The Wisdom of Teams

Creating the High-Performance Organization

Jon R. Katzenbach, Douglas K. Smith

• Publisher: Harvard Business Review Press
• Year: 2015
• ISBN:
  9781633691070
• Topic: Betriebswirtschaft
• Subtopic: Organizational Behavior

The definitive classic on high-performance teams The Wisdom of Teams is the definitive work on how to create high-performance teams in any organization. Having sold nearly a half million copies and been translated into more than fifteen languages, the authors’ clarion call that teams should be the basic unit of organization for most businesses has permanently shaped the way companies reach the highest levels of performance.Using engaging case studies and testimonials from both successful and failed teams—ranging from Fortune 500 companies to the U.S. Army to high school sports—the authors explain the dynamics of teams both in great detail and with a broad view. Their conclusions and prescriptions span the familiar to the counterintuitive:• Commitment to performance goals and common purpose is more important to team success than team building.
• Opportunities for teams exist in all parts of the organization.
• Real teams are the most successful spearheads of change at all levels.
• Working in teams naturally integrates performance and learning.
• Team "endings” can be as important to manage as team "beginnings.”Wisdom lies in recognizing a team’s unique potential to deliver results and in understanding its many benefits—development of individual members, team accomplishments, and stronger companywide performance. Katzenbach and Smith’s comprehensive classic is the essential guide to unlocking the potential of teams in your organization.

Part One

Understanding Teams

FIGURE I-1

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Focusing on team basics

TEAMS OUTPERFORM INDIVIDUALS acting alone or in larger organizational groupings, especially when performance requires multiple skills, judgments, and experiences. Most people recognize the capabilities of teams; most have the common sense to make teams work. Nevertheless, most people overlook team opportunities for themselves.

Confusion about what makes teams perform explains only part of this pattern of missed opportunity. More is explained by a natural resistance to moving beyond individual roles and accountability. We do not easily take responsibility for the performance of others, nor lightly let them assume responsibility for us. Overcoming such resistance requires the rigorous application of “team basics,” which are highlighted in the chart in Figure I-1. The vertices of the triangle indicate what teams deliver; the sides and center describe the elements of the discipline to make that happen. By focusing on performance and team basics—as opposed to trying “to become a team”—most small groups can deliver the performance results that require and produce team behavior.

The best way to understand teams is to look at teams themselves. Their own stories reveal their accomplishments, skills, emotions, and commitment better than any abstract commentary or logical presentation. Real teams are deeply committed to their purpose, goals, and approach. High-performance team members are also very committed to one another. Both understand that the wisdom of teams comes with a focus on collective work-products, personal growth, and performance results. However meaningful, “team” is always a result of pursuing a demanding performance challenge.

1

Why Teams?

TEAMS HAVE EXISTED for hundreds of years, are the subject of countless books, and have been celebrated throughout many countries and cultures. Most people believe they know how teams work as well as the benefits teams offer. Many have had first-hand team experiences themselves, some of which were rewarding and others a waste of time. Yet, as we explored the use of teams, it became increasingly clear that the potential impact of single teams, as well as the collective impact of many teams, on the performance of large organizations is woefully underexploited—despite the rapidly growing recognition of the need for what teams have to offer. Understanding this paradox and the discipline required to deal with it are central to the basic lessons we learned about team performance.

Lessons We Learned

Initially, we thought that executives and other decision makers could make teams work if only they understood the compelling argument for why teams make a difference to performance. We learned the challenge is more difficult than that. Most people, particularly business executives, already recognize the value in teams. Long-standing habits, demanding time schedules, and unwarranted assumptions, however, seem to prevent them from taking full advantage of team opportunities.

We also thought that people understood most of what differentiated a team from a nonteam, and, therefore, only needed a clearer definition of terms to take full advantage of teams. We discovered instead that most people simply do not apply what they already know about teams in any disciplined way and thereby miss the performance potential within existing teams, much less seek out new potential team opportunities.

There is much more to the wisdom of teams than we ever expected, which we highlight in the following summary of key lessons we have learned about teams and team performance.

1. Significant performance challenges energize teams regardless of where they are in an organization. No team arises without a performance challenge that is meaningful to those involved. Good personal chemistry or the desire to “become a team,” for example, can foster teamwork values, but teamwork is not the same thing as a team. Rather, a common set of demanding performance goals that a group considers important to achieve will lead, most of the time, to both performance and a team. Performance, however, is the primary objective while a team remains the means, not the end.

Performance is the crux of the matter for teams. Its importance applies to many different groupings, including teams who recommend things, teams who make or do things, and teams who run or manage things. Each of these three types of teams do face unique challenges. Teams that make or do things often need to develop new skills for managing themselves as compared to teams elsewhere in organizations. Teams that recommend things often find their biggest challenge comes when they make the handoff to those who must implement their findings. Finally, groups who run or manage things must address hierarchical obstacles and turf issues more than groups who recommend, make, or do things. But notwithstanding such special issues, any team—if it focuses on performance regardless of where it is in an organization or what it does—will deliver results well beyond what individuals acting alone in nonteam working situations could achieve.

2. Organizational leaders can foster team performance best by building a strong performance ethic rather than by establishing a team-promoting environment alone. A performance focus is also critical to what we learned about how leaders create organizational environments that are friendly to teams. In fact, too many executives fall into the trap of appearing to promote teams for the sake of teams. They talk about entire organizations becoming a “team” and thereby equate teams with teamwork. Or they reorganize their companies around self-managing teams, and risk putting the number of officially designated teams as an objective ahead of performance. They sometimes loosely refer to their own small group at the top as a team when most people in the organization recognize they are anything but a team.

Real teams are much more likely to flourish if leaders aim their sights on performance results that balance the needs of customers, employees, and shareholders. Clarity of purpose and goals have tremendous power in our ever more change-driven world. Most people, at all organizational levels, understand that job security depends on customer satisfaction and financial performance, and are willing to be measured and rewarded accordingly. What is perhaps less well appreciated, but equally true, is how the opportunity to meet clearly stated customer and financial needs enriches jobs and leads to personal growth.

Most of us really do want to make a difference. Naturally, organization policies, designs, and processes that promote teams can accelerate team-based performance in companies already blessed with strong performance cultures. But in those organizations with weak performance ethics or cultures, leaders will provide a sounder foundation for teams by addressing and demanding performance than by embracing the latest organization design fad, including teams themselves.

3. Biases toward individualism exist but need not get in the way of team performance. Most of us grow up with a strong sense of individual responsibility. Parents, teachers, coaches, and role models of all kinds shape our values based on individual accomplishment. Rugged individualism is credited with the formation of our country and our political society. These same values carry through in our corporate families, where all advancement and reward systems are based on individual evaluations. Even when teams are part of the picture, it is seldom at the expense of individual achievement. We are taught to play fair, but “Always look out for number one!” And, most of us have taken this to heart far more deeply than sentiments such as “We’re all in this together” or “If one fails, we all fail.”

Self-preservation and individual accountability, however, can work two ways. Left unattended, they can preclude or destroy potential teams. But recognized and addressed for what they are, especially if done with reference to how to meet a performance challenge, individual concerns and differences become a source of collective strength. Teams are not antithetical to individual performance. Real teams always find ways for each individual to contribute and thereby gain distinction. Indeed, when harnessed to a common team purpose and goals, our need to distinguish ourselves as individuals becomes a powerful engine for team performance. Nothing we learned in looking at dozens of teams supports an argument for the wholesale abandonment of the individual in favor of teams. Nor does our book present such an either/or proposition.

4. Discipline—both within the team and across the organization—creates the conditions for team performance. Any group seeking team performance for itself, like any leader seeking to build strong performance standards across his organization, must focus sharply on performance. For organizational leaders, this entails making clear and consistent demands that reflect the needs of customers, shareholders, and employees, and then holding themselves and the organization relentlessly accountable. Out of such demands come the most fruitful conditions for teams. An analogous lesson also applies to teams. Indeed, we think of the team definition (provided in Chapter 3) not as a series of elements characterizing teams but as a discipline, much like a diet, that, if followed rigorously, will produce the conditions for team performance. Groups become teams through disciplined action. They shape a common purpose, agree on performance goals, define a common working approach, develop high levels of complementary skills, and hold themselves mutually accountable for results. And, as with any effective discipline, they never stop doing any of these things.

The Need for Teams

We believe that teams—real teams, not just groups that management calls “teams”—should be the basic unit of performance for most organizations, regardless of size. In any situation requiring the real-time combination of multiple skills, experiences, and judgments, a team inevitably gets better results than a collection of individuals operating within confined job roles and responsibilities. Teams are more flexible than larger organizational groupings because they can be more quickly assembled, deployed, refocused, and disbanded, usually in ways that enhance rather than disrupt more permanent structures and processes. Teams are more productive than groups that have no clear performance objectives because their members are committed to deliver tangible performance results. Teams and performance are an unbeatable combination.

The record of team performance speaks for itself. Teams invariably contribute significant achievements in business, charity, schools, government, communities, and the military. Motorola, recently acclaimed for surpassing its Japanese competition in producing the world’s lightest, smallest, and highest-quality cellular phones with only a few hundred parts versus over a thousand for the competition, relied heavily on teams to do it. So did Ford, which became America’s most profitable car company in 1990 on the strength of its Taurus model. At 3M, teams are critical to meeting the company’s well-known goal of producing half of each year’s revenues from product innovations created in the prior five years. General Electric has made self-managing worker teams a centerpiece of its new organization approach.

Nonbusiness team efforts are equally numerous. The Coalition’s dramatic Desert Storm victory over Iraq in the Gulf War involved many teams. A team of active duty officers and reservists, for example, lay at the heart of moving, receiving, and sustaining over 300,000 troops and 100,000 vehicles with more than 7,000,000 tons of equipment, fuel, and supplies between the late 1990 buildup through and beyond the end of hostilities in 1991. At Bronx Educational Services, a team of staff and trustees shaped the first nationally recognized adult literacy school. A team of citizens in Harlem founded and operated the first Little League there in over forty years.

We do not argue that such team achievements are a new phenomenon. But we do think there is more urgency to team performance today because of the link between teams, individual behavioral change, and high performance. A “high-performance organization” consistently outperforms its competition over an extended period of time, for example, ten years or more. It also outperforms the expectations of its key constituents: customers, shareholders, and employees. Few people today question that a new era has dawned in which such high levels of performance depend on being “customer driven,” delivering “total quality,” “continuously improving and innovating,” “empowering the work force,” and “partnering with suppliers and customers.” Yet these require specific behavioral changes in the entire organization that are difficult and unpredictable for any single person, let alone an entire company, to accomplish. By contrast, we have observed that the same team dynamics that promote performance also support learning and behavioral change, and do so more effectively than larger organizational units or individuals left to their own devices. Consequently, we believe teams will play an increasingly essential part in first creating and then sustaining high-performance organizations.

Change, of course, has always been a management challenge. But, until recently, when executives spoke of managing change, they referred to “normal” change—that is, new circumstances well within the scope of their existing management approaches. Managers deal with this kind of change every day. It is a fundamental part of their job, and includes raising prices, handling disgruntled customers, dealing with stubborn unions, replacing people, and even shifting strategic priorities. Many people, however, would agree that change today has taken on an entirely different meaning. While all managers continue to have to deal with “normal” change, more and more must also confront “major” change that requires a lot of people throughout the company—including those across the broad base of the organization—to become very good at behaviors and skills they are not very good at now. The days of viewing change as primarily concerned with strategic decisions and management reorganizations have vanished.

Notice, for example, how Jack Welch, Lawrence Bossidy, and Edward Hood describe the challenge facing General Electric in their 1990 letter to shareholders.

Change is in the air. GE people today understand the pace of change, the need for speed, the absolute necessity of moving more quickly in everything we do. . . . From that pursuit of speed . . . came our vision for the 1990s: a boundaryless company. Boundaryless is an uncommon word . . . one that describes a whole set of behaviors we believe are necessary to achieve speed. In a boundaryless company, suppliers are not “outsiders.” . . . 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. (Emphasis added.)

Throughout much of the 1980s, General Electric made the critical strategic, restructuring, and management changes people typically associate with top management. To achieve their goals of being either number one or number two in each of their chosen markets, Jack Welch and his colleagues divested $10 billion worth of assets and made nearly $20 billion worth of acquisitions. All of these moves were difficult and essential; yet, they represented only a portion of top management’s job. The other part is in managing the kind of broad-based behavioral change described above—what our colleague Micky Huibregtsen calls “energizing” changes.

This is a much more difficult challenge and even the wisest of leaders seldom know fully what to change or how to make all the specifics happen. Jack Welch, for example, is the first to admit he developed GE’s now famous “Work-Out” town meeting approach largely through trial and error. Most leaders today cannot succeed without the participation and insights of people across the broad base of the organization. Together, top management and the people who look to them for leadership must first identify and learn critical new skills, values, and behaviors, and then work to institutionalize those behaviors to sustain high performance. We believe teams are essential to such objectives because they have always induced behavioral change as both an ingredient and by-product of team performance.

Several well-known phenomena explain why teams perform well. First, they bring together complementary skills and experiences that, by definition, exceed those of any individual on the team. This broader mix of skills and know-how enables teams to respond to multifaceted challenges like innovation, quality, and customer service. Second, in jointly developing clear goals and approaches, teams establish communications that support real-time problem solving and initiative. Teams are flexible and responsive to changing events and demands. As a result, teams can adjust their approach to new information and challenges with greater speed, accuracy, and effectiveness than can individuals caught in the web of larger organizational connections.

Third, teams provide a...