A senior audience of business owners, C-level executives, VP and director-level team leaders contributed insights from their experience of leading teams in a range of small, mid-sized and large organizations. This collective insight has revealed a number of related trends that clearly demonstrate the impact of team performance on organizational success.
1. Team Size Matters
Smaller organizations have teams that perform better than mid-sized and larger organizations. Over half of respondents from smaller organizations (52 percent) rate their team as achieving its potential, compared to 35 percent of senior executives from mid-sized organizations and 39 percent of respondents from large organizations. The least optimistic team leaders work at mid-sized organizations.
Our findings illustrate that there is also a correlation between the size of the immediate team in which a business leader participates and how effective they believe that team to be. While 50 percent of respondents on a small team (less than 10 people) believe it is underperforming, that jumps to 64 percent when the business leader’s immediate team is 10-50 people. An incredible 86 percent of respondents involved with teams of 50 or more believe those teams are underperforming.
A Harvard Business Review article, titled “The New Science of Building Great Teams,” by Alex Pentland, reinforces this point with data from a three-person team, “In a simple three-person team, engagement is a function of the average amount of energy between A and B, A and C, and B and C. If all members of a team have relatively equal and reasonably high energy with all other members, engagement is extremely strong. Teams that have clusters of members who engage in high-energy communication while other members do not participate don’t perform as well.”
2. Effective Communication is a Game Changer
The trait that high-performing teams utilize most often to outperform average teams is effective communication. While it’s not a new finding that communication is important, the overwhelming impact that poor communication can have on team performance should be a wake-up call to all.
Leaders of high-performing teams rate communicating frequently (daily or weekly) as the most important (4.24 out of 5) contributor to team success. Smaller teams, again, perform better than their mid-sized and large organization peers due to simpler reporting lines and streamlined communication channels.
The Pentland article further supports our findings on the importance of frequency in communication, adding the value of face-to-face exchanges: “We now know that 35 percent of the variation in a team’s performance can be accounted for simply by the number of face-to-face exchanges among team members.”
3. The Right Performance Management Can Drive Profit (and Other Benefits)
Almost half of underperforming teams (49 percent) recognize they need to pay more attention to the measurement process and secure more measurement data, while three in 10 senior executives admit they need more performance measurement tools.
It is very likely that many organizations are unsure what to measure and instead rely heavily on outdated performance management techniques. Defining team success needs to be in light of corporate strategic goals and tactical (or actionable) outcomes.
Bottom line, many organizations do not define what team performance is and therefore do not understand the value it can bring to their business. Performance management techniques need to focus on empowering teams to get the right feedback, at the right time and with the proper support to perform better and positively impact their organization’s goals and objectives.
4. Planning for Long-term Success
The importance of developing high-performing teams is clear to senior executives who want these groups for the long haul. They believe high performance contributes more to enduring organizational success, such as improving organizational culture, staff retention, profitability and risk mitigation.
Ultimately, while senior executives recognize that team performance plays a critical role in creating and growing organizational value, developing high-performing teams requires time and a disciplined approach to improving performance at both the team and individual levels. Smaller teams appear better suited toward achieving this outcome on a consistent basis.
At ThinkWise, our goal is to provide you with the necessary resources to make smart Employee Development decisions. Below is a link to the report: What Gets Measured Gets Managed. This guide will help you understand more about aligning your business strategies and improving team performance.
