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C. The Implementation Process
Implementing teams across an organization is not easy; it takes a lot of hard work, time,
training, and patience. Changing from a traditional organizational structure to a team-based
structure is a major organizational change and calls for a complete cultural change for the
organization.
However, many organizations need to be able to react quickly to a dynamic environment.
In this section we present several essential elements peculiar to an organizational change to a
team-based situation. This process is shown in Figure 7.4.
1. Phase 1: Start-Up
In phase 1, team members are selected and prepared to work in teams. Much of the initial
training is informational or “awareness” training that sends the message that top
management is firmly committed to teams and that teams are not experimental.
Training covers the rationale for moving to a team-based organization, how teams were
selected, how they work, the roles and responsibilities of teams, compensation, and job
security.
Perhaps most important is establishing the idea that teams are not “unmanaged” but are
“differently managed.” The difference is that the new teams manage themselves.
Performance by teams increases at start-up because of this initial enthusiasm for the
change.
2. Phase 2: Reality and Unrest
After perhaps six to nine months, team members and managers report frustration and
confusion about the ambiguities of the new situation. For employees, unfamiliar tasks,
more responsibility, and worry about job security replace hope for the opportunities
presented by the new approach.
All of the training and preparation, as important as it is, is never enough to prepare for the
storm and backlash.
The best advice is to perform phase 1 very well and then make managers very visible,
continue to work to clarify the roles and responsibilities of everyone involved, and
reinforce the positive behaviors that do occur.
Some managers make the mistake of staying completely away from the newly formed
teams, thinking that the whole idea is to let teams manage themselves. In reality, managers
need to be visible.
The change they supported results in more work for them. Managers report that they still
have to intervene and solve problems for the teams because the teams do not know what
they are doing.
3. Phase 3: Leader-Centered Teams
Members are learning about self-direction and leadership from within the team and usually
start to focus on a single leader in the team. In addition, the team begins to think of itself as
a unit as members learn to manage themselves.
This phase is not a setback to team development—although it may seem like one—because
development of and reliance on one internal leader is a move away from focusing on the
old hierarchy and traditional lines of authority.
The design and steering committees need to be sure that two things happen during this
phase. First, they need to encourage the rise of strong internal team leaders. The new
leaders can either be company appointed or team appointed.
The second important issue for this phase is to help each team develop its own sense of
identity.
Finally, as team identity develops, teams develop social activities and display T-shirts, team
names, logos, and other items that show off their identity. All of these are a sure sign that
the team is moving into phase 4.
4. Phase 4: Tightly Formed Teams
In the fourth phase of team implementation, teams become tightly formed to the point that
their internal focus can become detrimental to other teams and to the organization as a
whole.
To avoid the dangers of the intense team loyalty and isolation inherent in phase 4, managers
need to make sure that teams continue to do the things that have enabled them to prosper
thus far.
First, teams need to keep the communication channels with other teams open through
councils of rotating team representatives who meet regularly to discuss what works and
what does not; teams who communicate and cooperate with other teams should be
rewarded.
Second, management needs to provide performance feedback through computer terminals
in the work area that give up-to-date information on performance, or via regular feedback
meetings.
Third, teams need to follow the previously developed plan to transfer authority and
responsibility to the teams and to be sure that all team members have followed the plan to
get training in all of the skills necessary to do the work of the team.
By the end of phase 4, the team should be ready to take responsibility for managing itself.
5. Phase 5: Self-Managing Teams
Phase 5 is the end result of the months or years of planning and implementation. Mature
teams are meeting or exceeding their performance goals. Team members are taking
responsibility for team-related leadership functions. Managers and supervisors have
withdrawn from the daily operations and are planning and providing counseling for teams.
Probably most important, mature teams are flexible—taking on new ideas for improvement;
making changes as needed to membership, roles, and tasks; and doing whatever it takes to
meet the strategic objectives of the organization.
Although the teams are mature and functioning quite well, several things need to be done to
keep them on track.
First and foremost, individuals and teams need to continue their training in job skills and
team and interpersonal skills.
Second, support systems need to be constantly improved to facilitate team development and
productivity.
Third, teams always need to improve their internal customer and supplier relationships
within the organization.
IV. MANAGING TEAMS
The ongoing management of teams requires additional insights. These include understanding the
benefits and costs of teams, promoting effective performance in teams, and identifying and
developing teamwork competencies.
A. Understanding Benefits and Costs of Teams
The reason for a company to create teams should be that teams make sense for that particular
organization.
The best reason to start teams in any organization is to achieve the positive benefits that can
result from a team-based environment: enhanced performance, employee benefits, reduced
costs, and organizational enhancements.
Four categories of benefits and some examples are shown in Table 7.2.
1. Enhanced Performance
Enhanced performance can come in many forms, including improved productivity, quality,
and customer service.
Working in teams enables workers to avoid wasted effort, reduce errors, and react better to
customers, resulting in more output for each unit of employee input. Such enhancements
result from pooling of individual efforts in new ways and from continuously striving to
improve for the benefit of the team.
2. Reduced Costs
As empowered teams reduce scrap, make fewer errors, file fewer worker compensation
claims, and reduce absenteeism and turnover, organizations based on teams are showing
significant cost reductions.
3. Other Organizational Benefits
Other improvements in organizations that result from moving from a hierarchically based,
directive culture to a team-based culture include increased innovation, creativity, and
flexibility.
Use of teams can eliminate redundant layers of bureaucracy and flatten the hierarchy in
large organizations.
In addition, the team environment constantly challenges teams to innovate and solve
problems creatively.
With increasing global competition, organizations must constantly adapt to keep abreast of
changes. Teams provide the flexibility to react quickly.
CASE STUDY: Teamwork at IDEO
Summary: IDEO is a global award-winning design firm. IDEO’s corporate philosophy is that teamwork
improves innovation and creativity. Project teams share and improve ideas by leveraging members’ skills
and solving problems together. IDEO teams use the same process, team members lack status or formal
titles, and every team member receives equal respect.
1. How does teamwork influence innovation at IDEO?
Group brainstorming is used to spark new ideas at once, then projects are passed to teams. These
2. How does diversity influence the effectiveness of teamwork at IDEO?
3. What characteristics would you look for in staffing a project team at IDEO?
4. Employee Benefits
Employees tend to benefit as much as organizations in a team environment. Teams can
provide the sense of self-control, human dignity, identification with work, and sense of self-
worth and self-fulfillment for which current workers seem to strive.
As a result, employees have a better work life, face less stress at work, and make less use of
employee assistance programs.
5. Costs of Teams
The costs of teams are usually expressed in terms of the difficulty of changing to a team-
based organization.
Some managers have felt as if they were working themselves out of a job as they turned
over more and more of their directing duties to a team.
Employees may also feel like losers during the change to a team culture.
Another cost associated with teams is the slowness of the process of full team
development. Productivity may fall before the positive effects of the new team system
kick in.
Probably the most dangerous cost is premature abandonment of the change to a team-
based organization. The losses in productivity and efficiency will be very difficult to
recoup.
Management must therefore be fully committed before initiating a change to a team-based
organization.
B. Promoting Effective Performance
This chapter has described the many benefits of teams and the process of changing to a team-
based organization. In this section we discuss three essential issues that cannot be overlooked
when moving to a team-based organization.
1. Top-Management Support
Change starts at the top in every successful team implementation. Top management has
three important roles to play.
First, top management must decide to go to a team-based organization for sound business
performance–related reasons.
Second, top management is instrumental in communicating the reasons for the change to
the rest of the organization.
Third, top management has to support the change effort during the difficult periods.
2. Understanding Time Frames
Organizations often expect too much too soon when they implement teams. In fact, things
often get worse before they get better.
Figure 7.5 shows how, shortly after implementation, team performance often declines and
then rebounds to rise to the original levels and above.
The phases of implementation discussed in the previous sections correspond to key points
on the team performance curve.
Organizations changing to a team-based arrangement need to recognize the time and effort
involved in making such a change.
3. Changing Organizational Rewards
How employees are rewarded is vital to the long-term success of an organization. The
traditional reward and compensation systems suitable for individual motivation are simply
not appropriate in a team-based organization.
In a team-based situation, team members are generally rewarded for mastering a range of
skills needed to meet team performance goals, and rewards are sometimes based on team
performance.
Three types of reward systems are common in a team environment: skill-based pay, gain-
sharing systems, and team bonus plans.
a. Skill-Based Pay: Skill-based pay systems require team members to acquire a set of
core skills plus additional special skills, depending on career tracks or team needs.
Usually employees can increase their base pay by some fixed amount, say $0.50
per hour for each additional skill acquired, up to a fixed maximum.
b. Gain-Sharing Systems: These plans reward all team members from all teams based
on the performance of the organization, division, or plant. Such a system requires
employees receiving amount exceeding their base pay. Employees may be
receptive to the plan if there are ‘gains’ to share but become disillusioned if they
receive no additional pay.
c. Team Bonus Plans: These plans are similar to gain-sharing plans except the unit of
performance and pay is the team rather than a plant, a division, or the entire
organization. Each team has specific performance targets or baseline measures that
the team considers realistic for the plan to be effective.
Changes in an organizational compensation system can be traumatic and threatening to
most employees. However, matching the reward system to the way that work is organized
and accomplished can have very positive benefits.
C. Teamwork Competencies
Staffing teams with people who have the interpersonal skills and competencies to contribute to
task performance but who are also able to work well in team settings is critical.
Some of the teamwork abilities you should look for are:
a. Conflict resolution abilities
b. Collaborative problem-solving abilities
c. Communication abilities
d. Goal-setting and self-management abilities
e. Planning and task coordination abilities
Teamwork competencies also include an understanding of ethical behavior in teams. Other
people’s ethical behavior influences our own ethical behavior.
Four ethical issues are especially important in teams:
a. How do teams fairly distribute work?
b. How do teams assign blame and award credit?
c. How do teams ensure participation, resolve conflict, and make decisions?
d. How do teams avoid deception and corruption?
A team contract is a written agreement among team members establishing ground rules about
the team’s processes, roles, and accountabilities.
Team contracts help to reduce the potential for team conflict stemming from an unequal
division of resources and deter free riding.
By enhancing personal accountability and creating clear rules and expectations, team contracts
can promote ethical team behavior and improve team performance and team member
satisfaction.
V. EMERGING TEAM OPPORTUNITIES AND CHALLENGES
As teams become increasingly common in organizations, two additional sets of opportunities and
challenges must be addressed.
These involve virtual teams and diversity & multicultural teams.
A. Virtual Teams
Managing virtual teams can be difficult. Virtual team members are frequently separated by
both geographic space and time, increasing the challenges of working together effectively
Virtual teams allow organizations to access the most qualified individuals for a particular job
regardless of their location, enable organizations to respond faster to increased competition, and
provide greater flexibility to individuals working from home or on the road.
In some cases, some members of the team may be free agents or alliance partners and not be
employees of the organization. In some teams, members may never even meet face-to-face.
Many virtual teams operate within a particular organization, but increasingly they cross
organizational boundaries as well.
1. Virtual Team Leadership Skills
Working from different locations introduces challenges with communication, collaboration,
and the integration of the team members with the rest of the team and the broader
organization.
One of the most important things a virtual team leader can do is to establish a
communication climate that is characterized by openness, trust, support, mutual respect,
and risk taking.
This helps the team establish positive working relationships, share information openly,
reduce the formation of in-groups and out-groups, and avoid misinterpreting
communications.
One expert identified five categories of important leadership skills in virtual project team or
distance management situations:
a. Communicating effectively and matching technology to the situation
b. Building community among team members based on mutual trust, respect,
affiliation, and fairness
c. Establishing a clear and motivating shared vision, team purpose, goals, and
expectations
d. Leading by example and focusing on measurable results
e. Coordinating and collaborating across organizational boundaries
2. Leader Behaviors
The lack of face-to-face contact with virtual team members makes it difficult for leaders to
monitor team member performance and to implement solutions to work problems.
It is also difficult for virtual team leaders to perform typical mentoring, coaching, and
development functions.
The challenge for virtual team leaders is that these tasks must be accomplished by
empowering the team to perform these functions itself without the leader being physically
present.
For example, members of virtual teams are expected to have the technical knowledge,
skills, abilities, and other attributes to be able to contribute to team effectiveness and to
operate effectively in a virtual environment.
Thus, the need for virtual team leaders to monitor or develop team members may not be as
crucial and they can often distribute aspects of these functions to the team itself.
Virtual team leaders need to provide a clear, engaging direction for the team along with
specific individual goals. Clear direction and goals allow team members to monitor and
evaluate their own performance.
Virtual team leaders need to develop team processes that become the way the team
naturally behaves. One-way virtual team leaders can do this is by developing appropriate
routines and procedures early on in the team’s lifecycle.
Virtual team leaders may need to develop standard operating procedures that specify
appropriate and inappropriate computer-mediated communication.
Because virtual team members are more detached from the overall team environment, it is
also important for leaders to monitor the environment and inform team members of any
important changes.
3. Groupware and Group Decision Support Systems
Synchronous and asynchronous information technologies support members of virtual
teams.
Synchronous technologies such as videoconferencing, instant messaging, electronic
meetings, and even conference calls allow real-time communication and interaction.
Asynchronous technologies such as e-mail, wikis, and some electronic meetings delay the
communication of the message.
Meeting management software, electronic whiteboards, and collaborative document editors
facilitate meetings by allowing team members to contribute ideas, to view other people’s
ideas anonymously, and to comment and vote on them.
The right technology is critical to making virtual teams work. Collaboration software
connects virtual teams with members in locations around the world and helps structure the
meeting process.
B. Diversity and Multicultural Teams
Diversity can both help and hinder team effectiveness.
Diversity can be a source of creativity and innovation that can create a competitive advantage
and improve a team’s decision making.
Despite its potential for improving team performance, diversity can be a two-edged sword.
Diversity can create misunderstandings and conflict that can lead to absenteeism, poor quality,
low morale, and loss of competitiveness as well as lowered workgroup cohesiveness.
Informational diversity, or diversity in knowledge and experience, has a positive impact on
team performance.
Because team members’ unique knowledge enlarges the team’s knowledge resources and can
enhance the options it is able to consider, it can enhance creativity and problem solving.
Demographic diversity, on the other hand, often has a negative impact on performance.
Team conflict tends to increase and teams tend to perform lower as they become more
demographically diverse.
Effectively managing diversity in teams has as much to do with the attitudes of team members
toward diversity as it does with the diversity of the team itself.
It is easy to assume that challenges in multicultural teams are just due to differing
communication styles, but differing attitudes toward hierarchy and authority and conflicting
norms for decision making can also create barriers to a multicultural team’s ultimate success.
Global Issues: Increasing the Effectiveness of Multicultural Teams
Summary: How can a manager increase the effectiveness of multicultural teams? The best solution is to
adjust to another approach for decision making. For example, global American managers have learned to
keep impatient bosses away from team meetings and give them frequent updates. A comparable lesson
for managers from other cultures is to be explicit about what they need – saying, for example, “We have
to see the big picture before we will be ready to talk about details.”
Strategies:
1. Adaptation: seeing a problem as a cultural difference, not a personality issue
2. Structural intervention: changing the shape of the team
3. Managerial intervention: setting norms early
4. Exit: removing a team member when other options have failed
The most fundamental thing is to be a role model for respect. Managers and multicultural team members
must find ways to utilize each member’s strengths while minimizing coordination losses resulting from
communication problems, language differences, varying work styles, and misunderstandings.
1. Direct versus Indirect Communication
Communication in Western cultures is typically direct and explicit, and a listener does not
have to know much about the context or the speaker to interpret it.
In many other cultures, meaning is embedded in the way the message is presented.
In cross-cultural settings, the non-Westerner can easily understand the direct
communications of the Westerner, but the Westerner often has difficulty understanding the
indirect communications of the non-Westerner.
Communication challenges create barriers to effective teamwork by reducing information
sharing, creating interpersonal conflict, or both. Familiarize yourself with the
communication patterns and norms of any other cultures with which you will be
interacting.
2. Differing Attitudes toward Hierarchy and Authority
By design, teams have a rather flat structure. But team members from cultures in which
people are treated differently according to their status in an organization are often
uncomfortable on flat teams.
For example, in multicultural teams, engineers from the culture in India are typically not
culturally comfortable arguing with the team leader or with older people. This decreases
the ability of the team to secure everyone’s input.
3. Conflicting Decision-Making Norms
Cultures differ substantially when it comes to how quickly decisions should be made and
how much analysis is required.
Compared with managers from other countries, U.S. managers like to make decisions very
quickly and with relatively little analysis.
Summary and Application
Groups and teams are not necessarily the same thing. All teams are groups, but not all groups are teams.
Common kinds of groups in organizations include workgroups, teams, and informal groups.
The five basic group performance factors are composition, size, norms, cohesiveness, and informal
leadership.
When a new group or team is formed it typically goes through four stages of development: (1) mutual
acceptance, (2) communication and decision making, (3) motivation and productivity, and (4) control and
organization.
In terms of teamwork, other factors that contribute to performance include process gain or loss, team
efficacy, trust, social facilitation, and roles.
Managers should know what they need to do to promote effective team performance, including providing
top management support, understanding time frames, and planning for the likely need to change rewards.
Virtual teams and multicultural teams are important emerging areas of teamwork that are relevant to most
organizations today. Managers should strive to understand how to most effectively use these two kinds of
teams.
