Strategic Leadership and Decision Making

PART THREE

Teams and Decision Making in the Strategic Environment

10

CREATING AND MANAGING TEAMS

Despite America’s individualist ethos, American managers appear to have an insatiable appetite for information about teams. Since the mid-1980s, there has been an exponential growth in the number of articles published on teams in the workplace. The internet reveals endless numbers of consultants offering techniques to create teams out of "ordinary" workers or enhance the productivity of existing teams. Many of these articles on teams only advocate the use of teams as a solution to the new challenges confronting organizational leaders, and most authors fail to explain how leaders can successfully create teams.

Creating and managing teams in the workplace can lead to effective outcomes, but the success and longevity of teams in organizations will depend on how thoroughly organizational leaders understand how to extract the gains teams can provide. If leaders don’t understand the skills they need to possess, as well as the group processes that are required to create and maintain teams, then teaming will be destined only to be the management fad of the 90’s.

Should you care about this? Absolutely!! First of all it’s a matter of competitiveness. As leaders from your host organizations you should be trying to use high-performance teams to create and sustain competitive advantage. At a time when downsizing and consolidation decisions are followed by the statement, "doing more with less," leaders should be looking at every way to derive synergy from the organization. Leveraging human capital as teams will be one of the strategies that leaders have to try to gain and sustain advantage over competing nations, competing industries, and competing organizations.

Many of you may be comfortable with creating and managing teams in your service branch or agency, but you need to realize that creating and managing interservice and interagency teams present unique challenges and requires different leadership techniques. Chances are that leaders of these kinds of teams will have a harder time developing a common definition of issues and acceptable solution options among members. Furthermore, team members’ commitments are often divided between their home agency and the interagency team. The results of competitive team dynamics can be reduced efficiency in achieving goals, watered down recommendations in an attempt to address all issues or, if the issue is too contentious, disbanding the interagency team.

Knowing when to use teams and how to manage them are techniques supporting this strategy. This chapter and the three that follow are intended to broaden and deepen your conceptualization of what constitutes a team and team decision making.

TEAMS ARE COMPLEX

Most of us have been members of a group that we’ve labeled a team, whether it was a sports team, a committee, a task force at work, or an advocacy group in the community. Essentially the label of team is given to a group of people who interact well. But it is important to use a more precise definition of a team for two reasons:

Groups are "an expression of the needs and aspirations of the people who comprise them" (Walton and Hackman). Teams, on the other hand are a special kind of group, with three additional characteristics. First, teams are typically formed by management directive. Second, team members share responsibility for the specific outcomes and operations. Third, teams typically exist in an empowering work context. That is, teams are found in organizations that "emphasize the mutuality of interests between employers and employees . . . [where] all members, not just managers, have means to influence work related decisions . . . [where] there is open information and two way communication about organizational policies and practices; and hierarchical differences are minimized in ways that encourage all to feel that they are full members working together toward shared objectives"(Walton and Hackman).

All teams are not alike. First, they can differ on the type of outcomes they’ve been organized to achieve. Some teams, such as advisory panels, committees and employee involvement groups are assembled to provide advice and involvement to managers in the organization. Another type of team, the projects and development team, is an assembly of professionals who work on assigned or original projects. Finally, teams can be created to produce an outcome that is organized action. This type of team includes: sports teams, negotiating teams, expedition teams, and surgery teams.

Teams should be properly configured and managed for the type of organizational output that they are intended to produce.

Overall, teams in organizations create outcomes that exceed the collective capability of individuals who work within the formal line structure of an organization. For example, the Department of Defense benefits from the productivity defense contractors generate through teams. Honeywell Corporation, a subcontractor for the Air Force’s B-2 bomber, is a case in point:

TYPES OF WORK TEAMS AND THEIR CHARACTERISTICS

TYPE OF OUTCOME AND EXAMPLES COMBINATION OF MEMBER EXPERTISE TEAM’S DEGREE OF INTEGRATION WITH OTHER WORK UNITS TEAM’S WORK CYCLE
ADVICE AND INVOLVEMENT

Advisory Panels

Committees

Employee Involvement Groups

Low Differentiation of Expertise Among Members Low Level of Integration Can Vary in Length
PRODUCTION OR SERVICE

Assembly Teams

Maintenance Crews

Flt Attendant Crews

Low Differentiation of Expertise Among Members High Level of Integration Work Cycles Typically Repeated or Continuous; Cycles Often Briefer Than The Team Life Span
PROJECT

Research Groups

Task Forces

Architect Teams

High Differentiation of Expertise Among Members Low Level of Integration Work Cycles Typically Differ For Each Project
ORGANIZED ACTION

Sports Teams

Negotiating Teams

Expedition Teams

Surgery Teams

Cockpit Crews

High Differentiation of Expertise Among Members Low Level of Integration Brief Performance Events, Often Repeated Under New Conditions, Requiring Extended Training and/or Preparation

Adapted from: Sundstrom, E., DeMuse, K.P, and Futrell, D. (1990) Work teams. American Psychologist 25, no. 2, 120-133.

In 1992, Honeywell’s defense avionics division in Albuquerque reorganized their entire 1800 person organization into multifunctional teams. Division management searched among their supervisors for people who could facilitate loyalty, communication and decision making within a group and completed the change in six months. According to the division’s general manager senior management "took a ‘burn the bridge’ approach because we wanted people to know we were serious. If we hadn’t made a big fuss, this would have died a natural death." One of the successful teams developed a data storage systems for the Northrop Grumman’s B-2 bomber. The team leader managed the group by taking actions that created team loyalty and focused their effort on the Air Force’s needs. The leader saw his job as helping the team "feel as if they owned the project by getting whatever information, financial or otherwise, they needed. I knew that if we could all charge the hill together, we would be successful" (Caminiti 1995).

Honeywell’s strategy can be instructive in developing work teams. Senior management essentially bet the farm by ushering in a complete organizational transformation within 6 months. They wanted people to know they were serious. Next they diligently searched for employees who had the skills to work in teams. Senior management didn’t organize teams and then wish for success. They carefully identified employees who would maximize the chances that their teams would be successful. Finally, team leaders reinforced a strong sense of members who possessed a sense of ownership about their project and loyalty.

Team members can also be expected to demonstrate two types of loyalty and identification: (1) loyalty to other team members and identification with the group for effective group interaction; and (2) loyalty to the organization and identification with organizational objectives for effective task accomplishment. Recent research in teams and task groups suggest that these outcomes are the product of two coincident group processes.

LOYALTY TO TEAM MEMBERS AND IDENTIFICATION WITH THE GROUP. The interpersonal processes among team members culminating in loyalty and group identification are normal to group development. Connie Gersick’s research on a variety of task groups and teams is an example of recent research findings. She found that the orientation groups took toward completing a task was established in the group’s first meeting. Gersick reported:

...lasting patterns can appear as early as the first few seconds of a group’s life...The sheer speed with which recurring patterns appear suggest that they’re influenced by material established before the group convenes. Such material includes members’ expectations about the task, each other, and the context, and their repertoire of behavior routines and performance strategies (Gersick 1988).

Only later, at the midpoint of the group’s lifespan, did strategic reorientation to norms and task accomplishment take place. Gersick’s research reveals that from the opening moments of a group’s existence its members are simultaneously developing strategies for task accomplishment and developing the structure and processes for interpersonal relationships.

Gersick’s findings also suggest that leaders need to create immediately the conditions for team members to generate team identity and loyalty such as: establishing open communication, developing trust, and generating a sense of camaraderie. Trust, loyalty, open communication and camaraderie are the group characteristics that we typically associate with successful teams’ efforts in sports and in combat units. Team efforts are the synthesis of two processes; one part interpersonal (among team members and groups external to the team) and the other part, task directed. Consequently, leaders’ creation of conditions that facilitate positive interpersonal processes will also facilitate the task directed decision making process.

To reap the benefits of teamwork, one must actually build a team. Calling a set of people a team or exhorting them to work together is insufficient. Instead, explicit action must be taken to establish a team’s boundaries, to define the task as one for which members are collectively responsible and accountable, and to give members the authority to manage both their internal processes and the team’s relations with external entities such as clients and co-workers (Hackman).

THE OTHER SIDE OF THE COIN: THE TEAM’S LOYALTY TO THE ORGANIZATION AND ITS IDENTIFICATION WITH ORGANIZATIONAL OBJECTIVES. The team’s loyalty to the organization and identification with organizational objectives are essential. Without loyalty to the organization, the team will fragment as team members pursue their individual interests. Also, teams that lack identification with their organization’s objectives are not likely to produce outcomes of value.

Team loyalty to the organization is a consequence of the rewards leaders use to manage individual performance in the organization:

(1) Visibly and verbally reward productivity and innovation

(2) Downplay status differences between management and non-management employees

(3) Consistently demonstrate how organizational membership is instrumental to employees achieving their own goals.

How are you going to implement these techniques in your organization, and can you practice your strategy? Ideology must be translated into action on a daily basis so that members of the organization have solid evidence that they are partners whose efforts are recognized as instrumental to the organization’s success. Daily actions that exemplify the core values of trust and interdependence are critical for laying a solid foundation for employees to develop allegiance to their organization. Roger Hallowell’s research on Southwest Airlines illustrates how this firm turns concepts into action.

Southwest Airlines has demonstrated its superior comprehensive strategy by (1) being the only major United States airline to earn a profit throughout the early 1990’s, (2) having one of the most successful airline stocks, and (3) being the only airline to win the industry’s "triple crown" measures of customer satisfaction . . . Southwest’s success may be due largely to its unusual focus on creating value for employees. "LUV" and "FUN," the cornerstones of Southwest’s employee-relations approach, represent concern and respect for the individual, as well as the consensus creation of the environment that encourages all employees to have fun on the job . . . LUV refers to one of the company’s core values involving the way individuals treat each other. LUV includes respect for individuality and genuine caring for others . . . FUN is exactly what its name suggests . . . FUN occurs throughout the company through jokes, parties, and generally entertaining behavior. A front-line manager notes, "We’re kind of a big family here, and family members have fun better. Herb Kelleher sums up FUN at Southwest in saying "We demonstrate by example that you don’t have to be uptight to be successful . . . LUV and FUN are embedded into the Southwest culture and reflected in the company’s operating policies . . . FUN and LUV produce commitment that changes employees’ perception of their relationship with the airline (Hallowell 1996).

Southwest Airlines’ practices for developing loyalty provide some substance to the ideas that are circulating about transforming organizational culture. Would Southwest’s techniques work in the federal government? The bottom line is that if you want to insure team success in your organization you have to think hard about the ways you can reinforce or transform your organizational culture so that it communicates an ideology of partnership and collective gain to employees.

The effort of leading teams to identify with the organization’s objectives is as challenging as efforts to develop team loyalty. When teams identify with the organization’s objectives, members’ conceptualization of problems and their solutions have a better chance of being consistent with the strategic objectives of the senior decision makers. This is a matter of a team members actually understanding the top management’s strategic frame of reference.

Senior decision makers can reveal their frame of reference for organizational issues when they imbed answers to "why" questions in their assignments to their teams. Answers to "why" questions create clarity. With clarity of purpose there is a better chance for team members to develop a common understanding of issues, and to adopt unified approaches to solutions. Researchers Carl Larson and Frank LaFasto, who interviewed members of mountain expedition teams, executive management teams, GAO and Congressional investigation teams, provide insight to team clarity:

Examples of goal clarity are literally everywhere in our interviews with leaders and members of effective teams....Captain William Bauman, a staff writer for the [Challenger disaster] investigation team, identified goal clarity as one of the primary explanations for the success of the team, one of the most effective Presidential Commissions in recent history. The mission of the Rogers Commission was to investigate the Challenger disaster and determine the cause within 120 days. . . . The team was under considerable pressure from the public and media to assess blame. . . . But what was needed immediately following the disaster was a clear determination of cause. What caused the disaster? What were the major contributing factors? And what specific recommendations would grow from these determinations? The report of the Rogers Commission never deviates from the question of what happened and why. The mission was clear and concrete, and the team was able to execute it effectively (Larson and LaFasto 1989).

Their interviews also revealed that clear communication of the team’s purpose lead to successful team outcomes in mergers and acquisitions. Another interviewee, Anthony Rucci, one of the leaders of the team that implemented the largest merger of the health care industry, provided the following insights::

The first and most important step is to define the objective clearly. In fact Rucci believes it is important to be able to visualize the result and describe what that result will look like once it is accomplished. For Rucci, the vision includes imagining what excellence would look like in achieving the result. "It’s getting the results in a way that hasn’t been done before. It’s achieving the results in a way that set a standard, a higher standard for how you can get something done"(Larson and LaFasto 1989).

Each of these examples reinforces the earlier points made about ways leaders can develop a team’s loyalty to organizational objectives. If team members know why the specific issues that the team is to address are important to senior management then they can see how their efforts will be integrated into the organization’s strategy.

THE CHARACTERISTICS OF HIGH-PERFORMANCE TEAMS

High-performance teams may be appealing to think about because they conjure images of organizational teams operating with the precision of a drill platoon, the efficiency of an Indy race car pit crew, or the effectiveness of a police SWAT team; images synonymous with capability and productivity. These images are useful for picturing how teams could operate, but leaders need more insight about high-performance teams if they are going to create them.

Jon Katzenbach and Douglas Smith provide a description of high-performance teams based upon their research on teams in a wide variety of organizations:

Strong interpersonal commitments drive a number of aspects that distinguish high-performance teams. Fueled by interpersonal commitments, team purposes become even nobler, team performance goals are more urgent, and team approach more powerful. The notion, for example, that "if one of us fails, we all fail" pervades high-performance teams. In addition, mutual concern for each other’s personal growth enable high-performance teams to develop interchangeable skills and hence greater flexibility. High-performance teams also share leadership within the team more than other teams. And, not significantly, high-performance teams seem to have a better developed sense of humor and more fun (Katzenbach 1993).

High-performance teams seem to possess the characteristics of other organizational teams. However, this type of team also displays: (1) higher levels of camaraderie; (2) increased levels of interdependence; (3) greater collective learning and adaptive capabilities; and, (4) closer identification with team outcomes than the average team. Are high-performance teams a chance occurrence? It will appear that way if you only look at a team’s output. The success-failure records of teams, especially those operating in highly competitive environments, will fluctuate over time. How many sports teams can be considered dynasties?

At the core of a high-performance team’s capability is the team members’ ability to use interpersonal relations to facilitate team learning and performance. Team members forge and maintain high levels of camaraderie and appear to leverage these personal processes to: (1) accelerate members’ ability to learn from each other and from their collective experiences; and, (2) efficiently focus members’ efforts on accomplishing their objectives. Descriptions of high-performance teams consistently mention team members’ emphasis and maintenance of strong team identity. This team also vigilantly minimizes internal politics by agreeing to place high value on the team’s collective goals.

How do leaders encourage collective action?

CREATING AND MANAGING TEAMS AT THE STRATEGIC LEVEL OF ORGANIZATIONS

Whether they are used in employee involvement groups, assembly teams, maintenance crews, or research groups, many organizations have benefited from the higher quality output of teams. In the early 1990’s Motorola’s CEO and Prudential Insurance Company’s CEO offered the following perspectives on top management teams:

In my mind, there is a definite parallel between the self-managing worker teams we are trying to develop across the baseline of the organization and our top management group. We are really trying to create the same behaviors of openness, collective problem solving, multiple leadership, and mutual trust and respect in both situations. So there are important parallels. But somehow it is still different and more difficult at the top.

George Fisher, CEO Motorola

I know teams work. But I’m still not convinced it is worth the time and effort to push further in the direction of making our executive office into a team....The essence of the issue is defining a set of team goals for ourselves as a group beyond dealing with the broad strategic and leadership issues of the corporation. And so far, it is not evident to me what those would be. I must admit, however, I am intrigued by the possibility.

Robert Winters, CEO,

The Prudential Insurance Company of America

Why is it so difficult to create or even visualize a top management team? Part of the answer lies with the job demands of senior executives. Senior executives are paid to confront the VUCA environment. Under complex conditions they generate ideas for the organization’s future and translate them into initiatives, often resolving policy conflicts through negotiation. Other aspects of the strategic leaders’ responsibilities include conceptual tasks such as solving short term problems for which answers are derived through staff analysis or team consensus.

Strategic leaders make the greatest contributions to their organizations by generating decisions on issues for which there are no right answers. Here, top management teams can be of great assistance, because their members can reduce the uncertainty surrounding strategic issues by incorporating additional sources and types of information in all deliberations. Executive team members can also reduce complexity surrounding strategic issues by offering interpretations that are based on different frames of reference that can stimulate sophisticated analyses, and provide more comprehensive solutions.

Executive level decisions are also guided by multi-agency teams, comprising either strategic level executives themselves or senior staff representatives from organizations that have a stake in the issue. The Department of Defense is increasingly engaged in interagency operations. "Deep VUCA" issues ranging from drug interdiction policies, to peace keeping operations, to nuclear weapons control policies are all viewed from a multi-agency perspective. A benefit with multi-agency teams is that decision outcomes will be endorsed by those organizations that have a stake in the issue.

Can teams be organized at the strategic level to achieve gains discussed earlier? Yes, but only if challenges to developing team consensus about long term issues are overcome. The strengths of top management team members also create multi-agency liabilities in the form of each executive’s perceptual filters (Starbuck and Milliken 1988). Different terms pertain to each executive’s personalized model for interpreting VUCA issues, and these personalized models can be based on organizational culture, professional norms, individual preferences, or personal life experience. Regardless of the basis of executives’ approaches to interpretation, the success of team processes will depend on how the team manages conflict during their attempt to reach consensus.

Executive team interactions that contain too much conflict result in polarization or fragmentation within the team. Donald Hambrick, a researcher on executive teams from Columbia University conducted in-depth interviews with 23 chief executives from major corporations in the United States and Europe (Hambrick 1995). Among his findings were examples of how fragmentation occurs:

In our zeal to give autonomy, we’ve created a bunch of fiefdoms. Everyone’s pursuing their own objectives. Right now, there’s very little natural, informal communication or collaboration among these folks. We’re facing some new marketplace shifts which affect the whole company, and unless we can get our act together, we will be passed by.

We’re not running on all cylinders. Communication is slow and spotty. As a result, we’ve had things drop between the cracks. I’m trying to figure out whether this is a matter of group "chemistry", group process, or what.

Team? How do you define a team? When I think of a team, I think of interaction, give and take, and shared purpose. Here we’re a collection of strong players but hardly a "team". We rarely meet as a team-rarely see each other, in fact. We don’t particularly share the same views. I wouldn’t say we actually work at cross purposes, but a lot of self-centered behavior occurs. Where’s the "team" in all this?

These kinds of problems are not restricted to corporate teams. There are numerous examples of how excessive, dysfunctional conflict among the military services, and between the military and other government agencies, have led to suboptimal results. Richard Gabriel analyzed military operations such as the Sontay Prison raid, the Mayaguez rescue mission, the Iranian hostage rescue attempt and the Grenada invasion. Gabriel links many of these failures to breakdowns in interservice decision making at the executive level.:

A number of the key decisions seem to have been made on the basis of interservice rivalry, bureaucratic consensus, and political criteria rather than operational requirements. There seems to have been a bureaucratic imperative to give each service a role, regardless of whether it could best contribute to the success of the mission. In some instances, this imperative ruled even when a course of action seemed to work against the chances of success.

PRODUCTIVE CONFLICT

There is a third category of interaction, productive conflict, that seems best suited to the goal of strategic decision making teams. L. D. Brown describes productive conflict as follows:

Productive conflict at agency or cultural interfaces involves perceiving and explicitly recognizing cultural differences, encouraging communication about those differences, when relevant, and encouraging representatives to resolve differences without escalation.

Leaders must initiate and manage productive conflict in executive teams in two ways: through the techniques they use to unify team members’ commitment to strategic objectives; and through the rules of operation they establish for their teams. Jon Katzenbach and Douglas, in their book, The Wisdom of Teams, provide a set of guidelines that leaders can follow when establishing rules of operation for executive teams. They include:

CONCLUDING COMMENTS ABOUT TEAMS

This chapter has presented a discussion about work teams that provides you with the tools to analyze how teams operate in a variety of contexts. Ordinary work teams can be configured to produce different outcomes and it is up to organizational leaders to match the right kind of team with the desired output. High-performance teams are not found in ordinary organizational contexts. Instead, they embody a team capability that is necessary for success in highly demanding, nonroutine tasks. Executive level teams confront VUCA issues. But they can be hampered by the challenge of trying to develop team consensus among different individuals who may interpret strategic issues differently.

Effective teams do not exist because leaders hope they will exist. They exist because leaders possess the ability to analyze accurately when teams can be effective in the organization, and because leaders know how to manage team processes to produce high-quality results.

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