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Team effectiveness: The 5 conditions (and how to measure it)

a man and woman working together to achieve team effectiveness

Is team effectiveness the white whale of modern work?

In some ways, absolutely yes. There are entire sections of bookstores dedicated to team-building, communication, and collaboration -- and yet, from the stats above and anecdotal evidence within organizations, it feels like many haven’t quite achieved team effectiveness yet. 

Some of this is inherently logical: human beings come from different backgrounds, and arrive at jobs with different personal baggage, different desires from their career, different family situations, and much more. With so much individual difference, pulling all those disparate personalities and backgrounds into an effective, functional team can be a challenge (and obviously is). 

Now, when you talk about team effectiveness, there are two different tracks you can take. One is more theoretical, where you understand the science and context behind different models for team achievement. There are hundreds of these models, some detailed in this post from productivity software tool Wrike, and some in posts of ours, like this one on coaching leadership styles. 

The theoretical side of team effectiveness is definitely interesting, but it won’t necessarily give you a toolkit to a more-effective team in the moment. So, the other approach is more tactical, where the discussion centers on things you can enact right now to see more team effectiveness.

The latter -- pragmatic, tactical -- is the approach we will take in this article.

Table of contents
Team effectiveness statistics:
What are the building blocks of team effectiveness?
Team effectiveness: Establishing a compelling direction
Establishing a strong structure
Team effectiveness and psychological safety
Building a shared mindset
Team effectiveness and evaluation
The bottom line on team effectiveness

Team effectiveness statistics:

  • 75% of employers rate teamwork and collaboration as “very important” [1]
  • 86% of employees and executives list a lack of teamwork as the primary reason for project failures [2]
  • 97% of employees and executives believe lack of alignment within a team negatively impacts the outcome of a project [3]
  • 37% of employees indicate “working with a great team” as their primary reason for staying at a job [4]
  • 27% of employees planning to leave within the next 12 months cite a lack of teamwork as the main reason [5]
  • 33% of employees say increased team effectiveness makes them more loyal to the overall company [6]
  • Companies with effective teamwork, communication, and collaboration models are 4.5x more likely to retain top-tier employees [7]
  • 39% of employees report a general lack of teamwork and collaboration [8]

What are the building blocks of team effectiveness?

Martine Haas, from Wharton Business School, and Mark Mortensen, from INSEAD, have studied team development across a wide variety of industries and departments for 15+ years. They begin their discussion of team effectiveness by noting that most teams right now are “4-D” teams, meaning more diverse, dispersed, digital, and dynamic. 

In 2020, this absolutely feels true: there are notable corporate pushes for diversity, teams are necessarily dispersed because of COVID, digital rules the day, and business models are increasingly dynamic. 

“4-D Teams” do a have core enabling conditions for effective work:

  • Compelling direction: What are the end goals? Why is this team together? What do they hope to accomplish collectively and individually? Obviously the compensation is part of it, but it’s not the entire picture. People need to know they are working on something of relevance and value. 
  • Strong structure: This means that processes are clear, information is easy to access, the skill sets are dispersed so that team members know who to contact for various needs, and the flow of a week, day, month, and quarter makes sense to team members. 
  • Supportive context: This is commonly referred to in team management literature as “psychological safety,” and it’s been shown as a core tenet of team effectiveness in multiple studies, notably Google’s “Project Aristotle” team research. Above all else, it means that team members support each other and there’s a feeling that you can propose certain “zany” ideas because no one will laugh you out of a room. Those teams tend to see the highest levels of innovation.
  • Shared mindset: Commonly framed as “rowing in the same direction” or similar, this means that team members are on the same page about needs, goals, deliverables, timelines, process, and approach.
  • Evaluation: The team has clarity on how they are being evaluated in terms of projects, annually, as a team, and as individuals. The metrics and KPIs are clear, and the process is largely transparent.

If we believe these core tenets of team effectiveness, and variations of these hold up across a wide swath of management literature, then how do we improve these elements on our teams?

Team effectiveness: Establishing a compelling direction

Ideally this begins during the hiring process -- having a careers page, employee testimonials, and an interview process rooted in conveying what the big goals are. It moves, crucially, into onboarding new members to a team. Consider how John Deere does this:

There’s a group at John Deere in India, where they face a really competitive labor market for engineers. On the first day, a new employee is met by a friend they had been corresponding with who shows up with a favorite beverage, and they walk to their cubicle. It’s already set up. In fact, the first email is from the CEO of John Deere, who talks about the legacy that we have, 175 years of innovation. The fact that we’re making products that make people food and give people shelter, so we’re doing important things for the world. He welcomes people to their first day. On the desk is a model of the first file that John Deere ever patented. It was a plow that you could pull behind your oxen or your horses that didn’t get caught up in root systems when you were plowing a field.

In this example, the compelling direction is set from Day 1, which is very powerful. 

Other ideas for establishing a compelling direction:

  • Meet with the whole team every 90 days to discuss the bigger picture of the organization and how it’s shifted over the past year. 
  • Every month, have each team member write down the biggest purpose of the team and the company. If the answers are all over the place, connect with the team and see where the confusion lies. 
  • Pursue “executive sponsorship,” where the highest-ranking people in the organization come to your team and discuss the importance of their work and how they fit into the overall mission.

Establishing a strong structure

Paradoxically for some, establishing a strong structure for your team is about simplicity, not increased complexity. We already have too many platforms and pings at work. For processes to run smoothly, we need to simplify the processes involved in team effectiveness. Make them clear and make it easy to get work done, as General Motors CEO Mary Barra told some MBA students at Stanford:

“If you believe that most people come to work every day and want to do a good job, then what’s getting in their way? Do we have an environment, a collaborative environment, and the tools that are necessary so they can do their best work? Or is it painful to get the most simple task done?” she says.

Other ideas for a strong structure:

  • Allow team members to weigh in on what works and what doesn’t in terms of tools, tech, processes, and more.
  • Evaluate with the whole team at least twice/year.
  • Each month, have team members write down their biggest bottlenecks to team effectiveness, and attempt to deal with every response.
  • Institute daily standups aimed at a quick wrap-around (online, even) of core work and core “blockers” to effective work. Streamline this meeting and people will start every day knowing where their whole team stands.

Team effectiveness and psychological safety

This one is a bit harder during COVID, because teams cannot gather for social events as easily. But to establish a support structure and psychological safety on a team, some approaches include:

  • Virtual team gatherings
  • Have “failure events” where team managers or more senior members discuss times they’ve failed and how they recovered from it; it creates a culture where failure can be tolerated in the name of future greatness.
  • Have meetings where the team “fires themselves,” i.e. lists something they messed up in the previous quarter and commits to an action plan where it doesn’t happen again. This sets up the idea that failure is tolerated in the name of ultimate team effectiveness, and can foster more emotional connection.
  • Managers need to check in with each team member individually throughout the course of a month, and encourage other team members to do the same.

Building a shared mindset

This is somewhat similar to “compelling direction,” although one of the modern challenges of “shared mindset” is that business moves very fast these days (“VUCA” is the term, for volatile, uncertain, complex, and ambiguous) and sometimes the overall mindset shifts drastically and certain teams haven’t caught up. Their shared mindset is several iterations behind. You saw this commonly with basic approaches to work around cloud adoption, for example -- as organizations embraced the cloud, many teams were still heavily on-premise and paper-driven. Their mindset around work, while shared with their team members, was not broadly shared in that example. 

The most effective way to build a shared mindset is to be transparent as a team leader, and keep your people in the loop about:

  • Big picture strategy
  • Changes in thinking
  • Changes in tech
  • Changes in workflow
  • Changes in process
  • Changes in business model 

That’s all at a higher org level. At an individual level, team leads should check with the individual members of their team about:

  • What do you like about this work?
  • What don’t you like?
  • How do you think it’s changed recently?
  • Is that good or bad?
  • How are you being supported?
  • Where are you not being supported?
  • How could the team align more?

Those check-ins should happen at least 5-6 times/year, if not more. There should be whole-team check-ins with similar questions too; otherwise teams get lost in task work and deliverables, and while “stuff is getting done,” the shared mindset becomes lost as everyone focuses on their specific set of tasks.

Team effectiveness and evaluation

This is a very tricky one, and it varies a lot by industry and role. Above all else, though, the evaluation model needs to be transparent to members of a team in order for the team to be effective. To wit, then:

  • What are the core metrics this team is responsible for?
  • What are the group KPIs?
  • What are the individual KPIs?
  • How often are these reported?
  • Who sees them?
  • How many people can be advanced in a given year?
  • Who makes those decisions?
  • Who should team members approach when they lack clarity on a KPI or goal?

Transparency is the most important step -- people want to know how they will be evaluated, by whom, and what their prospects are for more responsibility, more opportunity, and more compensation. If those factors can be made clear, team effectiveness is within sight. 

Now, at the same time transparent reporting and KPI structure can alienate some team members, and they might choose to leave if they don’t like the structure. That’s OK, as very few teams in human history have 100% retention forever. 

The bottom line on team effectiveness

Be a good manager and check-in with your people frequently. Take their pulse. Understand what matters to them collectively and individually and how that may have shifted in the last few months. Focus on both giving and receiving feedback gracefully. Learn the work style of your team, which allows you to better understand People-Project Fit. Be an active, engaged leader who balances process, task completion, and empathy and discussion -- and team effectiveness will follow. 

As with the development of any top-tier team, there will be hiccups and challenges, but if you focus on a mix of goal completion and psychological understanding, your team can thrive.

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