Are Teams and Teamwork a Good Thing?

Most companies view teams and teamwork as a good thing. As a result, the use of teams is on the rise across all companies, with collaborative activities increasing by more than 50 percent over the past two decades. Teams, without question, provide a competitive advantage when they operate well. The problem is that designing and managing teams is a complicated undertaking requiring a level of creativity and commitment that many firms, and their leaders, lack. The most basic, and common, mistake is to use a team when a team is not needed—that is, the work is better done by individuals not working as a team. For instance, a group of leaders who are responsible for sales in different regions within a company can form a team. They develop a common set of goals and meet periodically to coordinate their efforts. The question to ask, however, is the value of this team in comparison to allowing the regional leaders to operate independently with little or no coordination other than reporting to the same supervisor. Since there is little overlap in how the regions in this company operate and no common work to be done, the value of a team is minimal if not negative (in consuming members’ time that could be better spent elsewhere, such as interacting with customers). One way to express this is that the return on the investment of having a team needs to be greater than the benefit of not having a team at all. In some situations, the critical work to be done can be achieved more effectively by individuals or smaller subgroups. Consider the company whose strategy to promote growth is flawed. The leader needs to determine what role, if any, his or her leadership team will play in addressing this deficiency. Strategy development can involve an entire team or can be driven by a smaller, more specialized group from within the company or in partnership with an external consulting group. The decision of which approach to use is influenced by a variety of factors, including the skill of team members to think strategically and their ability to see beyond the firm’s current business model. While it is logical to involve one’s team, that may not be the best approach. A leader is sometimes better served by crafting the strategy outside of the team and then engaging the members in determining how to best execute it.

A second mistake is failing to provide the support a team needs to be successful (such as group-level rewards). Even when the use of teams is warranted, many firms incorrectly believe that simply putting a group of bright people together will result in a positive outcome. How can a group of smart people not produce something worthwhile? Unfortunately, often too little thought is given to how a team is designed and managed. Even the most basic issues are ignored—such as careful consideration of who needs to be a member of a team and how it will define success. Companies often embrace teams, or at least the concept of teams, without providing attention to what is needed for them to be successful.

A failure to consider what a team needs to be successful extends beyond the team itself. To promote teams, organizations and their leaders need to carefully design the context in which they operate. Effective teamwork is often elusive because an organization’s formal and informal systems contradict what a team needs. A common example is a reward system that works against teamwork. Microsoft, for example, required for years that its employees be ranked each year on a performance curve. On each team, only a particular number of people could be in each performance category, with the goal of identifying those who were underperforming and those who were stars. The result was that even in a team where everyone performed well, only the best of the best were rated in the highest category (which enhanced the pay and future opportunities of those individuals. As a result, some of the most talented people in the company did not want to become members of a team they knew would be staffed with other highly talented people—fearing that they could easily be rated lower when competing with such individuals. Those who did join the team knew that they were operating in what some call a zero-sum environment, competing with each other to receive the top ratings, which would be distributed across the curve. It is easy to see how such a performance rating procedure, designed to motivate higher levels of performance, would have the unintended consequence of undermining teamwork. This rating process, which was eventually discontinued within Microsoft, indicates that even actions implemented with the right intent can make teamwork more elusive within a company.