Background

Why Teams?

The current increase in the use of teams reflects changes in the competitive environment of many organizations.  Organizations are experiencing dramatically increased pressures for performance.  They are being required to develop and deliver products and services at lower costs but with higher quality and increased speed.  To meet this requirement, organizations must become good learning systems; they have to introduce improvements in their products and services, in the processes they use to deliver value to the customer, and in the ways they organize to carry out these processes.  Organizations are having to formulate organizing strategies for dealing with these performance pressures (Morhman, Cohen, & Morhman, Jr., 1995)

Morhman, et al. (1995) document that during the past three decades, an increasing number of production settings have found that they could significantly improve their effectiveness by establishing teams that have responsibility for a “whole” part of the work.  For the most part, this increase reflects that teams are an appropriate structure for implementing strategies formulated to deal with performance demands and opportunities presented by the changing business environment (Morhman, et al., 1995).  Rayner (1993), shares that “any organization that is considering improving its product quality, productivity, ability to innovate, service, or employee relations has to seriously consider these innovative work systems” (p. 4).  Increasingly, it is being recognized that the fit between strategy and organizational design is a competitive advantage.  Morhman, et al. states, “appropriate organizational design enables an organization to execute better, learn faster, and change more easily” (p. 7).

What is a Team?

One definition of a “Team” defines the term as a group of individuals meeting periodically to solve a problem, improve a process, or take advantage of an opportunity These individuals (normally a group a five to ten people) are united by a common purpose and typically use a common methodology to come to consensus (ODI, 1993).

    Recardo, Wade, Mention, & Jolly (1995) define a team as “a unified, interdependent, cohesive group of people working together to achieve common objectives. Whereas each person may have a specialized function, each person also needs the resources and support of others and must be willing to forego individual autonomy to the extend necessary to accomplish those objectives” (p. 6).

Characteristics of Teams

    Recardo, Wade, Mention, & Jolly (1995) share that a successful team will have the following characteristics:

• Definable membership. This means defining the roles, responsibilities, and limits of decision-making authority of each member. Each member must also be consciously aware of the deliverable for which they are responsible.

• Membership stability. Teams must have a core of individual members who will be with the team throughout the team’s life.  This core provides continuity.

• Common goals. Team members must understand the goals and objectives that they were brought together to achieve.  Team sponsors and managers play a pivotal role in defining these goals and objectives and communicating them to team members.  Of equal importance, the team members must think the goals are worthwhile so they will commit to achieving them.

• Sense of belonging. Team members must feel that they belong to the team and are full contributing members.

• Interdependence.  Teams are only teams if there is a large degree of interdependence.  That is, one team member’s performance is dependent upon the inputs and outputs of other team members.

• Interaction. Team members must interact with each other to be considered a team.  Close proximity helps to solidify and bond team members together.

• Common rewards.  Having common performance metrics and reward systems is essential to a team’s long-term viability.

Self-Directed Work Team Development over Time

Teams are associated with a management model Ed Lawler calls high involvement, high participation (HIHP).  HIHP emerged from sociotechnical theory, which originated in the coalmines of England during the early 1950s.  This model suggests that increased productivity is achieved when workers are highly involved and participate in every aspect of the work they perform (Recardo, et al. 1996).

            Through the Self-directed team approach, based on sociotechnical theory, faded in the 1970’s, it re-emerged in many companies in the 1980s.  Just-in-time (JIT) production greatly revolutionized the factory floor in the late 1960s in Japan and did the same thing in the United States in the late 1970s (Recardo, et al. 1996).  The quality and productivity work of W. Edward Deming, Joseph M. Juran, and Philip Crosby have all pointed out the positive effects of involving employees in decision-making, productivity improvement, and customer satisfaction.  However, for the last 35 years, HIHP has been largely a curiosity, not a mainstream style of management, in spite of impressive results like the following:

• Xerox plants using teams have 30% higher productivity than their traditionally structured plants.

• Proctor & Gamble gets 30 to 40 percent higher productivity in its team-based plants.

• GM reports a 30- to 40-percent increase in productivity in its self-directed, JIT plants.

Recardo, et al. (1996) identify that the HIHP model has seven basic elements:

1.  Employees must be actively involved in designing processes and structures of the organization.  This means employees must be given all the information they need to be successful.
2. Employee manage the team, management manages the boundaries and the environment outside the team.
3. Employees are in charge of production and services; they have the authority to start, stop, or fix production.
4. Employees are cross trained to do several jobs and compensated for learning new skills.
5. High-quality products and high-quality work life are inseparable.
6. Continuous process improvement must be a way of life.
7. To a greater degree than in the past, employees hire, fire, and determine pay rates.

    At about the same time sociotechnical theory was being developed in Europe, Douglas McGregor was beginning to wonder why traditional management systems, called the scientific management model, didn’t work anymore (Recardo, et al. 1996).  The scientific management model focused on efficiency or time and movement in production.  In the 1970s another management model appeared called the performance management model.  This model stipulated that getting stakeholder buy-in was critical to increased productivity.  The underlying theory in performance management is that employees need to know where they are going, how they are going to get there, and what their roles and responsibilities are.  From this model we now have goals and objectives in our business plans (Recardo, et al. 1996).

Benefits of Teams

Recardo, et al. (1996) identify some common benefits of teams as:

• Better solutions. A group of individuals brought together to solve a business problem is much more likely to come up with a better solution than is an individual working alone. The collective brainpower of a team frequently outmatches the single brainpower of an individual.

• Increased motivation of members. Most managers are not trained, rewarded, or reinforced for making the workplace a sociologically and psychologically healthy experience and therefore misunderstand its importance in the forging of a good team.  Employees who work in teams typically state they have received more support then they would have in a non-team environment.  In a well-run team the social interaction of team members is a positive and rejuvenating force.

• Increased knowledge.  Teams provide all members with connections that can lead to new opportunities and new work experiences that would be less likely to occur in a traditional work environment.  People are exposed to other jobs and ideas that will make them more valuable in their own jobs.

• Better use of resources.  In today’s increasingly competitive environment, a key source of competitive advantage for many organizations is waste reduction.  Teams are frequently a cost-effective way of reducing resource costs through sharing human as well as material and financial resources.

• Increased productivity.  Teams go through a life cycle.  During the early stage3s of that life cycle, team failures are very high and very frequent.  It is not unusual for self-directed teams to have a failure rate as high as 60 percent.  But once through that life cycle, initial productivity increased of 15 to 30 percent are common.  In organizations with a long history if implementing teams, their success rates are much higher, and consequently productivity increases come more rapidly and with fewer failures.

    Additionally according to the ODI, Making Teams Work (1993) handbook, there are three prime benefits to teams:

1. They get work done.  A well-run and well-motivated team, with a clear focus and appropriate technology, can solve problems that have remained unsolved for years or improve processes that have been bottlenecks or major sources of waste and rework.  Through group creativity and the synergy that comes from constructive interaction, teams can save organizations many times what they cost in time and support. 

2. They tear down walls.  Teams span boundaries –individual boundaries, functional boundaries, hierarchical boundaries, even the boundaries that separate the organization from the outside world.  Teams become a catalyst that allows different parts of the organization to interact, to learn, and to take joint action.

3. They strengthen the organization.  Teams make an organization healthier by getting people in the habit of communicating, taking responsibility, thinking logically, and taking action.  Through their emphasis on “management by fact,” teams ensure that the focus is on issues and not personalities. 

Kinds of Teams

    Today, teams are configured in hundreds of different ways.  All teams fall across a conceptual continuum from those that are reactive, tactically focused like simple problem-solving teams, to those that are more proactive and focus on being self-supportive as in self-directed work teams.  Recardo, et al. (1996) break down teams structures into four main types of teams.

Figure 1.2, Recardo, et al., 1996 (p. 10):  The Team Continuum

• Simple Problem-Solving Teams. Simple problem-solving teams typically address intra-unit problems over a fixed time frame.  Membership is typically mandated, and these teams tend to be reactive and tactical.  They are typically easy to design and implement because they require little systems integration.

• Task Forces. Task forces are composed of team members with highly specialized skills, brought together from different functions across the organization for the purpose of solving complicated problems requiring a high degree of specialization.  Task forces usually conduct research and make recommendations but do not implement solutions.

• Cross-Functional Teams. Cross-functional teams are composed of team members who are brought together from different functions across the organization to analyze, recommend alternatives, and solve complicated problems.  Unlike a task force, a cross-functional team implements its findings and recommendations.  Team members are often highly skilled or specialized within their fields.  Some organizations have attempted to create permanent cross-functional teams, but the results so far are discouraging.  The problems appear to be universal to all cross-functional teams.  They include such things as lack of personnel resources, poorly detailed business plans, lack of clear roles and responsibilities, no clear chain of command, and lack of sponsor support.

• Self-Directed Work Teams.  Self-directed work teams (SDWTs) manage their own internal affairs.  More than any other team, self-directed work teams evolve over time.  They may come to control human resource decisions (hiring, firing, compensation, vacation scheduling, and so forth), often have budgetary and financial control, interact with customers, decide production schedules based on business goals, and generally have the authority to improve work methods.  Self-directed work teams are by far the most difficult type of team to implement because of the extensive systems integration required (they affect the information system, administrative control systems, human resource systems, and so on), they; correspondingly, have the lowest success rates.

When should you Form a Team?

    Part of an organization’s success in implementing teams deals with how they chose to implement those teams.  Recardo, et al. (1996) identify that many organizations have learned through the years that for all the measurement done concerning teams, four measures are ultimately important:

1. Customer acquisition, satisfaction, and retention.

2. Increased productivity.

3. Employee satisfaction.

4. Improved cash flow.

    The above four performance measures are often the major drivers for most high-performing organizations.  When investigating whether or not teams are right for an organization, these four important performance measures should be kept in mind.  If teams cannot positively impact these four performance measures, chances are time and resources will be wasted implementing teams.

According to the ODI, Making Teams Work (1993) handbook, Teams make sense under any of the following conditions:

• When a problem or opportunity can benefit from concentrated attention by a group of people.

• When the cause or causes of a problem are unknown or uncertain.

• When the solution is not obvious.

• When functional or other interests impede the selection of the best course of action for an organization.

• When consensus is necessary for organizational support or effective implementation

    Teams—one potential design element—should be adopted because they are the best way to enact the organization’s strategy and because they fit with the nature of the work, not because other companies are using teams and claiming success (Morhman, et al. 1995).

When shouldn’t You Form a Team?

           The key question to ask is whether a particular task is best accomplished by establishing teams to allow members to integrate their activities.  Teams should not be established simply because there is a need for speed, efficiency, quality, innovation, and customer responsiveness.  They should be established because a team structure is the best way to achieve the integration required to accomplish these strategic goals.

Teams are not the right choice when the conditions cited above do not exist.  They also do not make sense when you have insufficient support or insufficient time to do the job right, or when, for security or other reasons, the information to make a decision is not available to the team (ODI, 1993).

Teams, then, cannot be the answer to all problems.  It also is important to recognize that decision-making frequently takes longer for a team than for an individual, coordinating schedules is often difficult, and more viewpoints need to be reconciled.

    Recardo, et al. (1996) go on to further share that teams are not risk free.  Some of the more common risks associated with implementing teams are as follows:

• Loss of control.  Most Americans have grown up without working in a communal or team environment.  Furthermore, the compensation system in almost all corporations is based on rewarding the individual and not the team.  Teams make many people feel as thought they have lost some control or freedom over their work lives, where as employees who have worked on factory floors or in the back office are much more likely to be at home in teams.  Managers and supervisors tend to be threatened by teams because they have to surrender some of their traditional power to the team.

• Imposed consensus.  With teams individuals may not always get what they want.  All of us have identified and oftentimes offered what we think is the perfect solution to a problem; in teams, we may discover that we are the only one who thinks this the perfect solution.  In order for teams to work, a consensus among differing opinions must be forged and acted upon as a team.

• Managing multiple relationships can be difficult.  In a team composed of ten members, the effort to manage relationships is complex.

• Changing roles and responsibilities. The roles and responsibilities of managers and employees change significantly when teams are implemented, and change is uncomfortable.  Employees gain more power to influence work and are required to assume more responsibilities and be more proactive than in the past.  Employees also tend to be held more accountable because they and not their bosses are responsible for key outputs.  Managers because leaders instead of drill sergeants, coaches instead of control agents.  To many employees and managers this shift in roles is disconcerting, particularly if they have not received enough training to take on the new responsibilities.

• Cost.  Initially, teams re expensive to implement.  Increased training costs and lost productivity can be expected.  Sometimes redundant systems must be maintained during the transition period.  Human resources systems may have3 to be redesigned, including compensation and the performance management system.

Empowered Teams – Creating a Structure for Support

    The use of teams and teaming mechanisms to integrate organizations laterally has increased because many organizations, especially those that are highly complex, have found that traditional hierarchical and functional approaches are inadequate to address their coordination needs in a timely and cost-effective manner (Morhman, Cohen, & Morhman, 1995).

    Mohrman, Cohen, & Mohrman, Jr. (1996) share that while performance pressures are driving many organizations to a more lateral way of functioning, financial pressures are driving other: they can no longer afford the costs of the burgeoning hierarchy as a means of integrating increasingly complex work.  These costs include not only expenses resulting from proliferation of managerial and control roles but also those resulting from the delays and lack of responsiveness and learning that are build into an organization that is horizontally and functionally segmented.  But teams, a likely design component of the flat, laterally oriented organization, are not an inexpensive design either; they involve the costs of coordination time among multiple people.  For that reason, they should be used only where they are appropriate to both the task environment of the organization and the nature of the work to be done.

    Organizations that intend to make substantial use of teams to do work, manage and integrate work, and improve work cannot simply establish teams, train them, and expect them to operate effectively (Morhman et al., 1995).  Rather, organizations must be designed, or redesigned to support this new way of doing work.

Implementing Teams

    Why are so many of today’s organizations looking to work teams?  This change is taking place because more people are realizing that empowered teams provide a way to accomplish organizational goals and meet the needs of our changing work force.

    As plants, hospitals, service organizations, and American businesses as a whole seek to become more efficient, they cannot overlook the advantages offered by flexible, self-disciplined, multi-skilled work teams.  Meanwhile, workers recognize the benefits inherent in the self-directed work environment: and opportunity to participate, to learn different job skills, and to feel like a valuable part of the organization.

    Based on data from a survey conducted by Wellins, Byham, & Wilson (1991), shows the top reasons senior line managers give for their organizations; movement toward self-directed work teams. 

Some of these and other reasons for establishing teams are elaborated on below:

• Improved quality, productivity, and service.  To stay competitive, today’s organizations must bundle service, quality, speed, and cost containment into one package.  Success in these areas seldom comes from giant leaps; rather it comes from thousands of small steps taken by individuals at all levels in the organization.  The sense of job ownership resulting from the team concept has led to an emphasis on continuous improvement, which in turn has led to amazing leaps in quality, productivity, and service.

• Greater flexibility.  Advances in service quality today rely heavily on the organization’s ability to discover ways of increasing its responsiveness to customers and the marketplace.  In searching for ways to adapt more quickly, many companies are realizing the inherent advantages of work teams.  Teams can communicate better, tackle more opportunities, find better solutions, and implement actions more quickly.  Many teams in manufacturing environments are organized into natural work teams, which reorganize in a fluid way to accommodate shifting demands in production.  Because of the nature of teams, their members are often more engaged, alert, proactive, knowledgeable, and generally better able to respond to varying conditions than traditionally organized work forces.

• Reduced operating costs.  To remain competitive, many companies have been forced to eliminate layers of middle-level management and supervision.  With fewer managers, many decisions must be made at lower levels.  Empowered teams provide a vehicle for employees to take on the responsibilities typically reserved for managers and supervisors.

• Faster response to technological change.  Today’s advanced manufacturing technologies call for different and usually higher worker skills.  These technologies also create closer interdependence among activities that were once separate; thus, workers who previously worked alone now must learn to work together.

• Fewer, simpler job classifications.   As technology becomes more complex and the need for flexibility grows, many organizations see a corresponding need for multi-skilled individuals who can perform many different job functions.  Today, employees are asked to perform several functions, often rotating and filling in for one another.  Teams are designed to facilitate job sharing and cross-training.

• Better response to new worker values.  Employees today welcome autonomy, responsibility, and empowerment that self-directed work teams provide.  The results of a recent Louis Harris poll, as reported in the Behavioral Sciences Newsletter, show that all employees who were asked, “Do you want the freedom to decide how to do your work?”  77 percent answered “yes.”  Employees reported that factors such as the challenge of the task, participation in decision making and work that gives a feeling of accomplishment are more important than high levels of pay.  Those values and “wants” are wholly consistent with the empowered team concept.

• Ability to attract and retain the best people.  Organizations that acquire and retain capable work forces will offer a culture that matches the values of the new work force.  Teams offer greater participation, challenge, and feelings of accomplishment.  Organizations with teams will attract and retain the best people.  The others will have to do without.

    An organization empowers its people when it enables employees to take on more responsibility and to make use of what they know and learn.  For some positions, there is no limit to the amount of empowerment that is possible through increases in job responsibilities.   This is especially true in many professional and managerial positions.  In such cases, the degree of empowerment is directly proportional to the amount of responsibility.  Increasing responsibilities yield corresponding amounts of empowerment. Unfortunately, this relationship does not apply to the wide range of single-task jobs designed for manufacturing and service organizations.  For individuals in these jobs, while the scope of the job may continue to broaden, which will enhance the sense of empowerment and job ownership, at some point, however, the empowerment curve will begin to flatten out, because there is only so much that can be done by oneself.  In other words, amounts of empowerment and responsibility eventually stop tracking in direct proportion to each other.  Further duties would seem less meaningful, unrealistic, or too much like ‘make-work.’ Additional tasks would no longer be feasible or desired. 

Employee and Team Responsibility

    By giving several people collective responsibility for some meaningful output, you will have a better chance of opening up new possibilities for empowerment.  Further, if the group is allowed to make decisions on its own, even greater empowerment is possible. 

    The chart  below shows the team empowerment continuum, which converts “degree” of team responsibility to a four-point scale.  The scale track the approximate percentage of responsibilities a team assumes, many of which were once reserved for leaders, managers, or support departments in more traditional organizations.

Source: Wellins, Byham, & Wilson (1991).