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Along the history, we have always lived in groups and have continuously invented new ways of collaborating within and along groups. In this way, we achieved extraordinary advances. None of these advances could have been possible without our collaboration capabilities.

Today, groups are still core building blocks of every organization. Their effectiveness directly contributes to effectiveness of organizations. Effective organizations configure and execute their strategy better and gain a competitive edge in areas where they operate.

Group, Team, Effective Team

In order to provide a proper answer to our initial question, lets first start with defining the concept of “team”. There are many definitions around, but I believe the most proper one comes out by merging definitions of L. Thompson and R. Hackman.

A Team is a clearly distinguishable group of people, who are interdependent (with respect to information, resources, knowledge and skills) and seek to combine their efforts to achieve a common goal.

This definition includes the bare minimum qualities of a team, which are “clear boundaries”, “interdependency”, “common purpose” and a “coordinated effort” to achieve this purpose. When one of these qualities is missing or at very low level in a group, it is better to call it just as “group”. For example;

  • advisory groups, which are created by drawing people from different expertise areas or backgrounds in order to support or check out decisions of a leader or committee,
  • reporting groups, which are formed just to report on what is happening in their area of responsibility to a person or committee
  • learning groups, which are formed to support each other along a learning endeavor

In summary, all teams are groups, but not all groups are teams.

Teams are complex systems. Large organizations contain many teams, therefore they can be thought as nested systems of teams.

In order to be effective, a team, needs to deliver high value in a sustainable way. In general, we can define value as the benefits, which are expected to be received by the stakeholders by getting their needs addressed through the team. Stakeholders can be many, including the people who invested in the team, the people who receive and use the output of the team, the bodies who are indirectly affected by the activities or the output of the team, or the team members themselves. Each stakeholder may expect different needs to be addressed and these needs may change over time. Some needs may be explicitly stated, some may be hidden or unknown. Some may overlap, some may contradict. As a result, value can mean different things for different stakeholders. For any team, creating value should mean “addressing the composed set of all important needs of the stakeholders”. Importance level of the needs is relative with respect to perspective and time. As time progresses, the context may change, so that the importance level of the needs, which are expected to be addressed by the team. All of these boils down to the below definition:

An effective team is the one which continuously create high value for its stakeholders.

So what makes a team effective? Unfortunately, this is not a well-studied topic. A review of existing literature brings out many criteria into discussion.

Qualities of Effective Teams

Effectiveness of a team may improve, if a team

  • has a common purpose, which is sufficiently
    • clear
    • desirable
    • challenging
  • has proper member composition with sufficient
    • size
    • diversity
    • skills
    • stability
    • cohesion
    • leadership
  • has proper task and role design, which is sufficiently:
    • clear
    • stable
    • structured
  • has shared values and norms for effectively
    • engaging with each other
    • engaging with stakeholders
    • making decisions
    • resolving conflicts
    • providing psychological safety
    • learning and developing (both individually and collectively)
  • has a supportive organizational context, which provides sufficient
    • material resources
    • support systems

More Details

Since detailing all these items in a blog article is not feasible, I content with providing short explanations of what they are and how they contribute to effectiveness of the team.    

Common Purpose

Clarity of the purpose lets all team members depict the same picture of ambition in their mind. Then they can more easily work backwards in order to prepare a roadmap. This proves very useful in aligning decision making and coordinating efforts.

Desirability of the purpose is related with personal values of the team members. The more the common purpose resonates with personal values of the team members, the more desirable it becomes. 

A challenging common purpose energizes the team members. It is important to maintain a balance in the level of perceived difficulty. If perceived difficulty will be too high or too low the motivation is adversely affected.

Composition

Team size is a tricky parameter. There are evidences that the bigger the group is, the less satisfied the members feel with it.  The propensity to experience “social loafing” increases and productivity decreases. In general, in very large teams, people’s needs to form comfortably sized social groups will lead them to create sub-groups. This can be either positive or negative for team performance. Comfortable limit for the group size depends on the nature of the task. For simple task teams, 15 may be a good size. But for problem solving teams, higher than 10 may not be effective. Whereas, for integrated task teams 5 to 8 may prove much better.

Diversity seems to be an enabling factor for teams when they have effective processes for maintaining open and positively critical dialogue. There are several studies, which indicate that having cultural, expertise-based or gender-based diversity contributes to make more innovative and higher quality decisions. In the absence of effective decision-making mechanisms, diversity can bring chaos to the teams. 

Having sufficient skills is another important factor. Skills of the team members must be aligned with the purpose and task design in order to ensure success. Additionally, the more the people engages the full range of their skills, the more satisfied and engaged they become.

Some level of stability in the composition of the team also contributes to team effectiveness by giving members time and opportunity to learn how to work together well. When stability is too much, it can have adverse effects on performance. The typical problem observed in such situations is the decreasing ability or tendency to challenge the status quo. Recent research about creativity in teams found that creativity increases significantly when new members join and decreases when changes in membership stay still for a long time.

Cohesion means “sticking together” and it seems to consist of three elements. First element is about how well team members get on with and support each other. In effective teams, there is cooperative rather than a competitive mindset. Members offer and seek support from each other. They recognize when other members need help or encouragement, and take time away from their own priorities to assist their colleagues. The second element is about how committed they are to the team task. This includes adapting roles and behaviors to the tasks as needed and accepting personal discomfort or disadvantage, where there is a clash between their own interests and those of the team as a whole. The third element is about how proud they feel to be part of this group.

Teams may have heavy formal leadership roles, which holds all managerial responsibilities such as representing the team, protecting the team from external disturbances, developing the skills of the team members, clarifying goals, motivating them to achieve the goals, creating and maintaining the environment in which the team can succeed. But there are also self-governing teams, in which leadership responsibilities are distributed. In all cases the effectiveness of the team depends considerably on individual team members exerting leadership in circumstances where they have particular knowledge, skills or interest. It is also important that team members exert effort not only in fulfilling their part of the collective task, but also in ensuring that other members (including the leader, if any) are able to do the same.

Task & Role Design

Clarity of task and role design promotes development of “shared mental models”, which are common views of the work and the environment in which the team operates. This prepares a good background for effective communication between team members.

Task and role stability are also important parameters. When the roles in the team and the tasks that the team need to address change too frequently, teams often face difficulties in integrating necessary but different skills and in interfacing with the larger organization. When the task stability is too much, it is known that teams lose their ability to deliver innovative outcomes and to adapt to new challenges when necessary.

Task and role design must be aligned with the nature of the work. Some work may require clear standards. In this case, the space allowed to the team for judging how to execute the tasks must be limited. If the work requires creativity, then the task design must provide adequate dose of autonomy to members. In general, studies indicate that customer satisfaction is strongly associated with work standardization, whereas the overall team effectiveness seems to be more strongly associated with creativity.

Some studies also indicate that it is better if task and role design enforces collective knowledge management. Having a flexible and fluid role structure let team members be involved into each other’s domain and accumulate knowledge collectively. When there is a rigid role structure based on expertise, knowledge in different areas is concentrated and managed on specific roles. This incereases miscommunication, unwillingness of team members to question decisions in someone else’s area of expertise. Also the expertise loss when a team member leaves or is absent becomes a big risk.

Within role design, designing leadership roles is the most important topic. Some tasks may require formal and central leadership roles, which are expected to provide clear instructions and guidance. In other cases, it may be better to distribute leadership responsibilities or even let the team design it along the work as needed.

Another important parameter of task design is task interdependency. One study indicates that teams are more effective when their tasks are organized to be either highly interdependent (to allow working closely together by relying on each other) or highly independent (to allow working largely alone). Hybrid groups’ effectiveness seems to be lower.

Having a whole task and role design means designing the work and roles in such a way that the team members can see positive and worthwhile outcomes of their work and how these relate to the bigger picture. Wholeness in task design shouldn’t be interpreted as delegating everything to the team. Expecting the team to manage all of its own affairs doesn’t necessarily lead to higher effectiveness. Wholeness is closely correlated with meaning, because wholeness helps people understand their impact. People find meaning when they see a clear connection between their impact and what they highly value. Both wholeness and meaning are strong sources of motivation.

Shared Values & Norms

Team members need to communicate on a number of levels, both formally and informally, while working together. Having a shared approach in engaging with each other is not sufficient. In order to be effective, communication mechanism in the team must be appropriately frequent, varied, structured and open. Different team tasks and different team structures require different levels of each of these aspects.

Of course, relating well internally is not sufficient. Effectiveness is more dependent on how the team collectively engage with its stakeholders. Interestingly, most teams are observed to be far too internally focused. Teams need to be proactive in adapting their strategies in engaging with stakeholders. A study found that vertical engagement activities, which are aimed to form top management view, were more associated with positive rating of team performance by top management (in terms of budgets and adherence to schedules) early in the team’s life. But as the teams got more mature, horizontal engagement activities, which are aimed at coordinating work and obtaining feedback, were more positively related to top management’s view of how innovative the team was.

When a team has norms and processes, which allow its members to have open and positively critical dialogue, to investigate issues, identify and understand others’ perspectives, work on wide range of choices and synthesize these into a decision, this contributes positively to its effectiveness.

Ability to resolve conflict is one of the most important characteristics of effective teams. Conflicts are good if managed properly, and they are devastating when handled poorly. Researchers identify three distinct types of conflict, which are relationship conflict, task conflict and process conflict. Relationship conflict almost always damages performance due to increased stress, loss of focus on task, reduced communication etc. Task conflict, depending on the nature of the task itself, may be either beneficial or harmful for performance. In simpler and more routine tasks, the impact is generally negative. When the task becomes more complex and uncertain, having conflict generally becomes more beneficial. Process conflict, which is generally about who should do what and how much responsibility each member should have, may also be beneficial at correct doses. A study of team performance and types of conflict found that teams that performed well were characterized by low levels of relationship conflict and moderate levels of task conflict, low to moderate levels of process conflict. It helps a lot if teams have a set of norms and processes about when and how conflict is addressed. It is also necessary to have a proper value system in the team, which supports high levels of trust, respect, open and constructive discussion.

Psychological safety is described as a team climate characteristic, which involves interpersonal trust and mutual respect in which people are comfortable being themselves. In teams with low psychological safety, the cost of openness is perceived to be greater than its benefits. Therefore, everybody tries to avoid from behaviors such as admitting a lack of knowledge, asking for help, or raising difficult issues. A great deal of effort may be spent and numerous opportunities may get lost just because people are concerned with maintaining the social image that they feel is demanded by the group.

Learning and developing (both individually and collectively) means proactively and continuously creating or acquiring new knowledge, discarding existing knowledge when necessary and using new knowledge to change existing behaviors in pursuit of higher levels of achievement. In this way teams increase their capability to address different expectations and sustain their performance.

Supportive Organizational Context

Sufficiency of material resources, which are provided to the team to accomplish the work assigned, is an important factor that contributes to effectiveness. The other important factor in the organizational context is the support systems to address various needs such as information, alignment, development, rewarding & recognition. If teams get aligned with the larger organization (know the larger purpose and receive properly aligned performance objectives), receive necessary information on time, get developmental support (training or coaching) and receive positive consequences of their performance, their effectiveness increases. Many organizations run target setting, assessment and rewarding processes at individual level. This generally creates adverse effects on team level performance because people prefer to optimize their own performance when personal and team level priorities clash with each other.  

Team level development interventions are mostly considered to be effective ways of addressing problems of team performance. Although they are important, they can not cover issues originating from poorly configured structural variables (i.e. task design, team configuration, getting required resources).

Diagnosing Team Effectiveness

Admittedly, the above intensive list of criteria of being an effective team depicts a state of nirvana. Additionally, almost all of them are very qualitative, therefore it is not possible to provide an objective evaluation scheme for diagnosing teams. However, this list can be converted into a questionnaire to be used as a self-assessment or 360-degree assessment tool. The results can be used to feed teams during coaching sessions so that they can have an internal and external perspective on their effectiveness in a more quantified way.