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10Teams and Organizations

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Learning Outcomes After reading this chapter, you should be able to:

• Outline what significance organizational context has on teams.

• Define team-based organizing (TBO) and explain its five principles.

• Provide a practical road map for transitioning to TBO.

• Explain the psychology of organizational change and outline how learning and innovation can help overcome resistance to change.

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Introduction

Pretest

1. Successful teams are complete units, working without reference to their organizational context.

2. Team members in TBO organizations are interdependent at both the individual and team level.

3. Most people consistently choose to maintain current conditions or circumstances even when they are inferior to other alternatives

4. Clarifying whether—and how—a shift to TBO will support organizational strategies and goals is the essential first step in restructuring an organization for TBO.

5. Organizational employees tend to resist organizational change, especially when it is imposed on them.

Answers can be found at the end of the chapter.

Introduction The CEO and senior management of a large manufacturing company are concerned about worsening safety issues in their plants. They want to implement a new safety philosophy and are prepared to accept that this change might require their organization to be significantly restructured. After much discussion, the CEO and senior management spend 18 months researching the matter and consulting with experts to determine the feasibility of using TBO to improve safety. The senior team believes the shift to TBO will not only improve safety but also increase productivity, flexibility, and performance quality—but only if the organization can successfully restructure itself to support a highly collaborative environment.

The CEO and senior management know that restructuring will require employees at every level to be more interactive, interdependent, and involved in organizational processes, change, and learning. To attain such a high level of participation, members of senior management begin to question how they can align the organization to support teams. They know they will have to consider the team as the fundamental work unit, as opposed to the current work unit, which is the individual. They also know this might be quite confusing, as both teams and individuals will still be used in various capacities throughout the organization.

It is also apparent to the CEO and senior management that they will need to set an example for the organization and begin to function as a team themselves. They hope that their managers and directors will learn from their example and be more willing to embrace changes to their own roles. They will still be managers, but their role will now involve more coaching and training their employees to function as teams, rather than the more traditional managerial role of directing work and making decisions. Managers will now be encouraged to collaborate with their team members and share decision-making responsibilities.

To further support the restructuring and ensure that employees have everything they need to successfully work in teams, the CEO and senior management have been working

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Introduction

closely with human resources (HR) and the IT department. Human resources will be responsible for preparing training guides and making presentations to employees about how their roles are changing. In addition, HR has worked to create a reward system to support the new team structure that will provide both team and individual bonuses for meeting performance goals. The IT department, meanwhile, will work with teams to provide customized technology support. By involving other departments, senior management is confident they are developing the infrastructure to support TBO from the ground up.

It is possible that not all employees will welcome this change, and senior management is aware of this fact. Some employees may leave the company, while others who choose to stay might resist it. Such changes have the potential to disrupt employee morale and satisfaction, and even individuals’ self-esteem. To mitigate these negative potentials, senior management encourages employees to think of the change as a learning process for which management will provide the necessary support.

With nearly all organizations today utilizing some form of teamwork, teams enjoy almost universal popularity within the organizational environment (Kozlowski & Bell, 2003; Morgeson et al., 2010). While research supports the idea that teams are central to organizational success (Martin & Bal, 2006), many organizations fail to use teams to their full potential—mainly because they simply do not know how to effectively integrate teams into their organization (Dumaine, 1994). The treatment of teams as separate entities, rather than pieces of the organizational whole, ironically results in teams that do not work well together.

Organizations are more than just a framework from which business processes and products emerge. They are complex, multidimensional systems composed of interrelated and interdependent processes and subsystems, represented by organizational culture and structure, human and technological resources, and business processes. Thoughtlessly adding teams to that mix is like throwing a monkey wrench into a complex machine. With the right strategy and coordination, the wrench could act as a tool for better performance, but simply tossed in the middle it just becomes a frustrating obstruction.

In this chapter, we examine how organizational leaders can harness the power of teams by revamping the organization as a whole. Team-based organizations are designed to function with teams as their basic work unit. For an organization to transition to a team-based organization, leadership must radically change the way it works. This involves rethinking the organization’s strategy, work processes, hierarchy, and support systems, such as HR and IT. This chapter outlines the significance of team-based organizing and the steps involved in structuring or restructuring an organization to support a team-centric work model. We also discuss how to overcome the resistance to change that inevitably arises during major organizational transformations.

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Section 10.1Changing the Way We Work: Team-Based Organizations

10.1 Changing the Way We Work: Team-Based Organizations The growing complexity of the modern business environment over the past few decades has ushered in two major organizational trends: (a) an absolute need for flexibility and speed at both the individual and organizational level and (b) increasing dependence on teams and teamwork to satisfy those needs (Harris & Beyerlein, 2003). Teams are powerful tools for promoting and supporting employee and organizational productivity, flexibility, and performance quality, but scholars and practitioners alike recognize that their effectiveness is profoundly influenced by the organizational structure and culture within which they function. However, business literature largely misses this aspect of team effectiveness. There is a wealth of theories about how to organize and manage teams internally for success, but far less attention has been paid to the organization as a whole.

When introduced in isolation, without consideration for the organizational context, teams are more likely to fail—primarily because leadership does not understand how to make them work cooperatively within the organization (Dumaine, 1994). Organizations that are not fully prepared to integrate and support teams tend to isolate and weaken them to the point of fail- ure or dissolution. A team may function successfully within the boundaries of its own mem- bership, but if the surrounding organizational culture contradicts the values and principles of teamwork, the team is essentially functioning in a hostile environment (Harris & Beyerlein, 2003). In such cases, organizations may set teams in place only to see them fail to thrive– undermined by the lack of internal acceptance and support (Mohrman et al., 1995).

Imagine for instance, a group of employees working under a department head who believes in teamwork. She regularly includes her employees in key decisions that affect the life of the department and organizes their work according the principles of teamwork. The organization, however, is quite hierarchical and has a culture of top-down decision making. Despite the department head’s best efforts, some of her team’s decisions will ultimately be negated by top-down decisions, even if the team’s decisions are of superior quality and made more democratically. The team’s morale will go down, and teamwork will eventually die off. The department head might even be viewed as a deviant by her own hierarchy—her efforts at building teamwork undermined, unappreciated, even censured.

Scenarios like this occur all too often. If teamwork is not supported throughout the organiza- tion, then it is undermined from within. Team-based organizing works to create the support that teams need to succeed, looking beyond internal team dynamics to the significance of their organizational context.

What Is Team-Based Organizing? Team-based organizations describe a new millennium organizational model in which teams are the core unit for performance within an organizational context optimized to support them (Harris & Beyerlein, 2003). The shift to such a model involves a continuous process of organizational improvement and reinvention as a team-based organization, referred to as team-based organizing (TBO). Today TBO centers on the concept of formally optimizing collaborative capacities within a company by considering teams and teamwork as parts of a systemic whole.

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Strategy

Structure

ProcessesRewards

People

Organizational Culture

Direction: Includes current and future organizational goals, products/services, resource/market development, and plans for maintaining competitiveness.

Interdependence: Includes organizational hierarchy, distribution of power, networks and interrelations between organizational areas, departments, and work units, and the procedural roles and norms which shape them.

Functioning: includes business processes/resource allocation, product development, methods of working, and work flow within the organization.

Motivation: Includes compensation, incentives, leadership styles, and practices that promote employee identification and goal alignment within the organization.

Human Resources: Includes employee hiring, assimilation, development, and involvement practices, skills management, and formal/informal support systems for employee performance and well-being.

Section 10.1Changing the Way We Work: Team-Based Organizations

The transition to TBO introduces changes across all areas of an organization—at the individ- ual, group, and organizational level (Gard, Lindstrom, & Daliner, 2003). Although the change often begins with management-led episodic shifts in structure and process, proper imple- mentation of TBO requires a continuous learning and growth process that drives comprehen- sive and fundamental changes in the principles by which organizational structure, process, and systems are devised (Weick & Quinn, 1999). Reorganizing a business into a team-based organization requires employees across all levels and functions to be more interactive, inter- dependent, and involved in organizational process, change, learning, and innovation. The transition to TBO will also transform the organizational culture. As the terminology implies, teams are at the center of team-based organizing. Yet teams that are meant to work within a larger organization cannot function effectively if the influence of that organization—and the role that teams play within it—remain unexamined or unacknowledged. Businesses built around TBO concepts continually progress toward an organizational alignment that follows five core principles, which are discussed next.

The Five Principles of TBO Alignment To be successful in any context, organizations must have a certain level of coherence, or organizational alignment, across structural, strategic, and cultural components (Quiros, 2009). This alignment must occur across all areas of the organizational context, acknowledging the relationship between formal and informal organizational elements (Semler, 1997). Figure 10.1, a modern variant of Galbraith’s classic star model (1995), graphically illustrates the interdependence between the major aspects of organizational alignment. You might recognize the similarity between this patterning and that of the decentralized network discussed in Chapter 3. Like the team members within that all-channel communication network, the

Figure 10.1: Variant of Galbraith’s star model of organizational alignment

Alignment under the star model creates coherent relationships between organizational elements.

Strategy

Structure

ProcessesRewards

People

Organizational Culture

Direction: Includes current and future organizational goals, products/services, resource/market development, and plans for maintaining competitiveness.

Functioning: includes business processes/resource allocation, product development, methods of working, and work flow within the organization.

Motivation: Includes compensation, incentives, leadership styles, and practices that promote employee identification and goal alignment within the organization.

Human Resources: Includes employee hiring, assimilation, development, and involvement practices, skills management, and formal/informal support systems for employee performance and well-being.

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Section 10.1Changing the Way We Work: Team-Based Organizations

elements of organizational strategy, structure, processes, people, and rewards are intercon- nected and influence each other. Changes in organizational goals, products, or services, for example, can affect an organization’s distribution of power, and the interrelations between its departments and work units. Business processes will likewise evolve to fit organizational needs, as will the employee skills, training, and motivation methods required to fulfill those needs. The interaction of all of these elements creates the comprehensive organizational cul- ture within which employees operate.

Alignment means that an organization’s strategy—in other words, its main services or prod- ucts and how it delivers them—matches its organizational structure, processes, rewards sys- tem, culture, and type of employees. For instance, one would expect a technology start-up such as Uber’s car-ride service to be organized very differently than a large car-manufactur- ing company like General Motors. Uber is more likely to have a flat hierarchical structure (that is, few levels of hierarchy) and a flexible, informal, and creative culture that is aligned with the types of employees who work there, who are likely young, hip, creative, and technologically savvy. Furthermore, one would expect Uber’s employees to be rewarded for being creative and working together to take the company off the ground, even if that means doing tasks that are not in their job descriptions. This means incentivizing them through potentially lucrative stock options. General Motors will have a very different alignment that features older, less educated, and less innovative employees; a more formal culture; a more rigid hierarchy; and more emphasis on cutting costs. If Uber tried to adopt the same tall, hierarchical structure as General Motors or hire the same type of employees, it would be out of alignment. Alignment is the foundational component of TBO; it is the means by which organizational context achieves coher- ence with effective teamwork.

To illustrate alignment in the context of TBO, con- sider a company like IDEO, a world-renowned inno- vation consulting firm. IDEO (2016) presents itself as a global design and innovation company that helps others apply design thinking to any situation in virtually any industry. IDEO’s core product is its process of innovation. To support this, IDEO’s lead- ership has developed a very unusual organizational culture, structure, and set of work processes, all of which are in alignment and work synergistically to create an organizational context that systemi- cally supports IDEO’s product and its team-based method of production.

IDEO is organized around teams that practice a particular form of brainstorming dubbed the “deep dive.” Teams are carefully constructed to maximize members’ diversity of experiences and educational background; this promotes a diversity of ideas and perspective that serve innovation. IDEO’s open, tol- erant, nonhierarchical culture is in alignment with the focus on teams as the unit of work, and the pro- cess of brainstorming as the method through which innovation is achieved.

Noah Berger/Bloomberg via Getty Images

IDEO has created an organizational culture that supports teams and innovative brainstorming. Pictured here is a filing cabinet designed to help employees share ideas.

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Section 10.1Changing the Way We Work: Team-Based Organizations

This alignment even carries over to how IDEO reinvents itself. In the 1990s founder Larry Kelley and other leaders at IDEO recognized the need to help their clients not only design new products, but also redesign their own organizational structure, culture, and work processes in order to identify new areas of innovation and new products (Edmondson, 2012). This led to a type of service offering called Phase Zero, which now accounts for 30% of IDEO’s revenues. Such an evolution was made easy by IDEO’s flexible and open culture, structure, and processes, which are all in alignment and rely on teamwork as a core aspect of work.

For organizations to successfully transition to TBO, it is imperative that organizational struc- ture, systems, processes, and practices align with the team concept. TBO experts Harris and Beyerlein (2003) have identified the following five essential TBO alignment principles:

1. The team is the basic work unit for performance and accountability. 2. The leadership of the organization functions as a team. 3. The organization still uses both teams and individuals for different purposes. 4. The organization is designed to support teams and teamwork from the ground up. 5. The organization is dynamic and constantly evolves to support teamwork.

The following sections examine these principles in more detail.

The Team Is the Basic Work Unit for Performance and Accountability Describing the team as the basic unit for performance and accountability is the central principle of TBO and the one that most distinguishes the TBO model from other organizational formats. Businesses structured around TBO are not just organizations that frequently use teams. Rather, teams within TBO organizations perform core organizational functions, encompassing all facets of planning, decision making, and implementation (Mohrman et al., 1995; Mohrman & Mohrman, 1997; Shonk, 1997).

Keep in mind, however, that teamwork for the sake of producing teams is rarely effective in the long term; teams are meant to perform, and TBO organizations must maintain focus on team performance and integration. While the core unit for performance and accountability must be a team, teams should not become the company product.

An experiment conducted at Volvo in 1974 (Sagoe, 1994) provided one of the earliest examples of this principle at work. Testing the effectiveness of teams as a work unit, Volvo replaced its assembly-line model with self-managed teams. Each team was given production and quality quotas, but teams were left to organize themselves as they saw fit with respect to many aspects of their work. Team bonuses were awarded for meeting or exceeding quotas. However, each team was free to redistribute them among their members, also as they saw fit, depending on their individual performance and contribution to the team. Workers were cross-trained to perform each other’s jobs, and they rotated functions on the team. Teams were even afforded a degree of discretion in selecting new entrants and in firing underperformers from their team. In effect, teams became the basic work unit, instead of the individual or the assembly line. The experiment resulted in improved quality on the cars produced, a slight improvement in productivity, and improvement in employees’ job satisfaction (Cohen & Ledford, 1994). This and similar experiments marked the advent of teams in the workplace, but they still had a long, hard climb to get from factory floor to executive boardroom.

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Section 10.1Changing the Way We Work: Team-Based Organizations

The Leadership of the Organization Functions as a Team Teams entered the business world as industrial work units. Over the years, they have worked their way up the corporate ladder, finding relevance at all levels. However, traditional organizational hierarchies still tend to view teams as work units, managed at some point up the chain by an individual or group of individuals. Advocates of TBO believe that incorporating teams and teamwork into all levels of an organization is key to modeling and reinforcing the team concept (Mohrman et al., 1995). Organizational failure to effectively incorporate teams and teamwork is often related to having a top management group that pushes for teamwork yet is unable to effectively model it (Harris & Beyerlein, 2003; Katzenbach & Smith, 1993).

When the leadership of the organization functions as a team, it promotes and supports teamwork by modeling it from the top down. Likewise, the middle management of an organization often reflects the dynamics and conditions found at the top (Fry, Rubin, & Plovnick, 1981). When top management fails to work as a team, so does middle management. This mirror effect further illustrates the importance of incorporating teamwork values and behavior into leadership and management for effective teaming at all levels. Experiencing and modeling the management process as a team also allows top management to comprehensively understand the use, value, and challenges of teamwork. This in turn helps inform executive decisions and directs the development and adjustment of organizational support systems. Top management groups that learn to function effectively as a team support TBO and typically enjoy increased market success (Mathews, 1996; Smolek, Hoffman, and Moran, 1999).

Pixar, the award-winning animation studio that revolutionized animated features with box office successes such as Toy Story, Finding Nemo, and Inside Out, exemplifies TBO. Animation is an extremely complex and creative process that requires collective work. Teams work at every level of the organization, beginning at the top. For two decades Pixar was led by Ed Cat- mull, Steve Jobs, and John Lasseter (Catmull, 2014). Although it is highly unusual for organiza- tions to be headed by more than one leader, the three executives worked together as a team to make key strategic decisions.

Another example of team leadership at Pixar is the “braintrust,” which meets every few months to assess films in production. The braintrust model evolved naturally when a small group of editors and writers involved in making Toy Story met to discuss and resolve story and production issues. It was so useful and conducive to creative solutions that it became institutionalized at Pixar as a core mechanism by which key decisions are made and problems are solved. The braintrust is a great example of how team leadership near the top of the orga- nization supports team development at lower levels of the organization.

In organizations that employ TBO, teams tend to assume many of the roles traditionally held by individuals. How then does the individual fit into a team-based organization? It turns out, there is room for both.

The Organization Still Uses Both Teams and Individuals for Different Purposes Given that teams are the core units of performance and accountability, one misperception that commonly accompanies the TBO concept is that everyone must be part of a team at all times. However, this is not the case. Part of effective teaming involves correctly assessing when and where teams are best used—and when and where they are not. Some tasks or efforts are simply better performed by individuals, and TBO does not advocate blindly assigning every

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Section 10.1Changing the Way We Work: Team-Based Organizations

task, process, or function to a team without practical consideration. Rather, TBO organizations should use both teams and individuals wherever they are most appropriate and advantageous to the required performance. Individuals must be trained to work in parallel, in cooperation, and in support of teams—and vice versa. Additionally, employees should be equally prepared to perform in teams or act alone, as the situation requires. Appropriate implementation of TBO also encompasses team type. Rather than setting up permanent work teams, flexible organizations typically require a variety of temporary teams. Team type, composition, empowerment, responsibility structure, and longevity should be dependent on and adapted to the needs of the situation.

Let us return to the example of Pixar. While the animation studio makes extensive use of teams, it still relies on individual work. Programmers, animators, graphic designers, and such each have individual pieces of work that they spend a large amount of their day (and sometimes night) working on alone (Catmull, 2014). A team would not do a good job drawing or animating a character at a single workstation. This would be a case of too many cooks in the kitchen. Even in team-centric organizations like Pixar, there remains a time and place for individual work.

The Organization Is Designed to Support Teams and Teamwork From the Ground Up When implementing TBO, everyone within the organization must undergo a fundamental shift in the way they view the organization and their place within it. They must transition not only from individual to team-oriented logic, but also from merely managing teams to becoming a team-based system. This type of radical transition requires a multidimensional focus on both teams and their organizational context (Mohrman et al., 1995). While overall alignment is considered key to organizational effectiveness at all levels (Middleton & Harper, 2004; Kathuria et al., 2007), aligning organizational support systems—including managerial strategies and philosophies—with team operation and performance has been specifically identified as a critical factor for maintaining effective teams (Beyerlein et al., 1997; Mohrman & Tenkasi, 1997).

Volvo’s switch from an assembly-line mode of operation to self-managed teams is a case in point. This transition required a radical redesign of the whole organization. Consider that the assembly line promotes an individualistic mentality where a worker’s compensation is mostly tied to his or her individual performance. If the assembly line stops or stalls because a coworker falls behind, there is little incentive for others to help. They might just see it as an opportunity to take a break! In a self-managed team model, on the other hand, team bonuses are awarded based on the team’s collective performance. This promotes collaboration among team members, because if one worker falls behind, the whole team is potentially affected monetarily.

When Volvo switched to team-based work units, the entire organization changed. However, it didn’t stop changing once the initial transition to teams was made. To support teamwork, organizations must commit to continuous evolution, which is the final principle of TBO alignment.

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Section 10.2How We Get There: An Organizational Road Map for TBO

The Organization Is Dynamic and Constantly Evolves to Support Teamwork Unlike traditional organizational change, which has tended toward concrete changes set on a finite agenda (Holman, Devane, & Cady, 2007), TBO is a continuous process. TBO engenders adaptive organizations in which formal organizational structure and systems can be rede- signed as needed. Although the move to incorporate teams or toward TBO may represent a radical shift in formal organizational design and culture, the ongoing development of TBO initiatives reduces risk and increases adaptability by allowing progress based on incremental change, rather than forcing large-scale changes all at once (Holman, Devane, & Cady, 2007). Small steps are often more easily agreed upon and implemented by management (Knowles & Riner, 2007). Additionally, leaving the overall design open to reconfiguration can help ease the anxiety and resistance that often accompany organizational change (Dahl, 2011; Nester- kin, 2013; Stang Våland & Georg, 2014). Rather than being pressured to develop and enact a single “perfect” plan, organizational employees work incrementally, making flexible moves toward a goal state that itself represents an ongoing adaptive process (Harris & Beyerlein, 2003).

Team-based organizing does not happen by chance, nor does it simply develop unaided once an organization adopts teams. Creating an organizational structure, system, and culture in which teams can thrive requires a serious commitment of time and intentional effort. The decision to begin the process of TBO in an organization is akin to an individual decision to improve one’s health. Simply wanting to change, or even establishing some initial changes, will not be enough. Rather, one must be committed to continuously engaging in the activities and practices that generate physical health and well-being. Given a business environment in which flexibility equals adaptability and adaptability equals survival, TBO represents a con- tinuous process of organizational learning and change that allows the organization to thrive by constantly adapting to the environment in novel ways. Our earlier example featuring IDEO underscores this point: IDEO continuously reorganizes itself and evolves so as to anticipate and meet its clients’ needs, sometimes even before they become aware of them. This is why it remains one of the most successful, innovative, fresh, and sought-after organizations by both clients and aspiring employees.

Given the potential for TBO to help organizations stay on the cutting edge, how can they make the switch? The next section presents an organizational road map for transitioning to TBO.

10.2 How We Get There: An Organizational Road Map for TBO The decision to transition to TBO represents the initiation of a continuous process. Like teams themselves, organizations must be willing to comprehensively commit to supporting teamwork or their teams will fail to function effectively in the long term (Mohrman et al., 1995). Such a major organizational transformation faces a real possibility of failure. How does an organiza- tion switch to TBO with a maximum chance of success? In this section, we examine the four essential steps needed to successfully transition to TBO (Edmondson, 2012; Mohrman et al., 1995):

1. Clarifying whether and how a shift to TBO fits the organizational strategy 2. Identifying work teams and their tasks

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Section 10.2How We Get There: An Organizational Road Map for TBO

3. Specifying the new role of management 4. Aligning support systems, mainly HR and IT, to support TBO

Clarifying the Organizational Strategy The first step in any major reorganization is to determine whether the proposed change aligns with the organization’s strategy (Kotter, 2012; Galbraith, 1995). When Henry Ford decided to switch from a production model where workers built cars on sawhorses to an assembly-line model where cars automatically moved past the workers, this radical reorganization matched his strategy of simplifying the work process to reduce costs and increase productivity to build a high volume of low-cost cars. Eventually, other car manufacturers adopted the strategy and work process, and it even spread beyond the automotive industry to other mass manufacturers.

New ways of organizing, though, may become a fad that organizations seek to adopt without carefully determining whether it is appropriate for them. The assembly-line model would not be appropriate for a company that pursues a strategy of high-price, low-volume, luxury products, such as Morgan Motor Company. Not enough cars are produced to justify the cost of an assembly line, and the need to customize each product makes the approach ineffective. The same reasoning might apply to transitioning to TBO. While TBO is appealing and popu- lar, it may not be appropriate for all organizations. So how does leadership know if TBO is a good fit for their organization?

There are at least three situations where TBO may be appropriate and justified for an organization:

1. As a turnaround strategy for organizations that produce relatively simple products or services

2. For organizations that produce complex products or services 3. For organizations where innovation is central (Edmondson, 2012)

Culver Pictures, Inc./SuperStock Simon Dawson/Bloomberg via Getty Images

Proposed changes related to a major reorganization should support an organization’s overall strategy. Henry Ford’s decision to shift to the assembly line supported his company’s overall goal of mass producing less expensive cars (left). The assembly line model would not be an appropriate way to organize work for a low-volume producer like Morgan Motor Company (right), however.

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Section 10.2How We Get There: An Organizational Road Map for TBO

Let’s explore these situations with an example of each.

1. Turnaround strategy. Simmons, a company that has produced and sold bedding since the 1890s, provides an example of using TBO as a turnaround strategy when an organization produces relatively simple products or services (Edmondson, 2012). When new CEO Charlie Eitel arrived at Simmons in 2000, the company was losing market share and experiencing increased competitive pressure. Morale was extremely low at its various plants, and the organization’s culture was resolutely hierarchical and top-down. Part of Eitel’s strategy for turning Simmons around involved transitioning to TBO (Byrne & Womack, 2012). The idea was to improve quality while also boosting employee involvement and morale. He started the experi- ment at the Charlotte, North Carolina, factory, one of the two lowest performing of Simmons’s 18 manufacturing plants in the United States. The turnaround at the Charlotte plant was spectacular, and productivity, quality, and morale were up. As a result, it was awarded a plant of the year award and an Occupational Safety and Health Administration safety award. Its success also made it easy to roll out TBO to the rest of the organization.

2. Production of complex products or services. Julie Morath, chief operating officer of Children’s Hospital and Clinics of Minnesota, adopted TBO as a strategy for coping with complexity (Edmondson, 2012). The main strategic goal she decided to pursue was to increase safety, thereby reducing medical errors and saving lives. Hospitals are complex operations that require the collaboration of multiple skilled employ- ees—doctors, nurses, technicians, administrators—to solve and address complex problems of health care. In the bureaucratic mazes that hospitals are, mistakes inevi- tably happen. When they get compounded, they can result in serious medical errors that can cost lives. For instance, at Children’s Hospital and Clinics of Minnesota, a patient received a life-threatening overdose of medication because a nurse had to operate equipment with which she was unfamiliar when a patient was brought in from the intensive care unit due to an overflow of patients. That issue was also related to capacity, which is the responsibility of the department that allocates beds. Although the medicine label contained information that could have been helpful in that situation, the pharmacy placed the label in such a way as to obscure this infor- mation. All of these factors contributed to the error.

The culture of hospitals has traditionally tended to shun such mistakes when they occur. Aside from the enormous legal costs associated with medical errors, they tend to result in great shame for the personnel involved and finger-pointing to avoid responsibility. Such a culture is not conducive to understanding errors and remedying them. Morath used TBO as a way to develop a new philosophy of safety that eliminated the obstacles to reporting and understanding medical errors and removed blame. It focused instead on protecting employees who reported errors and developing a shared ownership of errors, which often result from collective rather than individual shortcomings. Transitioning to TBO allowed the different groups in the hospital not only to function more effectively as discrete units, but to work collaboratively to find the roots of medical errors when they occurred and take steps to avoid them in the future. Morath’s initiative profoundly transformed Children’s Hospital and Clinics of Minnesota and inspired other hospitals to follow suit.

3. Continuous innovation. The third situation in which TBO is appropriate is in organiza- tions that depend on continuous innovation. IDEO, Pixar, Google, Apple, Tesla, SpaceX, and many Silicon Valley start-ups are centers of innovation. All of these organiza- tions rely on teams as central components of their strategy. Going one step further by

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Section 10.2How We Get There: An Organizational Road Map for TBO

transitioning to TBO can help these organizations institutionalize collaboration not only within but across teams. When this happens, innovation is more likely to happen as novel perspectives, practices, and creative individuals constantly cross-pollinize different parts of the organization.

Whatever the situation that calls for creating or transitioning to a TBO model, it is essential that the organization’s overall strategy be in alignment with the principles of TBO. Next, we turn to the second step involved in redesigning an organization around TBO: identifying work teams and their tasks.

Identifying Teams and Tasks Once it has been determined that transitioning to TBO makes strategic sense, leadership can start the process of restructuring the organization by identifying the work teams that are needed and their tasks. Some work teams may already exist, and others may need to be created. The types of teams needed and the tasks assigned to them depend on the type of work being done at the organization.

At IDEO, for instance, the core process of developing new products occurs in four distinct phases:

1. Concept generation, during which a team intimately studies potential end users and develops several abstract design solutions

2. Concept development, during which basic questions about the product, the problems it solves, how it will work and be made, are answered

3. Detailed engineering, where product details are defined and prototype testing occurs

4. Manufacturing liaison, during which a team prepares the product and its documentation to be handed over to the client, so that it can be manufactured there (Edmondson, 2012)

Typically, the same team is involved in phases 1 and 2, another team tackles phase 3, and yet another team tackles phase 4. However, intense collaboration across teams occurs, and cross- membership exists among teams to ensure continuity and cross-fertilization.

In an organization that is new to TBO, the organization of the work might change radically (Sagoe, 1994). For instance, when Volvo transitioned from a traditional assembly-line model to self-managed work teams at its Kalmar plan, management had to define how to form teams and what tasks to assign to them. Each team was composed of 15 to 25 employees who worked together in their own team space. Old union job classifications were abolished, and workers were treated as interchangeable within each team. Each team worked on broadly defined tasks such as upholstery, electric wiring, or door assembly and carted semifinished cars to the next team.

Once team types and tasks have been identified, the next step in establishing TBO is to specify the new role management will play in this type of organization.

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Section 10.2How We Get There: An Organizational Road Map for TBO

Specifying the New Role of Management Self-managed teams are a key component of TBO. Many of the responsibilities traditionally held by managers in hierarchical organizations are now held collectively by the team. These include decision-making authority, the assignment, coordination, and evaluation of work tasks, scheduling, choosing work methods, discipline, technical leadership, integrating dif- ferent subtasks and processes, interacting with clients, and the like (Mohrman et al., 1995). Within teams themselves, empowered employees typically act as team leaders. Such leader- ship may even be distributed or rotate among different team members depending on exper- tise or according to a predefined process. While such a change is part of the strength of teams and TBO organizations, it can nonetheless lead to an existential crisis in managers who are not prepared to seriously reevaluate their function and change their behavior.

So what is the role of managers in TBO organizations? The answer to this question depends on the kind of organization. Some managers are more involved in the detailed work of teams, while others are more hands-off, focusing on activities outside of the team. However, regardless of how involved managers are in the team’s activities, they nonetheless have five roles to play in this new configuration:

1. Setting a clear and engaging direction for teams 2. Coaching, training, and facilitating teamwork 3. Evaluating the performance of teams 4. Coordinating organizational teamwork 5. Making key decisions (Munter & Netzley, 2001; Mohrman et al., 1995)

Let’s examine these roles more closely.

1. Setting clear and engaging direction. This is essentially a leadership and coordination role. While teams have a great degree of latitude in how they organize their work, they still need a clear mandate from the organization’s hierarchy about what work to do. At IDEO, for instance, at the beginning of each new project, the team manager gives product design teams a clear mandate about the type of product to work on. This role is similar to the role a typical manager may play, except that the direction proposed by a team manager is typically defined in much less detail than it would be in a traditional organization: There is a lot of leeway for the team to act autonomously in refining goals, devising work methods, organizing task work, and managing subtasks and work processes (Munter & Netzley, 2001).

2. Coaching, training, and facilitating. This is a less traditional role and perhaps represents the biggest departure from the role of a traditional manager. Managers are expected to move away from directing employees and instead become experts at understanding, coaching, and supporting teamwork. Teamwork does not happen by itself. Employees need to be trained to work as a team. Teams often need expert facilitation to jump-start teamwork and overcome difficult issues such as dysfunctional conflict or norms. While such facilitation and coaching can be provided by external consultants or members of the HR department, it can also be provided by managers who have developed expertise about teamwork. In innovative companies, such as the ones in Silicon Valley, the ability to work in and lead teams is typically an essential and nonnegotiable skill for high-potential employees and managers. The era of the technically competent boss who lacks people skills is coming to a close in the tech industry, and many other industries are not far behind.

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Section 10.2How We Get There: An Organizational Road Map for TBO

In the example of Simmons bedding company provided earlier, CEO Eitel was personally involved in helping the manager of the Charlotte plant transition to TBO (Edmondson, 2012). It is critical to note that the manager had previously been highly dictatorial in his management style, but he did not like that style; rather, he felt he had to adopt it because he thought this was how plant management was done. With the support, coaching, and encouragement of Eitel, he made a dramatic shift in style. His employees were pleasantly surprised, to the point that two employees who were planning to quit changed their mind and stayed (Edmondson, 2012).

3. Evaluating performance. Managers still play a role in evaluating performance within TBO. However, instead of focusing on individual performance, they evaluate the performance of teams. Part of that role is embedded in the coaching and feedback they may provide to the teams they repeatedly manage. Another part is more formal and involves evaluating their team’s products throughout a project’s key milestones. At Volvo, for instance, teams were assigned both quantitative production quotas and quality targets. The team was evaluated as a whole; the decision to reward or punish individual team members was left up to the team, not the team manager. Group decisions such as these support teamwork. The question of evaluation will be expanded on further in a later discussion of HR systems in TBO.

4. Coordinating organizational teamwork. While the basis of teamwork involves coordination within the team, different teams within an organization may not readily collaborate and coordinate their activities. In fact, group members have a natural tendency to develop in-group favoritism and feelings of competition toward other groups, as discussed in Chapter 4. This is why one of the important new roles that managers play in team-based organizations involves coordinating activities among teams. There are multiple ways to do so. Managers may assign individuals to be cross-members of different teams that need to collaborate. They may create incentives in the form of concrete rewards and punishments, for teams to collaborate with other teams. They may use leadership to inspire collaboration among teams by promoting a collaborative culture across the whole organization. They may redesign the work process to facilitate collaboration during the hand-off process between teams. They may create steering committees that integrate the work of different teams. IDEO uses all of these practices to facilitate collaboration among its various teams. The culture of IDEO has been cemented not only by its unusual leadership, but also by the wider culture of Silicon Valley, which is typically very collaborative.

5. Making key decisions. Managers still make important strategic decisions in team- based organizations. Some of them are related to the first role, setting clear directions for teams. Others may relate to the adoption of new technologies, organizational changes, and the like. At IDEO, for instance, the Phase Zero initiative that aimed to help clients not only design new products but also figure out which areas to innovate in was launched by key leaders in the organization.

Aligning Support Systems When transitioning to TBO, organizations must align their support systems, mainly HR and IT. HR typically functions in a variety of roles with respect to the management of the workforce, including recruitment, compensation and benefits, training and development, compliance with employment laws, workforce planning and staffing, and evaluation (Hollenbeck, Gerhart, & Wright, 1997). Two of these functions play an important role in transitioning to TBO: (a) reward systems and (b) training and development (Edmondson, 2012; Mohrman et al., 1995).

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Section 10.3 Successfully Overcoming Resistance to Change

An organization’s reward system refers to the various processes and practices that are used to encourage certain behaviors and discourage others. Reward systems are used to influence employees toward desirable and effective behaviors. Pay-for-performance is an example of that. For instance, in most organizations, members of the sales force are compensated accord- ing to the amount they sell each month. The more they sell, the bigger their bonus. This incen- tivizes them to sell as much as possible. However, such a system may have undesirable conse- quences. For instance, if salespeople receive mainly individual bonuses, this may discourage collaboration and teamwork and promote competition among salespeople. There may be ways to alleviate this, such as assigning salespeople to different geographical districts, but such a strategy may not fully resolve the issue.

Therefore, in order for team-based organizations to be successful, the reward systems— including, pay, bonuses, and employee evaluation and promotion decisions—and other incentives must be designed to reward teamwork and collaboration among teams and discourage individualistic behaviors that hurt team collaboration. Like Volvo did in its 1970s self-managed work teams experiment discussed earlier, this may include assigning team bonuses tied to team performance targets, which may or may not be redistributed individually.

Training and development is another key role that HR may play in transitioning to TBO. This is particularly true in organizations where teamwork has not been the usual way to work, such as at Simmons before Eitel took the helm. In such cases it may be crucial to retrain employees, including managers, to work in team-based environments. It may even be necessary to let go of employees who cannot or will not make the transition. Simmons, for instance, offered attractive severance packages to employees who did not wish to adopt the new model. This allowed the company to ensure that the most unwilling employees did not sabotage the shift to TBO.

Information systems are another important support system that can help an organization transition to TBO. As seen in Chapter 8, a variety of technological tools now exists to support teamwork within and across teams. It is important that the leadership of an organization initiate and facilitate the use of such tools by providing training to use them and changing the organizational culture to institutionalize their use. Tools that are not integrated into existing organizational processes, or that only a select few know how to effectively use, will do little to support the actual work that takes place day to day within the organization.

While the road map for transitioning to TBO outlined in this section is helpful, every major organizational change effort still faces a major hurdle: resistance to change (Kotter, 2012). We discuss this and how to address it in the next section.

10.3 Successfully Overcoming Resistance to Change Change can be difficult for one person to achieve, let alone an entire organization. This is due to people’s natural tendency to fear and resist change. Major organizational change is therefore bound to create resistance. How can this be overcome? First, it is important to help employees maintain a sense of autonomy and choice throughout the change. When employ- ees feel forced to change and believe that the change will rob them of their autonomy, they are more likely to resist it. Second, it is helpful to consider change as a form of learning. Learning

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Section 10.3 Successfully Overcoming Resistance to Change

can be facilitated by developing a climate of psychological safety among employees. The good news is that teams can help individuals feel secure. The switch to TBO itself can thus help in that regard. Once the initial resistance to change has been overcome, it is important to main- tain a climate that is supportive of continuous change and innovation, which is one of the distinctive features of TBO.

The Psychology of Change Organizational change, such as transitioning to TBO, represents a series of initiatives aimed at altering organizational systems, processes, or practices (Nesterkin, 2013). Given the complexity of the organizational environment, changes are often anything but simple and straightforward. This leads some individuals to resist change. Consider, for instance, the enormous change required of managers when transitioning to TBO. As outlined in Section 10.2, they lose many of their traditional roles and may view the change as undermining their authority, especially if they fail to appreciate their new role and to believe in the power of teaming.

People are creatures of habit. In most cases, they will consistently choose to maintain current conditions or circumstances even when they are inferior to other alternatives (Hartman, Doane, & Woo, 1991; Thaler & Sunstein, 2008; Nebel, 2015). This is because maintaining the status quo is less cognitively difficult, requires less effort, and is easier to justify and sustain (Eidelmen & Crandall, 2012). This behavioral phenomenon is referred to as status quo bias (Nebel, 2015). Investigations on the formation of habits have shown that people typically require from 3 to 35 weeks to form new habits (Lally, Wardle, & Gardner, 2011). This makes organizational change particularly challenging, as it requires the ongoing restructuring of employees’ systems of behaviors and beliefs (Tsoukas & Chia, 2002).

Adopting a TBO model is even more challenging because not only does it involve transitioning to TBO, but the TBO model also implies continuous change. When change is continuous, it undermines the habit formation process. This is because each new set of changes happens before the last set has had the chance to become routine. The stress and uncertainty of this ongoing disruption typically leads to negative employee reactions, justifying the natural tendency to resist change (Thaler & Sunstein, 2008; Eidelmen & Crandall, 2012).

Another cause of resistance to change relates to autonomy. Autonomy is essential for psychological well-being (Nesterkin, 2013; Ryan & Deci, 2000). When our need for autonomy is satisfied, self-motivation and sense of personal well-being are high. However, changes that are dictated, rather than self-motivated or chosen—as commonly happens during a major organizational change such as transitioning to TBO—are typically perceived as a loss of autonomy (Folger & Skarlicki, 1999). Such changes weaken employee’s perceived sense of autonomy and thus cause resistance to change.

A way to overcome resistance to change is to consider it as a form of learning and to facilitate it by fostering psychological safety. This is what we turn to next.

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Section 10.3 Successfully Overcoming Resistance to Change

Organizational Change as Learning The ongoing organizational change required by transitioning to TBO represents a form of collective learning. Educational philosopher John Dewey (1922, 2013) provided the foundational basis for modern conceptualizations of learning as a process. He described it as a repetitive process of learning by doing, in which we design, carry out, review, and subsequently modify our actions. Dewey considered the process of learning to be in distinct contrast to the human tendency to habitualize behavior and thought patterns and maintain the status quo.

Dewey’s conception of learning as a continuous process of adaptive action and reflection provides the foundation for current definitions of organizational learning, which stress the process and outcome of sharing, processing, and using group-, team-, and project-level knowledge and experience to change the potential range of behaviors available within the organization as a whole (Argote, 2013; Bartsch, Ebers, & Maurer, 2013). While organizational learning can be hard to induce, a major way to facilitate it is to develop a climate of psychologi- cal safety.

Psychological safety has long been considered important to effective collaboration, learning, and change (Schein & Bennis, 1965). The flexibility and adaptability required of both teams and organizations in today’s business environment cannot be realized without coordination and collaboration, which depend on engendering the levels of trust, commitment, and psy- chological safety needed for members to feel secure and able to manage the potential risks and loss represented by sharing knowledge, effort, accountability, and change. Members who engage in discussion are often affected by the common knowledge effect, or the tendency to share information that is largely agreed on by other members in the group, and withhold indi- vidually unique knowledge (see Chapter 6). Countering this behavior requires adjusting dis- cussion norms and fostering a collective sense of safety and confidence in expressing unique information and potentially conflicting viewpoints (Stasser & Titus, 1985; Wittenbaum, Hol- lingshead, & Botero, 2004).

Teams offer psychological safety, a shared belief that the team represents a safe context for interpersonal risk taking (Edmondson, 1999). Team psychological safety is not the same as team cohesion, which can discourage interpersonal risk taking by fostering conformity and an unwillingness to challenge or share conflicting viewpoints (Janis, 1982). Nor does the team’s psychological safe ground represent an area of unthinking permissiveness or positivity; instead, members are endowed with a sense of confidence that stems from mutual respect and trust that they will not embarrassed, rejected, or punished for expressing concerns or differences in opinion or point of view (Edmondson, 1999).

Teams foster psychological safety for the following reasons:

• Teams create a safe environment in which to enact learning behaviors. • Learning behaviors are not simply accepted or tolerated; they are actually required

by collaborative performance. • Learning behaviors are seen as enhancing effectiveness by promoting member

autonomy, efficacy, viability, and relatedness, and are therefore encouraged. • Necessary and encouraged behaviors are considered desirable and status affirming

rather than face threatening. • The interdependent, interactive processes that teams engage in mean that skills and

knowledge acquired by one member are easily transferred and shared among the others (Moreland & Myaskovsky, 2000; Stasser et al., 2000).

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Section 10.3 Successfully Overcoming Resistance to Change

The process and outcome of organizational learning play key roles in enabling organiza- tional innovation (Ellström, 2010; Skerlavaj, Song, & Lee, 2010) and enhancing speed and flexibility across the innovation process (Santos-Vijande, López-Sánchez, & Trespalacios, 2012; Jiménez-Jiménez & Sanz-Valle, 2011). Organizational learning enables the knowledge development, acquisition, transformation, and exploitation required for innovation (Wang & Wang, 2012; Yeung et al., 2007). Together, organizational learning and innovation are consid- ered crucial performance drivers for gaining and sustaining organizational competitiveness (Dulger, Alpay, Bodur, & Yilmaz, 2016; Jiménez-Jiménez & Sanz-Valle, 2011; Thornhill, 2006).

Once the initial resistance to switching to TBO has been overcome, it is important to maintain a climate that is supportive of continuous change and innovation, which is one of the distinctive features of TBO.

Supporting Organizational Innovation Organizational innovation is a process and outcome that results in generating, sharing, and implementing new ideas or behaviors within or across any area of an organization. It includes the creation of new procedures, policies, processes, products, systems, and services (Crossan & Apaydin, 2010; Rohrbeck & Gemünden, 2011). Organizational learning and innovation— key processes and outcomes of effective TBO—share similarities and are mutually enabling (Jimenez-Jimenez & Sanz-Valle, 2011). People tend to associate innovation with technology and invention, but these are simply the areas in which innovation is most publicly expressed; more than anything else, innovation is a means of enterprise. Through innovation, organizations can generate new business offerings and commercial capacities, adapt internal systems and processes, and transform intangible resources, such as employees’ intellectual and problem- solving capabilities, into tangible products and services (Atalay, Anafarta, & Sarvan, 2013; Gallego-Alvarez, Prado-Lorenzo, & García-Sánchez, 2011).

Both organizational learning and innovation require knowledge acquisition and sharing among and between organizational groups. Many organizations today consider knowledge to be among their most valuable resources, yet it remains one of the most underutilized, mainly because most organizations simply do not know how to properly use it (Mehrabani & Shajari, 2012). There are many models for knowledge management and approaches for when and how to effectively use it (Abtahi & Salavati, 2007). The ability to tap organizational knowledge for competitive performance, however, depends largely on the ability to share knowledge between individuals and groups across departmental, hierarchical, and functional boundaries (Mehrabani & Shajari, 2012). In order to transform and exploit existing and newly acquired knowledge, employees must share knowledge and information; innovation occurs when knowledge shared across the organization generates new and common insights (Nonaka & von Krogh, 2009; Wang & Wang, 2012). Recall IDEO’s deep-dive exercises that tap into the employees’ diverse knowledge base and often result in some of their most innovative ideas.

As we’ve learned, teams have a heightened capacity for knowledge acquisition, sharing, and interpretation; problem solving; experimentation; and processing and benefiting from con- flict, failures, and setbacks. These qualities make teamwork a significant enabler of organi- zational innovation (Hogan & Coote, 2014), and organizations increasingly rely on teams’ innovation capacity to remain competitive (Tjosvold, Tang, & West, 2004). Innovation capac- ity represents the ability to support potential innovation with resource elements, including funding, materials, employees’ KSAs, related information, organizational systems, processes,

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Section 10.3 Successfully Overcoming Resistance to Change

and employee training (Rohrbeck & Gemünden, 2011). The amount and quality of resources available to employees directly impacts the degree of innovation achieved (Anderson & West, 1998). This assertion follows the logic that any endeavor is more easily achieved when resource quantity or quality are not an issue; however, there are also more subtle factors at play.

Resources, for instance, play a role in an organization’s ability to innovate. Resource scarcity and inadequacy are serious obstacles to employee motivation (Bharadwaj & Menon, 2000). When employees lack sufficient resources, most will either compete for the few existing useful resources or be too fearful of wasting them to engage in the autonomous experimentation and creative exploration that innovation tends to require (Amabile & Gryskiewicz, 1987; Mumford & Simonton, 1997). Where quantity of resources is relatively easy to measure, resource quality can change depending on situational factors. Organizational processes and support systems that work well for individual or noninteractive collective work will not be quality resources for work that depends on interaction and knowledge sharing.

Compare and contrast a research university such as Princeton, for instance, with a company like IDEO. Universities still consider individuals, more specifically, professors, as the main work unit. While professors may collaborate on research papers, they are mostly evaluated based on their individual productivity (such as the number of papers they have published) and receive many more individual rewards (such as salary, promotion, awards, grants) than collective ones. They are housed in single offices, rather than open floor plans. All of these resources encourage individual creativity rather than collaborative creativity. At IDEO, by contrast, much of the work is done in teams, in large meeting rooms, and individuals are rewarded for working well in teams and helping others, rather than on individual metrics. These resources support collaborative innovation.

Researchers have identified a basic framework of factors through which organizational processes, systems, and culture affect innovation capacity (Anderson & West, 1998; Hogan & Coote, 2014). These include:

• organizational and supervisory encouragement, • technological resources, • psychological safety, • task autonomy, and • a clear and challenging goal.

Organizational and managerial support of the systems, processes, and principles that encourage effective teamwork will fulfill these factors and increase organizational innovation capacity. In particular, management should focus on creating a climate of cooperation and encourage the sharing of knowledge and viewpoints. This includes discussing contrary or negative opinions or concerns, engaging in collaborative problem solving across functional and hierarchical boundaries, and encouraging constructive feedback.

Some managers view structure as running counter to the free form, flexible thinking associ- ated with innovation; however, these two are more compatible than they first appear. Struc- ture is required during team performance and learning processes, for example, to ensure that

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Section 10.3 Successfully Overcoming Resistance to Change

both action and reflection occur in a productive and timely manner, but this does not preclude creativity, spontaneity, or process innovation. In fact, a well-structured learning process can support and promote the qualities and thought processes leading to innovation (Jimenez- Jimenez & Sanz-Valle, 2011. IDEO provides a great example of that: While teams have a free- flowing way of working together, they nonetheless follow a given structure and sequence of steps when coming up with new products. This structure and its associated rules—such as refraining from criticizing other people’s ideas during the idea-generation process—are enforced by a team leader who helps the team be more innovative. IDEO calls this “focused chaos,” in reference to the apparent paradox of having a structure that facilitates creativity.

Concepts in Action: A Liberating Structure—the Case of Filmmaking

The notion of “organizational structure” can bring to mind coercion, such as when we feel trapped in a bureaucratic maze. Anyone who has visited the Department of Motor Vehicles may understand the meaning here. Yet structure can also be enabling and even liberating (Giddens, 1979). Structure can create freedom and foster innovation. French poet Charles Baudelaire, for instance, found that the constraining structure of a sonnet liberated his creative potential when writing poetry. Another example of this apparent paradox can be found in filmmaking. While directors differ in how much control they like to exert on the creative process, many of them like to prepare extensively before they start shooting. This involves casting actors, finding locations to film, and working with costume and set designers to establish an aesthetic look for the movie.

A key starting point for a movie is its script. Directors typically subdivide the script into different scenes, each of which are subdivided into different shots. For each of these, directors work extensively with the director of photography, who operates the camera and lighting equipment, to determine how to shoot the film (angles, camera motion and effects, filters, lenses, lighting) so as to create the appropriate mood and drama desired. They also spend a lot of time with the actors to communicate their sense of the character. All of this happens before the movie enters the production phase, when the movie is actually shot (Coget, 2004). Most directors have a vision of the finished product (the movie) in their head and try to communicate it to their crew and cast through various means, such as storyboards (cartoon-like drawings that summarize the movie in visual format to complement the script, which features the detail of the lines said by the actors). They also have to think about how to communicate to their actors the characters’ key psychological elements and the emotional and dramatic axes that the movie articulates.

One might think such extensive preparation would stifle creativity. Isn’t there room for spontaneity? What about room for improvement? Daniele Suissa, a Canadian film director and former director of the Los Angeles Film School, describes how being well prepared actually liberates the director to try new things on set because there is no need to constantly figure out an enormous amount of logistical and creative details (Coget, 2004). Having a good structure therefore liberates the director to be spontaneous. Managerial support and the alignment of organizational systems and processes creates a similarly enabling structure for teamwork, allowing team members to concentrate their energies on process and goal activities rather than dealing with basic coordination and resource issues within the organization.

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Chapter 10 Summary and Resources

Critical-Thinking Questions 1. Describe a time when you engaged in a creative pursuit, or in work that required

innovation, and you felt supported and liberated by establishing a strict routine or structure.

2. Did you experience this phenomenon in an organization you were part of ? If so, what routines, rules, and structures helped you be innovative?

3. In both of the questions above, at which point did the structure become more of a constraint than a form of support for creativity? How did you manage to balance the two?

4. In your future creative work, which types of routines, rules, or structures do you think would help you be more productive? How would you help potential teammates or employees establish liberating structures?

Concepts in Action: A Liberating Structure—the Case of Filmmaking (continued)

Enabling innovation requires a guiding structure that directs but does not subsume autonomy, empowering participants to move freely within it. Participants may then move through an organized structure calling for action and reflection yet remain open-minded about the reflection process and the various ideas and viewpoints revealed (Edmondson, 1999). Rather than viewing structure and flexibility as opposing forces, they can be used synergistically to counterbalance each other, which creates a dynamically guided learning environment that fosters innovative thinking. Organizational learning and innovation are key processes and products of TBO, and the basic principles of TBO alignment are both enabled by and supportive of the flexible structure in which these elements thrive.

Chapter 10 Summary and Resources

Most contemporary organizations rely on teams to remain profitable and competitive and to foster continuing growth; however, using teams effectively requires organizational alignment that supports teamwork and team functioning. TBO provides a systemic road map to achieve this alignment and foster the major drivers of organizational health and competitiveness—organizational change, learning, and innovation.

Chapter Summary

• Teams formed without consideration for their organization’s context tend to fail because they are neither supported by organizational systems nor cognizant of how to function cooperatively within them.

• Team-based organizing centers on the concept of formally optimizing collaborative capacities within an organization by considering teams and teamwork as parts of a systemic whole.

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Chapter 10 Summary and Resources

• The transition to TBO introduces changes across all areas of an organization, at the individual, group, and organizational level. To be successful in any context, organiza- tions must have a certain level of organizational alignment.

• Alignment, the foundational component of TBO, follows five basic principles: • Make teams the basic units for performance and accountability.

• Lead teams with teams. • Use a variety of teams and individuals appropriately. • Design an organization that supports teams and teamwork. • Treat TBO as a continuous process that requires intentional effort.

• Team-based organizations put greater focus on process than product, and work accomplished within them is characterized by interdependence. In this way, the behavior and actions of each member or unit form a network of mutual dependence.

• Effective support systems reflect organizational design and purpose; systems that facilitate individual performance will not offer equally effective support for teamwork. Whether an organization is simply adding teams to its workforce or transitioning toward TBO, team-based support systems will need to be instituted if effective teamwork is going to happen.

• Sustainable operation relies on the ability to continuously improve performance through ongoing organizational change, learning, and innovation.

• People tend to be subject to status quo bias. Deviating from existing thoughts, ideas, and preconceptions requires effort, can be stressful, and may threaten our sense of stability or control.

• The climate of cooperation, mutual accountability, and knowledge sharing that characterize teamwork help mitigate adverse psychological reactions to change.

• Organizational change is directed toward altering organizational systems, processes, or practices. Organizational learning is directed toward changing the existing behavioral range within the organization. Organizational innovation is directed toward establishing new ideas or behaviors within the organization. Organizational change, learning, and innovation require psychological safety and organizational support.

• Teams provide an optimal environment for organizational learning because: • Teams create a safe environment in which to enact learning behaviors. • Learning behaviors are not simply accepted or tolerated; they are actually

required by collaborative performance. • Learning behaviors are seen as enhancing effectiveness by promoting member

autonomy, efficacy, viability, and relatedness, and are therefore encouraged. • Necessary and encouraged behaviors are considered desirable and status

affirming rather than face threatening. • The interdependent, interactive processes in which teams engage mean that

skills and knowledge acquired by one member are easily transferred and shared among the others.

• Organizational learning and innovation are key processes and products of TBO, and the basic principles of TBO alignment are both enabled by and supportive of the flexible structure in which these elements thrive.

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Chapter 10 Summary and Resources

Posttest

1. To successfully effect TBO, organizational alignment must include all of the following EXCEPT __________. a. acumen b. systems c. culture d. processes

2. Work within TBO organizations is characterized by __________. a. problem solving b. interdependence c. risk adversity d. task complexity

3. Organizational change, learning, and innovation require all of the following EXCEPT __________. a. interaction and knowledge sharing b. managerial and organizational support c. psychological safety for risk taking d. clear punishments for failures

4. Teams formed without consideration for their organizational context tend to __________. a. be more autonomous b. become isolated and fail c. have a greater capacity for innovation d. function successfully regardless

5. Change is a form of __________. a. management b. risk adversity c. learning d. productivity

6. Managers play all of the following key roles within the TBO configuration EXCEPT __________. a. direction setting for teams b. facilitating teamwork c. evaluating team performance d. organizing task work

7. Incentivizing salespeople to sell as much as possible by attaching compensation and bonuses to their work is an example of an organizational __________. a. interdependence b. context c. change strategy d. reward system

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Chapter 10 Summary and Resources

8. TBO focuses on __________. a. the team’s internal organization b. team facilitators and leaders c. the team’s organizational context d. project management

9. The shared belief that the team represents a safe context for interpersonal risk taking reflects all of the following EXCEPT a team’s __________. a. psychological safety b. tendency toward conformity c. confidence in sharing viewpoints and concerns d. ability to handle risk and loss

10. When it comes to dealing with dictated changes, people tend to __________. a. invite changes in the status quo b. quickly habitualize new behaviors c. experience some stress and uncertainty d. feel their autonomy is respected

Critical-Thinking Questions

1. Business processes are inherently goal oriented and have a starting and stopping point directly related to goal attainment. Goals themselves tend to be concrete, with parameters for accomplishment that are clearly defined. Leaders and managers mired in this perspective view TBO as a finite process in which the goal is to desig- nate organizational support systems for permanent teams throughout the organiza- tion. Explain why this runs counter to TBO principles and organizational competi- tiveness in today’s business environment.

2. TBO practices foster a flattened hierarchy in which team members share many of the responsibilities typically held by managers. Despite this, leadership remains a vital support system for TBO. In what way does organizational leadership support TBO practices, and why does it have such a significant impact?

3. Explain the concepts of team psychological safety and outline how teams provide an optimal environment for organizational learning.

Additional Resources Links

• Why Organizational Change Is So Hard: http://www.gallup.com/businessjournal/168992/why-creating-organizational -change-hard.aspx

• Why Sustainability Is Now the Key Driver of Innovation: https://hbr.org/2009/09/why-sustainability-is-now-the-key-driver-of-innovation

• When Learning at Work Becomes Overwhelming: https://hbr.org/2015/03/when-learning-at-work-becomes-overwhelming

• Learning New Things Mean Getting Up From Your Desk: https://hbr.org/2014/11/learning-new-things-means-getting-up-from-your-desk

Answers: a, b, d, b, c, d, d, c, b, c.

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http://www.gallup.com/businessjournal/168992/why-creating-organizational-change-hard.aspx

https://hbr.org/2009/09/why-sustainability-is-now-the-key-driver-of-innovation

https://hbr.org/2015/03/when-learning-at-work-becomes-overwhelming

https://hbr.org/2014/11/learning-new-things-means-getting-up-from-your-desk

Chapter 10 Summary and Resources

Videos • TED Talks: David Kelley on How to Build Your Creative Confidence:

https://youtu.be/16p9YRF0l-g • Talks at Google: Team Genius: Richard Karlgaard on the New Science of High-

Performing Organizations: https://youtu.be/VjGmf9vgp6I

Answers and Rejoinders to Chapter Pretest

1. False. A team’s successful functioning is profoundly impacted by its organizational context and its support (or lack of ) by and integration with organizational systems. Teams established as isolated units without reference to the organization tend to fail.

2. True. The creation of teams in TBO is based on their required interdependencies. Internally, team members depend on each other to effectively accomplish group tasks and goals. Likewise, the teams within a TBO organization represent mutually dependent units responsible for organizational work and performance.

3. True. Most people will consistently choose to maintain the status quo even if it is inferior to other alternatives, because doing so requires less mental, physical, and psychological effort.

4. True. The first step in any major reorganization is to determine whether the proposed change aligns with the organization’s strategy. Transitioning to TBO begins with understanding why and how this shift will support organizational strategy and goals.

5. True. Change that is not initiated voluntarily by individuals tends to threaten their sense of autonomy, which makes them resistant to change.

Rejoinders to Posttest

1. To successfully transition to and function within the TBO model, organizational context—the comprehensive culture, systems, structure, processes, and resources in place within the organization—must align with TBO principles and support the TBO process.

2. Work within TBO organizations is characterized by teamwork and interdependence, such that the behavior and actions of each member or unit form a network of mutual dependence.

3. Organizational change, learning, and innovation require psychological safety and managerial and organizational support to foster necessary interaction and risk-taking behaviors such as knowledge sharing, mutual problem solving, and constructive discussion of errors and failures.

4. Teams formed without consideration for their organizational context tend to be treated as isolated entities and eventually fail because they have no systemic support for teamwork processes or for working cooperatively within the organization.

5. Changing is a form of collective learning that occurs as knowledge shared through- out the organization transforms the potential range of behaviors available within the organization as a whole.

6. Managers play five essential roles within the TBO configuration: (a) setting a clear and engaging direction for teams; (b) coaching, training, and facilitating teamwork; (c) evaluating team performance; (d) coordinating organizational teamwork; and

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https://youtu.be/16p9YRF0l-g

https://youtu.be/VjGmf9vgp6I

Chapter 10 Summary and Resources

(e) making key decisions. Team members are themselves responsible for refining goals, devising work methods, organizing task work, and managing subtasks and work processes.

7. Reward systems—including, pay, bonuses, employee evaluation and promotion decisions, and other incentives—are used to influence employees toward desirable and effective behaviors.

8. Team-based organizingconsiders teams and teamwork as parts of a systemic whole. Attention shifts from the traditionally internal focus on teams to the external envi- ronment, or organizational context, in which they are set.

9. Team psychological safety is not a tendency to conform to majority viewpoints, but rather the sense of safety and confidence to express various viewpoints and con- cerns, and the collective ability to effectively handle risk and loss.

10. Concerning change, most people tend to experience some stress and uncertainty and lean toward maintaining current conditions—or the status quo. It takes a long time to habitualize even simple new behaviors, and dictated change particularly tends to threaten our sense of autonomy.

Key Terms and Concepts innovation capacity The ability to support potential innovation with resource elements, including funding, materials, employees’ KSAs, related information, organizational systems, processes, and employee training.

organizational alignment Coherence across all areas of the organizational context, including both formal and informal compo- nents of organizational structure, strategy, culture, and processes.

organizational change A series of initia- tives aimed at altering organizational sys- tems, processes, or practices.

organizational innovation A process that ends with generating, sharing, and implementing new ideas or behaviors within or across any area of an organization, including the creation of new procedures, policies, processes, products, systems, and services.

organizational learning The process and outcome of sharing, processing, and using group-, team-, and project-level knowledge and experience to change the potential range of behaviors available within the organization as a whole.

psychological safety A shared belief that the team represents a safe context for interpersonal risk taking.

reward system The various processes and practices that are used to encourage certain behaviors and discourage others.

status quo bias A behavioral phenom- enon wherein most people will consistently choose to maintain current conditions or circumstances even when they are inferior to other alternatives, because doing so is less cognitively difficult, requires less effort, and is easier to justify and maintain.

team-based organizing (TBO) The continuous process of improving and reinventing an organizational model that uses teams as the core unit for performance in an organizational context optimized to support them.

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