Suppose you have embraced the following three truths:
To truly engage people, with all their capabilities you need to distribute power between people more equally
To truly utilize technology, with all the unique solutions it can provide, you need to unleash the creative problem-solving potential of people at all levels in an organization
Psychological Safety, Mindfulness, System Thinking – three significant tenets of every healthy organization – can not be achieved by appeals; instead, you need to weave them into the day to day work designs of a company
Armed with these beliefs, you are ready to liberate your company or team. There are two different, complementary ways to do that. Bottom-up or top-down.
Bottom-Up Liberation: The Company Board
There are five steps to do that:
List and visualize your current work designs
Learn about new work designs
Experiment with some promising work designs
Evaluate Work Designs together
Adopt those that work for your organization – discard those that don’t
Repeat & Evolve
The Liberated Company Mapis a great tool to list and visualize your current work designs. Besides, it is useful to learn about the plethora of possibilities, their interdependences concerning the level of power inequalities existing in your organization, and the risk you expose yourself to in the experiment.
While the Liberated Company Map is a map of the current all work designs of a company or team, a second tool is useful to show and track the dynamics of the experimentation process: The Company Board. The company board is a KANBAN board in which columns show the stage that a work design is in, from idea, to test, to evaluation, to adopted or discarded. The key to working with the company board is to let everyone bring up the work design she or he likes to try – everyone at their own pace. Work designs are not mandated, but they are discussed and evaluated openly before a decision is made to include them into the DNA of work designs of a company.
I have worked with customers who skipped step one and jumped directly into action two without too much upfront deliberation. That worked fine, also. The crucial thing in this bottom-up process is to evaluate and decide on adopting work designs together (steps 4 and 5). While this or that work hack can enter one’s personal portfolio of work techniques, the major work designs that organizations use should be aligned. Having a “zoo” of work designs is confusing, counterproductive, and ultimately doomed to fail. There needs to be consistency in the overall work designs of an organization.
Bottom-up Liberation works like a charm because it brings order to all the Agile, New Work, Work Hack, or other management initiatives that exist in a company. It provides a holistic picture of how work is done in a company, from the simple status meeting to complex decision-making procedures, and a way to evolve it. Even better, it lets people experience that it is worthwhile to re-think the ways they work together or manage.
Most of my clients choose to do iterate and evolve their work designs in three-month cycles. That’s one 4 hour workshop every three months. Compare this tiny investment with the cost of never reflecting holistically about the way people work together at all. After twenty-five years me being in the business of organizational development, I never experienced something as effective.
Top-Down Liberation: The Themes
But all is not well. Bottom-up Liberation is excellent to get started and evolve companies or teams, but it sometimes is not intentional enough. A company is a living system, but it also a target-oriented system. The intention of a company, its purposes, should be reflected in its overall configuration of work designs.
Bottom-up experimentation with work designs will definitely make a company better but is not a surefire way to link a vision or strategy to the inner workings of a company. A certain amount of top-down design is needed to inject intentionality into the bottom-up, evolutionary process.
These kinds of top-down interventions into organizations are quite tricky. Managers, Researchers, and organizational design practitioners have been pondering about providing optimal work environments intensively since the days of Stafford Beer, the father of cybernetic design of organizations, in the 1960s. “Cybernetic design” is really just a fancy phrase for the quest to learn how to provide a good or productive work environment. Its basic premise is that you can design an environment in a way that it best supports the purpose of a company, by manipulating all the social and psychological strengths and vulnerabilities of people in a professional manner.
It is certainly not for lack of trying, but even today, effective cybernetic is as rare as it is ethically dubious. So, how can top-down liberation work? After analyzing progressive organizations, I got a hunch. Each of these organizations seems to have an underlying theme to the way it had configured itself with work designs. While the theme might not have been apparent at the start of a company, I think it can be clearly discerned in their current configuration of work designs.
Some companies are about decisions (like Bridgewater, one of the world’s most successful hedge funds), others about entrepreneurship (like Haier, a world-class manufacturer of appliances), and others still about service (like Buurtzorg, a 14.000 healthcare company).
The question is, what is your company (or team) about? I have dissected this high-level question into five major ideas:
The idea of Technology: What’s the role that technology has in your company?
The idea of Performance: What constitutes good performance for your company?
The idea of Ruling: How is power wielded and distributed between people?
The idea of Work: What exactly is work in your company i.e., what are the criteria that should play a role when selecting work designs?
The idea of Life: What does it mean to lead a meaningful life while being a part of your company?
Of course, there are many other ideas possible, but I think that those five ideas describe essential underlying themes around which companies can be built. Even better: Around which companies can configure their work designs too – like the four companies listed in the table below did.
You can start at any level
As explained in this post, you can begin the journey of liberation anywhere in a company, at any level, at the top of companies, somewhere in middle management, or at the team level. Both bottom-up and top-down avenues to liberation are possible at any level. However, the lower you are on the hierarchical level, the more restricted your options to use work design are, and the more your themes need to be aligned to the overall organization.
“Liberated Companies” is a new approach to organize companies or teams. Its unique perspective is to make the work designs- i.e., those structures, processes, and routines used to collaborate inside an organization- explicit and evolve them.
Every company uses work designs: Meetings, decision-making, task allocation, information and communication, performance management, project methods, and business processes. There is no way for any company or team not to use work designs. The thing is: Most companies are not aware of what often disastrous effects their incumbent work designs have on their performance as on people. Overwhelmingly, companies plow ahead and use those work-designs their managers learned by imitation from past generations’ managers.
Progressive Organizations, many Technology Companies, the Agile, New Work, and Lean Start-up Movement demonstrate that better results can be realized for everyone by using ever more refined work designs. Work designs that enhance people’s collaboration by eliminating fear in the work-place, creating the space for more mindful, holistic, and finally more ingenious solutions.
Liberated Companies provides a model and methods to utilize these advanced work designs at scale. Just imagine what good follows from activating people all those 85% more or less disengaged people in today’s companies, of people bringing their whole to work instead of turning into a mini-sized version of themselves once they entered the office!
Every work design carries in it a message. Hierarchical decision making, for example, however it is done, carries with it a clear message of discretionary, paternalizing power. It tends to disenfranchise people, making them retreat into their inner shells. More participative decision making, more open communication, more dynamic systems of distributing power between people, reduces these negative messages and systematically encourages people to speak up.
Another example: Giving feedback. The way that managers give managers feedback but teach people to become subservient underlings. Not because all managers suck at it, but because feedback is usually delivered from a position of great power, teaching people that manipulating the perceptions of superiors is more important than truth.
Or think of meetings. Meetings are often only thinly structured discussions on agenda points that do not reflect what people actually need and that do not strive in any way to elicit people’s genuine opinions.
Work designs are not merely structures to get things done. They all carry messages in them that are detrimental or beneficial for an organization’s mission and growth. Every time a meeting is done, a review is done, a decision is taken, information is disseminated, a project is set up, it sends a message to people. It teaches them how to behave, what to say, and it impacts their self-esteem and personal agency.
Systems change people much more than people change systems. The unreflected systems of work designs most companies are using today are not working as good as they could. “Liberated Companies” mean to change that.
A Liberated Company is (i) a learning organization that (ii) evolves its work designs in an (iii) holistic manner, often (iii) towards a more egalitarian distribution of power. It aims to free people of oppression to put itself on the trajectory of technology, thereby maximizing its number of options over time.
“Liberated Companies” is an approach to creatively configure and evolve the work designs of any organiz ation, company or team.
Let’s change the system and start evolving work designs to make companies and teams into ever better versions of themselves – for the benefit of everything that a company touches.
It is strange. On the one hand most companies seem to be all alike and not so much different from one another at all: Hierarchical beasts that employ the classical work designs of Feedback, Delegation, Status Meetings, Protocols, Policies, Orders, Rewards, Appraisals etc. to get things done.
On the other hand there are more progressive companies like Google, Buurtzorg, Amazon, Haier, Netflix or Bridgewater that utilize some “leading edge” work design such as OKR’s, Self-Managed Teams, 6 Page memos, Culture Books, Promises Beyond Ableness, Mission Command, Consent Decision Making etc. They often appear to be using quirky ways to get things done differently.
Many people are fascinated by this or that “Work-hack”. Some even try it on their own Organization. Well, I guess by now most people have been subjected to daily stand-up meetings, KANBAN Boards and more engaging workshop formats with lots of breakout groups working in parallel – just to name a few of the better known practises.
What if we could explain companies by the way people are working with another? Introducing the Liberated Company Map.
During the last couple of years I have assembled a library of Work Designs of both traditional and more progressive organizations. All these Agile Work-hacks, New Work or Self-Managed Practices were too intolerably disordered for my limited teutonic mind. So here is my roster for ordering them. It consists of three criteria.
First, all work designs have a primary function, a target that they are used for. I have clustered these targets into nine functions of management in a 3*3 matrix. That order is inspired largely by Henry Fayols classic six functions of management.
Please note that “Management Practices” are a subset of work designs – more on that in later posts, I do not want to get bogged down in theoretical discussions here.
Second, work designs are ordered by the size of the power differential that exists between people. By doing this, I am assuming that the amount of discretionary power that bosses have over employees has a critical influence on a persons behavior. People in more hierarchical, authoritarian companies will weigh every word and deed to not upset superiors, wherelse people in more self-managed organizations will find it easier to disagree and speak up. There is much more psychological safety in more self-managed organizations, and that causes work designs that foster on intrinsic motivation and social team dynamics to work much better than they would work in an enviromment of conformity and fear. I clustered the size of the power differential in four levels.
With increasing liberation level, the power shifts away from a manager towards employees and groups. This way of ordering companies is based on a scale proposed by Renis Likert, an American business professor, and is similar to other popular ordering systems, like Laloux’s Teal Model.
Last, I use the severity of a work design as an ordering criteria. The “severity” is the risk of a major backlash occuring if things go wrong with the use of a work design. For example, there is usually no harm in using pratices like “Daily Standups” or “Kanban Boards” but immense harm is done by using “Elected Superiors” or “Self-Service Remuneration” out of place, i.e. without a suitable company environment and other supporting work designs being in place.
Putting it all together, here is the map. It uses the 3*3 Layout of the nine management practice categories, subdivides each of the nine quadrant’s into four sub-quadrants by liberation level, and orders the list of practices in these sub-quadrants by severity. I call this the Liberated Company Map.
It’s a big map: You need to zoom in to see the details; you won’t know some practices and you might disagree with some of the mapping. I can offer you some help right now: If you want to dig into the practices, here is a complete list. Howeever, there is more to it, more to the art of configuring companies with work designs. But I leave that for the next posts.
I like to close with a preview. Any company can be mapped on the Liberated Company Map: Amazon, Google, Haier, Netflix, Buurtzorg or Siemens and Ford – any company. So here is a mapping of Bridgewater, a company of about 3500 employees and the worlds successful Hedgefund, known for its radically progressive organizational design.
All the management pratices not used by Bridgewater are left out in this graphic.
In the next posts, I will go through configurations of progressive companies and explain how they work. Companies on the very edge of organizational design, such as Buurtzorg, Haier and Bridgewater – but also more traditional companies.
I have just finished a manuscript for a book called “Liberated Companies: A Map and a Compass to Better Organisations in the Digital Age” that explains the topic in about 300 pages and 45 graphics and tables. If you are interested in learning more, sign up to my blog.
And spread the word, if you like what you see.
Featured Picture by aitoff, https://pixabay.com/users/aitoff-388338/
I was wrong. Two years have passed since then. Time, I almost exclusively dedicated to learn and practice the art of mastering more self-managed organizations. My advice for those seeking to improve companies or teams is to read Brian Robertson’s “Holacracy”, just after you read Frederick Laloux’s “Reinventing Organizations” or listened to his excellent new video series. Mr. Laloux’s work fills you motivation and Robertson’s work will give you as close a view on the future of management as you will ever get.
The crucial thing which I got wrong in 2017 is that implementing Holacracy is not the thing. It is understanding Holacracy that is crucial for a move towards more self-management. Implementing Holacracy without having gone through a journey towards more self-managed for a couple of years before that, will properly get your company, team and yourself into deep trouble. It is simply too radical for most people in an organization to understand. Still, there is no better way to understanding a possible vision for the destination of the journey to “Management in the Digital Age” than Holacracy. The one approach on par with Holacracy is Sociocracy3.0, an updated and now very accessible version of another, similar “Self-management” Operating system. But beside it, I see no equals, no better way to understand Self-Management thoroughly.
Management 3.0 is certainly much more easily digestible with its colorful Mindsettlers app and has its merits to get more agile, liberated ways of management going, but it is ultimately less useful as a vision. It is something that you can use to start your journey but will not sustain you for long, as it lacks consistency and perspective.
Liberated Management Practices, is a term I use (inspired by Issac Geetz and Brian Carney’s book Freedom.Inc), to describe all the various management practices of progressive, more self-managed companies. They are not part of a system at all. Instead, they are just a diverse bunch of practices used at Buurtzorg, Gore, Patagonia, Haier, Bridgewater, and many more progressive companies. They lack order and consistency.
A way to picture all the ways to manage companies these days looks like this.
During 2018 I become unsure if “management” is still a thing. I was suspicious of the word “leadership” before – after all, there are far more people wanting to lead than to those who want to follow.
The aspect of management which become suspect to me is the notion that people must be managed. Things surely need to be organized in order to reach anything meaningful but do people need to be managed? Isn’t it enough to build an environment where people can prosper and organize themselves as deem best to reach the target of the company? Is the provision of an organizational environment still management or should it better be called work design?
Now, on the 1st of January 2019, I tend towards ditching the term “management” and talk about “work-design” more. Words matter and people often have either a negative connotation of management or an attitude towards management that leads to overbearing behavior.
In the digital age is might often be wiser to think of yourself as a work-designer than a manager.
That way you might keep yourself from interfering too much.
New Years Day is a great time to reflect on the past year. As most of my time in 2018 has been devoted to reading and writing about “organizing companies in the digital age”, I decided to update my list of favorite books on this big topic. The ones that most influenced my thinking can be found on top of the list
Grey Background: Essential Reads
Yellow Highlight: New Entries in 2018
Green Highlight: Books which I came to value more in 2018 – they took time to take root in my thoughts
Red Highlights: Books which I came to value less in 2018 – these are still very good books, though
Books that Describe the Workings of the Individual Mind
This Category is about Mindfulness, Vulnerability, Bias, Mental Focus and all those things that make up the intrinsic motivation of people. What has proved to be quite consequential in my daily work is “Deep Work” by Cal Newport. I think that the ability to deeply focus is not only a personal working technique – it is a quintessential design criterion of an organization seeking to maximize improve knowledge work.
Books about Teams
Oh my, how many years did I delay reading the works of Robert J. Hackman. His work has been cited so often and everywhere, that I thought I already knew everything Mr. Hackman had to teach. How mistaken have I been! “Leading Teams” by Robert J. Hackman is a must read. As is Amy Edmondson’s “Teaming”, which is delivering important underpinnings to ones understanding of teams from the realm of psychology.
“SCRUM” by Jeff Sutherland is still a great book, but I became a lot more skeptical about the rigidity of the method and the dogmatic way SCRUM it is used. SCRUM is so often executed with no understanding to its inner working, that it lends itself pretty well to being corrupted with the conventional, corrosive workings of excessive power differentials between people. OftenSCRUM becomes a method of exploitative productivity rather than customer value and excellence.
Books about Organization
Henry Mintzberg fortified his position on the top spot in my mind in this category with his extremely wise book “Simply Managing”. I don’t think that anyone will come close to that. But be warned: Simply Managing does not, despite the title, supply any recipe for management. Rather, you will end up not knowing what to do now in face of all the complexity.
The same feeling will haunt you after you have finished Philp Rosenzweig’s “The Halo Effect”: Crushing complexity and no easy solutions. Do not despair – hope is just two columns to the right: Liberated Companies.
Books about Digitalization
So many things are written about Digitalization, yet so little new is added. Over the last year, I came to value the challenges posed by the intersection of technological challenges (Companies IT-infrastructure and IT-Architectures) and the way that people are organized more and more: The collaboration of Man and Machine. I came to value these seemingly so techie topics of “DevOps” and “Continous Delivery” even more. Although the understanding of those topics requires quite a bit of insight on the work of software engineers, I believe more and more that there is no alternative for managers than to understand tech.
Digitalization without understanding Technology from a genuine Technology perspective is crucial – a User/ Strategist/Entrepreneur perspective alone is not enough.
Managers, Organizers, Work designer – however, you might call them to need to immerse themselves in the realm of technology or be left out.
Sorry about that, you techno-agnostic writers on digitalization or you organizational psychologists. It far from “nerdy” to know what “DevOps” is. I am convinced that understanding concepts like DevOps is a necessity is a technology to lead companies in a technology-saturated world.
Books about Liberated Companies
What Laloux manages to deliver on examples and theories, Peter Block underpins with spiritual insight in “Stewardship“. The discovery of the word “spiritual” was central for me in 2018, as all more advanced organizations need people to hold open space where performance can prosper, where people can self-direct themselves more. And the conviction that “holding open a space for self-management” is worthwhile doesn’t come out of the blue. It is, strangely enough, a spiritual process.
Now, “spiritual” is not a word often used in management literature. Yet a state of mind naturally precedes any action. A wonderful example which is focused on ACTION but is essentially a spiritual journey is delivered by David Marquet’s “Turn the Ship Around“. A book about a nuclear attack submarine and its crew – a setting like in a Tom Clancy thriller.
If you want something futuristic to read, read Yangfeng Cao’s “The Haier Model”: Haier’s organizational model is probably the most sophisticated company on earth.
Books About Work Designs
The skeleton of today’s companies is the hierarchy and the process. With self-management on the rise, the hierarchy will be replaced with work-designs that ensure checks and balances that allow people to govern themselves. Some of these work designs can be gleaned from the books on Liberated Companies or Teams. Deeper insights into microstructures that make up work can be found in books like “Liberating Structures” from Keith McCandless et al. It is full of practical recipes, too.
Books about Strategy
A company is a purposeful system and cannot be seen disconnected from its purpose. That is why understanding strategy is important for anyone in charge of organizing. A strategy is nothing else than the way for a company to work towards its purpose. Therefore, read Henry Mintzberg’s “Strategy Safari” if you want to manage purposefully – and you want to show those consultants of McKinsey’s and Boston Consulting Group how outdated their analytical way of approaching strategy really is.
Books about Data Science
In a VUCA World, it is indispensable to get a grip on understanding and using uncertainty to the advantage of a company. Running experiments will never suffice is not supported by the capability to understand such thing as volatility, variance, covariance and the difference between causation and correlation.
Nissam Taleb’s “The Black Swan” focusses one’s views on the things that really matter, i.e. when events occur that may be very unlikely but have so much impact, that all other event’s do to really matter.
On the other hand, the small events matter, too, especially in those shorter time frames that most companies use to focus on. Nate Silver’s “The Signal and The Noise” is still my favorite classic for this field. It has very practical implications for the set-up of teams, technology, and processes.
Books about the Digital Age
I read Kevin Kelly’s “What Technology Wants” for a second time in 2018 because I was looking for an answer to the question “What does Technology want from Companies?”. A strange question at first glance, but I suspect that the impact that technology, the cooperation of Men and Machine, has on human collaboration is still undervalued.
In the Digital Age companies must not only solve the problem of human engagement – they must solve the problem of human-machine engagement, too
A special mention goes to “White Working Class” from Joan Williams for explaining the downsides of globalization and digitalization: The divide of society into many have-nots and the few prosperous. This economic and cultural divide cannot be solved by Silicon Valley’s Elitism.
Biographies – Long, Deep Reads
Last not least I have added my three favorite biographies that shaped by view on many of the topics of work design:
“Seize the Fire” by Adam Nicholson – how Lord Nelson, 1st Sealord of the British Admiralty made the Navy. Fundamentally, a book about intrinsic motivation.
“The One Best Way” by Robert Kanigel – a biography of the “worlds first business consultant” Frederick Taylor. He came up with “Scientific Management”, which still dominates companies today. A voluminous book about a thinking process which went on around 1900 and is to thank and to blame for today’s, often inhuman and underperforming state of companies
“The Undoing Project” by star-author Michael Lewis – a biography of the collaboration between Amos Tversky and Daniel Kahnemann, two of the most important organizational psychologists. The essence, as I see it, is: We can’t trust our brain and judgment alone. Human judgement benefits from checks and balances that companies may weave into their work designs.
That’s my year 2018 in books. Let me know what you read and have been fascinated by! I sincerely like to hear from you.
Have a Liberating 2019!
Next post will be continuing the long series on “Effective Teams” – to be found in your mailbox at the end of January.
This is part 5 of a series exploring what makes an effective team. Read this if you are interested in great teamwork and like to explore different types of teams.
Condition 4: Clear Boundaries
Effective teams are groups of people that act towards a particular direction. Although everyone is different, people inside a team align actions with one another. A crude but essential way of achieving alignment is setting clear boundaries.
By setting boundaries, two things are achieved: First, the freedom to act is clearly defined. The team can do everything that is within the limits of the team. Second, everything that is set out of bounds is simplifying the mission: It is one less thing to take care of – which is very welcome as long as the boundary does not overly restrict the team’s ability to deliver. Cleary stated limits create certainty for the team. They are giving the team something to work with. They lessen the risk of the team running into major, unyielding, yet unstated boundaries later.
Boundary conditions are everything that is framing the team’s mission: Resources, scope, and deadlines are the three classical boundary conditions given to a team. However, it is although its decision-making power and the very definition who is on the team and who is not, and what is means to be on the team.
Who is on the team?
To merely assign team members is not enough. There are two things to consider. First, what does it mean to be on the team? Which rights and obligations come with team membership? A decision on team membership is a decision to include a person – but it is a decision to exclude a person, too. There should be no in between, and there should be no half-baked assignments, no “extended teams”- just universal clarity. Extended teams are a backdoor to increase team size and dilute responsibility, often for the sake of political convenience. There are always persons outside the team who need to contribute, but usually, that contribution can be limited to consulting with the team, delivering some tasks, contributing to workshops, reviewing and testing.
Second, in high-performance teams being on the team does mean to spend a lot of the time on it, the more, the merrier: Everything being equal, a full-time dedicated team will always outperform the part-time team in efficiency, speed, quality, and any other target dimension. This is not to say that the team needs to be together all the time. It may be necessary to split up the work or explore different paths, while all the time working on the team’s task.
These two demands, clearness who is on the team and who is not, and full-time dedication are so immensely essential and easy to understand yet appear so often utterly unrealistic in most companies. All the right people are already over-assigned. Restricting the number of assignments is often hard to do, as there is always some constituency to please by demonstrating action. This is all too understandable. Well then, go ahead and over-commit your team to multiple endeavors simultaneously. Just do not expect high performance.
Again, this sounds a bit passive-aggressive. I do not mean to. The fact that people are overcommitted again illustrates the underlying theme in this series of posts: Organizations do not care about individual or team effectiveness too much. They are willing to sacrifice performance for other priorities, like stability and predictability. Sometimes, they even choose to sacrifice performance to uphold the appearance of busyness. Where results are hard to link to individuals, hierarchies tend to reward people who appear to be busy. It takes much discipline for a company not to overload its co-workers with work. More on that in part III.
What is the authority level of the team?
What is the team allowed to decide on its own? What is the team’s freedom to act? Hackman describes four levels of authority:
Level 1: Authority to execute the task
Level 2: Authority to monitor and manage work processes and progress
Level 3: Authority to design the team and its organizational context
Level 3: Authority to set overall directions
Based on these authorization level 4 types of team’s can be identified.
Type I: The Workgroup that is executing the team task
At the first, fundamental level, the team needs to be authorized to execute the team task. That may sound very basic, but in more political companies even this authorization level is sometimes not given to a team.
One of my very first projects, as a young consultant, was of this kind. Our team was supposed to fix the multi-billion investment management process in the Volkswagen Group across all its brands, VW, Audi, Skoda, Seat. For this, we were supposed to be using a brand new shiny new software package from a south German company called SAP, which offered work-flow functionality to fully digitalize the very communication intensive review and approval process of investment projects. Albeit the very same corporate grandees that initiated this project didn’t want any change in the way work is done to not upset the powerful brands. To implement standard software without changing historically grown processes is a blatant contradiction. Still, our mission was: Implement but do not change anything. While informing a senior partner in our company on our straits, he just smiled thinly and said: “Oh well, they are playing their old game: Go wash me, but do not get me wet.”
Every boundary set on the way the team task is to be executed closes down an avenue to a solution – possibly up to the point that the job is no longer feasible – or becomes bereft of economic sense. An example for this is the demand often faced by teams to keep within just one silo of the organization: You can do everything here, but do not change process X or System Y, that is a given. It is the nature of really important changes to have an impact on multiple organizational silos. Most modifications done to just one part of an organization quite often result in a local optimum – and global dysfunction. They might make sense for a unit, but not for the company a whole.Such boundaries can turn an otherwise pretty sensible team mission to one might make limited or no sense at all.
Type II: The Self-Managing Team that is Monitoring and managing its work process and progress
Once that first, existential hurdle is cleared, and the team is all set to execute the task the next question is: Who is to monitor and manage the work process and progress, i.e., to lead the team? Usually, a manager (or project manager) is assigned to do this, no questions asked. The alternative that a team can monitor and manage its own work is not even considered. Yet this amount of freedom to organize in a way it deems best is precisely what a high-performance team needs. Mr. Hackman and all the researchers specialized in the science of high-performance teams have delivered an abundance of evidence about that.
Managers are not irrelevant in ta Self-Managing team. They still set the overall direction, convene the team and provide the working environment, including setting the boundary conditions. However, they refrain from intervening in the way the team does the work. If managers intervene, for example by coming up with meticulously detailed work break down structures, teams just won’t perform on a high level. Such manager-led teams are workgroups: Collections of individuals to whom work is assigned by a manager. A workgroup might be good enough to do a job, but it is unlikely to achieve high-performance levels. If the work process is managed by a single person, the team cannot build its emergent properties, not integrate in a way to deliver results that are more than the sum of its parts. In such a one-sided power structure, the openness and integration needed for a genuine team effort are unlikely to occur.
Beware about the overbearing manager (especially in projects)
Wait a minute! I just said that the manager led teams are a killer to a team’s performance. I even said that those are workgroups and not teams at all!
This is true. Workgroups are the way most company units or departments are organized. A loosely bound collection of individuals coordinated by a manager. Their performance will never be as high as a team, but their results are predictable and controllable. Work-groups are the norm, and Self-managed teams are exotic. Performance aspirations of line units might not justify a team effort, but within more significant projects, performance aspirations are usually higher. A good case for a high-performing, self-managed team. So how often are project teams self-managed?
Conventional project teams are headed by a project manager. Although Agile Methods like SCRUM discourage the use of project managers, most companies hold on to the notion of project managers. A manager leads a business unit. A project manager leads a project. Someone needs to be in control. It just makes so much sense to them.
Here comes the snag: Effective teams are NEVER manager-led workgroups. They are at least Self-Managing teams, where every team member can engage more wholly. Science has proven that classical, manager-led teams that come with micromanaging, intrusive, administrative procedures, overbearing interventions into the team space do not lead to exceptional performance.
The trouble is that most project managers approach projects with the same mindset as line managers. To be in control is their core concern. The question of control is at the heart of the world’s leading project management methods like PRINCE2 or PMBOK. To reliably come up with projects that deliver on time, in quality and to budget. Control is what is expected by them by the line organization. Get out there, take charge of a project and deliver according to the plan.
The problem with big project management frameworks is not that they do not solicit good advice. The problem is rather that they give too many methods, tools, and advice. If you learn the whole curriculum, you are likely to end up with a zoo of intrusive management interventions that patronize team members and undermine their initiative. There is a commercial incentive to blow up what it takes to manage projects successfully. Project managers tend to think they need to apply all those methods. I am not saying that learning about project management is a bad idea. However, I am saying that a core condition of effective teams, the freedom to determine its path on its own, is often threatened by overbearing project managers. Those types are keen to show what they have learned and are eager to display to the rest of the organization that they are in control.
That sounds like a fundamental attack on the time-treasured ancient art of project management. Old style project management may lead to great charts, great reporting and the illusion of control, but seldom to a great performance.
What’s the alternative to run successful projects? The standard answer nowadays is Agile and Scrum. The trouble is, Agile and Scrum can just be as overbearingly intrusive to teams as classic project management methods can be. The underlying solution lies, according to a host of research on high-performance teams, in managers not intervening too much: Hands-off – Eyes on. The actual project method, waterfall style or SCRUM, is of secondary importance.
Great team performance needs managers who enable teams to do their best. For that, they need to devolve control to the team and give people the freedom to act. According to Hackman and other researchers, a manager should design the team and its organizational context, but not interfere and intrude into the group dynamics of a team. A useful manager is an environment builder and coach, not an overbearing patron or a dictator. Alas, the sheer size of world-leading project manager standards leads people to believe that the more interventions, the merrier. The contrary is true.
Type III: The Self-Designing Team that is designing itself and its environment
Time to go even further. A team can also be trusted with designing itself and its work environment. For example, and contrary to popular belief, it is not a law of nature that managers need to “staff” teams. People can assign themselves to teams and teams can decide on shedding team members themselves. They can produce their own boundary conditions, setting targeted costs, marshaling resources, and to determine the scope of the project without managerial oversight.
Teams can be “self-designing.” In such a context, a manager points a team at a direction and let the team figure out everything on their own.
Wait a minute! That sounds like a free for all. A chaotic commune. Anarchy. Sure, if you make a team Self-Designing, without doing anything about the other 11 conditions for effective teams, you are bound to get into trouble. Those things only work if one takes a holistic approach to work design. What’s more, this holistic approach needs to extend not only to the management of teams but to the management of the company as a whole. Precisely what this blog is about.
Type IV: The Self-Governing teams that set its own directions
The fourth level is to authorize the team to set its overall direction. Such a “Self-governing,” free-ranging team is subject to the same team dynamics described in this part of the post but needs an entirely different organizational context to operate in than a traditional hierarchical organization provides. Such a team is found in Self-managed organizations that replace hierarchies of authorities with hierarchies of purpose – a phenomenon that is explored in this blog, e.g. Holacracy, Liberation and Management 3.0.
How common are these four types of teams?
What is the empirical frequency of the four different team authorization levels in today’s companies? I have found no studies about this, but here is my hunch:
The overwhelming majority of teams are managerial led, co-working groups, let’s say 85% in a line organization and 70% in a project context
Self-Managing teams are about 13% in a line organization and 25% in a project context. These are those teams, where a manager is shrewd enough to take on an enabling role to the team and keeps his interventions to a minimum. Such a team might call itself “Self-managed,” but it is.
Self-Designing Teams make up the larger share of the remaining 2% in line and 5 % in project contexts. Using such a high authorization level on teams would seriously undermine the appearance of being in control and decisive that a manager needs to uphold, so this is seldom done. It is most common in informal groups, like for example communities of interest.
Very few teams are Self-governing. Self-governing teams are only possible in a self-managing organization, and those are very few. They are in the vanguard of today’s organizational thinking.
Managers relinquishing control is a rare phenomenon. Yet it is what is required for great team performance. However, without a manager being in full control, how can a team stay on track? How can low performance be sanctioned? Please hold on to these questions until we make through all 12 conditions of effective teams, as all of those deliver important pieces to the answer.
That’s it for today. In the next post, in two weeks, I will show why diverse teams are sometimes a good idea, but not always.
Audible…no: I hope you enjoyed this post. Let me know what you think!
There is just one team. Not an extended Team, too.
Full time dedication of people to a team is king. Period
Authorize the team to organize on its own. There simply is no other way to high performing teams.
Good Managers refrain from intervening in the way the team does the work. People call that Self Management.
Effective teams are NEVER manager-led workgroups.
Agile and Scrum can just be as overbearingly intrusive to teams as classic project management methods can be
Part 3 of a series that explores the effectiveness of individuals, teams, and organizations
The factors that drive team performance are very well researched. This post is based on Richard J. Hackman’s research on team performance. Mr. Hackman has been a Harvard professor who specialized in organizational psychology.He is recognized today as the most authoritative voice on the topic of team performance. He devoted his academic life to the research of teams. In his 2002 book “Leading Teams” he came up with a list of five conditions that foster team performance. I took the liberty of re-ordering and often re-naming these factors for better understandability.
This re-ordered model of team performance is based on a total of twelve conditions. Nine conditions internal to a team, and three conditions external to it. This effectiveness model aims to be collectively exhaustive and mutually exclusive.
All the twelve factors listed do matter, for any team. There is no weighting given with this model. Weightings depend on the specific performance context the team is in at a certain point in time.
The twelve factors are no menu card. You can’t choose to run a team by, say “a compelling direction “and “small size” only while neglecting the other factors and still expect high performance. In general, all 12 conditions must be there for a team to achieve great things. They are reinforcing one another.
Meaning and Spirit – the Internal Conditions of Effective Teams
The internal conditions are those that held within the team. Some of those might be set externally at the start of the team effort, but once the team effort starts they are the essence of what this team is all about. They become internalized into the fabric of the team.
There are two categories of internal conditions: Meaning and Spirit. The five conditions subsumed under Meaning describe what the team is all about: The direction of the teams work, the tasks that they are doing, team size, the scope of the effort and its composition and stability. Meaningful work engages people. Meaning does describe why something is to done and what people do. It’s a reason to climb up to a summit and a clear view of the mountain. To be clear on the meaning to a team is a good start to pay off the motivational debt of teams.
The Spirit of a team is describing how the team approaches their work: The impact people they feel their work has, their level of aspiration to do great things, the way they think about their ability to speak up, and the level of transparency and trust.
Let’s start with exploring the five factors that make up teams Meaning first.
Condition 1: A Compelling Direction
A compelling direction has several functions in a team setting:
Harnessing the team to the targets of the organization
A source of motivation
Provide direction for decisions to be made
Align the actions of all team members towards the common goal
Setting a compelling direction is more than goal setting. To set goals is a classic, often useful management practice. Goal setting is the art of laying out clear goals, for example by using the SMART criteria that decrees that targets should be Specific, Measurable, Attainable, Relevant and Time-based. Setting a goal implies setting an end-point, a definite location that to achieve.
However, the higher the performance aspiration of a team, the less traditional goal setting will suffice. First, in complex environments where solutions cannot be known at the start of the effort, being too SMART in goal setting, will be limiting for the team. If the problem is complex, it is not wise to be too specific. Goals need to be described on a high level and vague level. Being too specific will determine outcomes in ways that are hard to anticipate before the team gets its hands dirty on the complex matter itself. Second, for a team, it is often crucial to figure things out for themselves. It is tough for any team member to latch her intrinsic drive on to the team’s mission if too much is already defined. By supplying overly detailed goal criteria, the freedom of the team to do what it deems to be best is limited.
It is a better idea to get a team to work itself into the subject matter – to advance in a given general direction. It will find out new things and will over time and decide then what to go for and where to end up. For teams, a direction works better than specific goals.
Let me give you a prime example of how to set directions, but not goals.
Mission Type Tactics
Providing a direction is nothing else than giving a mission. This style of command is known as “Mission Type Command” in military command theory. Its origin is the German “Auftragstaktik” is attributed to the Chief of Staff of the Prussian Army Erich von Moltke. Auftragstaktik and has been a core element of German military thinking, and modern military tactics, ever since.
In mission-type tactics, a subordinate commander is assigned a mission, the resources available to attain it, and a time frame. The subordinate leader then implements the order independently. The subordinate leader is given, to a large extent, the planning initiative and freedom in the execution. Thus, a high degree of flexibility at the operational and tactical levels of command is achieved. Mission-type orders free the more senior leadership from tactical details.
The opposite of Mission type tactic is the Command tactic. People using command tactics give exact orders, SMART orders. Maybe too SMART. To manage teams effectively, managers need to learn a new trick and refrain from providing precise orders. Instead, they need to be vaguer. They need to point in a direction. Now, this might seem like an ideal excuse to give sloppy orders: “I do not need to be exact in what I am ordering you – go find it out yourself.” Sloppy orders would leave the team wondering what to do, wasting time and possibly never get anywhere.
To specify missions and not end up issuing sloppy orders is hard. Giving an excellent mission to the team requires much thoughtfulness on the part of the one defining the mission. Here is some guidance:
Describe the mission as an intent, not end-point
Give boundary conditions, that act as guard rails
Refrain from determining the ways of getting towards the intent
Mastering the art of mission command might be one of the most crucial things that distinguish an ordinary boss from a great leader, both of military as of business organizations. It takes much humility to accept a variation in methods and a variation in outcomes. It takes the willingness to accept the risk that one’s intent is misinterpreted. It takes willpower to refrain from being too explicit and not declare once own perception to be the truth. There is a lot of doubt and uncertainty involved in trusting other people to do your bidding to their best of abilities.
These are all reasons why mission-type tactics are seldom used in traditional businesses. Mission type tactics are best used in environments of uncertainty, complex situations where swift action based on local knowledge on the spot of the action is crucial. Alas, traditional businesses and management practices are aiming at eliminating uncertainty, to fence it in, to produce predictable, constant outputs. Things that worked fine in the industrial revolution, but that are deeply problematic for many challenges posed by the digital age.
There is another snatch: Mission-type tactics alone do not work well if used in a traditional business environment. To understand a direction, the intent and not the end-point, in spirit and not only to the letter, the team needs to have a splendid view of the organizations need, with all its various constituents who are invested in or impacted by the team’s efforts. Even more than a genuine understanding of the situation, the team needs to have a view on the dynamics of the situation: Is the stated intent really what a constituent wants? The more complex and dynamic the situation is, the more the team needs to develop, maintain and test a hypothesis how the intent of the organization might be changing over the course of the team effort. This level of visibility needs much more close bonds between people and a level of transparency that is hard to find in most companies. It requires a supportive organizational environment geared towards shaping intense personal relationships and a culture of organizational transparency.
Who set’s the Teams Direction?
The first thing is to be clear about is who is setting the overall direction of the team. This is usually not the teams’ job, but the person or group that want something to be done. The need to get something done is, of course, the very reason why a team exists. A team is a tool at the hands of someone or a group to get something done.
There is just one exception to that rule: In a self-governing team, a form of organization used in highly innovative or egalitarian organizations, which are not bound to conventional hierarchy, a team may choose its own direction. An example is a community of interest, which can work even in hierarchical business, where co-workers are forming teams on their own initiative and waiting for followers to “vote with their feet” and self-assigning them to a cause. While this form of a team is still somewhat exotic in a business environment, its results are often attractive. Organizations employing those teams at scale are Google, Netflix, IDEO, Haier, Procter & Gamble, Unilever, Microsoft, and many others. For the overwhelming majority of businesses, most goals need to be set by the hierarchy in a way to serve its needs.
A Mission does not need to be Inspiring
While it is difficult to set a good mission, it is still not enough. The mission needs to be compelling, too. Nowadays we tend to understand the word “compelling” synonymous with adjectives like inspiring, purposeful, or motivating. However, compelling can as well be connected with attributes like coercive, forceful, or void of alternatives. A compelling direction may not at all be a positive one. Take for example the need to close some operations and lay-off people. This can be a compelling target, too, because management has decreed this, and might frame it as a cut necessary for the survival of the whole organization. Most of the time, we tend to think of teams and business of being a growth story, forward-thinking, providing opportunities and winning. This is quite silly, as leading organizations and teams means not only to be starting things but to be ending things, too. An inspiring mission is excellent and much preferable – but a sincere one will do just fine.
But if the direction of a team is not inspiring, how can a team member ever give her or his best? She might be compelled or even coerced to do things, but surely her intrinsic motivation will take a hit and limit her performance, right? Perfectly right, an uninspiring (but still compelling) direction results in intrinsic motivation taking a hit at the start of the project. However, it is just the start of the project. This debt can be recouped. People are terrific to find their sense of purpose once the team progresses. One of the most potent biases there is, the confirmation bias, lets people reinterpret their world in a way to see their actions and the actions of others in a more positive light over time. Individual autonomy enables people to find their purpose even within a compelling but uninspiring setting. This personal purpose might not be felt at the start, but a good team context might enable every team member to find her or his purpose while working towards the goal of the project.
The quest to come up with an inspiring, instead of just a compelling direction is morally laudable, and it is beneficial for team performance. However, it is not needed to achieve high performance in teams. Think of it this way: What is an inspiring target for one person, might have little attraction for another. What can be inspiring on a high level, might be lost entirely in the daily struggle to get things done. Motivation is a very individual thing. To come up with an inspiring direction that motivates everyone, independently of personal idiosyncrasies, is hard. Not every company is there to save the world. There is a job to be done, and it needs to be done for a compelling reason. That’s good enough. Inspiration is laudable, but it also is optional, often unrealistic and therefore usually ends up existing in shallow corporate slogans only.
To seek congruence between the direction of a team and the motivation of individuals often means to fight a losing battle. Instead, come up with a sincere direction, and let the group dynamics their individual motivational dispositions to the overall direction over time, while working towards the target. A sincere direction is often more practical and meaningful than sending people on an inspired mission invented by someone else or during a group “visioning workshop.”
Warning: Directions release Energies
The more compelling the direction of the team is for its members the more energy will be released. Surely, releasing energy is a good thing to get things done, but releasing energy is dangerous. Usually, if given a choice between an under-energized and an over-energized team, most managers and organizations would choose an over-energized “squad”. The over-energized team might break things, in its push to get things done, but it gets things moving. But there are problems.
If the organization is not mobilized to a sufficient level for the change that the team is supposed to bring into life and the team is not able to pace its enthusiasm to what the organization can absorb, clashes will occur. These clashes might destroy the team’s energy level and burn significant relational capital that the team needs to succeed. A team’s effort is a lot about pacing. A team leads a change effort inside a company. Therefore, it needs to be visible to the other co-workers and not disappear out of sight of the rest organization. Enthusiasm is a virtue but might lead to frustration. A measured pace is often preferable over short-term euphoria. After all, most really significant changes are rather marathons than sprints.
Next post will take a look at Condition II: “A True Team Task”. I hope you enjoyed this post. Let me know what you think!
Effective teams require 12 Conditions: 9 internal and three external to a team
Two types of internal Conditions can be identified: Meaning & Spirit
The first condition is: A Compelling Direction
Mastering the art of mission command might be one of the most crucial things that distinguish an ordinary boss from a great leader
Mission-type tactics alone do not work well if used in a traditional business environment
To seek congruence between the direction of a team and the motivation of individuals often means to fight a losing battle
According to Prof. Hackman there are 5 factors that driving team performance: 1. A Real Team 2. A Compelling Direction 3. An Enabling structure 4. A Supportive Context and 5. Coaching. All these factors and not more are represented in the model I give here. Just that I extended those factors to 12, as I think there is too much of importance hidden underneath some factors, especially in factor 3 “enabling structure”.
Mission type tactics has been at the heart of German military doctrine ever since the three successful campaigns for German unification against Denmark, Austria and France at the end of the 19thCentury. A large part of the successes of the World War I’s “Sturmtruppen” (Small team tactics) or World War II’s “Blitzkrieg”, can be attributed to the vast discretion given to commanders at the front. For more an Moltkes command style see Barry, Quintin (2015) ‘Moltke and his Generals – a Study in Leadership’.
Paraphrased from https://en.wikipedia.org/wiki/Mission-type_tactics
In western military this is known as “Commanders Intent”. It is the second item on any mission briefing, just behind a description of the situation.
Does anyone remember the “Fuzzy” Movement in the 2000’s? A hype term borrowed from electronics (“fuzzy logic”) that has been used in business to praise the virtues of vagueness and heuristics.
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.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.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.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.
If the conditions for successful teamwork are given, a team is likely to outperform a group of individual actors.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.
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
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.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.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.
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. 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. 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) 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.
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
The academic term is “underbounded” team. See Alderfer, Clayton (2005) “The Five Laws of Group and Intergroup Dynamics”.
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/
IBM studies on project performance, cited by Sutherland, Jeff (2015) “Scrum” p.43
Values are illustrative only, they can’t be generalized. Values are based on the exemplary studies cited by Sutherland, Jeff in “Scrum”, see above.
Hackman, ibid. Hackman based this formula on psychologist Ivan Steiner, who described the term “process loss “ in his work.
Hamburger Sport Verein (HSV), a member the German Bundesliga.
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.
“No theory of Management is worth anything if it has no underlying theory of performance”. I am not sure where I read this sentence, but it stuck with me ever since. The performance question is the “holy grail” of any organizational theory. The very reason why companies exist is that they are there to perform something. The very function of the market is to root out low performing companies.
Still, most management advice is of the self-help nature: There is much advice given how to do this or that, without ever being clear on why this or that management action should work. This article is the first one in a series that drills down on the conditions of performance, the underlying theory of human performance as individuals, of groups and of companies.
After all, performance is the crowning discipline of anyone who is managing. A manager/ leader’s job is to get people to do things.
But there are ways of getting people to do things which will cause people to achieve much and ways that won’t achieve much. So how can management practices be designed in such a way to maximize performance? To answer this question you got to look at the conditions that drive individual effectiveness.
Why does individual performance occur?
Here is the synopsis of what I learned from my research over the years.
Internal conditions are, first of all, the capabilities that people bring into a job:
A set of skills at various levels
Cognitive abilities, such as Intelligence (IQ), Emotional Intelligence (EQ) and specific talents
No big surprises here: You hire for skill. And slightly more advanced, you rely on some personality tests in order to select by cognitive ability (for more on this checkout Hiring like a Pro: Lessons from Google).
But capabilities are not enough. It takes the willingness to use those capabilities, the willingness to fully engage. Engagement can be triggered best by addressing the needs of a person’s intrinsic motivational structure. Of all the literature on intrinsic motivation, I have found the summary that author Daniel Pink made most useful:
The urge for mastery, to perfect oneself
The autonomy to act
To follow one’s own purpose
Of course, no one has the same urge for mastery, the same need for autonomy or the same clearness of purpose. Some people may like to hang loose, spend their time on youtube or engage in social media all day. These people are unlikely to be highly effective. Some may not have found their purpose, their need for mastery and autonomy just yet.
Internal conditions are more or less given to a person, at least at a certain point in time. People are endowed with capabilities and what drives them. It is a package deal. Although these attributes may change over time, they are pretty constant over a longer period of time. It’s hard to change IQ, it takes time to acquire new skills and it takes a transformational experience to shift one’s intrinsic motivations.
A popular myth in western culture is “you are able to achieve anything if you really want it”. Well, I guess that may true – at least as the laws of physics are not violated- but I think a more accurate version of this saying would be “you are able to achieve anything if you really want it, but some things are highly unlikely”. But that kills the motivational intent of this statement, doesn’t it?
To excel as an individual the circumstances of your whereabouts matter. You need external help. Malcolm Gladwell researched the question of individual performance and dug-out three factors that explain individual excellence best:
A supportive context
An environment full of opportunities
Deliberate practice, ten thousand hours of reflective, focused, professional practice
These claims have been scrutinized in a business context. One of those factors is not important in a business context: Deliberate practice. Shockingly for Protestant work ethics, which stresses the importance of hard work, deliberate practice is of low value in a business context. It is important for sports and arts, yes. But not in the much more complex, muddled world of business.
A work environment that provides people with opportunity and assistance to perform and grow is very relevant, though. In all organizational or educational research about performance, these factors stand tall.
I have added a third factor: Accountability and Rewards.
In a business context, it is important what people are assigned to do: What is their accountability? People may have great capabilities, possess a great intrinsic drive to excel, they may be part of an organization that provides them with truckloads of opportunities and support, but if they are kept inside a small, narrowly described job they may not be able to fulfill their potential. People need to have the authorization to act.
And not all people are easily intrinsically motivated. Some people respond better to extrinsic motivation, such as money or status that is given to them by others. Extrinsic motivators, financial bonuses, key performance indicators linked to individual pay, are used quite regularly in business settings. They are effective if well used, but tend to crowd out individual motivations or may even encourage reckless behavior, as all those things which are not rewarded will be relegated to secondary considerations.
Combining intrinsic and extrinsic motivation is tricky. The safest path seems to be to rely foremost on intrinsic motivation and to use extrinsic motivators only sparingly.
The Magnitude of Performance: 10X?
Suppose that all internal and external conditions for individual effectiveness are given: What is the difference between the performance of the highest performers and the lowest performers?
An interesting narrative is given by Jeff Sutherland in his 20014 book “SCRUM”. Joel Spolsky, a software developer, compared the time needed to complete a standardized programming assignment at Yale University. Just focussing on those people who managed to get the top 25% of grades, he researched the time spent on the assignment:
The top 10% of performers needed 10 times less time than the low 10% of performers
The 10X factor was pretty constant over the years and classes
This narrative is showing what the performance differential can be in a laboratory setting. It is illustrative, but not more. In a business setting a quantification of individual performance is much more complex. Even for more routine jobs, such as call center agents, it is very difficult, as there are so many things that are hard to quantify and measure. In a normal line job measuring individual performance quantitatively is nearly impossible. What is the value added by an ordinary accountant? How does that compare to another employee, say in logistics? Therefore, in traditional business settings, one has to rely on qualitative, gut-based judgments of managers.
But two things are sure:
Even one good or bad decision of an individual might sometimes determine the fate of the company.
The sum of all tiny, daily decisions of all colleagues in a company does a lot to determine the overall performance of the whole company
So optimizing the work environment and management practices in a way to foster the conditions for individual performance is a sure winner. You might disagree with the conditions I laid out, but you absolutely need a yardstick.
Individual Performance Does Not Equal Team Performance
A question for you: Is most work actually done by individuals or by teams? That question may sound silly. After all, the sum of each person’s work makes up the work of a team. But here is another perspective: How much of work is actually already structured, in established processes and daily, habitual work practices and therefore does need much personal interaction? I guess the latter is actually the bulk of the work in most companies. I.e. my answer to the first question is: Most work inside companies is done by individuals and not teams. True team tasks, that require intense collaboration between people and can only be solved by their close cooperation, are rare.
I share that view with Richard Hackman, a professor who was specialized in the research of teams. According to Mr. Hackman, most departments are work teams. In a work team, work is parceled out to each individual by a manager, through job descriptions, processes and day to day delegation. Close collaboration, “a true team” as he calls it, is not needed.
Indeed, treating work teams as true teams is very wasteful. Investments in team building of ordinary work teams have no measurable benefits. None, nada, niente, aucun, gar nichts. Still, companies send their so-called “teams”, which are really Work Teams, to team building exercises.
Companies confuse work teams, which make up the majority of teams inside most companies, with true teams. What a waste of resources.
The preponderance of work teams in organizations highlights the need to have a consistent and holistic theory of individual performance in business. The one given above is my best shot.
Let me know what you think!
This is part one of a series of articles on the underlying theory of performance in businesses.
More on the effectiveness of teams in the next article.
Gladwell, Malcolm „Outliers“, 2009 -> on the external supporting conditions to achieve “outlying” performance
Pink, Daniel “Drive”, 2009 -> On the the conditions of intrinsic motivation
Rosenzweig, Philip, “Left Brain, right stuff”, 2014 -> On the limits of deliberate practice in business
Keegan, Robert et al, ” An Everyone Culture”, 2016 -> On organizational learning that is built on individual growth
Ray Dalio has founded and leads one of the worlds largest and most successful hedge funds, Bridgewater, worth 150 Billion$. Last year, and with great media fanfare, he launched his book to explain to the world his management philosophy. It’s a best seller, which is not surprising, given Mr. Dalio’s stellar reputation in the dominant business sector of our time: The guys making huge piles of money out of money: Hedge funds. Does all this money make Hedge funds or investment banks the real rulers of the world? You bet. The US government, the Senate, the Fed, International Institutions, the European Central Bank, the World Bank – all full of ex-Investment Banker in leading positions. Even the former FBI director James Comey was a Bridgewater employee. The Masters of the Universe – and Dalio is one of the Grand-Masters of the Universe.
Mr. Dalio is spelling out over 200 principles of “Work and Life,” principle by principles. Like the great Roman Emperor Marcus Aurelius did in his “Meditations.” How fitting.
Irony aside, I actually like the clarity and to read about the accumulated wisdom of thoughtful people. And Mr. Dalio is very thoughtful. He is driven by his worldviews, especially on management, and he share’s it with us. I think that’s grand, mainly because the management practices he employs are often so extreme and apparently over the top:
Video Taping all Meetings. All.
Giving performance feedback in real time during a meeting of every participant to let the person know how she is doing
The “Pain Button” app where people can describe their emotional stress and share it with others
The “Dispute Collector” app where people can mediate their interpersonal conflicts guided by a machine
Orwellian speech is rampant in “Principles.” Mr. Dalio talks of “tough love,” or “shoot your friend,” – all for the service of the collective.
The Rule of the Fittest
My favorite example of all those management practices is to let people vote on decisions while weighing these decisions with the “believability” of the person: An “Idea Meritocracy” where every person is eligible to vote, but only the most knowledgeable votes carry decisive weight. The believability is determined by their track records, test results, and other data. In other words: The reign of competence, instead of a reign of populists. Wow!
If only the standards that determine believability can be kept “objective” and free of corruption. Mr. Dalio doesn’t explain how to do that, but my hunch is Discipline. Adherence to formal systems, to the principles underlying the believability algorithm. Adherence to the formal system is prominent in Mr. Dalio’s business empire. Comply with the system or be fired. The attrition rate of new and very carefully selected employees is about 30% within the first year. And Bridgewater is very Elitist in selecting candidates in the first place.
Psychological safety, i.e., a safe place to speak up without the fear of retaliation, is a key feature of learning organizations or any organizations aiming at achieving innovations. Dissenters need to be encouraged. And yes, Bridgewater is a safe place to speak up, with even brutal honesty, as Mr. Dalio writes. People may even raise dissent with the system, and principles might evolve in consequence, if its ruling hierarchs choose to adopt them. But chances are that fear is rampant. Not the fear to speak up, but the fear of acting in a dissenting way, which is not in compliance with the ruling system, the principles. If everything is taped and visible to everyone, political correctness rules, and human fallibilities are suppressed. But control is maximized, too.
The central metaphor for the business which Dalio uses right at the start of the book is the machine. And as cogs in a machine people got to be kept inline, disciplined. Add to that that Mr. Dalio is very close to central figures of China’s ruling party, a country where a lot of experimentation in social control is ongoing, and the pictures become genuinely, outlandish dystopian.
And whats more: His practices are actually embraced by Robert Kegan, a Harvard Professor of Psychology and one of the worlds leading proponent of the “learning organizations”. Money, Power, and Academia united to create a Dystopia. A possible future where the Rationale, Analytic, Performing runs Amok creating a new super-collective of connected super-minds, where the apparently “dumb” are ignored by the (believability) algorithm. This is can be labeled and sold as “Intelligent Democracy”: The rule of the one with the most merits. Not far from Darwins “The rule of the fittest”.
A Great Experiment
Let’s look at the bright side. It’s is a great experiment based on many of the principles of movements like Agile, Lean, the Learning Organization, Leading Management thinkers and Behavioral Organizational Psychologists propose:
Build more reflection into daily work routines in order to enable learning
Trust more in the power of the collective than in individual decisions makers through structured exchanges that drive out biases, to come up with better decisions
Give everyone a voice and a place and time to speak out
Use data gained from objective and subjective sources extensively
Address all level of the Organization simultaneously: Mind-Sets, Principles, and Practices
Seek organizational growth in the inert, personal growth of individuals
Looking at Mr. Dalio’s work this way, there is a lot to learn about Bridgewater. Therefore reading “Principles” is absolutely recommended.
Long live Hierarchy & Control!
The most remarkable thing is, Mr. Dalio has added all these routines on top of the traditional management hierarchy.
In all of the 539 pages, he does not write a single line about self-managed teams. But the other times he uses the prefix “self” is revealing: Self-accountability, self-discipline, self-reflection, self-accountability. It is the individual how needs to better herself. By sticking to the collective rules set by, well Mr. Dalio. Or the Chinese communist party…
Mr. Dalio trusts the individual to get better under guidance, he trusts collective, believable weighted votings, as long as
Superiors may veto any decision and
Mr. Dalio (or a governing elite) sets the rules
At the heart, Mr.Dalio’s vision is not about liberation. It is about performance. About making money. If what it takes to make money is to develop individuals, so be it.
But Control is central. Full stop.
Bridgewater might be a great Place for Fawning Alphas
I like organizational designs more that give space for autonomy (a word not found anywhere in the book) and non-mainstream people – call them beta if you want.
Whats more, true innovativeness will not come from an environment that is purely ratio driven and relegates fun to an emotion that is to be reflected on and analyzed – all in the service of big performance equation that is to be solved.
A bigger car, I guess. This Hedgefond even wants to exploit life itself. Putting such a line in front of the whole work shows what Frederick Laloux would call intensely “orange” beliefs, beliefs bred in the industrial revolution: It’s about getting things, about scarcity, about accumulating, and finally about consuming life itself.
I am a bit harsh, though. It’s is worthwhile reading:
It shows how the application of Agile/Lean/ Behavioral Sciences while being stuck in a Mindset of scarcity and control – instead of abundance and exploration- may quickly lead to dystopia.