Purpose+ Internal Research, March 2016

NON-CONFIDENTIAL AND NON-PROPRIETARY, ENTIRELY SHAREABLEPurpose+, Amstel 95, Amsterdam, The Netherlands

Building High-Performing Teams

Companies are relying more on autonomous, multidisciplinary teams as the central component of their organisational structure...

Trends with regards to teamwork...

New ways of assembling teams...In order to facilitate cross-disciplinary & silo-bridging teamwork, many companies have established overarching ‘MDTs’ (multi-disciplinary teams), or an equivalent. The ideal is that a multi-talented and knowledge-heavy team, can collaborate more effectively between silos, be more creative and more autonomous.

...new ideas around effective teamwork...Popular trends like Agile, Holacracy, Sociocracy and other organisational and cultural restructuring efforts generally aim for more autonomy, agility and customer centricity in teams. In these models, teams can therefore be fully in charge of a product/service that the company offers to its clients.

...and new corresponding technologyMany tech companies have facilitated teamwork. Examples include Basecamp, Asana, Whatsapp,Google Drive, and Dropbox for Business.

...and organisational examples

• ING Bank has restructured the way most of it’s IT-employers do their work. Their scrum teams are now highly self-steering, work in larger ‘tribes’ (~150 people), with a ’tribe lead’ and supportive Agile coaches.

• ING’s model was originally copied from Spotify; where employees already worked in scrum teams, and formed together in tribes.

• Management consultancy firms like McKinsey, Bain, BCG and Accenturehave traditionally placed their bets on (well-supported) teams to solve their client’s problems.

• Schuberg Philis, a highly specialized IT firm and a Harvard Business Case famous for it’s culture, uses autonomous teams where unanimity in the team is required to make decisions (called the sociocratic circle method).

Source: Purpose+ team, HBR (2016), The Economist (2016)

‘Functional organisations’

‘Network of teams’

...but creating self-steering teams is no guarantee for success

Social loafing: high-flyers forced to work in teams may be undervalued, and free-riders empowered. When teams grow in size, the productivity per team member

tends to decline. In general, teams underperform.

Time: teams generally work better when they are together longer. But

most organisations use ‘teaming up’ for specific purposes, and disband them

quickly when the job is done.

Groupthink: teams can converge on more extreme conclusions collectively

than members on their own – especially when ‘defiants’ are not allowed to

challenge the group’s thinking.

Unclear purpose/mandate: studies show that most teams don’t agree on what

exactly the team should be doing, and why.

Well-known barriers for team success

Source: The Economist (2016), Richard Hackman in HBR (Why Teams Don’t Work, 2009); Hackman, Wageman, Nunes, Burruss (Senior Leadership Teams, 2008), Purpose+

Team size: ideal teams consist of 5-9 people. Larger teams tend to slow

down productivity per team member. The rule of thumb is ‘no double digits’*.

“I have no question that when you have a team, the possibility exists that it will create magic, producing

something extraordinary... But don’t count on it.”Richard Hackman, Harvard University

Ambiguous team boundaries: many teams (including senior leadership teams) suffer from a lack of clarity about who’s on

the team, and who is not. Studies by Richard Hackman (Harvard) show that just 10% of teams align on who’s in the

team, but most teams nonetheless believe they have clear boundaries.

Mistaken beliefs: most team members mistakenly belief that having a

harmonious team (compared to a team with friction points) is best for it’s

performance. Research consistently shows this is not the case.

* Or: in the words of Amazon CEO Jeff Bezos: ‘if I see more than two pizzas for lunch, the team is too big.”

Company executives and managers need to educate themselves on how to build high performing teams

12%

88%

% executives that reports understanding how people work in networks

% executives that reports a lack of understanding how people work in networks

Source: Deloitte, as mentioned in The Economist’s ‘Team Spirit’ article (2016)

21%

78%

% executives comfortable with building cross-functional teams

% executives not comfortable with building cross-functional teams

Eight common pitfalls exist that hinder the building of a high performing team

Source: Richard Hackman, Why Teams Don’t Work (2012); Purpose+ team, Ferguson’s Formula, HBR, 2013; The Five Dysfunctions of a Team, Lencioni (2002)

Use a team for work that individuals should do. Some tasks are better left to individuals. Some experts argue that this is also true for executive leadership due to the expert nature of the job.

1

Call the unit a team, but manage individuals. Teams are groups with shared purpose/goals, where members are interdependent. The team should therefore have tasks for which they collectively are responsible.

2

Build large teams for ‘capacity reasons’. Large teams generally underperform, due to all the interpersonal relations that need to be managed. Teams of 5-9 individuals are considered ideal.

3

Mismanage the authority balance. The team leader should be clear about the the authority balance, the rules and codes of conduct. Handing over all responsibility to the team is seldom a good thing.

4

Dismantle organisational structures to ‘empower’. Abandoning older controls and structures in order leave teams with full empowerment is not always a good idea. Teams need clear processes to focus on team work*.

5

Set high ambitions, but don’t deliver on support. Teams that set very high goals, but fail to receive the needed support/resources from the organisation, usually get disillusioned over time.

6

Assume that team members have all the skills. When projects are challenging, it is likely that team members need to be educated/coached to reach the level needed on all dimensions.

7

Build teams with open walls. Many teams are unclear about who is on the team, and who is not. ’Extended’ teams, with multiple layers, can have the same problem. Don’t allow people in for political reasons only.

8

* Unclear priorities, processes and structures can lead team members to assume interpersonal difficulties as the root cause, while in reality problems were structural.

Senior teams do well to request expert ‘team dynamics support’ to help them deliver what they do best, in three critical phases

Source: Richard Hackman, Leading Teams (2002).

Form ‘real’ teams, where members know their place. Don’t select people for political reasons. This is the leaders’ job.

Provide a clear and compelling direction. Prioritize goals, align the team around it. This is the leaders’ job.

Provide the team with enabling structures. Decision making criteria, technology, codes of conduct, roles etc.

Ensure a supportive organisation. The team’s goals should be regularly aligned with organisational priorities.

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4

Allow expert coaching. For team members to do what they do best, allow experts to help building the team.

5

Don’t fear defiance. Great teams do not always agree, but rather dare to argue and sit in discomfort.

Best expert advice on how to build great teams... ...and the best times to utilize external support

Perfo

rman

ce

Time

‘Forming’: Select the right team members

& align on direction and ground rules.

’Norming’: shorten this period by having the courageous discussions.

’Performing’/’Adjourning’: ensure high standards

persist, consider renewal.

6

Social sensitivity is a critical factor for collective intelligence of teams –more so than the individual intelligence of team members

Source: Evidence fo a Collective Intelligence Factor in the Performance of Human Groups (Woolley, Chabris, Pentland, Hashmi and Malone; 2010)

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Study 1: Video Game Study 2: Architectural Design

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Collective Intelligence Average Member Intelligence Maximum Member Intelligence

Having group members with very high IQ links to

collective intelligence; but less than social sensitivity.

Mostly linked to social sensitivity in those teams. Teams where members showed better

performance than teams with ‘dominators’. Teams with women (who scored higher on social

sensitivity) did better overall.

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