The 6 Things Middle Market Companies Need to Build Effective Teams

After decades of data-driven research and practice, including this from Harvard Business Review, we now know how to build effective work teams. Yet effective teams are still the exception, rather than the rule. For instance, research shows that 80 percent of senior leadership teams perform at a level that’s either “poor” (42 percent) or “mediocre” (37 percent). That’s a failure rate of about 80 percent. When we look at cross-functional teams, it’s similar—three out of four of those critically important teams fail to deliver on their goals.

The Six Conditions for Team Success
The conditions and behavioral norms that drive team effectiveness are identifiable and measurable, and can also be benchmarked.^† Let’s examine each in depth:

1. A Real Work Team
Any work team needs four basic elements: (1) a task; (2) clear boundaries; (3) clearly specified authority to manage its own work processes; and (4) membership stability over time.

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 in order to achieve a common task for which they’re held accountable.

2. A Compelling Team Direction
When you begin any journey, it’s essential to have a clear destination in mind: clearly define the end you seek, so you’ll know success when you achieve it.

A clear, compelling direction helps you in several critical areas. It is the beginning of a map for collective success and enables teams to make detailed plans for the journey ahead. Equally important, a compelling team direction gives leadership a vital tool to motivate team members. Teams are energized by important journeys and inspiring challenges. The idea of getting to the end—reaching that mountaintop—will energize the team to keep pushing forward when unexpected obstacles arise.

3. The Right People
Be careful about the composition of the team, because it matters a lot. You don’t want a team of like-minded individuals who simply confirm each other’s opinions and unspoken biases. Teams succeed when members constructively challenge one another, sharing views openly, listening with respect and a willingness to learn, and moving collectively toward the best solutions.

Functional, demographic, and other forms of diversity can add great value to your teams, as long as members have appreciation for the value of multiple perspectives. You want deep, conceptual thinkers, but also pragmatic “doers.” You want fresh eyes, but also veterans who’ve seen (and solved) every problem in the book.

You may also need to deal with the wrong people by getting them off (or keeping them off) the team. Those who seek to dominate discussions can destroy any chance for the open exchange of opinions. Those who communicate in a way that devalues and diminishes others can ruin team chemistry. Every team needs a mechanism for dealing with such derailers.

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 simply splitting 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 seem to work best. In larger teams, you run the risk of having team members becoming disengaged and flying below the radar while doing as little as possible (i.e., free riders).

In general, accountability and social cohesion can be more challenging when the team is overcrowded. As J. Richard Hackman explains in “Leading Teams,” what brings an effective team together are the group norms it develops. These norms are defined and enforced by collective behaviors. Behavioral norms around punctuality, communication, and dispute resolution serve as the ground rules for collective behavior and allow team members to comfortably move forward instead of constantly renegotiating and revisiting the rules of the road.

5. A Supportive Organizational Context
Although teams are fairly 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 trees to thrive. Hackman’s “teams as trees” metaphor is particularly appropriate because it shows that multiple teams 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 teams may face, thus opening up space for growth.

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

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 Belichick consistently creates the conditions for team success. He’s created a team culture of “do your job.” What does this three-word dictate, so often repeated by players, actually mean? It requires that team members focus on the small details that drive success, don’t get sidetracked by gossip/drama/politics in the media or in the locker room, and most of all trust that their teammates are being held to the same high standards they are.

This “do your job” mantra can work for any team, because it prioritizes personal accountability and builds trust in collective action. Coaching can come from someone inside the team or someone outside the team, and can focus on any number of areas—motivation (“you can do better”), skills (“let me offer some feedback on your presentation”), and behavior (“when you raise your voice in anger, people stop listening”). Whether it’s done formally or informally, coaching helps teams develop their full potential.

The six conditions described above present an evidence-based, practical, measurable framework for building effective teams in your middle market company. Consider implementing them in your own organization to see how they impact performance and team successes.  

^†The descriptions of these conditions for team success are based upon two trailblazing books: (1) Senior Leadership Teams: What It Takes to Make Them Great, by Ruth Wageman, et al. and (2) Leading Teams: Setting the Stage for Great Performances, by J. Richard Hackman).