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The Myth of Teams

Peter Drucker once said, "Team building has now become a buzzword in American [companies]. The results are not overly impressive." Consider John Reed, former CEO of CitiCorp, who in the mid-1990s decided the company needed to adopt a more team-based work structure. Without really knowing how that should look, he incented his 100 top managers with stock options so they would implement teams in their units. In the midst of a bull market, Reed's gambit paid off nicely for the top managers as they were able to cash in handsomely without changing a thing. Last month we focused on company structure; this article looks at work group structures, where the work actually gets done.

As noted by Drucker, the concept of teams has become popular to a workplace where problems are more complex and non-functional. To be competitive and innovative, teams are considered a way to create advantage. Yet, telling managers to use teams (as Reed did at CitiCorp) is akin to telling them to use more leadership in the abstract it sounds good, but offers no insight on what it means. Like many other management terms, the concept of a "team" is usually misunderstood.

A team is actually just one type of work group structure that is employed to get work done. Managers would do well to understand the different types.

Managers are accountable to get results, but good ones assign work to others ideally they do this through policy where the accountability, authority, and resources are specified for others. Unless the work can be done by specialists working alone, work groups are established to accomplish the sought outcomes. Groups can do things individuals working alone cannot: combine varied skills, bring different perspectives to a situation, leverage short timelines, or lessen untenable workloads. There are, however, very different ways to structure these groups (often called teams, whether the structure is that of a team or not) which also indicate how they should be staffed.

The variables of the work group structure are captured by a simple graphic where:

Given these variables, four distinct work group structures emerge, each dependent on the known variables:
A true team, by this definition, is only required when both the inputs and the means are unknown. In fact, only about 10% of work fits the conditions that call for a team. For example: customers are not buying a new product and it is unclear why. Here the desired outcome is sales of the new product, but both the inputs and the activities required to generate results are unknown.

An ideal team would consist of members primarily committed to team goals. That is, specialist skills are not all that helpful in team problems. Consider NASA in its early days. Armed with experts in many fields, teams were successfully used to tackle goals with no known ways to get there. The specialist skills team members brought to these teams were less useful than their ability to communicate, willingness to suspend judgment, and commitment to getting B. Effective teams are flexible (open to different methods) and innovative. To help teams work, managers should focus training and intervention on the process of organization, not on functional specialties.

Since teams can be costly due to the high caliber of the members and time required, managers are fortunate that most work does not require a team structure because either the inputs or transformations or both are clearly known. In these situations, expertise can be applied effectively using one of the other group structures. Managers should seek group structures that use this expertise more effectively than teams might. Also, people can work effectively in any of the structures; but managers may need to help them adjust (i.e., training) when working in a structure new to them.

Thinking through the variables that impact the work, and figuring out which group structure to use is often neglected.


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