Why teams matter.

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 …