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The Discipline of Teams

by Jon R. Katzenbach and Douglas K. Smith

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Included with this full-text

Harvard Business Review

article:

The Idea in Brief—the core idea

The Idea in Practice—putting the idea to work

Article Summary

The Discipline of Teams

A list of related materials, with annotations to guide further

exploration of the article’s ideas and applications

Further Reading

What makes the difference

between a team that performs

and one that doesn’t?

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The Discipline of Teams

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The Idea in Brief The Idea in Practice

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The word

team

gets bandied about so loosely that many managers are oblivious to its real meaning—or its true potential. With a run-of-the-mill working group, per- formance is a function of what the mem- bers do as individuals. A team’s perfor- mance, by contrast, calls for both individual and mutual accountability.

Though it may not seem like anything spe- cial, mutual accountability can lead to as- tonishing results. It enables a team to achieve performance levels that are far greater than the individual bests of the team’s members. To achieve these benefits, team members must do more than listen, respond constructively, and provide sup- port to one another. In addition to sharing these team-building values, they must share an essential

discipline

A team’s essential discipline comprises five characteristics:

1. A meaningful common purpose that the team has helped shape.

Most teams are re- sponding to an initial mandate from outside the team. But to be successful, the team must “own” this purpose, develop its own spin on it.

2. Specific performance goals that flow from the common purpose.

For example, getting a new product to market in less than half the normal time. Compelling goals inspire and challenge a team, give it a sense of urgency. They also have a leveling effect, requiring members to focus on the collective effort necessary rather than any differences in title or status.

3. A mix of complementary skills.

These include technical or functional expertise, problem-solving and decision-making skills, and interpersonal skills. Successful teams rarely have all the needed skills at the out- set—they develop them as they learn what the challenge requires.

4. A strong commitment to how the work gets done.

Teams must agree on who will do what jobs, how schedules will be estab- lished and honored, and how decisions will be made and modified. On a genuine team, each member does equivalent amounts of real work; all members, the leader included, contribute in concrete ways to the team’s collective work-products.

5. Mutual accountability.

Trust and commit- ment cannot be coerced. The process of agreeing upon appropriate goals serves as the crucible in which members forge their accountability to each other—not just to the leader.

Once the essential discipline has been estab- lished, a team is free to concentrate on the critical challenges it faces:

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For a team whose purpose is to make rec- ommendations, that means making a fast and constructive start and providing a clean handoff to those who will implement the recommendations.

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For a team that makes or does things, it’s keeping the specific performance goals in sharp focus.

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For a team that runs things, the primary task is distinguishing the challenges that re- quire a real team approach from those that don’t.

If a task doesn’t demand joint work-products, a working group can be the more effective option. Team opportunities are usually those in which hierarchy or organizational bound- aries inhibit the skills and perspectives needed for optimal results. Little wonder, then, that teams have become the primary units of productivity in high-performance organizations.

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The Discipline of Teams

by Jon R. Katzenbach and Douglas K. Smith

harvard business review • july–august 2005 page 2

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What makes the difference between a team that performs and one that

doesn’t?

It won’t surprise anyone to find an article on teams by Jon Katzenbach and Douglas Smith figuring into an issue devoted to high performance. While Peter Drucker may have been the first to point out that a team-based organization can be highly effective, Katzenbach and Smith’s work made it possible for companies to implement the idea.

In this groundbreaking 1993 article, the authors say that if managers want to make better decisions about teams, they must be clear about what a team is. They define a team as “a small number of people with complementary skills who are committed to a common purpose, set of performance goals, and approach for which they hold themselves mutually accountable.” That definition lays down the disci- pline that teams must share to be effective.

Katzenbach and Smith discuss the four ele- ments—common commitment and purpose, per- formance goals, complementary skills, and mu- tual accountability—that make teams function. They also classify teams into three varieties— teams that recommend things, teams that make or do things, and teams that run things—and de- scribe how each type faces different challenges.

Early in the 1980s, Bill Greenwood and a small band of rebel railroaders took on most of the top management of Burlington Northern and created a multibillion-dollar business in “piggy- backing” rail services despite widespread resis- tance, even resentment, within the company. The Medical Products Group at Hewlett- Packard owes most of its leading performance to the remarkable efforts of Dean Morton, Lew Platt, Ben Holmes, Dick Alberding, and a hand- ful of their colleagues who revitalized a health care business that most others had written off. At Knight Ridder, Jim Batten’s “customer obses- sion” vision took root at the

Tallahassee Demo- crat

when 14 frontline enthusiasts turned a charter to eliminate errors into a mission of major change and took the entire paper along with them.

Such are the stories and the work of teams— real teams that perform, not amorphous groups that we call teams because we think that the label is motivating and energizing. The differ- ence between teams that perform and other groups that don’t is a subject to which most of us

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pay far too little attention. Part of the problem is that “team” is a word and concept so familiar to everyone. (See the exhibit “Not All Groups Are Teams: How to Tell the Difference.”)

Or at least that’s what we thought when we set out to do research for our book

The Wisdom of Teams

(HarperBusiness, 1993). We wanted to discover what differentiates various levels of team performance, where and how teams work best, and what top management can do to enhance their effectiveness. We talked with hundreds of people on more than 50 different teams in 30 companies and beyond, from Motorola and Hewlett-Packard to Opera- tion Desert Storm and the Girl Scouts.

We found that there is a basic discipline that makes teams work. We also found that teams and good performance are inseparable: You cannot have one without the other. But people use the word “team” so loosely that it gets in the way of learning and applying the discipline that leads to good performance. For managers to make better decisions about whether, when, or how to encourage and use teams, it is im- portant to be more precise about what a team is and what it isn’t.

Most executives advocate teamwork. And they should. Teamwork represents a set of val- ues that encourage listening and responding constructively to views expressed by others, giving others the benefit of the doubt, provid- ing support, and recognizing the interests and achievements of others. Such values help teams perform, and they also promote indi- vidual performance as well as the perfor- mance of an entire organization. But team- work values by themselves are not exclusive to teams, nor are they enough to ensure team performance. (See the sidebar “Building Team Performance.”)

Nor is a team just any group working to- gether. Committees, councils, and task forces are not necessarily teams. Groups do not be- come teams simply because that is what some- one calls them. The entire workforce of any large and complex organization is

never

a team, but think about how often that platitude is offered up.

To understand how teams deliver extra per- formance, we must distinguish between teams and other forms of working groups. That dis- tinction turns on performance results. A work- ing group’s performance is a function of what its members do as individuals. A team’s perfor-

mance includes both individual results and what we call “collective work products.” A col- lective work product is what two or more members must work on together, such as inter- views, surveys, or experiments. Whatever it is, a collective work product reflects the joint, real contribution of team members.

Working groups are both prevalent and ef- fective in large organizations where individ- ual accountability is most important. The best working groups come together to share infor- mation, perspectives, and insights; to make decisions that help each person do his or her job better; and to reinforce individual perfor- mance standards. But the focus is always on individual goals and accountabilities. Working- group members don’t take responsibility for results other than their own. Nor do they try to develop incremental performance contri- butions requiring the combined work of two or more members.

Teams differ fundamentally from working groups because they require both individual and mutual accountability. Teams rely on more than group discussion, debate, and deci- sion, on more than sharing information and best-practice performance standards. Teams produce discrete work products through the joint contributions of their members. This is what makes possible performance levels greater than the sum of all the individual bests of team members. Simply stated, a team is more than the sum of its parts.

The first step in developing a disciplined ap- proach to team management is to think about teams as discrete units of performance and not just as positive sets of values. Having observed and worked with scores of teams in action, both successes and failures, we offer the fol- lowing. Think of it as a working definition or, better still, an essential discipline that real teams share:

A team is a small number of people with complementary skills who are committed to a common purpose, set of performance goals, and approach for which they hold themselves mutually accountable.

The essence of a team is common commit- ment. Without it, groups perform as individu- als; with it, they become a powerful unit of col- lective performance. This kind of commitment requires a purpose in which team members can believe. Whether the purpose is to “trans- form the contributions of suppliers into the satisfaction of customers,” to “make our com-

Jon R. Katzenbach

is a founder and senior partner of Katzenbach Part- ners, a strategic and organizational consulting firm, and a former director of McKinsey & Company. His most re- cent book is

Why Pride Matters More Than Money: The Power of the World’s Greatest Motivational Force

(Crown Business, 2003).

Douglas K. Smith

is an organizational consultant and a former partner at McKinsey & Com- pany. His most recent book is

On Value and Values: Thinking Differently About We in an Age of Me

(Financial Times Prentice Hall, 2004).

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pany one we can be proud of again,” or to “prove that all children can learn,” credible team purposes have an element related to win- ning, being first, revolutionizing, or being on the cutting edge.

Teams develop direction, momentum, and commitment by working to shape a meaning- ful purpose. Building ownership and commit- ment to team purpose, however, is not incom- patible with taking initial direction from outside the team. The often-asserted assump- tion that a team cannot “own” its purpose un- less management leaves it alone actually con- fuses more potential teams than it helps. In fact, it is the exceptional case—for example, entrepreneurial situations—when a team cre- ates a purpose entirely on its own.

Most successful teams shape their purposes in response to a demand or opportunity put in their path, usually by higher management. This helps teams get started by broadly fram- ing the company’s performance expectation. Management is responsible for clarifying the charter, rationale, and performance challenge for the team, but management must also leave enough flexibility for the team to develop com- mitment around its own spin on that purpose, set of specific goals, timing, and approach.

The best teams invest a tremendous amount of time and effort exploring, shaping, and agreeing on a purpose that belongs to them both collectively and individually. This “pur- posing” activity continues throughout the life of the team. By contrast, failed teams rarely de- velop a common purpose. For whatever rea-

son—an insufficient focus on performance, lack of effort, poor leadership—they do not co- alesce around a challenging aspiration.

The best teams also translate their common purpose into specific performance goals, such as reducing the reject rate from suppliers by 50% or increasing the math scores of graduates from 40% to 95%. Indeed, if a team fails to es- tablish specific performance goals or if those goals do not relate directly to the team’s over- all purpose, team members become confused, pull apart, and revert to mediocre perfor- mance. By contrast, when purposes and goals build on one another and are combined with team commitment, they become a powerful engine of performance.

Transforming broad directives into specific and measurable performance goals is the sur- est first step for a team trying to shape a pur- pose meaningful to its members. Specific goals, such as getting a new product to market in less than half the normal time, responding to all customers within 24 hours, or achieving a zero-defect rate while simultaneously cutting costs by 40%, all provide firm footholds for teams. There are several reasons:

• Specific team-performance goals help de- fine a set of work products that are different both from an organization-wide mission and from individual job objectives. As a result, such work products require the collective effort of team members to make something specific happen that, in and of itself, adds real value to results. By contrast, simply gathering from time to time to make decisions will not sustain team performance.

• The specificity of performance objectives facilitates clear communication and construc- tive conflict within the team. When a plant- level team, for example, sets a goal of reducing average machine changeover time to two hours, the clarity of the goal forces the team to concentrate on what it would take either to achieve or to reconsider the goal. When such goals are clear, discussions can focus on how to pursue them or whether to change them; when goals are ambiguous or nonexistent, such dis- cussions are much less productive.

• The attainability of specific goals helps teams maintain their focus on getting results. A product-development team at Eli Lilly’s Periph- eral Systems Division set definite yardsticks for the market introduction of an ultrasonic probe to help doctors locate deep veins and arteries.

Not All Groups Are Teams: How to Tell the Difference

Working Group

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Strong, clearly focused leader

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Individual accountability

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The group’s purpose is the same as the broader organizational mission

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Individual work products

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Runs efficient meetings

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Measures its effectiveness indirectly by its influence on others (such as financial performance of the business)

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Discusses, decides, and delegates

Team

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Shared leadership roles

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Individual and mutual accountability

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Specific team purpose that the team itself delivers

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Collective work products

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Encourages open-ended discussion and active problem-solving meetings

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Measures performance directly by assessing collective work products

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Discusses, decides, and does real work together

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Building Team Performance

Although there is no guaranteed how-to recipe for building team performance, we observed a number of approaches shared by many successful teams.

Establish urgency, demanding per-

formance standards, and direction.

All team members need to believe the team has urgent and worthwhile pur- poses, and they want to know what the expectations are. Indeed, the more ur- gent and meaningful the rationale, the more likely it is that the team will live up to its performance potential, as was the case for a customer-service team that was told that further growth for the entire company would be impossible without major improvements in that area. Teams work best in a compelling context. That is why companies with strong performance ethics usually form teams readily.

Select members for skill and skill

potential, not personality.

No team succeeds without all the skills needed to meet its purpose and performance goals. Yet most teams figure out the skills they will need after they are formed. The wise manager will choose people for their existing skills and their potential to improve existing skills and learn new ones.

Pay particular attention to first

meetings and actions. Initial impres-

sions always mean a great deal.

When potential teams first gather, everyone monitors the signals given by others to confirm, suspend, or dispel assumptions and concerns. They pay particular atten- tion to those in authority: the team leader and any executives who set up, oversee, or otherwise influence the team. And, as always, what such leaders do is more important than what they say. If a senior executive leaves the team kickoff to take a phone call ten minutes after the session has begun and he never returns, people get the message.

Set some clear rules of behavior.

All effective teams develop rules of conduct at the outset to help them achieve their purpose and perfor- mance goals. The most critical initial rules pertain to attendance (for exam- ple, “no interruptions to take phone calls”), discussion (“no sacred cows”), confidentiality (“the only things to leave this room are what we agree on”), analytic approach (“facts are friendly”), end-product orientation (“everyone gets assignments and does them”), constructive confrontation (“no finger pointing”), and, often the most important, contributions (“every- one does real work”).

Set and seize upon a few immedi-

ate performance-oriented tasks and

goals.

Most effective teams trace their advancement to key performance- oriented events. Such events can be set in motion by immediately estab- lishing a few challenging goals that can be reached early on. There is no such thing as a real team without performance results, so the sooner such results occur, the sooner the team congeals.

Challenge the group regularly

with fresh facts and information.

New information causes a team to re- define and enrich its understanding of the performance challenge, thereby helping the team shape a common purpose, set clearer goals, and im- prove its common approach. A plant quality improvement team knew the cost of poor quality was high, but it wasn’t until they researched the differ- ent types of defects and put a price tag on each one that they knew where to go next. Conversely, teams err when

they assume that all the information needed exists in the collective experi- ence and knowledge of their members.

Spend lots of time together.

Com- mon sense tells us that team members must spend a lot of time together, scheduled and unscheduled, especially in the beginning. Indeed, creative in- sights as well as personal bonding re- quire impromptu and casual interac- tions just as much as analyzing spreadsheets and interviewing cus- tomers. Busy executives and managers too often intentionally minimize the time they spend together. The success- ful teams we’ve observed all gave themselves the time to learn to be a team. This time need not always be spent together physically; electronic, fax, and phone time can also count as time spent together.

Exploit the power of positive feed-

back, recognition, and reward.

Posi- tive reinforcement works as well in a team context as elsewhere. Giving out “gold stars” helps shape new behaviors critical to team performance. If people in the group, for example, are alert to a shy person’s initial efforts to speak up and contribute, they can give the hon- est positive reinforcement that encour- ages continued contributions. There are many ways to recognize and re- ward team performance beyond direct compensation, from having a senior executive speak directly to the team about the urgency of its mission to using awards to recognize contribu- tions. Ultimately, however, the satisfac- tion shared by a team in its own per- formance becomes the most cherished reward.

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The probe had to have an audible signal through a specified depth of tissue, be capable of being manufactured at a rate of 100 per day, and have a unit cost less than a preestablished amount. Because the team could measure its progress against each of these specific objec- tives, the team knew throughout the develop- ment process where it stood. Either it had achieved its goals or not.

• As Outward Bound and other team-building programs illustrate, specific objectives have a leveling effect conducive to team behavior. When a small group of people challenge them- selves to get over a wall or to reduce cycle time by 50%, their respective titles, perks, and other stripes fade into the background. The teams that succeed evaluate what and how each indi- vidual can best contribute to the team’s goal and, more important, do so in terms of the per- formance objective itself rather than a person’s status or personality.

• Specific goals allow a team to achieve small wins as it pursues its broader purpose. These small wins are invaluable to building commitment and overcoming the inevitable obstacles that get in the way of a long-term pur- pose. For example, the Knight Ridder team mentioned at the outset turned a narrow goal to eliminate errors into a compelling customer service purpose.

• Performance goals are compelling. They are symbols of accomplishment that motivate and energize. They challenge the people on a team to commit themselves, as a team, to make a difference. Drama, urgency, and a healthy fear of failure combine to drive teams that have their collective eye on an attainable, but chal- lenging, goal. Nobody but the team can make it happen. It’s their challenge.

The combination of purpose and specific goals is essential to performance. Each de- pends on the other to remain relevant and vi- tal. Clear performance goals help a team keep track of progress and hold itself accountable; the broader, even nobler, aspirations in a team’s purpose supply both meaning and emo- tional energy.

Virtually all effective teams we have met, read or heard about, or been members of have ranged between two and 25 people. For exam- ple, the Burlington Northern piggybacking team had seven members, and the Knight Rid- der newspaper team had 14. The majority of them have numbered less than ten. Small size

is admittedly more of a pragmatic guide than an absolute necessity for success. A large num- ber of people, say 50 or more, can theoretically become a team. But groups of such size are more likely to break into subteams rather than function as a single unit.

Why? Large numbers of people have trou- ble interacting constructively as a group, much less doing real work together. Ten people are far more likely than 50 to work through their individual, functional, and hierarchical differ- ences toward a common plan and to hold themselves jointly accountable for the results.

Large groups also face logistical issues, such as finding enough physical space and time to meet. And they confront more com- plex constraints, like crowd or herd behaviors, which prevent the intense sharing of view- points needed to build a team. As a result, when they try to develop a common purpose, they usually produce only superficial “mis- sions” and well-meaning intentions that can- not be translated into concrete objectives. They tend fairly quickly to reach a point when meetings become a chore, a clear sign that most of the people in the group are un- certain why they have gathered, beyond some notion of getting along better. Anyone who has been through one of these exercises un- derstands how frustrating it can be. This kind of failure tends to foster cynicism, which gets in the way of future team efforts.

In addition to finding the right size, teams must develop the right mix of skills; that is, each of the complementary skills necessary to do the team’s job. As obvious as it sounds, it is a common failing in potential teams. Skill re- quirements fall into three fairly self-evident categories.

Technical or Functional Expertise.

It would make little sense for a group of doctors to liti- gate an employment discrimination case in a court of law. Yet teams of doctors and lawyers often try medical malpractice or personal in- jury cases. Similarly, product development groups that include only marketers or engi- neers are less likely to succeed than those with the complementary skills of both.

Problem-Solving and Decision-Making Skills.

Teams must be able to identify the problems and opportunities they face, evalu- ate the options they have for moving forward, and then make necessary trade-offs and deci- sions about how to proceed. Most teams need

People use the word

“team” so loosely that it

gets in the way of

learning and applying

the discipline that leads

to good performance.

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some members with these skills to begin with, although many will develop them best on the job.

Interpersonal Skills.

Common understand- ing and purpose cannot arise without effective communication and constructive conflict, which in turn depend on interpersonal skills. These skills include risk taking, helpful criticism, objectivity, active listening, giving the benefit of the doubt, and recognizing the interests and achievements of others.

Obviously, a team cannot get started with- out some minimum complement of skills, es- pecially technical and functional ones. Still, think about how often you’ve been part of a team whose members were chosen primarily on the basis of personal compatibility or for- mal position in the organization, and in which the skill mix of its members wasn’t given much thought.

It is equally common to overemphasize skills in team selection. Yet in all the successful teams we’ve encountered, not one had all the needed skills at the outset. The Burlington Northern team, for example, initially had no members who were skilled marketers despite the fact that their performance challenge was a marketing one. In fact, we discovered that teams are powerful vehicles for developing the skills needed to meet the team’s performance challenge. Accordingly, team member selec- tion ought to ride as much on skill potential as on skills already proven.

Effective teams develop strong commitment to a common approach; that is, to how they will work together to accomplish their pur- pose. Team members must agree on who will do particular jobs, how schedules will be set and adhered to, what skills need to be devel- oped, how continuing membership in the team is to be earned, and how the group will make and modify decisions. This element of commitment is as important to team perfor- mance as the team’s commitment to its pur- pose and goals.

Agreeing on the specifics of work and how they fit together to integrate individual skills and advance team performance lies at the heart of shaping a common approach. It is per- haps self-evident that an approach that dele- gates all the real work to a few members (or staff outsiders) and thus relies on reviews and meetings for its only “work together” aspects, cannot sustain a real team. Every member of a

successful team does equivalent amounts of real work; all members, including the team leader, contribute in concrete ways to the team’s work product. This is a very important element of the emotional logic that drives team performance.

When individuals approach a team situa- tion, especially in a business setting, each has preexisting job assignments as well as strengths and weaknesses reflecting a variety of talents, backgrounds, personalities, and prejudices. Only through the mutual discov- ery and understanding of how to apply all its human resources to a common purpose can a team develop and agree on the best approach to achieve its goals. At the heart of such long and, at times, difficult interactions lies a commitment-building process in which the team candidly explores who is best suited to each task as well as how individual roles will come together. In effect, the team establishes a social contract among members that relates to their purpose and guides and obligates how they must work together.

No group ever becomes a team until it can hold itself accountable as a team. Like com- mon purpose and approach, mutual account- ability is a stiff test. Think, for example, about the subtle but critical difference between “the boss holds me accountable” and “we hold our- selves accountable.” The first case can lead to the second, but without the second, there can be no team.

Companies like Hewlett-Packard and Mo- torola have an ingrained performance ethic that enables teams to form organically when- ever there is a clear performance challenge re- quiring collective rather than individual effort. In these companies, the factor of mutual ac- countability is commonplace. “Being in the boat together” is how their performance game is played.

At its core, team accountability is about the sincere promises we make to ourselves and others, promises that underpin two critical as- pects of effective teams: commitment and trust. Most of us enter a potential team situa- tion cautiously because ingrained individual- ism and experience discourage us from putting our fates in the hands of others or accepting re- sponsibility for others. Teams do not succeed by ignoring or wishing away such behavior.

Mutual accountability cannot be coerced any more than people can be made to trust

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one another. But when a team shares a com- mon purpose, goals, and approach, mutual ac- countability grows as a natural counterpart. Accountability arises from and reinforces the time, energy, and action invested in figuring out what the team is trying to accomplish and how best to get it done.

When people work together toward a com- mon objective, trust and commitment follow. Consequently, teams enjoying a strong com- mon purpose and approach inevitably hold themselves responsible, both as individuals and as a team, for the team’s performance. This sense of mutual accountability also pro- duces the rich rewards of mutual achievement in which all members share. What we heard over and over from members of effective teams is that they found the experience ener- gizing and motivating in ways that their “nor- mal” jobs never could match.

On the other hand, groups established pri- marily for the sake of becoming a team or for job enhancement, communication, organiza- tional effectiveness, or excellence rarely be- come effective teams, as demonstrated by the bad feelings left in many companies after ex- perimenting with quality circles that never translated “quality” into specific goals. Only when appropriate performance goals are set does the process of discussing the goals and the approaches to them give team members a clearer and clearer choice: They can disagree with a goal and the path that the team selects and, in effect, opt out, or they can pitch in and become accountable with and to their teammates.

The discipline of teams we’ve outlined is critical to the success of all teams. Yet it is also useful to go one step further. Most teams can be classified in one of three ways: teams that recommend things, teams that make or do things, and teams that run things. In our expe- rience, each type faces a characteristic set of challenges.

Teams That Recommend Things.

These teams include task forces; project groups; and audit, quality, or safety groups asked to study and solve particular problems. Teams that rec- ommend things almost always have predeter- mined completion dates. Two critical issues are unique to such teams: getting off to a fast and constructive start and dealing with the ul- timate handoff that’s required to get recom- mendations implemented.

The key to the first issue lies in the clarity of the team’s charter and the composition of its membership. In addition to wanting to know why and how their efforts are important, task forces need a clear definition of whom man- agement expects to participate and the time commitment required. Management can help by ensuring that the team includes people with the skills and influence necessary for crafting practical recommendations that will carry weight throughout the organization. Moreover, management can help the team get the necessary cooperation by opening doors and dealing with political obstacles.

Missing the handoff is almost always the problem that stymies teams that recommend things. To avoid this, the transfer of responsibil- ity for recommendations to those who must im- plement them demands top management’s time and attention. The more top managers as- sume that recommendations will “just happen,” the less likely it is that they will. The more in- volvement task force members have in imple- menting their recommendations, the more likely they are to get implemented.

To the extent that people outside the task force will have to carry the ball, it is critical to involve them in the process early and often, certainly well before recommendations are fi- nalized. Such involvement may take many forms, including participating in interviews, helping with analyses, contributing and cri- tiquing ideas, and conducting experiments and trials. At a minimum, anyone responsible for implementation should receive a briefing on the task force’s purpose, approach, and objec- tives at the beginning of the effort as well as regular reviews of progress.

Teams That Make or Do Things.

These teams include people at or near the front lines who are responsible for doing the basic manu- facturing, development, operations, market- ing, sales, service, and other value-adding ac- tivities of a business. With some exceptions, such as new-product development or process design teams, teams that make or do things tend to have no set completion dates because their activities are ongoing.

In deciding where team performance might have the greatest impact, top management should concentrate on what we call the com- pany’s “critical delivery points”—that is, places in the organization where the cost and value of the company’s products and services are most

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directly determined. Such critical delivery points might include where accounts get man- aged, customer service performed, products designed, and productivity determined. If per- formance at critical delivery points depends on combining multiple skills, perspectives, and judgments in real time, then the team option is the smartest one.

When an organization does require a signifi- cant number of teams at these points, the sheer challenge of maximizing the perfor- mance of so many groups will demand a care- fully constructed and performance-focused set of management processes. The issue here for top management is how to build the necessary systems and process supports without falling into the trap of appearing to promote teams for their own sake.

The imperative here, returning to our ear- lier discussion of the basic discipline of teams, is a relentless focus on performance. If man- agement fails to pay persistent attention to the link between teams and performance, the or- ganization becomes convinced that “this year, we are doing ‘teams’.” Top management can help by instituting processes like pay schemes and training for teams responsive to their real time needs, but more than anything else, top management must make clear and compelling demands on the teams themselves and then pay constant attention to their progress with respect to both team basics and performance results. This means focusing on specific teams and specific performance challenges. Other- wise “performance,” like “team,” will become a cliché.

Teams That Run Things.

Despite the fact that many leaders refer to the group reporting to them as a team, few groups really are. And groups that become real teams seldom think of themselves as a team because they are so focused on performance results. Yet the op- portunity for such teams includes groups from the top of the enterprise down through the di- visional or functional level. Whether it is in charge of thousands of people or just a hand- ful, as long as the group oversees some busi- ness, ongoing program, or significant func- tional activity, it is a team that runs things.

The main issue these teams face is deter- mining whether a real team approach is the right one. Many groups that run things can be more effective as working groups than as teams. The key judgment is whether the sum

of individual bests will suffice for the perfor- mance challenge at hand or whether the group must deliver substantial incremental perfor- mance requiring real joint work products. Al- though the team option promises greater per- formance, it also brings more risk, and managers must be brutally honest in assessing the trade-offs.

Members may have to overcome a natural reluctance to trust their fate to others. The price of faking the team approach is high: At best, members get diverted from their individ- ual goals, costs outweigh benefits, and people resent the imposition on their time and priori- ties. At worst, serious animosities develop that undercut even the potential personal bests of the working-group approach.

Working groups present fewer risks. Effective working groups need little time to shape their purpose, since the leader usually establishes it. Meetings are run against well-prioritized agen- das. And decisions are implemented through specific individual assignments and accountabil- ities. Most of the time, therefore, if performance aspirations can be met through individuals doing their respective jobs well, the working- group approach is more comfortable, less risky, and less disruptive than trying for more elusive team performance levels. Indeed, if there is no performance need for the team approach, ef- forts spent to improve the effectiveness of the working group make much more sense than floundering around trying to become a team.

Having said that, we believe the extra level of performance teams can achieve is becoming critical for a growing number of companies, es- pecially as they move through major changes during which company performance depends on broad-based behavioral change. When top management uses teams to run things, it should make sure the team succeeds in identi- fying specific purposes and goals.

This is a second major issue for teams that run things. Too often, such teams confuse the broad mission of the total organization with the specific purpose of their small group at the top. The discipline of teams tells us that for a real team to form, there must be a team pur- pose that is distinctive and specific to the small group and that requires its members to roll up their sleeves and accomplish something be- yond individual end products. If a group of managers looks only at the economic perfor- mance of the part of the organization it runs to

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assess overall effectiveness, the group will not have any team performance goals of its own.

While the basic discipline of teams does not differ for them, teams at the top are certainly the most difficult. The complexities of long- term challenges, heavy demands on executive time, and the deep-seated individualism of se- nior people conspire against teams at the top. At the same time, teams at the top are the most powerful. At first we thought such teams were nearly impossible. That is because we were looking at the teams as defined by the formal organizational structure; that is, the leader and all his or her direct reports equals the team. Then we discovered that real teams at the top were often smaller and less formal- ized: Whitehead and Weinberg at Goldman Sa- chs; Hewlett and Packard at HP; Krasnoff, Pall, and Hardy at Pall Corporation; Kendall, Pear- son, and Calloway at Pepsi; Haas and Haas at Levi Strauss; Batten and Ridder at Knight Rid- der. They were mostly twos and threes, with an occasional fourth.

Nonetheless, real teams at the top of large, complex organizations are still few and far be- tween. Far too many groups at the top of large corporations needlessly constrain themselves from achieving real team levels of perfor- mance because they assume that all direct re- ports must be on the team, that team goals must be identical to corporate goals, that the team members’ positions rather than skills de- termine their respective roles, that a team must be a team all the time, and that the team leader is above doing real work.

As understandable as these assumptions may be, most of them are unwarranted. They do not apply to the teams at the top we have observed, and when replaced with more realis- tic and flexible assumptions that permit the team discipline to be applied, real team perfor-

mance at the top can and does occur. More- over, as more and more companies are con- fronted with the need to manage major change across their organizations, we will see more real teams at the top.

We believe that teams will become the pri- mary unit of performance in high-performance organizations. But that does not mean that teams will crowd out individual opportunity or formal hierarchy and process. Rather, teams will enhance existing structures without replacing them. A team opportunity exists anywhere hier- archy or organizational boundaries inhibit the skills and perspectives needed for optimal re- sults. Thus, new-product innovation requires preserving functional excellence through struc- ture while eradicating functional bias through teams. And frontline productivity requires pre- serving direction and guidance through hierar- chy while drawing on energy and flexibility through self-managing teams.

We are convinced that every company faces specific performance challenges for which teams are the most practical and powerful ve- hicle at top management’s disposal. The criti- cal role for senior managers, therefore, is to worry about company performance and the kinds of teams that can deliver it. This means top management must recognize a team’s unique potential to deliver results, deploy teams strategically when they are the best tool for the job, and foster the basic discipline of teams that will make them effective. By doing so, top management creates the kind of envi- ronment that enables team as well as individ- ual and organizational performance.

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Further Reading A R T I C L E S How Management Teams Can Have a Good Fight by Kathleen M. Eisenhardt, Jean L. Kahwajy, and L. J. Bourgeois III Harvard Business Review July–August 1997 Product no. 97402

Teams whose members challenge one an- other’s thinking can create more options and ultimately make better decisions. But without the kind of discipline advocated by Katzenbach and Smith, such friction can be- come unproductive or downright ugly in- stead of creative. In this article, the authors identify six tactics that bring discipline to team decision making: Acquire as much infor- mation as possible and focus on facts. De- velop as many options as possible and evalu- ate them jointly. Agree sincerely on common goals. Encourage humor. Ensure a balance of power among team members. And in cases where agreement cannot be reached, have the most relevant person make the decision based on input from the group.

How the Right Measures Help Teams Excel by Christopher Meyer Harvard Business Review May–June 1994 Product no. 94305

For multifunctional teams to fulfill their prom- ise, performance-measurement systems must be modified so that they adequately capture cross-functional work. Meyer offers four guid- ing principles for building measurement sys- tems that promote team members’ mutual commitment to specified goals. First, the sys- tem should help the team, rather than top managers, gauge its progress. Second, the team must play the lead in designing its own measurement system. Third, the team needs to devise measures of the process by which it delivers value. (Knowing that there’s been an 8% drop in quarterly profits with a 10% rise in

service costs doesn’t tell a customer-service team what to do differently. But knowing that the average time spent per service call rose 15%, and that late calls consequently rose 10%, helps the team understand the prob- lem.) And fourth, no more than a handful of measures should be used.

B O O K Team Talk: The Power of Language in Team Dynamics by Anne Donnellon Harvard Business School Press 1996 Product no. 619X

Donnellon takes a sociolinguistic perspective on why so many teams underperform— that is, she examines how teams talk for clues about why teams fail to meet expecta- tions. Her definition of team—a group of people who are necessary to accomplish a task that requires the continuous integration of the expertise distributed among them— is consonant with the notion of mutuality that Katzenbach and Smith describe. Talk, Donnellon explains, is how teams achieve in- tegration and mutuality. The work of most teams involves constructing new meanings, whether it’s in the form of new product devel- opments or enhanced processes. And that work is essentially linguistic.

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