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A Model for Team-Based Organization Performance
Author(s): Russ Forrester and Allan B. Drexler
Source: The Academy of Management Executive (1993-2005), Vol. 13, No. 3, Themes: Teams
and New Product Development (Aug., 1999), pp. 36-
Published by: Academy of Management
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Academy of Management Executive, 1999, Vol. 13, No. 3
………………………………………………………………………………………………………………………………………………….
A model for team-based
organization performance
Russ Forrester and Allan B. Drexler
Executive Overview
The team-based organization performance model is a map for the landscape of
organizations that use a lot of teams. The critical issues that team-based organizations
must resolve to perform effectively are: formation, getting the right pieces in place and
fitting them together; dependability, making reliable connections between the parts;
focus, targeting the direction and goals of the organization and its accountability
processes; buy-in, the ownership of and involvement in the organization's work and the
issues of power and control; coordination, achieving smoothness and consistency in an
organization's operations; impact, the impression the organization makes on itself and its
clients; and vitality, the energy that starts and sustains the organization over time, and
the capacity it has to learn and adapt. This article visits each of these landmarks,
illustrating them with company examples, examining the keys to mastering them, and
describing detours that some organizations have taken and how they got back on track.
The article also provides an aerial view of the elements and their relationships.
............................................................................................. ................................................................................................................ a
On the Side Benefits of Filing
We developed the team-based organization perfor- mance model as a result of going through some files in our consulting practice. As we looked through the files and recalled the companies in them, the model gradually emerged. What follows is a tidied-up version of our discovery, with the names of the companies and identifying details changed to respect their privacy.
The Wheelwright Information Services File
Wheelwright Information Services collects techni- cal information and provides it to clients to use as a basis for research and development, technologi- cal investment, and other decisions. The Wheel- wright database has more than 41 million records, and the company responds to more than three mil- lion requests for information annually. It conducts two gigantic operations: collecting and recording information, and responding to requests for infor- mation through various media from clients. For most of its history, Wheelwright was a traditional hierarchical organization, organized by function and geographic region. Its operations are highly automated, with extraordinary standardiza- tion across work groups, extremely detailed pro-
duction measurements, and close controls-a clas-
sic production system. In the early 1990s, a
manager in the Systems Development Section de-
liberately introduced work teams into his organi-
zation, quickly achieved both reductions in costs
and improvements in customer satisfaction, and
was designated as a champion of the team concept
to replicate his success throughout the organiza-
tion. During the course of implementing this plan,
we were called in to help. What we found was that
Wheelwright had created some promising ele-
ments of a team-based organization, but hadn't
found a good fit for them.
The impetus for change rested on the premise
that what worked well in one environment would
work as well in a much different environment, al-
beit in the same company. The major work of the
organization didn't on the face of it involve much
interdependence among group members. The
whole culture of the organization was autocratic,
with emphasis on central management, top-down
decision making, and uniformity of practice. There
was little interest in giving greater power to the
groups to be relabeled as teams. The entire com-
pensation system was highly sensitive to produc-
tion and focused exclusively on how individuals
performed in relation to their standards.
36
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1999 Forrester and Drexler 37
Our work with Wheelwright Information Ser- vices, through consultation and training of the staff designated to implement the change, con- sisted largely of sorting through these fundamen- tal issues about forming a team-based organiza- tion, getting the needed parts in place, and building the support systems required. From this and similar work with other clients, the team- based organization performance model took shape. As shown in Figure 1, each element of the model is represented by a sphere labeled with the name of the element and the quality that results from handling it well. The sphere is bracketed by two sets of three features of the element. One set, the Keys, gives the focal points of attention and action to master the element. The other set, the Offkeys, describes the conditions that tend to re- sult when the element or one of the Keys is not handled effectively. Formation,’ the first element, involves establish- ing the teams an organization needs and the set- ting in which they will work, and giving them the support they need to contribute to the organization most productively. The objective is to give teams the grounding they require to be successful, to shape the contours of the organization in ways that are friendly to teams, and to provide the kind of environment where teams can prosper, grow, and produce. The product of effectively managing for- mation issues is balance in the organization. Teams and other work units are in proportion, they fit together, make sense as a whole, have every- thing they need, and not much of what they don’t.
####### The product of effectively managing
####### formation issues is balance in the
####### organization.
Keys to Formation
Composition
The first concern for an organization is whether it
has the pieces in place that it needs-teams
formed where they can best do the work to be done,
clear charters for each of them, and the right peo-
ple on the right teams.
Coherence
This quality exists when all of an organization's
parts hang together well. They fit and form a whole
that is complete, internally consistent, and has
what the organization needs to achieve its pur-
poses. Some of the fits that have to be attended to
are: between the best work processes that can be
achieved and the use of teams as an organiza-
tional unit; among individual teams as they play
their part in the work process; between the organi-
zation's philosophy of management, as practiced
more than as espoused, and policies and practices
related to the use of teams; and between team
ownership or responsibility for work and members'
involvement in decision making, control of re-
sources, and other uses of power. Perhaps the
greatest challenge facing an organization moving
to a team basis is achieving a goodness of fit
among all of its elements, systems, and dynamics.
Supportive Systems
For a team-based organization to be successful,
the on-going organizational systems and struc-
tures must be supportive of teamwork, including
employee selection processes; compensation and
reward programs; performance appraisal process-
es; training programs, particularly with reference
to team-skills and multiskill or pay for skill pro-
grams; information systems to meet the needs of
empowered teams; and planning and resource al-
location systems.
Offkeys
Incongruence
When organizations don't form teams thoughtfully,
organizational anomalies arise. Teams are formed
where they aren't really needed, sometimes based
simply on the notion that teams are a good thing.
Some work continues to be done by individuals or
groups that could better be done by a well-con-
structed team. Organization structures not fit for
teams are in place.
Team Isolation
Without a clear sense of how the organization
forms a coherent whole or how teams fit into the
overall scheme of things, teams tend to act auton-
omously and become isolated. They read mixed
signals from the organization, experience confu-
sion, and fail to identify with the organization as a
whole. Their focus becomes their own agenda and
they may actually act to insulate themselves from
the rest of the organization.
Organizational Barriers
Because of misfits, teams frequently run into bar-
riers and are thwarted from doing their best work.
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38 Academy of Management Executive August
Team-Based Organization
Performance Model
Keys Keys
* Composition * Enthusiasm
K. Coherence* Openness
* Supportive Systems * Learning
Formation Offkeys Offkeys Vitality
Balance * Incongruence * Apathy Meaning
* Organizational Barriers * Defensiveness
Keys \ Team Isolation * Complacency * Information Sharing Keys
* Follow Through * Innovation
* Give and * Flexibility
Take Ofes*Outstanding
t ;0~~~~epenldail * Secrecy * Statust Qu mpac ) ~~JL*.- Secrfecys Offkeys Imat Results
fYP~~~ uepeNu~auiit Skepticism s RigidityVau
Integrity / Self-Interest * Mediocrity Value
Keys Keys
* Clear Direction Offkeys X Operational Planning
' Measurable Goals * Aimlessness Offkeys * ommu t
zv_,, o Accountability Focus Uncertainty *Redundancy Coordination Iegrang
Clarity * Freelancing o Shortfalls Sotns 0Disjointedness
Keys
*Balanced Power B uy-n, Pwelsns
Sufficent Reources Resolve o Frustration
Connecting Values 9~~~~~ Alienation
######## FIGURE 1
Team-Based Organization Performance Model
The resources or skills they need may not be avail-
able in the organization. Compensation, appraisal,
and recognition systems oriented to the individual
may encourage self-serving behavior rather than
the teamwork the organization needs. Information
systems may not be capable of providing teams
with essential information. Part of the organiza-
tion's energy may be drained in attempts to over-
come self-imposed obstacles.
The Regional Telecommunications, Inc., File
Regional Telecommunications, Inc. is a medium-
sized telephone and telecommunications company
serving a large segment of northern North Amer-
ica. At the initiative of high mid-level management
and with the acquiescence of top management,
Regional Telecommunications set out to convert to
a team-based organization. And it did so more
smartly than many organizations. It formed teams
of people who had previously been specialists:
order writers, resident installers, cable repairers,
and switch maintainers. In addition to forming ap-
propriate teams, Regional Telecommunications
supported them to learn what they needed to be
successful: cross-training in technical competen-
cies, team skills, and management of the diversi-
ties within the teams. While doing a lot of things
right in its organizational transformation, Re-
gional Telecommunications came on a major stum-
bling block: The management planners had put off
informing the union representing employees on
the work teams that the reorganization would en-
able them to reduce staff count by one-third. Man-
agement refused to guarantee the security of em-
ployees or to even address the issue. The union
pressed for information, but kept getting a busy
signal, so to speak. The union dug in, and employ-
ees began questioning the need for any change at
all and cooperated reluctantly. The focus of our
consultation moved from training to reopening the
lines of communication and building some mea-
sure of trust and feeling of security among the
parties.
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1999 Forrester and Drexler 39
The Regional Telecommunications case illus- trates another feature essential to the performance of team-based organizations: Dependability.2 This feature affects how well teams in an organization can count on one another and on the organization. It is influenced heavily by the level of information sharing and openness, first between the central organization and teams, and also among teams. Dependability also includes teams’ consistently doing what they say they will do, keeping commit- ments to one another and to the organization, and the organization’s doing likewise. The perception of dependability may be tested most when one part of the organization is asked to yield something of value for the sake of the whole or another part. The product of managing these issues well is organi- zational integrity.
####### The perception of dependability may be
####### tested most when one part of the
####### organization is asked to yield something
####### of value for the sake of the whole or
####### another part.
Keys to Dependability
Information Sharing
The foundation of trust is the full sharing of impor- tant information. The key question is what infor- mation is shared with whom, and maybe more importantly, what is held back? Teams can’t act responsibly unless they are well informed. They can’t have confidence in an organization that holds back what is most important for them to know. Nor can organizations rely on teams that are guarded and secretive.
Follow Through
For the organization to be effective, teams have to
believe they can depend on one another to come
through, and on the organization. Particularly
where they are vulnerable, will the organization
and other teams take care of them? With consistent
follow through, trust holds the organization to-
gether by holding teams to the center and to one
another. Without it, all of the information sharing
in the world is just talk.
Give and Take
Teams may be called on to give in different ways
for the good of the whole or other teams, to set
aside their own interests for the general welfare.
For example, a team may have to cede some of its
autonomy so that processes can be standardized
and all teams can count on their working in a fixed
way. On the other side, an organization might well
forego some short-term efficiencies to provide the
security that teams need to focus their energies on
their work.
Off keys
Secrecy
People within the organization give out informa-
tion sparingly, seeing it as a source of power and
withholding it as an advantage over others. Suspi-
cion of the motives of others leads them to commu-
nicate as little as possible and to deal with one
another strategically and tactically, rather than
straightforwardly.
Skepticism
Units within the organization often don't follow
through and do what they say they are going to do.
As a result, there is little confidence across or-
ganizational units. Teams tend to be skeptical of
one another, take matters into their own hands,
feel they can't rely on anyone else, and suspect the
motives or competence of other organizational
units.
Self-interest
Because they can't rely on one another, teams tend
to get focused on themselves. They don't see the
organization or other teams as allies but rather as
opponents or obstacles. They have little interest in
serving the needs and interests of others. They
play games and maintain the appearance of sup-
porting others, but in fact their focus is on them-
selves above all.
The Morton Chemicals File
Morton Chemicals is an international leader in
silica-derived products. It has 26 plants world-
wide, 60 percent in the U.S. and Canada, 32 per-
cent in Europe, and eight percent in the Pacific
rim. Its catalysts and other products are used in
the manufacture of beer, in detergents to make
them biodegradable, and in ceramics. The com-
pany is doing well financially, with annual sales
in the $500 million range. Morton Chemicals is
aiming for a 15 percent annual growth rate for
the next ten yeaxrs, prima[rily through exparnsion
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40 Academy of Management Executive August
in the Pacific rim. The company has traditionally been organized into separate businesses that correspond to product lines. To make the most of the opportunities in the Pacific rim, the CEO and COO are intent on getting more collaboration across businesses. Their primary strategies are to rely more on the use of teams across business units, and to redefine the role of the executive team. In our work with Morton Chemicals to build an identity with the corporation throughout the business, a crucial phase was clarifying the goals that were common to all business units and the teams within them, and designing com- patible systems of accountability. The top executives and the board of directors of Morton Chemicals were crystal clear in the general direction they provided, where they wanted the company to be in ten years, and the general strategies to be followed in getting there. The core team of business unit represen- tatives recognized and accepted the notion that they were going to be accountable for the suc- cess of the company, not just their component, a difficult break from tradition. They worked hard to identify the areas in which they could work together to support the company’s vision. From there, it was difficult work but a straightforward matter to develop shared goals, with various measures of success. In doing so, they also sorted through how their systems of accountabil- ity had been applied and how they needed to change. For example, the business unit, which had been the cash cow for the company but promised little growth in the future, had to be evaluated by different standards from develop- ing businesses, which had not shown a profit yet, but held the key to the company’s future growth. As these issues came into sharper relief, Morton Chemicals began to jell as a team-based organ- ization. Our work with Morton Chemicals captures the essence of another element of the team-based organization performance model, focus.3 Focus has to do with the organization’s clarity of vision and its precision and accuracy in marking progress. At one level, the concern is with the clarity of its overall vision and how well it com- municates its vision so that teams can set their sights well. At another level, this element ad- dresses how goals are assigned to teams, how clear they are, and the coherence of the goals collectively. Finally, focus is about training teams’ eyes on the goals through systems of ac- countability, taking stock of how well goals are achieved. The quality that emerges from achiev-
ing focus is clarity. The organization and its
teams know just what they want to do.
Keys to Focus
Clear Direction
This key to organizational focus is to point teams
in the direction the organization wants to go. It is
first an exercise in imagination, becoming clear
about a vision to move toward, then communicat-
ing the vision to work teams. By setting a clear
direction, the organization also sets the bound-
aries within which teams work.
####### The quality that emerges from achieving
####### focus is clarity. The organization and its
####### teams know just what they want to do.
Measurable Goals
Ray and Bronstein (1995) state, "Without goals
which can be measured, there is no team," and
label that statement the "most important sentence"
of their book. There is a good deal of evidence that
what enables organizations to empower teams is
having measurable goals, that, in effect, fix the
boundaries of what they can do or can't do, and
become the basis for their accountability.
Accountability
The central message is that performance matters.
Accountability is the organization's way of saying
that it makes a difference whether goals are
reached or not. How things will be different may
vary widely across organizations, but if there is no
difference, then performance doesn't matter much.
In managing this key aspect of performance, the
organization reduces confusion and enhances clar-
ity by specifying exactly who is responsible for
exactly what. And it builds in consequences both
for goal achievement and shortfalls.
Of fkeys
Aimlessness
Without clear goals and a sense of direction, teams
tend to drift. Their actions are wasteful and ineffi-
cient because they aren't targeted. They work in a
scatter-shot way, in fits and starts, beginning this
then shifting to that. At best, they drift in the same
general direction but without the crispness and
precision that clear goals would give them.
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1999 Forrester and Drexler 41
Uncertainty
Teams feel their way along and try to guess what is expected of them and what needs to be done. They spend a lot of effort talking about what they are to do and trying to read the tea leaves man- agement has given them. They work tentatively and halfheartedly, trying not to become too fully committed to a course of action that turns out not to be the right one. They also worry about how they’ll be evaluated and the consequences of it for them, since they aren’t sure of the basis on which their performance will be judged.
Freelancing
In an ambiguous situation, teams might strike out
on their own, move in a direction that doesn't con-
sider the interests of the organization as a whole,
and commit resources and time to work that is
either indifferent or contrary to the preferences of
the organization. Lack of accountability might en-
courage teams to work their own agendas, whether
or not they are in service of the organization's
broader purposes.
The Jefferson School District File
The Jefferson School District in California, operat-
ing in a highly charged political environment, had
organized into teams around individual schools.
The district superintendent, his deputies, staff spe-
cialists, and the school principals formed a gov-
erning or coordinating team to make policy and
resource decisions, and set a direction for the dis-
trict. Our consultation with this team eventually
focused on issues of power and control.
As we worked through the issues, it became
clear that all of the key players in the Jefferson
district were feeling a power shortage, because of
interference, as they saw it, from the board. The
school principals were feeling most helpless be-
cause the new superintendent and his new staff
were moving aggressively to breathe life into a
situation they saw as stagnating and were forcing
the action. In response, many of the principals
withdrew and devoted themselves only to their
individual schools. A primary objective of our work
with Jefferson was to regain ownership by the
school teams of the whole effort in the district and
to get their buy-in to the course of action the dis-
trict was taking. In exploring ways to empower the
school teams, we looked at the traditional sources
of power and how they might be redistributed:
Who has the money (or other resources) and control
of it? Who has information and access to it? Where
is the expertise and how is it used? Who makes
decisions effectively? Who controls what benefits?
Whose positions carry authority? And how is the
organization willing to change the balance on any
of these power bases?
Buy-in4 to the organization's course of action is a
central dimension of the team-based organization
performance model. It represents both the bottom
line and the turning point in the organization's
move to high performance. Buy-in has to do with
the commitment teams and individuals have to the
goals and direction the organization has set or
allowed to be set, and with their determination to
do what it takes to realize their goals. To the extent
that teams are internally committed to the work
they are doing, see its rightness for the organiza-
tion, and feel they've been properly involved in
decision making, they have a sense of ownership
of their work and a resoluteness in doing it. An
organization with a mastery of this element is res-
olute. It is constant in its determination to fulfill its
vision and realize its goals.
Keys to Buy-in
Balanced Power
The organization needs to make deliberate deci-
sions about how much freedom and discretion it
will allow teams, and how much it wants to retain
control centrally. It also needs to address how
teams will be involved in or have input to deci-
sions that are made centrally. The word balance in
the name of this key dispels the notion that vesting
complete power and authority in work teams is an
ideal. The judgment about delegating power to
teams is influenced by a number of factors, includ-
ing the level of interdependency between teams,
the size and number of teams, the diversity of func-
tions or disciplines represented on teams, the rate
of change, the skill level of teams, and their life
span.
Sufficient Resources
The organization has to make choices about how to
use its total resources, about how much and what
to allocate to different work and different teams.
The resource levels applied dictate the limits of
what teams can do and communicate the organi-
zation's priorities in time and money. The issue of
resources is also a matter of finding the best bal-
ance.
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42 Academy of Management Executive August
Connecting Values
Where teams have the freedom to act and the re-
sources to be productive, they will tend to buy into
the organization's enterprise when one other con-
dition applies: that the organization's work taps a
deeply held value or set of values. This connection
to what is most important or meaningful to teams
and their members creates a sense of mission and
an esprit de corps that bonds teams together and to
the organization as a whole.
Offkeys
Powerlessness
Teams may see themselves as pawns in a large
organizational game, unable to control their own
fates, at the mercy of the whim of management or
the vagaries of the actions of other teams. They
may feel like victims, put upon and taken advan-
tage of, asked to do what is beyond their resources
or capabilities, pressed or oppressed by decisions
that are not their own and on which they have little
influence.
Frustration
Without adequate resources in money, time, mate-
rial, or equipment, teams may feel frustrated and
conclude that there's no point to trying since they
are foreordained to fail, or that nothing they do will
ever be good enough. Continually raising the bar
may make yesterday's triumphs tomorrow's fail-
ures, and doing more with less may eventually
wear thin.
Alienation
Teams that aren’t involved in decision making and setting the course of the organization may disown it, view the path they are going down not of their own making, and feel little responsibility for the result. They may adopt a minimalist approach, and even engage in sabotage, to assure that their dis- sent from the direction their work is taking is val- idated.
The Plant Engineering Division File
The Plant Engineering Division is a team-based organization within a company that makes soft drinks. The organization’s mission is to build or renovate the company plants. At any given time, the Plant Engineering Division has several major projects. For each one, there is a core team consist- ing of cost center managers who are plant employ-
ees, and representatives of various contractors
who are doing the work. Each of the principals on
the core team is also a leader of a team or teams,
which in turn may have sub-teams. As a project
moves from conception to proposal, and through
the design, construction, and testing phases, the
players change. The primary team members dur-
ing design are often not involved directly in con-
struction.
The Plant Engineering Division is a high per-
formance organization, and one reason why is that
it pays attention to planning and coordination. A
project team leader has to be as skilled in project
management as in engineering. Every team goes
through a detailed start-up process, including not
only those involved at the start but those who will
be involved at the end or anywhere in between.
The project plan is highly detailed and subject to
continuous changes. Communicating changes to
all parties is an explicit responsibility assigned to
one individual. Meetings of the whole group and
various subgroups are incessant, and key mem-
bers are electronically connected. When decisions
are made, the information cascades down through
all teams involved. When there is a glitch in com-
munications or a conflict among parties, Plant En-
gineering does what it needs to do to get back on
track. Our continuing consultation to the division
often relates to some aspect of its planning and
communication processes, and to connecting all of
the players together in a way that helps it achieve
the smoothness its clients demand.
In the midst of the Plant Engineering file, we
uncovered another element of the model-coordi-
nation.5 In a more lateral organization, most deci-
sions aren't made at the top, so the impulse to
action may come from many different places in the
organization. A necessary implication of more
scattered decision points is that more information
has to be available throughout the organization.
And so the challenge of coordination, of the whole
####### organization’s acting more or less in unison, is
magnified. The product of handling coordination
well is smoothness. Things blend well, they flow.
Events happen in due course, outputs of one part
are there as inputs for others when needed. The
people in the organization and those who depend
on it have a sense of control and confidence that
things will be as they need to be.
Keys to Coordination
Operational Planning
Once goals are set, the organization has to estab-
lish an approach to accomplishing work, and have
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1999 Forrester and Drexler 43
an overall plan into which the plans of individual units fit. In their planning processes, organizations have to find an effective balance, giving their teams the clarity and structure they need, but al- lowing them the flexibility to take advantage of unforeseen opportunities and respond to unpre- dicted events.
Communications
To stay aligned, teams need to talk to one another and to the organization. For this to happen well, mechanisms and practices through which commu- nications flow must be developed. The primary issues are: Is there enough communication among teams and between teams and the center of the organization? If not, why not? Are people and teams sufficiently available to one another or are they consumed by busyness? Are the needed com- munications mechanisms, such as meetings, E-mail, messages, phones, and newsletters, in place to assure information flow up, down, and sideways? Is there a proper balance-are we over- communicating? Team-based organizations need to establish channels of communication, get clear about the information needs of all parts of the organization, and monitor both the level of commu- nication and the noise level.
Integrating Mechanisms
Organizations with empowered teams need to
make full use of any mechanisms available, in
addition to the basic organizational systems, that
tend to integrate their work into a coherent whole.
Some commonly used mechanisms are informal
connection, liaison roles, overlapping member-
ship, cross-integrating teams, management teams,
representative integrating teams, individual inte-
grating roles, and improvement teams. Beyond
these explicit links, organizations may use a vari-
ety of means to tie together the work of many
teams, including shared common processes, over-
arching policies, common values, all-hands meet-
ings and conferences, shared progress reports, and
system assessment measures-anything that clar-
ifies where teams are intended to be at any point
in time, where they actually stand, and where they
are aiming to go next. Integrating mechanisms are
particularly critical when teams in an organization
don't frequently meet face to face, are dispersed
geographically and across time zones, or rely on
####### virtual systems to stay in contatct.
Off keys
Redundancy
Teams may duplicate the work that another team
or other teams are doing, build systems or do re-
search that has already been done, or spend un-
needed effort. Reinventing the wheel may be com-
monplace, and the not-invented-here syndrome
may prevail too often.
Shortfalls
Work that needs to be done might be unfinished at
best, unstarted at worst. Things important to the
organization may never be thought of, or if so,
never implemented because the location of respon-
sibility is unclear. Things fall through the cracks,
teams assume that others are taking care of them,
and work stalls because of performance gaps.
Disjointedness
There is little smoothness in the organization's
work. Teams keep getting in each other's way,
experience friction among themselves, or have lit-
tle awareness of each other's activities. There is no
coherent plan of action or schedule of activities to
guide their activities and give their operations the
crispness and efficiency they need.
The HL&W Instruments File
HL&W Instruments, Inc., is a small midwestern
manufacturer of technical instruments, including
thermal sensors, water quality gauges, and bioana-
lytical instruments. It is moving toward a related
field, environmental monitoring. In the past twelve
years, HL&W has transformed itself, the way it does
business, and its position in the market place.
In 1985, HL&W was a modestly successful,
technically competent company in a market that
wasn't particularly competitive. Though it was an
industry leader, it wasn't really going anywhere.
Its management style was paternalistic and infor-
mal, with relatively low expectations of employ-
ees. With 335 employees, it generated about $18.
million in revenues. With the leadership of a new
CEO, HL&W recreated itself. The company got in
touch with its core values, which centered around
respect for the person, equality, diversity, and the
dignity of the individual. It also formed a vision of
what it would be. To get there, it changed its way
of managing to a more participative and open
style, but one that was more demanding of perfor-
mance and insistent on operating in a way that
served its vision and values.
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44 Academy of Management Executive August
What HL&W accomplished is impressive. New
products and technologies were developed, ei-
ther independently or in collaboration with a
variety of business partners. Revenues nearly
doubled to $35 million a year, while employee
productivity increased by a factor of 2.5. Em-
ployee profit shares rose from something on the
order of $50 in 1986 to about $2,000 in 1996. HL&W
has become a global player, with offices now in
several locations in Europe and Asia. It is con-
stantly exploring new ways of doing business,
creating valuable partnerships and other joint
ventures. In passing through the white water of
its journey, HL&W has not only stayed afloat, but
has gained strength and stability.
Although HL&W has made tremendous progress,
it hasn't moved unerringly in a straight line. Along
####### the way, it tried and abandoned a number of ap-
proaches. However, its missteps did not deter the
firm, or put it off course. It bought a New England
company specializing in environmental monitor-
ing systems, married their product lines, and in-
creased the revenues of that business from
####### $250,000 to $8 million in four years. It formed a
partnership with Tufts University to take advan- tage of research into fiber optics that it needed. It entered a joint venture with a company in New England that makes control boards compatible with the water probes HL&W makes. The emerging picture from this flow of events is a company that is innovative in its own right, opportunistic, willing to experiment and to form alliances with partners where there is a mutual interest-and is highly successful. How did HL&W achieve this kind of success? As we have consulted to and observed HL&W through- out this period of change, it has systematically and deliberately transformed itself. The steps the com- pany took include:
####### * It reorganized completely around empowered
work teams. In doing so, it made teamwork, em-
powerment, and employee involvement an ex-
plicit company strategy.
####### . Since the impetus for change was top down, the
management philosophy, values, and methods
of operations fit into the new organizational
structure. The top management team was crys-
tal clear about the direction HL&W was taking.
. HL&W created systems that supported the high- involvement, team environment. It adopted the Drexler-Sibbet Team Performance Model, trained everyone in the company on its princi- ples, and gave them the skills to work as teams. Employee selection procedures, compensation
####### systems, financial processes, and plarnning and
information systems were all redesigned. The
company developed an employee stock option
program and a profit sharing program. Training
and employee development became a constant
feature of work life at HL&W. The orientation
program for new employees changed from three
hours to one week.
. HL&W developed a flexible work force. With an emphasis on cross-training, it is able to move people and teams around to satisfy work load needs on its production teams.
- Employees were given access to financial data and trained to understand and interpret what they meant. There were meetings of all kinds
####### focused on cost cutting, process improvement,
quality management, and the structure of the
work environment.
. Accountability for goal accomplishment was clearly structured and accounts were kept.
####### * Much, but not all, decision-making authority
was transferred to teams organized around
product lines, with emphasis on ownership, both
of the action and the consequences.
####### Over an extended period of time, HL&W has
####### been a high performing system, making a differ-
ence in the field in which it works and for its
customers and employees. It illustrates impact, the
penultimate feature of a high performing team-
####### based organization. HL&W demonstrates that high
performance comes not simply from establishing
teams as a primary unit of work, but by managing
####### effectively all of the elements that are critical to
team-based organization performance.
HL&W demonstrates that high
performance comes not simply from
establishing teams as a primary unit of
work, but by managing effectively all of
the elements that are critical to team-
based organization performance.
Impact has to do with the advantage implied by
high performance. The product of an organization
handling this element well is that value is added.
The organization creates value for its clients and
serves the values of its members, both in what it
does and how.
Keys to Impact
Innovation
####### A hallmark of high performance organizations is
that they go beyond what is known and has been
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1999 Forrester and Drexler 45
done, they are inventive, they create new products and processes, and work with a style that is their own. Creative organizations may have specific standards around innovation, live by values that encourage challenging the status quo, and have systems that support new or adventurous projects. Teams in the organization may seem restless and little inclined to stand on past success.
Flexibility
High performance organizations adapt and adjust on the fly. While maintaining what is most impor- tant to them, they let go of what needs to be let go of and move on. They are opportunistic and see possibilities before others. The boundaries be- tween teams and projects may be soft, enabling fluid movement between organizational units. There is an easiness to the flow of work, with teams not feeling artificially constrained.
Outstanding Results
The ultimate measure of high performance is re-
sults. Organizations with impact make a signifi-
cant difference. Their impact may be in terms of
immediate payoffs-profits yielded, products gen-
erated, or innovations introduced. They might also
have other effects, such as overcoming what had
been seen as insurmountable obstacles, turning
around a difficult situation, changing the way
business is done, altering the long-term direction
of the organization or reshaping its overall values,
or preventing a crisis. By any reasonable mea-
sures, the organization excels at what it does.
Offkeys
Status Quo
There is minimal emphasis on innovation or cre-
ativity. The focus is on doing well what has been
done in the past, preserving and protecting what
has been successful. New ideas or projects may not
be encouraged. People approach problems and
possibilities with blinders on, to some extent pris-
oners of the past. Risk taking is low.
Rigidity
Teams and the organization are most comfortable
in a stable situation following well-established
procedures and fixed routines. They tend to be
disconcerted by shifting demands, course correc-
tions, volatile market conditions, and changes in
direction. They become confused or disheartened
and feel the rug has been pulled out from under
them when the unexpected happens.
Mediocrity
The performance of the organization is flat. It may
be acceptable or it may be declining, but it is by no
means extraordinary. Doing the same things the
same way produces the same result. There is little
excitement in the way work is done, and little re-
markable in the way things turn out.
The National Systems Management File
National Systems Management was founded in
1970, with a mission to serve the information man-
agement needs of its clients. A major part of its
business was with the U.S. Department of Defense
and aerospace agencies. For more than a quarter
of a century, National Systems Management has
prospered not only because of its pioneering role
in the field but because of its capacity to adapt. It
gradually diversified, forming 14 separate divi-
sions providing an array of services to clients, from
financial institutions to telecommunications firms.
With the cutback in the federal budget and
reductions in defense and NASA contracts in the
1980's, National Systems focused its efforts more on
the manufacturing sector and looked outside the
U.S. for new markets. Its no-layoff policy enables it
to retain its highly skilled and trained work force
through fluctuations in business levels and pro-
vide a measure of continuity. It has decentralized,
giving a great deal of operational autonomy to its
14 business units. The decentralization has been
balanced in one way by retaining central control of
major strategic financial decisions. National Sys-
tems has also taken steps to avoid the potential for
competition among the independent divisions with
overlapping market targets. One way the firm re-
duced the pressure to compete among business
units was by establishing project teams that cross
business units. In the last several years, the com-
pany has made a significant investment in en-
hancing the performance of its work teams. Its
commitment to learning and adaptability have en-
abled it to more than triple its overall revenues
despite the reductions affecting the defense indus-
try.
National Systems Management illustrates vital-
ity, the final element of the model.7 Vitality has to
do with the processes by which a team-based or-
ganization sustains itself, finds and maintains its
energy level, and taps the motivation of its mem-
bers to serve the purposes of the organization as
well a s their own. When an orgatnization effec-
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46 Academy of Management Executive August
tively addresses this element, the people in the
organization are more likely to find meaning in
their work. They are drawn to their work, fired up to
do their jobs, and bound to one another by the
shared meaning they find in what they do.
Keys to Vitality
Enthusiasm
An organization and its teams are an energy sys-
tem. The energy, which gives the organization
spirit and life, has to have a source. One source is
the intrinsic value of the work the organization is
doing, enabling its members to find meaning in it.
The organization needs to stay in touch with how it
is managing its own energy level. Some key issues
are: What meaning do people find in their work?
Do teams or individuals make or take opportuni-
ties to recognize one another? What is the organi-
zation's energy level, and what raises or depresses
it? How the organization manages these issues
will in part determine its vitality and its ability to
go on, particularly in hard times.
Openness
The organization has a lot of open channels to the
external environment, exchanging with it in a lot
of ways. People come and go, ideas are taken and
given, information is read in and sent out. The
organization forms partnerships and alliances, op-
posing and supporting others. The organization is
nourished, thrives, changes, and grows through its
interchanges with the outside.
Learning
Mohrman and her associates (1995) say it plainly:
"The team-based organization is a learning organ-
ization. It is not enough to say that learning is
necessary for teams to be effective in a team-based
organization. Learning is the essence of the team-
based organization." A central premise is that in-
formation, knowledge, skills, and authority are
more dispersed than in traditional organizations. It
is necessary for the organization, its teams, and
team members to be constantly learning.
Offkeys
Apathy
Teams and individuals in the organizations feel little enthusiasm or excitement for what they’re doing. They tend just to go through the motions. They may be compliant, but don’t go out of their
way to make sure things are a success. There is
little team spirit or organizational verve to inspire
and carry people through tough times.
Defensiveness
The organization is defensive in its approach, and
tends to build a protective wall around itself. It
shields itself from outside influence, is wary of
collaboration with others, and takes pride in its
independence and self-sufficiency. Because it
tends to be closed, the organization exerts little
influence outside, and suffers from a lack of new
blood and fresh ideas.
Complacency
Teams and employees see little reason to strive or
change. They are satisfied with the way things
have been and aren't inclined to take a second look
at them. They may even be a bit arrogant and be
seen as resting on their laurels. They take it for
granted that they will always prosper well enough
and have little incentive to push themselves to
greater heights.
Implementing the Team-Based Organization
Performance Model
Architecture of the Model
This model is not a developmental one showing
stages through which organizations grow through
the course of time. It is a model of performance
pointing to the major issues that have to be con-
stantly managed to reach and maintain high per-
formance. The issues in all of the elements of the
model are in play all the time. At some points, one
or another comes into the foreground but they are
all there all the time, and have to be managed.
The elements of the model are displayed in the
sequence one might follow when starting an organ-
ization from scratch:
. Formation has to do with assembling the neces- sary pieces to create an organizational system. . Dependability is about connecting the pieces and managing the space between them. . Focus emphasizes that the connected pieces can’t be a system without acting; they have to do something, and so they get themselves pointed in a certain direction with selected milestones along the way.
- Buy-in represents the decision of the parts to start moving, with determination to get where they are going and taking what they need to get there.
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1999 Forrester and Drexler 47
* Coordination describes the journey and build-
ing momentum, or breakdowns and detours, as
the case may be.
* Impact occurs when the system comes upon its
destination. Does it glance off, just keep cruising
along, or make a breakthrough and leave a
memorable impression?
* Vitality appears at the end because a part of it is
about getting into position for the next destina-
tion. But it also has to do with what the organi-
zation does along the way to refuel, refresh, and
recreate, so it doesn't run out of gas.
Notwithstanding this initial ordering of the ele-
ments and the apparent logic of it, the process of
organizational performance is usually not a linear
one with straightline progress through each of the
elements in succession. Work on all of the ele-
ments evolves simultaneously, and the process
turns back and recycles again and again, with the
work in each element flowing around and influenc-
ing what is or can be done in the others.
Getting all the teams in an organization to a
stage approaching single-mindedness is the first
dilemma to be solved, and is the focus of the work
####### of the elements on the left side of the model. As
####### organizations approach buy-in, they are looking
for their teams to have approximately the same
intentions for the organization, to be supporting
the same purposes, to be striving for the same
goals. Given alignment among what all of the
teams and individuals in the organization are aim-
ing for, the work that remains, reflected in the
####### right-hand side of the model, is to work as a single
unit, to be smooth in its work, to be inventive as it
goes and adjust but stay in synch, and to create
and grow together.
The elements of the model are arranged in the
form of an arc, the earlier ones descending and the
later ones ascending. This arrangement corre-
####### sponds to a general pattern described by cosmol-
####### ogist Arthur Young,8 who held that all process is a
movement from freedom to constraint and back to
freedom. The process of organizational life mirrors
this pattern. At the outset, given only the intent to
####### organize for a particular purpose, the possibilities
are endless. The organization then works through
####### a process of defining itself and its work until it
reaches the most constrained point, the buy-in,
where the money goes down and commitments are
made. It is then free to act on its commitments and
move back to a point where new possibilities open
####### up again. And that is why the elements of the
####### model are arranged in the shape of a V. The multi-
dimensionality of the process, its emergence from
the workings of the organization as a whole, and
its cyclical nature are represented in the image of
the model by elements being set in perspective as
if they were wrapped around a larger sphere of
activity.
When and How to Use the Model
The team-based organization performance model
begins not with the notion that organizations ought
to consist of teams, but with the conviction that
when an organization is team-based, certain fun-
damentals need to be attended to and mastered to
work effectively. Others, including Mohrman and
her colleagues, have set forth some of the condi-
tions under which teams are more useful as a form
of organization: When work processes cut across
functional lines; when speed is important; when
the organization mirrors a complex, differentiated,
and rapidly changing market environment; when
innovation and learning have priority; when the
tasks that have to be done require online integra-
tion of highly interdependent performers.9 When
an organization has moved to a team basis for
these or other reasons-such as to reduce supervi-
sory layers or to create more meaningful units of
work-the team-based organization performance
model comes into play as a tool to guide the organ-
ization's self-management.
The term team-based can mean a lot of things,
from a few leadership teams to 100 percent project
teams, covering all varieties of teams-permanent
and temporary, dedicated or not, cross-functional
or functional, highly interdependent or little so,
organized around products or processes. Our work-
ing definition of a team-based organization is one
that relies predominantly on teams as a basic unit
of organization, including the whole gamut of
kinds of teams and the full range of predominating
of teams as the basic organizational unit. As an
organization approaches full reliance on teams as
its primary unit, has teams that need deep deci-
sion authority to function effectively, has work pro-
cesses that cut across functional specializations,
and relies on frequent communication between
teams because of their interdependence around a
task, the more salient the elements of the model
will be and the more utility it will have.
We and the organizations that have adopted the
model use it in several ways:
* As a map. The most immediate application of
the model is as a conceptual map through the
complexities of organizational life. As a mental
model, it provides a set of lenses to focus atten-
tion on the landmarks of organizational success,
the key routes for getting there, and the paths it
needs to avoid.
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48 Academy of Management Executive August
As a common language. The model serves as a
conversation aid for managers and employees
of team-based organizations. A common lan-
guage facilitates discussion of organizational
issues and provides a shared understanding of
terms, reducing the noise that sometimes gets in
the way of organizational progress.
As a diagnostic tool. Making the rounds of its
elements and listening for those which are on-
key and which are off-key has allowed our client
organizations to monitor organization perfor-
mance systematically. They have done this in an
informal way, as you keep track of your own
physical health by paying attention and noting
when something seems obviously out of sorts.
We have also used the model in a more struc-
tured way, as the basis for formal organizational
surveys. Keyed to the model, the TBOP Invento-
ry'0 elicits data about the essential aspects of
organizational performance. This tool serves as
the starting point for the organization to assess
the need to make changes in the way it works.
Endnotes ‘A methodical process for the formation of a team-based organization is presented in Mohrman S. A., with Cohen, S. G., & Mohrman, A. M. 1995. Designing team-based organizations. San Francisco: Jossey-Bass. Michael Campion and his col- leagues identify composition as one of the five major themes in the literature on team effectiveness (Campion, M., with Papper, E. M., & Medesker, G. J. 1996. Relations between work team characteristics and effectiveness: Replication and extension. Personnel Psychology, 49: 429-452. See also Lawler, E. E. 1992. The ultimate advantage. San Francisco: Jossey-Bass; and Na- dler, N. A., with Gerstein, M. S. & Shaw, R. B. 1992. Organiza- tional architecture. San Francisco: Jossey-Bass. Both works em- phasize the demands of fitting together all organizational structures. The array of systems needed to support team-based organizations is treated by Shonk, J. H. 1992. Team-based organ- izations. Homewood, IL: Business One Irwin; and by Galbraith, J. 1994. Competing with flexible, lateral organizations. Reading, MA: Addison-Wesley. Similar issues are dealt with in Banner, D. & Gagnle, T. E. 1995. Designing effective organizations: tra- ditional and transformational views. Newbury Park, CA: Sage Publications. 2 Some of the dimensions of dependability are explored in Kramer, R. M. & Tyler, T. R. 1996. Trust in organizations: Frontiers of theory and research. Thousand Oaks, CA: Sage Publications. The potential benefits of widespread information sharing are set forth by Case, J. 1995. Open book management: The coming business revolution. New York: Harper Business; and by McCoy, T. 1996. Creating an open book organization. New York: AMACOM. The importance of information sharing for responsi- ble behavior in an organization is stressed by Anfuso, D. 1994. Kodak employees bring a department into the black. Personnel Journal, 73-9:104-112; and by Randolph, W. A. 1995. Navigating the journey to empowerment. Organizational Dynamics, 23 (4): 19-32. Information sharing, as well as the requirement for con- sistent behavior and walking the talk are highlighted by Rogers, R. 1994. The psychological contract of trust. Pittsburgh:
Development Dimensions International. The paradoxes that in-
dividuals have to manage in groups are presented by Smith,
K. K. & Berg, D. N. 1987. Paradoxes of group life. San Francisco:
Jossey-Bass. Some of the tradeoffs that ensue from those para-
doxes are presented by Hackman, J. R. (Ed.), 1990. Groups that
work (and those that don't): Creating conditions for effective
teamwork. San Francisco: Jossey-Bass.
3The necessity of having a clear purpose well known to all
who have to contribute to it is long established. (See Barnard, C.
- The functions of the executive. Boston: Harvard University Press.) Various researchers have established the organizational value of a shared understanding and direction, including Zenger, J., with Musselwhite, E., Hurson, K., & Perrin, C. 1995. Leading teams. New York: Irwin. Measurable goals are a focal point of team effectiveness in Ray, D. & Bronstein, H. 1995. Teaming up. New York: McGraw-Hill. A methodology for goal setting, measurement, and accountability is described in Kaplan, R. S. & Norton, D. P. 1996. The balanced scorecard. Boston: Harvard Business School Press. Christopher Meyer of- fers a worthwhile assessment device for team-based organiza- tions in Meyer, C. 1994. How the right measures help teams excel. Harvard Business Review, 72:95-103. ‘A useful overview of power dynamics in organizations is provided by Pfeffer, J. 1981. Power in organizations. Cambridge, MA: Ballinger Publishing Company. The balance of power issue is labelled as focus versus circulation in Kanter, R. M. 1983. The change masters. New York: Simon and Schuster. Mastenbroek presents a pattern of choices defining a continuum from auton- omy to interdependence among organizational units, and calls it a "framework for corporate vitality" in Mastenbroek, W. 1988. A dynamic concept of revitalization. Organizational Dynamics, 16 (4):52-61. A continuum of degrees of authority sharing is presented by Tannenbaum, R. and Schmidt, W. 1958. How to choose a pattern of leadership. Harvard Business Review, 36:95-
- The conditions under which a high-involvement decision style is effective are set forth by Lawler, E. E. 1992, op. cit. A foundation for values as a key feature of organizational life is established by Rokeach, W. 1968. Beliefs, attitudes and values: a theory of organization and change. San Francisco: Jossey-Bass. The same line of thought is extended in Kuczmarski, S. & Kuc- zmarski, T. 1995. Values-based leadership. Englewood Cliffs, NJ: Prentice Hall. The impact of alignment around a set of values has been noted by Tichy, N. & Charan, R. 1989. Speed, simplic- ity, self-confidence: An interview with Jack Welch. Harvard Business Review, 67 (5):112-120; and by Howard, R. 1990. Values make the company: An interview with Robert Haas. In R. Howard (Ed.), The learning imperative: 195-214. Boston: Harvard Business School Publishing. 5An approach to managing the issues of this element is presented in Chisholm, D. 1989. Coordination without hierarchy: Informal structures in multiorganizational systems. Berkeley, CA: University of California Press. Mohrman and her col- leagues, op. cit., elaborate on the need to specify integrating needs as part of the organizational design process, and also to develop integrating processes in the course of implementing a team-based organization. Jay Galbraith (op. cit., and also in Galbraith, J. 1973. Designing complex organizations. Reading, MA: Addison-Wesley) addresses the demands around planning and communications in differentiated organizations. Similar issues have recently been covered by Laufer, A. 1997. Simulta- neous management: Managing projects in a dynamic environ- ment. New York: AMACOM. 6 Peter Vaill’s studies of high performing systems over sev- eral years consistently noted innovation as a key aspect. See Vaill, P. B. 1982. The purposing of high performance systems. Organizational Dynamics. 11 (2):23-39; and Vaill, P. B. 1978. To-
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1999 Forrester and Drexler 49
ward a behavioral description of high performing systems. In M. W. McCall & M. M. Lombardo (Eds.), Leadership: Where else can we go?: 103-225. Durham, NC: Duke University Press. Ralph Stacey approached the topic from a different perspective in Stacey, R. 1996. Complexity and creativity in organizations. San Francisco: Berrett-Koehler. The dimensions of the organiza- tional environment that support creativity are studied by Gun- dry, L., with Prather, C. W. & Kickul, J. R. 1994. Building the creative organization. Organizational Dynamics, 22-4:22-37. The impact that organizing around teams can have on produc- tivity is illustrated in Wellins, R., with Byham, W. C. & Dixon, G. R. 1994. Inside teams. San Francisco: Jossey-Bass. 7 The broad issue of sustaining spirit and enthusiasm in an organization is dealt with in Kilmann, R. H., Kilmann, I. & Associates. 1994. Managing ego energy: The transformation of personal meaning into organizational success. San Francisco: Jossey-Bass. Related issues are covered by Vroom, V. 1995. Work and motivation. San Francisco: Jossey-Bass. The impact of work and organizational design on motivation is specifically ad-
dressed in Hackman, R. & Oldham, G. 1980. Work redesign.
Reading, MA: Addison-Wesley. Several aspects of organiza-
tional exchange with the environment expressing openness or
closedness are presented in Leonard-Barton, D. 1995. Well-
springs of knowledge. Boston: Harvard Business School Press.
Mohrman and her colleagues, op. cit., emphasize the critical
nature of learning in a team-based organization. A practical
approach to building learning structures into an organization,
with many examples, is provided by Wick, C. W. & Leon, L. S.
- The learning edge. New York: McGraw-Hill. 8 Young, A. 1976. The reflexive universe. New York: Delacorte Press. 9 Mohrman, et al., op. cit., describe when a team-based orga- nization pays off and when it is of limited value. Shonk, op. cit., also offers a methodology for determining the fit of teams to an organization’s work. ‘o The TBOP Inventory is an 84-item survey using an agree- disagree format. It contains item scales for each of the seven elements of the model. Reports based on the survey are organ- ized in terms of the model and address each of the key areas.
Russ Forrester, Ph.D., an organ-
izational psychologist, is prin-
cipal of Forrester & Associates,
which provides consulting ser-
vices related to personal, team,
and organization development.
He also teaches and writes. His
work centers on teams; devel-
oping team-based and other
non-traditional organizational
patterns; the creation and use
of organizational power; and
the generation and distribution
of leadership in organizations.
Contact: russf@erols.com.
Allan Drexler, Ph.D. is presi-
dent of Drexler & Associates,
Inc., and has been consulting in
organization development for
over 20 years. He is also the au-
thor of numerous articles on or-
ganizational development and,
most recently, team and team-
based organizational issues.
He consults on high team per-
formance and team effective-
ness at all levels in the organi-
zation. Contact: drexlerinc@
rockbridge.net.
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