Organisations have historically relied on teams to do the heavy lifting. Where in the past this was predominantly true for the top layers within organisations (boards, management teams etc.), today this has become a reality for many people in organisations. Almost half of the 7,000 company executives surveyed by Deloitte said they were in the middle of restructuring towards – or already embarking on – a ‘team-heavy’ way of working. In this article, we’ll deep-dive into commonly held beliefs around teams, share some of the insights of what constitutes great teams, and pinpoint some pitfalls to avoid when building a high-performing team.

Let’s look at the beliefs first: First of all, do teams generally perform better than individuals and/or groups? Obviously, sometimes teams produce extraordinary results, with the most recent example in the case of Leicester City, a soccer club that played 3rd tier in England just years ago, now on its way to winning the Premier League in their ‘magical season’. Research on teams shows that as expected, they tend to outperform individuals. However, contrary to many expectations, teams generally do less well than the sum of their members. This knowledge has led to the famous formula Actual Performance = Potential Performance – Process Loss. The process loss is due to barriers that hamper teamwork, or prevent effective initial design of the team (slide below). Although self-steering teams tend to work better than non self-steering ones, it’s success is definitely not guaranteed.

Great teams, like great leaders, never follow a standard formula. They come in many shapes, and can have very different internal cultures. There are, however, certain factors that generally work: teams should have clear barriers (less than 10% do!), the leader should provide a clear direction and prioritisation, and ‘defiance’ should be encouraged. More importantly, expert teams should allow expert coaching on team dynamics – so that they can do what they do best (first slide below). This external expert can in turn focus on social sensitivity – expressed by letting each other speak in equal turns – which is a better predictor of  success than the maximum IQ of team member (second slide below).

Building great teams requires insights into what’s critical to do so. But a recent report by Deloitte (described in The Economist) shows company executives largely lack this knowledge – with just ~1 in 10 executives expressing a clear understanding of networks and ~2 in 10 executives comfortable with building cross-functional teams (see slide below). In a world where half of the companies rely on teams to create the magic, this is a serious fallacy.

Summarising, more and more companies focus on team-based models of organisation. They’re right to do so, especially when they provide teams with enough autonomy. But self-steering teams do not guarantee success. In the words of Harvard’s Richard Hackman who spent a lifetime studying teams: “I have no question that when you have a team, the possibility exists that it will create magic, producing something extraordinary… But don’t count on it."

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