The importance of a high-performing team is well-recognized in the business world. Investors in start-ups often place more emphasis on the quality of the team and the dynamics of the founding members than on the initial idea.
This is underscored by the fact that 90 percent of investors consider the management team's quality as the most crucial non-financial factor in evaluating an IPO. The correlation between a unified top team and superior financial performance is evident, with 1.9 times increased likelihood of achieving above-median financial results when there's a common vision.
Reid Hoffman, LinkedIn co-founder, aptly states, “No matter how brilliant your mind or strategy is, if you’re playing a solo game, you’ll always lose out to a team.” Michael Jordan, the basketball legend, reinforces this, saying, “Talent wins games, but teamwork and intelligence win championships.”
As digital technology reshapes workplaces and alters work processes, the significance of effective leadership in managing teams, especially in remote settings, becomes more pronounced.
Despite technological advancements addressing operational challenges, the human element in team dynamics remains critical. The complexity of building a cohesive team is undiminished, given the diversity of functions, products, business lines, and geographical locations, all competing for influence and resources.
The continuous focus on top-team performance is a perpetual business concern, as outlined in the sidebar “Cutting through the clutter of management advice” from the book “Leading Organizations: Ten Timeless Truths.”
The book highlights top-team performance as one of the key business topics over the past 40 years. In building top teams, certain enduring principles regarding team composition and dynamics have consistently proven their value.
These principles offer guidance amidst the plethora of advice on team building, reflecting their sustained relevance in an ever-changing business environment.
In 2016, Deloitte found redesigning organizations around teams to be the number one human capital trend, with 92% of companies believing it was very important or important. The following year, re-organization was again the number one trend.
This reasonably recent drive to restructure around teams is for good reason. Teams have been shown to perform better on complex problem-solving than the best of an equivalent number of individuals.
In fact, Deloitte’s 2019 trends suggest that “shifting toward a team-based organizational model improves performance, often significantly.” 53% of respondents stated that they had experienced a significant improvement in performance since transitioning to a team/network-based organization. Clearly, teams (when created effectively) get the work done and perform at a high level.
Building high-performing teams is a nuanced and complex task underpinned by extensive research. With over 8,100 peer-reviewed studies dedicated to this topic, as highlighted by the Oxford Review, the subject is both vast and deeply analyzed.
The initial belief that high-performing teams are merely a collection of individual star performers has been debunked. It turns out that the interactions among team members are as crucial as their individual abilities. The team's dynamics and how they communicate and collaborate often play a pivotal role in determining their success.
A significant study involving academics from MIT, Carnegie Mellon, and Union College, which tested 192 groups, sheds light on the core elements of successful teams:
Teams exhibiting higher levels of social sensitivity tend to be more successful. This trait involves the ability to read and respond to non-verbal cues and empathize with others' perspectives.
The distribution of conversational turn-taking is a critical indicator of a team's collective intelligence. Teams where dialogue is evenly distributed, as opposed to being dominated by a few individuals, demonstrate higher collective intellect.
The presence of female members in a team correlates positively with the group's collective intelligence. This could be attributed, in part, to higher social sensitivity scores observed among women. The study concluded that collective intelligence within teams is only moderately linked to the intelligence of individual members and remains consistent regardless of the team's size.
When assembling a team, it's beneficial to consider candidates with high emotional intelligence. This involves the ability to understand and manage emotions effectively. Emotional intelligence can be as crucial, if not more, than traditional intellectual measures in predicting team performance.
While there is no one-size-fits-all formula for creating high-performing teams, certain attributes like social sensitivity, balanced participation, gender diversity, and emotional intelligence stand out as key factors. Recognizing and valuing these aspects can significantly enhance the effectiveness and success of teams in any organizational setting.
The team dynamics within organizations are experiencing a significant transformation. Heading into 2024, the key to achieving organizational success lies in adapting to and adopting these evolving dynamics. This shift is not just a trend; it's grounded in data and studies.
The pandemic has highlighted the critical role of teams like never before. The concept of teamwork isn't new, but the challenges posed by the pandemic - including significant job losses (which we've largely recovered from in the last two and a half years), inflation (now under control), supply chain disruptions (mostly resolved), along with issues like war and climate change - have emphasized that the dynamics of running a business in the 21st century differ greatly from those in the 20th century.
Here's our perspective.
The key difference, as we've learned both theoretically and practically, hinges not so much on technology, products, finances, or other common factors, but rather on the effectiveness of high-performing teams.
This may sound obvious, but it's a tangible reality that's beyond dispute. So, here’s our input, starting with these three questions:
Why are some teams more effective than others?
Decision-making comes in two forms – rational and interpersonal. The former can be done alone, but the latter can't. The pandemic forced us to reimagine team dynamics in a remote and challenging environment, but we managed to do it.
What causes these differences?
Above all, effective communication has been key. It acted as a catalyst for transformation.
How do these factors influence team outcomes?
High-quality decisions and strong buy-in lead to improved team performance. Teams have always been about synergistic decision-making; this just became more evident since 2020.
Synergy occurs when the collective output of a group exceeds the sum of individual efforts, often through mutual support.
Though his teachings date back nearly a century, Kurt Lewin's (1890-1947) insights into high-performing teams remain unmatched. He highlighted:
Being part of a team not only enhances individual contributions but also the collective synergy.
Having diverse perspectives is crucial to avoid being stuck in a fixed mindset.
As Abraham Maslow (1908-1970) taught, motivation is key to human growth, and team members often show higher motivation levels. Maslow and Lewin were close colleagues.
Teams are more inclined to make bolder decisions, knowing they have mutual support.
Involvement in decision-making processes boosts commitment, especially in smaller teams.
Change in values, attitudes, and behaviors within teams lays the groundwork for effective decision implementation.
Team members naturally support each other's success.
While seemingly counterintuitive, teams often develop the confidence to adopt more conservative, aggressive, or creative stances as needed, inspired by the thesis/antithesis/synthesis model.
Lewin's theories have been substantiated by real-world practices. While today's technology, the geographical spread of teams, and the pace of business have evolved, Lewin's principles still hold true.
The essentiality of team composition begins with size; neither too small to limit diversity and bandwidth, nor too large to encourage fragmentation and dilute decision ownership. Teams with fewer than six members often face challenges due to a lack of diverse perspectives and slower decision-making processes.
Such a limited size also poses a hindrance to succession planning due to fewer available candidates and a potential increase in internal competition. Conversely, research indicates that a team's efficiency begins to wane when the count exceeds ten members, leading to the formation of sub-groups and fostering divisive behavior.
In larger teams, the representation of a united front in meetings often masks the underlying individual maneuvering.
The composition of a team extends beyond mere numbers. For CEOs, it's imperative to consider the unique skills and attitudes each member contributes. Factors like recognizing improvement opportunities, a sense of accountability for the company's overall success, resilience, and being a positive role model are crucial.
CEOs often find themselves constrained by team members who, despite their individual prowess, do not align well with team dynamics. They may also encounter challenges in managing inclusivity to avoid conflict or dealing with members who were once effective but no longer meet current standards.
In some cases, overlooking certain senior executives for the team’s greater efficacy may be necessary, despite the potential for slighting them.
For large organizations, limiting the top team to ten or fewer members is often impractical due to the sheer complexity and volume of work. For instance, the CEO of a multinational insurance company, managing 18 direct reports globally, found it challenging to address extensive agendas in their videoconference meetings.
To mitigate this, he established three distinct top teams: one focusing on long-term strategy and company health, another on short-term performance and operational issues, and a third addressing governance, policy, and personnel matters. In this structure, some executives, including the CEO, participated in all teams, while others were specific to one.
Additionally, the inclusion of members from the management level below the executive team was a strategic move to infuse new ideas, facilitate expertise sharing, and nurture the next generation of company leaders.
The successful functioning of a team goes beyond assembling the right combination of members; it hinges on the team dynamics that emerge when individuals begin to collaborate. The true character of a team is forged through these dynamics, which can either propel the team towards exceptional achievements or confine it to mediocrity.
To illustrate, consider the 1992 US men's Olympic basketball team, featuring some of the sport's most legendary figures such as Charles Barkley, Larry Bird, Patrick Ewing, Magic Johnson, Michael Jordan, Karl Malone, and Scottie Pippen.
Despite the aggregation of such immense talent, their initial synergy did not guarantee immediate success. This was exemplified when the "Dream Team," during their initial practice phase, suffered an eight-point defeat in a scrimmage against college players.
As Scottie Pippen reflected, the team initially struggled to adapt to each other's playing styles. However, they overcame this hurdle, and the rest is history. They not only secured the Olympic gold medal but also overwhelmingly dominated the competition, scoring over 100 points in every game.
The distinction between a team comprising all-stars and an all-star team is crucial. In every research to be ever conducted, there have consistently been a few fundamental aspects of effective teamwork.
The first is alignment on direction, entailing a collective understanding and belief in the organization's goals and the team's role in achieving them. The second is high-quality interaction, marked by trust, open communication, and the capacity to engage constructively in conflicts. The third aspect is a sense of continual renewal, where team members feel energized, are encouraged to innovate, take risks, and draw from external ideas, often triumphing against significant odds.
The critical question that emerges is how to replicate these conditions in every top team to ensure their maximum effectiveness and success.
The first step in enhancing team effectiveness is to assess the team's current standing in three key areas: alignment on direction, quality of interactions, and sense of renewal. This evaluation often involves a mix of surveys and interviews involving team members, their subordinates, and other relevant stakeholders.
It's vital to approach this assessment objectively, as team members might not fully recognize their contributions to any dysfunction within the team.
While different teams have varying levels of improvement to make, most can benefit from a structured program that combines offsite workshops with practical, on-the-job activities.
These workshops, typically spanning two or more days, are designed to strengthen the team by engaging them in actual work and critical business decision-making, followed by reflective sessions focusing on team dynamics.
The choice of problems to address in these meetings is crucial. A frequent issue in low-performing teams is the excessive time spent in meetings, which often arises not from the duration but the substance of these meetings.
Meetings of top-tier teams should be reserved for discussions that require the collective expertise of the team, such as corporate strategy or resource allocation. Avoiding topics that can be resolved at the individual business or functional level not only optimizes the use of time but also enhances the team's sense of purpose.
Reflective sessions are less about the business problem itself and more about how the team collaborates to solve it. Questions like whether team members felt aligned, excited about the outcomes, or if they felt they brought out the best in each other are explored. Such open discussions, regardless of the responses, deepen trust and awareness among team members about the impact of their behaviors.
These sessions help in recognizing the value of each team member and understanding that diversity of opinion doesn't necessarily lead to conflict but can result in better decision-making.
Many teams find it beneficial to have an impartial observer in initial sessions to help identify and improve dynamics. Observers can highlight when discussions deviate into less productive areas.
For example, teams may spend disproportionate time on trivial matters (known as the ‘bike-shed effect’), or a CEO may inadvertently dominate discussions, stifling other voices. In one instance, a team, believing they were aligned on the company’s top priorities, actually listed a total of 15 different priorities when asked to write them down, revealing a lack of true alignment. These insights are crucial for teams to understand and rectify their dynamics for improved performance.
1. Exemplary Leadership: The Foundation of High-Performing Teams
At the heart of any high-performing team is a leader who not only sets a clear vision but actively inspires and communicates effectively. A leader's direct involvement, especially by working hard alongside employees, establishes a benchmark for the team's work ethic. This approach is crucial in cultivating a thriving team environment.
2. The Power of Diversity in Team Dynamics
Key to any high-performing team is a culture that values collaboration, akin to Google's emphasis on creative and flexible workspaces. The essence of such a culture lies in embracing diversity and fostering inclusivity. By incorporating team members with varied skills, backgrounds, and perspectives, you enhance creativity and problem-solving abilities, driving the team toward groundbreaking solutions.
3. The Role of Communication in Team Success
A cornerstone of any successful team is effective communication, ensuring clarity in roles, and maximizing individual contributions. Leaders like Steve Jobs, known for his succinct and impactful communication, exemplify this. It is essential to create an environment where team members feel safe to express ideas and concerns. Regular one-on-one check-ins and promoting a culture of transparency and collaboration can significantly empower teams to align with and contribute to the company's objectives.
4. Setting Clear Objectives to Guide Teams
High-performing teams are fueled by clear, attainable goals. Drawing inspiration from Amazon's long-term thinking approach, it's vital to define and regularly reassess team objectives. Ensuring that every team member understands their role in achieving these goals and providing regular feedback keeps the team aligned and focused.
5. Encouraging Innovation Through Risk-Taking
Innovation, a critical aspect of successful businesses, is born from a culture that encourages risk-taking and values experimentation. Creating an environment where failures are seen as learning opportunities and successes as milestones fosters this innovative spirit. By encouraging team members to explore new ideas and providing support in the face of challenges, leaders can spur groundbreaking advancements.
6. Fostering Professional Growth for Team Success
Companies like Microsoft exemplify the benefits of prioritizing continuous learning, and offering employees various training and development opportunities. Supporting team members in their professional growth not only enhances their skills but also contributes significantly to the team's success. Such investments in development can lead to increased employee retention, engagement, and satisfaction.
As we navigate the uncertainties and possibilities of 2024, the landscape of team building and leadership is undergoing a remarkable transformation. This era, more than ever, demands leaders who are not just visionaries but also agile adapters to the ever-shifting dynamics of the workplace.
The key to thriving in this new age is embracing a leadership ethos that is as diverse and dynamic as the times themselves. Let's step forward into this year with a renewed commitment to innovation, inclusivity, and inspirational leadership, setting a new standard for what it means to build and lead high-performing teams in an era that promises both challenges and unprecedented opportunities.
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