Building Effective Teams: 6 Conditions for Success

Business biographies and glossy magazines regularly celebrate the “heroic CEO,” comparing them to sports heroes or famous military strategists. But even the most successful CEO knows that they’re only as successful as their teams. “When you were made a leader, you weren’t given a crown,” said former General Electric CEO Jack Welch. “You were given the responsibility to bring out the best in others.”

Teams perform so many core business functions: they solve strategic problems, drive innovation, serve the needs of customers, impact your bottom line every single day, and most importantly, offer competitive advantage against your rivals. What teams do is drive success.

Team Failure is Prevalent

While business leaders are increasingly aware of the mission-critical value of successful teams, our work teams are failing far too often. In fact, failure is the norm.

Let’s examine two different types of teams to get a better idea of how teams are doing. The pioneering organizational psychologists who wrote the book Senior Leadership Teams: What It Takes to Make Them Great followed the performance of 120 senior leadership teams from global companies of all sizes. These 120 teams performed far below expectations. Most of these teams were categorized as either “poor” (42 percent) or “mediocre” (37 percent).

We should also keep in mind that members of senior leadership teams are usually serving as leaders of their own work teams within the same organization. How can you create a culture of excellence, one that justifiably prioritizes the importance of effective collaboration, when your leadership teams are mostly “mediocre” or “poor”?

Next, let’s examine the performance of cross-functional teams. These teams are typically tasked with driving innovation, solving difficult business challenges, or coming up with ideas to better serve customer needs. Professor Behnam Tabrizi of Stanford University, an expert in organizations, spent three years studying cross-functional teams in various industries, such as software, pharmaceuticals, and financial services. He described his data-driven results in a Harvard Business Review article with a title that tells most of story: “75% of Cross-Functional Teams are Dysfunctional.”

The cross-functional teams Tabrizi researched failed in so many ways—they went far over budget, they delivered late or sometimes not at all, they produced low-quality projects, they botched customer requirements, and more. Some cross-functional teams were so dysfunctional that they couldn’t even agree on a common framework for analyzing their malfunctions.

The 6 Conditions for Team Success

Organizations no longer need to put teams together and hope for the best while expecting the worst. While no business executive can personally make a team great, smart leaders can put in place the underlying conditions that increase the chances for team success. We know exactly what these conditions are.

1. A Real Work Team

A real work team requires four basic elements: (1) a task; (2) clear boundaries; (3) specified authority to manage its internal processes; and (4) membership stability.

When people work side-by-side, but their work doesn’t depend upon each other, they are not a real team (even if they share a manager). Teams must work together, interacting with each other to achieve a common task for which they are collectively accountable.

Clear boundaries must be established, enabling team members to know what their roles are (and are not). The team also needs sufficient authority to discuss and decide how it wishes to manage its collective workload. Finally, teams need continuity in their makeup to develop any sort of team dynamic. Changing the team leadership or membership constantly will disrupt any sense of ongoing team cohesion.

2. A Compelling Team Direction

When you begin any journey, it’s of course essential to have a clear destination in mind. Saying you’re going to visit “somewhere in Asia or Europe” raises more questions than it answers. Defining your destination helps you get there. Albert Einstein once said that if he had an hour to save the world, he’d spend the first 55 minutes defining the problem, and the last 5 minutes solving it. The basic idea is the same: begin by defining the end you seek, and then you’ll know “what success looks like” when you get there.

A clear, compelling direction is the beginning of a map for collective success and enables teams to make a detailed plan for the journey ahead. Just as importantly, it also gives you a vital tool to motivate team members.

3. The Right People

Don’t assemble a team of like-thinking individuals who just reinforce each other’s viewpoints and biases. Teams succeed when members constructively challenge one another, share views openly, listen with respect and a willingness to learn, and move collectively toward the best solutions.

Diversity (functional, demographic, and other forms) can add real value to your teams, if members have an appreciation for the value of the different perspectives each member brings with them. You want deep thinkers, but also pragmatic “doers.” You want fresh, young eyes and old hands.

You will, of course, need to select team members who have the skills and experience necessary to perform the required tasks the team will undertake. You can’t put a drummer in a string quartet. You should also look for team members who model the behavioral norms that lead to team success—listening skills, open-mindedness, empathy, and comfort navigating diversity. An effective team has the requisite “hard” skills to do the job, but also the “soft” skills to build trust, challenge constructively, and communicate with respect. 

4. A Sound Team Structure

As teams get larger, social cohesion and communication structures begin breaking down. Sometimes, and if all else fails, the best way to improve a large but underperforming team may be to simply split it in half. Amazon founder Jeff Bezos is famous for his “two-pizza rule”: he believes the team should be small enough to share two large pizzas for lunch. Teams sized in the single digits seems to work best.

As author and productivity expert Laura Stack explains the two pizza rule: “Recent studies suggest smaller teams tend to be more productive than larger ones, and that teams whose members have more face time and social contact often prove more productive.” So the two-pizza rule is a sizing tool for teams.

As J. Richard Hackman explains in Leading Teams, what ultimately brings a successful team together are the group norms it develops. These norms are defined and enforced by collective behaviors. Acceptable behaviors are reinforced, while unacceptable behaviors are sanctioned either formally or informally. So, if a team norm holds that members must arrive on time for meetings and should not interrupt someone who is speaking, then late arrivers and interrupters will be sanctioned with raised eyebrows, head-shaking, or perhaps other, more formalized correctives against these “inappropriate” behaviors.

5. A Supportive Organizational Context

Although teams can be cohesive units, they do operate within a larger organizational context. Hackman likens a team to a tree with many branches, but compares the organization to the soil in which the tree grows. That soil needs to provide nutrition and space for the tree (multiple trees, actually) to thrive. Hackman’s “teams as trees” metaphor is particularly appropriate because it shows that multiple teams (trees) may be competing for the same resources (nutrition, sunlight) and can crowd each other out. Part of the organizational support needed is to simply remove barriers and obstacles the team may face, thus opening space for growth.

Recognition by leadership for team achievement is one area where the organization can “nurture” team effectiveness. In Leading Teams, Hackman emphasizes three other areas where the organization can positively impact team performance: rewards, information, and education/training. When these three areas are aligned with team goals, you have a rich soil that will nurture teams.

6. Team Coaching

Great teams have star players and star coaches too. Think of the perennially winning New England Patriots football team and Head Coach Bill Belichick. The Patriots have long benefitted from having great players like quarterback Tom Brady, but coach Bill Belichick consistently creates the conditions for team success. He’s created a team culture of “do your job,” that requires team members to focus on the small details that drive success.

Coaching can come from someone inside the team or someone outside the team, and can focus on any number of areas—motivation, skills, and behavior. Coaches model best practices, and communicate the how and the why of best practices. They are crucial supporters of individual and team development, and key supporters of team behavioral norms. There is an emerging field of professional “team coaches” who are trained to help assess and improve team dynamics and performance.

In short, whether it’s done formally or informally, coaching helps the team develop and grow to its full potential.

In conclusion, when the six conditions for team success, as described above, are put in place, teams will have what they need to drive both team and organizational success.