Academic journal article The McKinsey Quarterly

Why Teams Matter

Academic journal article The McKinsey Quarterly

Why Teams Matter

Article excerpt

An excerpt from The Wisdom of Teams: Creating the High-Performance Organization

Effective teams, not abstract commitments to teamwork or empowerment, are the real drivers of top-flight organizational performance

In their private lives, managers know that real teams can produce extraordinary performance results -- results way beyond the reach of separate individuals or less cohesive groups. At work, however, turning this private knowledge to the advantage of their organizations has often proven difficult. It is not always clear when to use teams or how best to support them. Nor is it clear what, precisely, it is that makes a team a team. Drawn both from the authors' long experience working with organizations to improve their performance and from a detailed study of some 50 or so different teams of executives in 30 different companies, this excerpt from The Wisdom of Teams describes in close detail what teams are, which attributes set them apart from other kinds of groups, and -- most important -- why they are the essential organizational units for achieving performance results as well as accelerating personal growth.

SAVVY MANAGERS have always known that real teams -- not just groups of people with a label attached -- will invariably outperform the same set of individuals operating in a non-team mode, particularly where multiple skills, experiences, and judgments determine performance. Being more flexible than larger organizational groupings, they can be more quickly and effectively assembled, deployed, refocused, and disbanded. And being more firmly and mutually committed to tangible performance results, they can more readily leverage their combined skills to achieve objectives beyond the reach of less tightly-bound collections of individuals.

None of this is new. Ancient generals understood the wisdom of teams no less than do modern corporate leaders. What makes that wisdom of such importance now -- and so worth the urgent attention of top management -- is not novelty but the proven link between teams, individual behavioral change, and high-performance. Building organizations that consistently outperform their competitors, as well as the expectations of their key constituencies (customers, shareholders, and employees), over an extended period of time requires lasting behavioral change. And experience shows that the same team dynamics that boost performance also enable such change -- and do so far more effectively than can larger organizational units or individuals left to their own devices.

Change has always been a top management challenge. But until recently, when executives spoke of managing change, they usually referred to normal change -- that is, adapting to new circumstances where demands fall well within the scope of existing management approaches. Today, however, these demands often extend to "major" change, which requires people at all levels of a company to become very good at behaviors and skills they are not very good at now. As Jack Welch, Lawrence Bossidy, and Edward Hood of General Electric note, "Every effort of every man and woman in the company is focused on satisfying customers' needs. Internal functions begin to blur. Customer service? It's not somebody's job. It's everybody's job."

This is, of course, a much more difficult challenge -- one that cannot be met solely through top-down, command-and-control organizational responses. Change on this scale depends on teams because behavioral change occurs more readily in teams. Their collective commitment keeps members from being as threatened by change as individuals left to fend for themselves. Their flexibility offers members more room for growth. And their focus on performance motivates, challenges, rewards, and supports members who try to alter the way they do things.

The lesson seems clear: only teams can make hierarchy responsive without weakening it, energize processes across organizational boundaries without distorting them, and bring multiple capabilities to bear on difficult issues without undermining them. …

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