1 represents a continuum of the teamwork or collaboration needed for a team to function. The continuum is based on the notion that the importance of teamwork will vary according to the task environment, notably the degree of interdependence required to complete the team's tasks.
Figure 2.1 Continuum of Teamwork
Modular Interdependence Sometimes the nature of the task doesn't require the team to work closely together because the team tasks are largely individual in nature. With these types of tasks, individuals on the team are connected through what is called modular or pooled interdependence, performing tasks independently and pooling only the results to create a team output. For example, a golf team may do some general planning and share information about the golf course, give each other tips on how to hit certain shots, or give each other information about the competition, but in the final analysis, play is by the individual performer. Likewise, some sales teams are comprised of team members who work individually and only meet periodically to share ideas or get feedback on their performance. Team performance is based on individual performances that are pooled together.
Similarly, an academic department requires relatively little teamwork. Each professor can do most of the required work—teach, research, write—alone. Of course, faculty members share ideas on how to be effective in teaching and research. But the performance of the department, as measured by student teaching evaluations or the number of faculty publications in top journals, is based largely on individual performances that are pooled together. When important decisions need to be made or departmental goals set that require the efforts of all department members, then those members must function as a decision-making team. However, these situations occur relatively infrequently.
Sequential Interdependence Individuals on teams are sequentially interdependent when one person cannot perform his or her task until another has completed his or her task and passed on the results. Under these circumstances, team members must meet more regularly and consistently to coordinate their work.
A baseball team is an example of a team that requires a moderate amount of teamwork. All nine players must be on the field at once, but for much of the game, the effort is individual in nature. However, whether a batter bunts or tries to hit to the opposite field depends on what the previous hitters have done. Relay throws from outfield to home base and double plays require sequential coordination. Moreover, the catcher and pitcher interact constantly in a coordinated fashion as they try to prevent batters from reaching the home plate.
An accounting or financial department requires sequential coordination. Everyone in the department must work within a common accounting framework, and the work of one part of the accounting financial process depends on the work of other parts. The accuracy of the tax people depends in part on how well internal auditors have done their work in accurately identifying relevant firm revenues and expenses. Although each accountant may be doing individual work, each sometimes may be unable to proceed without input from others.
Most company executive committees require a moderate amount of teamwork. Historically, for much of their work, the heads of marketing, finance, personnel, and manufacturing have done their work autonomously in their own areas. At key times, they come together to build a common strategy, set common goals, and coordinate work activities, such as getting marketing and manufacturing to agree on the type and amount of product that should be produced for the marketplace. However, effective companies now realize that success in coordinating product development and manufacturing, or manufacturing and sales and marketing activities, requires what we call “reciprocal” rather than sequential interdependence.
Reciprocal Interdependence In some groups, the nature of the task requires a high degree of teamwork because tasks are reciprocally interdependent. Team results are achieved through work done in a simultaneous and iterative process in which each individual must work in close coordination with other team members because he or she can complete tasks only through a process of iterative knowledge sharing and the coordination of one another's efforts. Team members must communicate their own requirements frequently and be responsive to the needs of the other team members. They must adjust in real time to meet the needs of other members of the team.
Similarly, members of a basketball team are on the court together and must coordinate constantly as they run offense plays and play team defense. Every member interacts with every other member. Thus, one would predict that a basketball team would suffer more from the lack of teamwork than would a golf team or even a baseball team. Indeed, this seems to be the case, as evidenced by the fact that major league baseball teams that acquire a few free agent stars occasionally come from a low-ranking team the prior year (even last place) to win the World Series. This happens less often with basketball teams, which must learn how to coordinate and work together to be successful.
Product development teams for complex products such as automobiles, aircraft, robotics, and consumer electronics work together in a reciprocally interdependent fashion. For example, when a commercial aircraft is being designed, decisions regarding the weight and thrust of a jet engine as well as the aerodynamic design of the fuselage and wings must be made taking each other into account. Team members must share information back and forth as they iteratively solve problems. Similar arguments could be made for a police SWAT team or the surgical team in a hospital operating room. All of these tasks are highly connected, and members cannot do their respective work without others doing theirs in a coordinated fashion.
Understanding the level of teamwork and the nature of interdependence required by the task is important for three reasons. First, they dictate the amount of attention that managers need to pay to teamwork and team processes: the greater the team interdependence, the more important it is to make sure the team is working together effectively, and that everyone understands the nature of the interdependence. Second, by understanding the nature of interdependencies in the team, managers will have greater insight into why certain common problems arise and will know how to fix them. For example, team members of modularly interdependent tasks frequently feel frustrated when team processes are designed for frequent meetings and interaction. They rightly want to be left alone to get their work done rather than be bothered by group processes. Similarly, highly interdependent teams often run into trouble when they have few opportunities for frequent, rich interactions. Third, understanding the different levels of teamwork and the nature of interdependence will allow managers to adapt business and team structures to the nature of the task and thereby prevent some problems from occurring in the first place.
The Role of Top Management
Senior managers in an organization generally set the tone for the use of teams in the organization. We find that in some organizations, senior managers prefer not to use teams and teamwork extensively, preferring to make decisions by themselves or in one-on-one conversations with other key managers. Also, senior managers often don't know how to run effective team meetings so they are poor role models for their subordinates. We've been to many senior management meetings that unfortunately were poorly organized, with unclear objectives, and many on the team not focused on the agenda item at hand, preferring to have quiet side conversations with one another. Effective teamwork starts at the top!
Some senior managers encourage teamwork by recognizing the importance of teamwork in the organization's mission or values statement. For example, Bain & Company, one of the world's most successful management consulting firms, has in their mission statement that Bain & Company is a community of extraordinary teams. Indeed, since Bain's clients are served by consulting teams, they must be excellent for the company as a whole to succeed. Extraordinary teams is a term that you hear often within Bain & Company. They create these teams by placing a senior director responsible for researching and understanding what makes an extraordinary team at Bain. This senior executive then gives a report at the annual company meeting on the company's progress in this area. An extraordinary team is selected and featured in the biannual company newsletter with a description of how and why the team is extraordinary. These teams were also recognized at the company meetings and celebrated with a team “event.” All teams within the company are encouraged—and given the resources—to celebrate successful projects or particularly effective teamwork. Celebrating can range from a team dinner to a weekend of skiing together. Senior managers want to let the team know that they appreciate a job well done. When top management devotes its own resources to developing and recognizing teamwork, they create a context within which teamwork can thrive.
Reward Systems
Rewards for team performance are also very powerful in encouraging teamwork. Bain & Company employees are given both time and incentives for them to function effectively as a team. Most organizations focus their reward systems on individual achievement—your bonus or your annual raise is predicated on how well you performed individually. Such an approach makes sense when only pooled interdependence is needed and therefore individual contributions are the key to success.
However, in many cases, sequential or reciprocal interdependence is required to get work accomplished, and therefore team members must cooperate and coordinate their efforts to achieve the team's goals. Progressive organizations recognize this and have as part of their performance evaluations (1) the individual team member's contribution to team performance, and (2) the overall performance of the team. Thus, team members are not fully rewarded if only they, and not their team, succeed. Furthermore, coordination between various teams in the organization is often needed for the organization to achieve its goals as well. Hence, some type of reward system, such as profit sharing that rewards individuals if the entire organization is successful, encourages cooperation between various departments and teams within the organization.
Amazon is a company that works hard to get employees to feel like owners and builders of the entire company, not just individual business units. “Our performance appraisal and compensation scheme rewards ownership,” Jeff Wilke, CEO of Amazon's retail operations, told us. “It rewards doing the right thing for the whole company, not optimizing your part of the company.”1
We find that successful organizations today use multiple criteria—individual, team, and organizational—to determine pay raises and bonuses. For example, an organization might base its bonuses using the following percentages: 40 percent on individual achievement, 40 percent on team achievement, and 20 percent on the achievement of organizational goals. Thus, someone would receive 100 percent of his or her bonus if the goals were achieved in all three areas. The bonus would decrease by the corresponding percentage if performance was unsatisfactory in one or more of the areas. In this way, organizations can focus an employee's attention not only on individual achievement but also on achieving the goals of the team and organization.
Feedback Systems
Teams need good information to function effectively. Without such feedback it's difficult, if not impossible, for the team to improve and make course corrections. If you wanted to sail a boat from Los Angeles, California, to Hawaii, you would not simply point your boat at Hawaii and take off without ever again checking your bearings. Wind, waves, and tides would all pull your boat in different directions. Without frequently and consistently receiving feedback about your path through GPS and other navigational tools, and making constant course corrections, you would never reach your destination.
Leading a team to a desired destination is the same. You can't just set it up and assume it will function perfectly without continual feedback regarding how it is performing. Bain & Company is a good example of a company that provides effective feedback to its teams through its information systems. Overall team satisfaction and team leadership effectiveness are evaluated every month through a formal review process. Members fill out a survey and rate their satisfaction on such issues as:
- Value addition and impact of work
- Ability of team leaders to motivate and inspire team members
- Clear and prompt downward communication
- Reasonable time demands
- Up-front planning and organization
- Fun, motivation, and a sense of teamwork
- Interest level of work
- Clear performance expectations
- Level of responsibility
- Opportunities for professional growth and development
- General level of respect for each person
The data are compiled and given to both the team members and the team's leaders (manager and partner). The team then meets alone, without the team leaders, to discuss the results and to develop recommendations regarding what could be done to improve team satisfaction and performance. Likewise, team leaders meet to develop their own recommendations. Then the team members and leaders meet together to discuss each other's recommendations to determine what should be done to improve team satisfaction and performance over the next month. In cases where the team satisfaction scores are particularly low, a facilitator will meet with the entire team to facilitate a team-building discussion.
Team satisfaction and performance scores are posted publicly each month so team leaders have strong incentives to ensure that they are taking actions that improve team satisfaction if scores are low. When asked whether monthly reviews were too frequent, Krista Ridgeway, a partner in the Chicago office, said, “We used to do reviews every two months in the Chicago office and thought that was enough. But the other offices started doing it every month and we eventually decided we would give it a try. We discovered that we were able to discover and respond to team problems much more quickly when we did it monthly. Problems were less likely to escalate. And it really only takes people about 5 minutes to do the evaluation, so we've found that it is definitely worth the effort.” Bain teams also get regular performance data on how their clients are performing related to the goals the client wants to achieve—a key measure of team success. Armed with these data, Bain team members know how their team is performing in relationship to other teams within Bain as well as how their client is performing. There is no question that developing processes and systems that provide accurate and timely data to teams regarding team functioning and performance is part of a context that allows teams to thrive.
Organization Structure and Team Performance
Structure refers to the basic design of the organization as represented in an organization chart. It reflects authority, communication patterns, and the responsibility for certain functions in the organization. Organization structure largely determines who works with whom and whether teams are designated formally to carry out organization tasks. Although all organizations have informal groups that form for a variety of reasons, the formal organization structure can encourage and support teamwork, or it can make it much more difficult for teams to form and function effectively. The structure also typically determines the authority a team has to make decisions and implement them. For a team to be effective, the proper authority needs to be delegated to the team through the organization's structure. Furthermore, the role of the team within the organization can have a significant impact on team members. If team members feel that the role of the team is important to the organization, then they will likely feel more committed to the team and to helping it achieve its goals.
We have also found that organizations which rely on a structure which fails to account for the teamwork that occurs across the various functions (engineering, marketing, manufacturing, and so on) tend to foster conflict, miscommunication, and poor coordination. To illustrate, Chrysler experienced teamwork problems in developing new cars up through the early 1990s when it was organized around functional silos in engineering, manufacturing, finance, marketing, and purchasing. New cars were developed in temporary project teams that pulled individuals from each of the functional areas. However, using this organizational structure, Chrysler took six years to develop a new car, while its Japanese competitors, Toyota and Honda, were consistently developing new cars in four years. Chrysler realized that its organizational structure was one of the problems.
To address the teamwork problem, Chrysler reorganized around car platform teams: large car, small car, truck, and minivan. In this way, individuals from the different functional areas worked together consistently within the same team over long periods of time. This structure even brought supplier partners onto the team—giving the supplier “guest engineers” desks and workspace within the platform team.
This reorganization improved teamwork and coordination within the product development teams at Chrysler. Within three years, they were developing new car models on a four-year basis, just like their Japanese competitors. Chrysler's experience shows that organizations that are designed based on a team concept can use organization structure to bring people together in formal, and sometimes informal, teams to accomplish the organization's goals.
Organizational Culture and Teamwork
An organization's culture is a context variable that plays a powerful role in team development. An organization's culture represents the basic shared values and assumptions held by most people in the organization. It defines what things are viewed as right or wrong, what is valued, how one gets into trouble, and how people are expected to see the world around them. It is critical to a teamwork-focused organization that the shared cultural rules emphasize that teamwork is essential to advance one's career and that people at all levels get into trouble if they do not collaborate with others and respond readily to the needs of their team. If the culture is either openly or passively resistant to the importance of teamwork, any attempts to foster collaboration, participation, or involvement will be seen as a temporary action or management manipulation.
In one organization we studied, the culture was permeated by one key assumption or basic rule: no one does anything without checking with Fred, the CEO, first. The rule was clearly demonstrated each time an employee walked past the thermostat in the hall and read the sign: DO NOT ADJUST THIS THERMOSTAT WITHOUT FRED'S PERMISSION!!! In an atmosphere in which one must wait for the boss before taking any action, it is difficult to encourage teamwork and collaboration. It is important for team members to clearly understand which types of decisions and actions require a leader's approval and which ones the team members are empowered to make.
For example, at Amazon leaders teach employees to distinguish between “one-way door” (costly to reverse) decisions and “two-way door” (reversible at low cost) decisions. “We want to have a start-up culture and start-up companies make decisions very quickly,” Jeff Bezos, CEO of Amazon, told us.
“In larger companies there are certain decisions that are so momentous and so hard to reverse that appropriately you should use a very deliberate decision-making process that takes time. Those are ‘one-way door’ decisions. One of the things that slows large companies down is that all decisions end up being made with that heavy weighted process; even ones that are reversible. To prevent that we constantly teach the difference and when you see examples of something reversible being made with a heavyweight decision-making process you need to highlight it and say: ‘Why is this happening, what's going on?' Our goal is to have the scale and scope of a large company but the heart and spirit of a small one.”2
Developing a culture that creates a supportive context for teamwork—such as speed of decision making—is important to helping teams work productively.
Physical Space and Teamwork
The last context factor that we will consider is that of physical space. We know from both research and experience that people interact with one another more frequently if they are located close to each other. Thus, having team members co-located by one another is a significant advantage for the team, especially if the team's tasks require reciprocal interdependence. Teams also need to have space to meet and do their work together. So, whether it be a large conference room or some other facility, it must be readily accessible to the team. Finally, team members may also need to meet privately with one another to discuss confidential matters. This is particularly true for the team leader who may want to have a confidential conversation with a team member or when team members have a disagreement with one another and they may want to discuss their differences in private. Thus, the arrangement of the team's physical space can either help or hinder teamwork.
Assessing Whether the Organization's Context Supports Teamwork
In this chapter we have argued that one reason for poor team performance is the lack of congruence between an organization's context and teamwork. To avoid this problem, an organization should periodically assess how these context factors—the need for teamwork, top management support, reward systems, feedback systems, structure, culture, and physical space—are affecting teamwork in the organization. The following assessment could be used for this purpose. After such an assessment, management can take corrective action to ensure that the organization's context supports teamwork.