There are lots of reasons to hate teams. Teamwork diminishes authority, often involves endless and ultimately indecisive discussions, foul compromises and can be generally unrewarding.

There are lots of reasons to love teams. Working closely with another, with a near intuitive understanding, learning all the time and achieving more than one ever would have thought possible.

Today the hymn of the great team performance is sung all over the realm of business. Agile, Lean and nearly all progressive organizations rely on the team as the primary unit of work. In business, many people haven’t had that many great team experiences. Why is that?

I think there are two reasons. First, a group of people is not necessarily a team. Teams are a bunch of persons working together closely to achieve a goal that would have been out of reach for anyone acting individually. The dividing line between a group and a team is the amount of interrelatedness of team members. It alienates people if a manager say’s “you are a team,” while you know that one of the last things you want is to be associated with those slackers, psychopath, suckers, pretenders.[1]In day to day conversations, little difference is being made between a team and a group. If you and your co-workers are just a bunch of ladies and guys toiling on their daily tasks without too much need to communicate at all, the chances are that you are in a workgroup but not a team. In this setting, managers tend to appeal to the spirit of the team if she has no clue whom to make responsible for something.

Second, teams can make you feel powerless. In the quest to achieve something, it’s just much more complicated if you need to get along with other people instead of being able to deliver this thing on your own.

Now, in this post, I will not research what makes a great team experience.  I am a North German. As such, I am culturally primed to be too serious to write about such trivial matters as pleasurable experiences.  I will instead spell out what makes a team perform at a high level. I walk you through the conditions, and I think the chances are, that you will feel that a team where these are given, would be a good one to work in.

However, before that, I would like to get the basics of the economics of the team straight, because teams are not universally good. Sometimes, the better choice is to do work in a workgroup, than in a more tightly interconnected team.

The Benefits and Costs of Teams

If you want something done, you got to do it yourself. That might be the credo of an incompetent manager – but it is often true, too. A look at the empirical evidence of individual vs. team performance confirms this: Teams are often worse performers than individuals.

Here is an example. A study at Yale University looked at the time “A” grade students invested in their studies.[2]All the students were top, “A” grade, performers, but some managed to get to an “A” Grade by investing less time. The most efficient students spent just 10% of the time that the worst performing student did. A 1:10 performance ratio between lowest and highest performance student.

Now have a look at the performance of teams. In studies that looked at thousands of projects, the ratio of performance between the best and the worst performing teams was as high as 200: 1.[3]Imagine that: There are project teams so bad, that they accomplish what another team does in a week in 200 weeks! Apparently, there are factors at work that complicates teamwork a lot, compared to work that is done individually. Lousy team experiences can get people to back off from teams for good – and it is hard to blame them. How frustrating it must be to see all this waste if one works in a tedious, four yearlong project: 199 weeks sacrificed to entropy for could have been achieved in just one week.

Then again, the top teams are outperforming other teams by a factor of 200. What a bliss it must be to work in such a team! Effective teams manage to outperform less-effective teams by 1:200 – effective individuals manage to outperform others by 1:10. Apparently, there are many things to get right – and many things to get wrong – in teams. A team is a sensitive thing indeed. The following graphic illustrates the difference in performance spread.[4]

ivt

If the conditions for successful teamwork are given, a team is likely to outperform a group of individual actors.[5]Not by small increments, but by order of magnitude. Furthermore, the chances are that in complex and innovative situations, only a team-based organization will be able to deliver the intended outcome at all. The unique way a team is able to utilize the skills and minds of people, allowing each to exploit personal strength and grow in the process, can bring many superior results.

Still, a poorly organized team might be a nightmare. The point is: Companies that are not able to provide a suitable environment conducive to teams should stay away from the team. Instead, they should organize work groups, where managers define, assign and follow-up work tasks. That can be a much safer and efficient alternative.

Team Debt

Let’s take a look at the reasons for a team’s underperformance first. A way to understand the looming underperformance of teams is to think of a team’s potential performance in an equation:

Team Performance = Potential Performance – Coordination Loss – Motivation Loss[6]

The potential performance of a team is its theoretical peak performance. It might vary from team to team, from mission to mission, from the composition of the team with various team members, but there is always a theoretical maximum performance level. We might not know it, but it is there and likely to be reached if the 12 conditions are fully satisfied.

However, potential performance doesn’t translate into real team performance. Every team is automatically incurring two hits to its effectiveness. These hits are incurred right at the start of the project, and they are universal and unavoidable.

First, there is the cost of coordination that is needed to align people again and again on a target and ensure that work is done in a coordinated manner. Team meetings, Team processes, Reports – you know the drill. This alignment is meta-work, it takes time, that is not spent on working directly on the task at hand.

Second, a team task is very often less critical to a person than a task directly assigned to a person individually. A team task is somewhat out of the control of a person. Others need to collaborate. This is somewhat frustrating, as it prevents motivated persons from charging headlong into solving the task. On the other side of the motivational scale, a team opens up the opportunity to relax and take it easy. If the task is out of reach of what I can accomplish by myself, I might as well wait for the others to do something. This phenomenon is called “free-riding” in economics and “social loafing” in social psychology.

So, there is a universal and unavoidable penalty for each team effort. This penalty is in effect a debt that each team starts with. The good news is that this team debt can be repaid. Over the lifecycle of the team, the team may learn how to coordinate effectively, even intuitively.

Allow me a personal story about coordination debt, here. As I was 18 years old, I once had the opportunity to play a game of soccer against a German premier league team.[7]Being young and full of self-confidence, I respected this team much but still thought that in a one on one situation I can hold my own. It happened to be that I was playing against the at this time striker of the Polish National Team, Jan Furtok. I was right: I never lost a one on one situation against Jan Furtok in 90 Minutes – because there were none. He just didn’t need to go into these situations, as he knew exactly where to be at what point in time. Before I could do anything, he already passed the ball and moved on.  He and his co-players had an instinct understanding where the other would be and where he would play the ball. Their coordination was so brilliant; they did not have to use much of their abundant personal skill. Not against us village boys.  My team had so much of a coordination debt that all skill didn’t even play a role.

To repay coordination debt takes practice and reflection. The same is true for motivational debt. It can be repaid over time by opening up the new sources of motivation that the team offers: Relatedness to other persons. To not let down the team, to be loyal to it, to care for one another becomes a natural motivator the more people can bond with one another over time. With increased bonds, comes visibility and social control, which in makes coordinating the team easier: Coordination debt is repaid until coordination between people happens seemingly intuitively.

Coordination and motivation debt can be recouped over time. As the team gains in maturity, coordination efforts decrease, and the motivation dynamics of groups take over. This ripening of the team is accelerated by orchestrating the process of team building. Every team needs to go through a sequence of 4 phases that Bruce Tuckman, a scholar of organizational psychology has described as storming, forming, norming, and performing.[8]The better this process is managed, the sooner the team debt can be repaid. The team debt acts like a negative up-front investment that can be recouped in a classical “hockey stick” curve like manner.[9]

tuck

 

Does Team performance matter?

Excellent performance is not always what a company needs. What is needed in most situations is a team performance that is good enough to reach a certain level and do so consistently. A job well done by a team might not require a high level of performance. Often teams can get away with less.

This may sound unconventional and dispiriting, but this mode of operation is actually the norm. Most units or departments exist to do a particular, usually well-defined job, consistently every day. More is not required. Beside human laziness and ineptitude, there is an excellent rationale for this lack of performance aspiration for a team. First, as shown above, high-performance teams start with significant debt. The organization might be inept to provide an environment where a team can ever exceed the performance level that a much less risky workgroup can deliver. Second,  teams are pretty sensitive things. They might produce great outcomes but tend to do so inconsistently. High-performance teams are much harder to manage than teams or workgroups that aim at lower, but still useful enough levels of performance. Going for high performance is risky – good enough performance can be bought for less.

 

The Reasons why Teams may outperform Work-groups

However, what are the reasons why a team can perform better than a working group? After all, individuals are what teams are made off – why is a team allowing individuals to surpass themselves if only they act in unison? Here are the main reasons:

  • Growth and Learning are enhanced in teams. We learn by social interchange and feedback. The much tighter social collective context of a team enhances growth and learning for everyone in it, compared to the looser coupled workgroup. This is not to say that individuals do not learn in work-groups. In good teams, they just have more opportunities, nudges, motivation and need to learn – and grow as a person.
  • Social bonds increase motivation. People are social animals. Tight social bonds are one of the primary things that motivate us. Some studies show that the quality of relationships to others is the deciding factor regarding one’s quality of life and happiness. In the world longest running research on happiness, which has been running since 1938 and is still ongoing, the most significant decisive influence factor for the overwhelming majority of persons is the quality of relationships – by far.[10]  The fact is, humans are hard-wired to care for others.
  • Coordination is achieved much more smoothly the closer people bond with one another. If people look out for one another, with the team task in mind, the mind and senses of everyone in the collective, the team, are coordinating their work implicitly. Until there is no need for a single mastermind, the manager of a group, to be the one sole, principal caretaker for the whole group. Coordination in a team happens more and more in a distributed and implicit manner, instead of being centralized and outsourced to a manager.
  • The human mind is very susceptible to biases. The team can be a corrective. If the team engages in active discussion, allows for people to speak their mind, integrating a multidate of perspectives, the tricks our mind plays on us can be mitigated. By discussing with others and receiving feedback, we can be pushed out of intuitive thinking – i.e., rushing to conclusions- into, rational thought.[11] This mitigation is empirically much more effective by interpersonal interchange, then by staying within the limitations of one’s mind.

The importance of the last point is hard to overstate. Teams improve even a sociopath nerd that possess a cold, analytical outlook of the world and does not have too much interest in others. His cognitive biases, his memory biases, and latent social biases are all decreased by social interchange. This way, a team helps to surpass our biological, neuronal limitations.

That’s right: The team helps to overcome our evolutional, cognitive impediments. The better the team, the more a team is set-up to un-bias the individual. The history of group dynamics (or group processes)[2] has a consistent, underlying premise: ‘the whole is greater than the sum of its parts.’ This is a large part of what collective intelligence is all about.

However, still, the fact of the matter is: Each team starts with a sizeable debt. Unchecked, this debt will accumulate, and a team’s performance might stay below the level of a workgroup. In this case, the team as a method of organizing is not optimal.

However, if we can devise a way to rapidly pay off team debt, reliably again and again for each new or changed team, then the team might become a very superior tool to achieve organizational performance. Indeed, the team as a way organizing can get much more attractive than the department, i.e., a manager led workgroup, as the principal basic unit by which work is done. Such an organization would be one of a lot of networked teams with few central controls. However, before we get there (in Part II), let’s check out the 12 conditions of team performance in detail.

Oh, and one more thing: Individual performance matters.

Before we start looking at the 12 conditions of team performance, here is a reminder. The six internal conditions for individual effectiveness remain valid (for those check out You call yourself a Great Manager? Let Me Hear Your Theory of Performance!). To have the right skills, the right cognitive abilities, the urge to archive mastery, the autonomy to act, the deeply felt meaningful purpose and to be genuinely accountable for results still matter very much for effectiveness. The strength, weaknesses, needs, and idiosyncrasies of people don’t go away once they enter a team.

Effective teams build upon the conditions six for effective individuals. The 12 conditions of effective teams are all but tuned to provide a social environment for individual performance to prosper.

Yes, by leaving one’s confines of individuality and exposing oneself to others motivation takes a hit and coordination is tedious. Until one realizes that mastery is enhanced by collaborating, while one’s needed level of autonomy is not infringed upon and that the purpose of serving the group is one that can latch on to with one’s personal purpose.

Key Points

  • Team debt is universal and unavoidable
  • Companies that are not able to provide a suitable environment conducive to teams should stay away from organizing work in teams – they should stick to the workgroup instead

  • If a way can be found to rapidly and reliably pay off team debt, the team can be the nucleus of all work design, replacing the traditional department/workgroup

Next post will be about the first half of the 12 conditions for team effectiveness. I hope you enjoyed this post. Let me know what you think!

Sources & Footnotes

[1]The academic term is “underbounded” team. See Alderfer, Clayton (2005) “The Five Laws of Group and Intergroup Dynamics”.

[2]Sutherland, Jeff (2015) “Scrum”, p.42 based on a study by Joel Spoelsky on computer programmeUniversityle university class, see also https://www.joelonsoftware.com/2005/07/25/hitting-the-high-notes/

[3]IBM studies on project performance, cited by Sutherland, Jeff (2015) “Scrum” p.43

[4]Values are illustrative only, they can’t be generalized. Values are based on the exemplary studies cited by Sutherland, Jeff in “Scrum”, see above.

[5]Hackman, Richard (2002) “Leading Teams”

[6]Hackman, ibid. Hackman based this formula on psychologist Ivan Steiner, who described the term “process loss “ in his work.

[7]Hamburger Sport Verein (HSV), a member the German Bundesliga.

[8]Known as “Tuckman’s stages of group development”. See Tuckman, Bruce W. (1965) ‘Developmental sequence in small groups’, Psychological Bulletin, 63, 384-399. Tuckman later added a 5th phase, “Adjourning” to highlight the importance of the way the teams work is ending.

[9]Katzenbach, ‘The Wisdom of Teams’, 2002

[10]The Harvard Grant Glueck Study, see http://www.adultdevelopmentstudy.org

[11]Described by Daniel Kahnemann and Adam Tversky as System 1 and System 2, in: Kahneman, Daniel (2011) ‘Thinking Fast and Slow’.

Posted by Frank Thun

Management. Systems. Liberation

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