Business teams and footy teams have much in common: ranging over the entire field has changed the game radically from what it was when each player stayed in position. But is the change for the best? By Adele Ferguson
In 1997 a financial services company spent countless hours and hundreds of thousands of dollars rejigging itself along team lines. It hoped to create a series of dream teams that would lift performance and change its command-and-control culture. Eighteen months later, the company is struggling. It has had mass walk-outs, its debt has blown out and it is recording losses.
Although this is an extreme case of what can go wrong with teams, it epitomises the problems corporate Australia is facing in the late 1990s. Most companies are organised along team lines. There are executive teams, cross-functional teams, process redesign teams, quality teams and self-directed work teams. Even management schools encourage, sometimes require, students to work in teams.
Teams have been a fad for 15 years. But, unlike most fads re-engineering, quality assurance, empowerment, benchmarking and the rest teams are still here.
For years the management propaganda machine has worked overtime preaching that people are more productive working in small groups. Certainly, teams have often made companies more nimble and innovative by tapping into ideas from all employees. The success stories include Boeing, Volvo, Hewlett-Packard, Procter & Gamble and Federal Express.
The greatest success story is the entire nation of Japan. After World War II the Japanese economy was in ruins: it had few natural resources and no modern infrastructure. Through teamwork, the country managed to pull itself together to become one of the super-economies of the world. Every worker in every function at every level was made part of a company team.
Teams are appealing because they hold out the promise of something along the lines of the family unit: caring, sharing, loving and committed. The belief is that the ideal team is a miracle of autonomous cross-functional efficiency. It shares knowledge and creates solutions. It cuts costs and is close to the customer. Put simply, teams increase productivity, improve communication and improve processes. For these reasons the rules for work have been changing. Individuals are now being judged by how well they work in a team. This is translating into who will be hired, who will be promoted and who will be let go.
But proponents of the dream team forget the dark side of the family unit: rivalry, bitchiness and the conflict between wanting to belong and wanting to be noticed as an individual. These darker elements subvert the dream team. As a team leader from American President Cos put it in Fortune magazine: “A team is like having a baby tiger given to you at Christmas. It does a wonderful job of keeping the mice away for about 12 months, and then it starts to eat your kids.”
In the harsh world of downsizing and flat management structures people have trouble overcoming the feeling that individualism trumps teamwork when it comes to getting ahead. For this reason it is easy to forgive employees for not buying the teamwork pitch. Paul Osterman, a management professor at the Massachusetts Institute of Technology, surveyed 500 companies in 1992 and 1997 and found that companies using work-group-like teams to lift quality and productivity did not share any gains they realised with workers unless those workers were unionised. He also found that those same companies tended to have more lay-offs than traditional companies.
Osterman says it is hard to reconcile the fact that at the same time that managers are pursuing profits and their own bonuses, they are urging workers to consider themselves part of the company team. At Lend Lease the team is heralded as fundamental to the culture and success of the organisation. Yet it also breeds stars. For companies that espouse teams but promote individuals, the tension can get out of hand. In the case of Lend Lease, executive chairman Stuart Hornery and former chief executive John Morschel felt that tension acutely. Both had wanted to run the company in his own way and the situation was only resolved with the departure of one. Yet Lend Lease is a great success as a team player. Over the past two years its share price has more than doubled, to $22 a share, making it one of the best performers on the Australian Stock Exchange.
At the heart of the problem is human nature. Frequently team leaders revert to form and claim the sandbox for themselves, refusing to share authority with others. The rest, meanwhile, bicker about peripheral things, like who gets credit for what the team does.
Harvey Robbins and Michael Finley in their book Why Teams Don’t Work say: “The dream team is up there in six-sigma land no more than a miscue or two per millennium. Virtually variation free […] After all these centuries of jostling against one another, squinting and misunderstanding virtually everything everyone says to us, we ought to have figured out that we are all different and understand things differently, and therefore we are continually miscommunicating.” Most teams are leaderless, motionless and clueless. “Ten years after the team took on the trappings of business fashion, thousands of organisations would like to give up on the idea if they could.”
Amanda Sinclair, professor of management at Melbourne Business School, believes that companies are still grappling with teams because their chief executives do not like admitting defeat. “You rarely hear a chief executive saying the team hasn’t worked so we are giving up. There is an issue of pride at stake,” she says.
Despite their questionable record, teams have had many reincarnations over the years. In the early 1980s there was the encounter team, then came multi-teams and self-managed teams. These last are the most popular and most dangerous. Such teams never make decisions. Self-managed teams were what caused the aforementioned Sydney-based financial services company to get into trouble. The various members of the teams were reluctant to make any decisions, resulting in wrong choices being made.
In an article in the Harvard Business Review (November-December 1997) Jon Katzenbach says that too often teamwork becomes a feel-good mechanism that can get in the way of actually accomplishing anything. Sometimes decisions need to be made quickly, and deferring to the team may promote good will but little else.
Chris Hart, principal of Hart Consulting Group, says teams can embody the best of things and the worst. He says teams do not work because most companies do not really have them. “A team is only a team when all the members are interdependent. If the individuals in the group have tasks that are interrelated, then it’s a team.” While researching a book on the skills students need to prosper in a changing economy, Richard Murnane, a professor at the Harvard Graduate School of Education, found one company that had a team of customer-service representatives who worked by themselves on phones in cubicles. “A great many more firms talk about teamwork than do it in a meaningful way,” Murnane told the New York Times. “It has become a vogue.”
Hart says many companies throw people together and tell them they are a team, leaving teamwork entirely to chance. Worse still, remuneration is often based on team performance. This can create acrimony if some members of the team feel they are working harder or contributing more to the team than others. “The problem then becomes the high performers going down to the same level as the rest of the team, rather than the reverse,” Hart says. “Ninety-nine point nine percent of teams don’t work. They aren’t interrelated individuals. They are individuals doing their own thing and they don’t have any idea about how to work together. For this reason they think if I help that guy, will I get the kudos for it or will he?”
But some companies and industries work brilliantly in teams. These include engineering and construction companies and technology organisations. Hart says: “There are many project management issues in such industries, and teams are the best way to deal with them.”
Leading political and business consultant Toby Ralph has worked in teams all his life, in jobs at the pointy end of capitalism or in planning elections. Ralph says some teams work, others are a disaster. “It seems to me that teams fall over when egos and personal agendas get in the way. Sometimes people are so intent on settling scores, proving points and doing down corporate rivals that it poisons the process. They build a cathedral of intrigue, rather than get on with the job.”
Ralph says the best teams he has worked on have been the federal election teams of Lynton Crosby and Andrew Robb. “They handpicked individuals from around the country, and had to make some serious egos chiefs of staff and million-dollar salary earners work together constructively. Most of the senior people were used to calling the shots in their own worlds. But, with the intensity of the project and with a crystal clear understanding of who did what, they harnessed the best without any argument.”
Ralph says there are techniques that we can draw on from the theory of group dynamics. When groups get together they go through phases of “norming, storming and performing.” Norming is when people try to establish their persona within a group by making claims about who they are and what they do. They want to let you know how important they are, and set their place within the hierarchy of the group. Having done that, they move on to storming, which is the process of acting in a way that they imagine is consistent with the persona they have invented. “Once again, the things they say, their recommendations in the team are colored by their agenda rather than the task at hand,” Ralph says. It is only when a group moves through the norming and storming stages that its members relax enough to start performing. “There are a number of techniques to accelerate people through the stages, most notably reassurance.”
Roger Collins, professor of management at the Australian Graduate School of Management, is optimistic that teams can work. But he believes that the national culture and the style of organisation play a big role. “At the most fundamental level, some countries are more inclined to teams than others,” he says. “In the US, and to a lesser extent Australia, the culture is very individualistic; whereas, if you go to Asia or parts of Scandinavia, the collectivism is strong. At the next level, the organisation itself can be more adept at forming teams.”
Collins says teams work best in organisations that have their core capabilities embedded in the culture. “With Qantas the issue of safety is embedded right throughout the organisation. In McDonald’s consistency is embedded into that culture and so everybody works together to that end. On the other hand, in the financial services industry, individualism dominates and so it is hard to subsume that into teams.”
For these reasons, Collins believes that teams need to be better understood. “I am very optimistic about teams if they are set up properly. You don’t get an Olympic team being thrown together and told to work. Instead, they spend years training to get it right. That’s what companies should be doing.”
Robbins and Finley argue in their book that companies should plunge deeper into the team experience. “The old pyramid of bureaucracy was simply too expensive. Any company tempted to turn back knows what it means taking on the waste and cost of old-line organisations that contributed to the competitiveness calamity in the first place.”
The answer lies in learning why teams have not been working and in changing our organisations. The premise Robbins and Finley take is that the human race is not a species of loners, making their way in the world in isolation. We are social creatures who seek one another out in situation after situation. “As the bumper sticker says, bad stuff happens. Teams are put together wrong. They botch their assignments. They run aground because one lousy personality consistently wrecks their initiatives. They lack leadership, vision, motivation, a clue.”
Robbins and Finley believe teams fail because of misplaced or confused objectives. A good team goal has several parts:
- A task, what you are doing.
- A promised limit to what you are doing.
- A promised level of performance.
- A deadline or sunset clause.
- A definition of the customer, who all this effort is for.
The book also lists team excesses that members should guard against. These include team sadism and long-term goal setting. “We knew a manager in Minnesota who joked about his motivational methodology. I chase them up a ladder, then kick it out from under them. Nice guy. It is one thing to throw your team into a tank to teach it to swim. Call it tough love. But it’s something else to stock the tank with piranha, or fill it with boiling water.” Goal-setting often fails because people get hung up on the long-term aspect of the primary goal. Robbins and Finley believe successful teams live and breathe the short-term. So what constitutes the short term? “We begin by proposing task durations much shorter than you may currently use as benchmarks. We sort all goals and objectives into short, middle and long-term frames.” Short means less than one month; medium-term means one to three months; long-term means three to six months. Once the team has listed its goals and sorted them into the appropriate time frames, the team must then prioritise the short list. If a task does not appear on the high priority, short-term goals list, leave it out.
Teams also have a use-by date. When a team’s goals are accomplished, it should be disbanded and regrouped into other short-term action teams.
Another potential problem with teams is the unresolved role. Sinclair says teams are often used as a way of deferring responsibility. She says self-managed teams are the worst offenders. Nobody wants to make the final decision, particularly when they are remunerated for team effort. “Why should they make the ultimate decisions and take responsibility when it is a team effort,” she says. The upshot is that many decisions are not made quickly enough. Collins believes the best way to deal with this is to remunerate people in three components: base salary, individual performance and team performance. “That way the conflict of individual versus group plays itself out.”
The idea of teams is that people are adults. The problem is that there are tasks out there that nobody wants to do. They are routine, or unpleasant, or they do not play to our strengths. After all, everyone wants to look good. Robbins and Finley cite paperwork as the number one item to avoid. “Phone calls bother some people. Evaluating people. Filing reports. Getting rid of the old grounds in the coffee pot. Terrible things, but they have to be done.” The trouble occurs when team members refuse to handle these tasks.
Problems also occur when more than one team member has responsibility for a single task. The result: turf wars. “People will fight over just about anything if they are convinced the turf in question represents power for them or if they perceive they are painted into a corner,” Robbins and Finley say.
But not all management theorists believe conflict is a bad thing. An article in the Harvard Business Review (July/August 1997) by Kathleen Eisenhardt, Jean Kahwajy and L. J. Bourgeois III argues that the absence of conflict is not harmony but apathy. “Management teams whose members challenge one another’s thinking develop a more complete understanding of the choices, create a richer range of options, and ultimately make the kind of effective decisions necessary in today’s competitive environments.” But the authors concede that healthy conflict can quickly turn unproductive. “A comment meant as a substantive remark can be interpreted as a personal attack. Anxiety and frustration over difficult choices can evolve into anger directed at colleagues. Personalities frequently become intertwined with issues.”
For the past decade Eisenhardt and her co-authors have been researching the interplay of conflict, politics and speed in strategic decision-making by top management teams. In one study of 12 teams in technology-based companies, it was revealed that one-third of the companies had little or no disagreement or conflict, and the other two thirds had considerable conflict. Four of them managed the conflict without it degenerating into interpersonal conflict, the others were plagued by intense animosity. “Executives often failed to co-operate, rarely talking with one another, tending to fragment into cliques, and openly displaying their frustration and anger,” the report said. When executives described their colleagues, they used words such as “manipulative”, “secretive”, “burned out”, and “political”. The study found six strategies for managing interpersonal conflict:
- Work with more, rather than less, information and debate on the basis of facts.
- Develop multiple options to enrich the level of debate.
- Share agreed goals.
- Inject a sense of humor into the decision process.
- Maintain a balanced power structure.
- Resolve issues without trying to force consensus.
Without conflict, groups lose their effectiveness. The study found that managers can become withdrawn and only superficially harmonious: thus the alternative to conflict is usually not agreement but apathy and disengagement. “Teams unable to foster substantive conflict ultimately achieve, on average, lower performance. Among the companies that we observed, low-conflict teams tended to forget to consider key issues or were simply unaware of important aspects of their strategic situation,” the study says. “They missed opportunities to question falsely limiting assumptions or to generate significantly different alternatives. Not surprisingly, their actions were often easy for competitors to anticipate.”
The debate on teams is fierce. Proponents believe it is the best idea around, and its detractors believe it is wasteful and useless. For all that, teams continue to play a big part in corporate life. Jobs depend on it, futures are built on it. As one consultant says: “If you can’t beat them, join them.” In Australia there is a tension between mateship and individualism. The winner will ultimately be the one that pays more.