Team effectiveness in context
In groundbreaking research on how established organizations create new strategic capabilities, Rita McGrath discovered a consistent pattern of progress. The first challenge, addressed by her work on discovery driven planning, consists of understanding business drivers. These are the causal factors that shape business outcomes – such as a relationship between quality and customer willingness to pay. As this understanding develops, the teams working on projects can become increasingly deft, where deftness refers to how effectively they work together. When understanding is low, by definition, teams find it difficult to make progress as quite literally nobody knows what is going on.
As understanding progresses, teams are increasingly able to accomplish results consistent with their expectations. This is evidence of growing competence, where competence for an organization is analogous to skill for a person. At first, competence levels will be low, but as the team learns, these will increase. Some, not all, of these competences will be distinctive to that team and organization, meaning that it would be difficult for another team or organization to readily copy them. Of these, three characteristics determine whether the organization has a value advantage (often called a competitive advantage in the literature).
Market value refers to the extent to which a group of external agents, such as customers and other key ecosystem partners find what the team has created to be sufficiently worthwhile that they will pay for it or contribute to it. Firm value refers to the extent to which the originating firm is supportive of this new capability finding its way into the world. A common misconception is that the two are necessarily highly correlated – the statistical research finds a correlation of about .4, a positive, but weak, association.
Finally, we come to competitive insulation. This is the question of whether the value advantage is somehow protected from easy matching or imitation by competing entities. Interestingly, as the world is moving toward digital or service products and away from physical ones, levels of competitive insulation have plummeted across the board, causing a phenomenon McGrath called “transient advantage” in which firms must continually invent new capabilities to replenish those that have become commoditized and undifferentiated.
To assess team effectiveness, we examine 5 variables. The first is whether the team has the right people in the right roles. The second is whether there are strong levels of trust amongst team members. The third is whether the right information is getting to the right people at the right time. The fourth is strong mutual commitment to the team’s goals. The fifth and final element is whether the team shares a psychologically safe environment, in which there is little fear of retribution for speaking up.
The button below will take you to the team effectiveness assessment based on this research. You can take it for a spin, providing just your own answers based on your perception of how your team is doing. If you find this intriguing, we suggest that you consider investing in having your whole team respond. Everyone puts in their own assessment, which we would then analyze, anonymously. In the 2-hour debrief session we hold after collecting the data, our facilitators will run through the three lowest average scores (where efforts to improve would have the greatest impact) and the three largest standard deviations (where the team may be experiencing wildly different realities without even knowing it).
The debrief sessions often reveal simple and inexpensive shifts that can lead to massive improvements in team effectiveness. In a recent case, for instance, a company with heavily cyclical demand patterns found that information flow among key team members was breaking down at the most critical times of the year. This was due to team members’ presence in field operations during this time, which was obvious in retrospect but which had not been explicitly noticed until the team completed our assessment. The fix? A simple 20-minute remote call each day to provide structured sharing of information and get everyone on the same page for that day.