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The Trouble With Teams

The Trouble With Teams - MANAGiNG iHE ERGUBLE iWTH he...

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Unformatted text preview: MANAGiNG iHE ERGUBLE iWTH he! They’re a major innovation in organizing work: and everybody loves the —in theory. in practice it’s another story. Here’s how smart companies use them. I by Brian Dnmcine ORPORATE AMERICA is hav- ing a hot love affair with teams. And why not? When teams work. there‘s nothing like them for tur- hocharging productiy'ty. Beguiiing exam- pies abound: Scores of sen’ice companies like Federal Express and EDS have booste ‘ productivity up to 40% by adopting self- rnanaged work teams; Nynex is using teams to make the difficuit transition from a bu~ reaucratic Baby Bell to a highepeed cruiser on the i-way: Boeing used teams to cut the number or" engineering hang-ups on its new 77? passenger die: by more than half. Says Boeing President Philip Condit: “Your corn— petitiveness is your ability to use the skills and knowiedge of people most effectively. and teams are the best we; to do that.” But wait a minute. Forget aii the swoon- ing over teams for a moment. Listen care- fully and you‘ll sense a growing unease. a worry that the e things are more hassie than their fans let (tn—that they might even turn around and bite you. Says Eileen Appel- baurn. author of The New American Work- place: “It’s not that teams don’t work. It’s that there are lots of obstacles." That may explain Why the use of high-per- forrnance teams like the ones that got the results mentioned above hasn‘t spread as fast as you might have expected. The Center for Effective Organizations at the University of Southern California recently conducted a survey of FORTUNE 3.000 companies show- ing that 68% use self-managed or high-per- formance teams. Sounds iiite a lot—but the study aiso shows that only 10% of worker are in such teams. hardly a number betoken- ing a managerial revolution. “Peepie are very naive about how easy it is to create a team," says USC‘s Edward Lawler: the man— agement professor who oversaw the study. “Teams are the Ferraris of work design. They’re high performance but high mainte- nance and expensive." Sf: F0 RTU N E SEPTEMBER 5. 1994 The most common trouble with teams: Many companies rush out and form the wrong kind for the job. Quality circles. prim- itive types in which people take a few hours off each week to discuss problems. die-n: die in the E‘io‘l‘s. though they declined. While they may provide incremental gains in pro- ducrivity. they'll never give you high-octane boosts. Tnose come from self—managed or high-performance teams. whose members are truiy empowered to organize their work and make decisions. What often happens is that a company afraid to Eet go of control will create a itumdrum quality circle where what’s really needed is a dynamic seif—rnan— aged team. and then wonder why its teams don't work. To compound the problem. teams often get launched in a vacuum. with little or no training or support. no chwges in the design of their work. and no new systems like E- mail to help communication be tween teams. Frustrations mount. and people Wind up in endless meetings tryin‘3 to figure out Why they‘re in a team and what they’re expected to do. Says Paul Osterrnan, a professor or" management at NUTS Sloan School: “When teams are introduced in combination with other organization changes. they work. When they’re introduced as an isolated practice. they faii. My gut feeling is most are introduced in isolation.“ Boeing's Condit identifies another prob- lem: "Teams are overused." Remarkably. many companies will create teams where they’re not really needed. What they don’t realize is that workers who are lone wolves or creative types aren’t necessarily better off in a team. Making them sit in a team meet- ing waiting to reach a consensus can even stifle creativity. The key is to analyze the work before you form a team. Does the task reflly require that people interact with each other? Can the work be done faster by a sin— gle person? After all. teams take a lot of me then dmban mmonmuhrofws oom mrmowlefie' worersyyhofgafllerto .-' . _ lvet-a-SPecifiofproblem '- . .: , time and z: ergy to set up. Says Henry Sims, a management trofessor at the Maryland business schooi and author of Business without Bosses: “You don't use teams with insurance salesmen and long-benitruckers. When it comes to paying teams. most managers stilt throw up their handheld computers in despair. Pay the team as a group? Then won': your star performers :" ei siighted? Pay for individuai performance? What does that do to encourage teamwork? Companies that use teams best generauy still pay members individualiy. but with a significant difference: They make team- THE sze SPECEES or TEAMS The kingdom of teams can be confusing. "" Here’s a rundown of the most common types. wailfimbement Teams work-among teams. Work Teams An increasingly popuiar 'species, work teams do just that—the daily work. When empowered. they are can“ - self-managed teams. ' “I "' ILLUSTRATION BY Rome-x PRATO work—a sharing attitude. the ability to rice; wet} wit": or sv—o key issue in an in Evid— uai‘s 3511 I31 performance review. The reettgiaeeting craze is aiso taking its toll or. teams. Executed ruthiessly, reengi- nearing can corrode the esprit tie corps vi- tal to teamwork. Lister. to US West's Jerry Miiier. whose team of biiiing clerks in Duiuth. Minnesota. got éownsized out of existence last month: “When we first formed our teams. the company came in talking teamwork and empowerment and promised we tx-‘Ouldn't lose any jobs. It turns out ail this was a big cover. Toe com- ' Consisting mainly of managers from? va‘nous functtotts 11kt: sales and ' ' proouctton, this species coordinates 7'“ ‘Vt‘rzuai Teams 5‘1 A characteristic of this new type of work team: members taik by computer, flying in and out as needed. ans: take turns as leader. We showed them 11m; to streamline the work. and now 9.900 people are gone. I was cut-your—own-tbroat. It makes you See! used." US Wesr. which argues that in the long run reengineering wiii enhance team- work. admits that for new. “peopiefs stress Eeveis will be b'gh. and some peopie wii': be sad and angrv For ail the trickiness entailed in getting them right. corporate America obviously shouldn’t give up on reams. Used correctiy, they still increase productivity, raise meme- and in some cases spur innovation. Smart in danger of extinction, this type= typically made of workers and supervisors, meets intermittently to air workplace problems. SEEMBER 5. 1994 F0 R T U N E 87 2i “Mt-1’: p‘rla-i-r l W 5 am» A v'v-mm-vn . This Boeing team, part of the new 777 iet proiect, seeks—«arid tries to soivHficky prob companies like Textron, Nynex, Boeing, and Allina navigated the bumps and pothoies of em building. Their stories ofier compelling examples of how to overcome the troubles with teams. Here’s what they’ve learned. I Use the right team for the right job. A com- mon mistake among mangers is to think a. team is a team is a team. To the contrary. a more accurate taxonomy reads like Homer‘s catalogue of ships in the Illiad: problem— soiving teams, product-deveiopment teams, self—managed teams, virtual teams, to name just a few. Too often a CEO will get excited about the idea of teams and order them up as if only one type existed. That kind of un- thinking, one-tool-for-ali—jobs application is bound to send tremors through the ranks. The CEO ofa Western mantfi‘acturing com- pany suddeniy announced that from now on everybody was going to be in a team. The next day absenteeism soared. Understanding the history of teams helps in choosing the right kind. Widespread use of teams in America started in the 19805 when industries like autos and steel, trying to combat growing Japanese competition, began forming quality circles= in which workers meet weekly or monthiy to discuss ways to improve quality. These teams helped companies cut defects and reduce re- work, 'out enthusiasm for them has ebbed. The USC study of FORTUNE 1.000 compa nies found that 65% of companies used such 33 F D R T U N E SEPTEMBER 5, 199-1 groups last year. down slightly from 1987. Professor Ed Lawler says that quality circles are losing appeal because they Operate par- aliel to work processes rather than within them- In other words, they’re good for solv— ing minor quaiity problems, but because they don't accompany changes in the way work is done, they can‘t spark quantum leaps in productivity. Tne teams most popuiar today are of two broad types: work teams, which include high—performance or self-managed teams, and specialpurpose problem-301mg teams. Problennsoiving teams. in particular, differ from quality circies in important ways. Where quality circles are per- manent committees designed to handle whatever workplace problems may pop up. problem- soiving teams have specific mis- sions, which can be broad {find out why our customers hate us) iems between other teams. MANAGiNG - .m Whiie probiem-soiving teams are temporary. work teams. used by about two-thirds of US. companies, tend to be permanent. Rather than attack specific problems. a work team does day- to-day work- A team of Boeing engineers heiping to buiid a jet weald be a work team. If a work team has the authority to make decisions about how the daily work gets done. it’s properly de- scribed as a seifvman- aged or high—performance team. Common tests for a self-managed team are. Can it change the order of tasks? Does it have budgets? I Create a hierarchy 0? teams. Time and again teams fail short of their promise because companies don't know how to make them work together with other teams. If you don’t get your teams into the right constel- lations, the whole organization can stall. The problems at DEC, America‘s second- largest computer maker. stand as a striking illustration. The Maynard, Massachusetts. company announced in Juiy it was aban- doning its matrix team structure. Under the oid system, workers in functional are- as—engineering, marketing—also served on teams organized around product lines like minicomputers or integrated chips. The teams spent endiess hours in meetings trying to build a consensus be- tween the two factions in the matrix: the functional bosses and the team bosses. its sheer organizationai weight left DEC 21 laggarcl in the fast- moving technology sector. or narrow figure out wh' the Boeinc has an organization» \- . (I; . 3. use teams 1 =2, . . ~ DEC 1 o.opump eeps overheanng}. a structure Slmllal’ to 5 Once the job is done, such with but with a critical difference. teams usualiy disband. The Its structure encourages teams USC survey found that 91% of Insurance to work together and seize in- American companies use prob— itiative. Says Henry Shom'oer, lam-solving teams, about a third salesmen a Boeing chief engineer: “We more than seven years ago. And and have the tic-messenger rule. on average. about 20% of a Team members must make de- company-'5 employees are 'oea- {ong-hau[ ago? in the;1 spoft. They cap’t vering away at any given time run ac. tot err auctions or on such teams. truckers. permission.” This kind of free- PHOTOGRAPHS 3»: Ronnie Mchaam u -‘ ‘7'"MI'VW' W!“ f .mccwg- - ————~'mmr;‘amvf-film («w—yr...— G MAN AlN dom allowed Boeing to use teams to build its new 777 pmsenger jet, which flew its first successful test flight this summer with fewer than half the number of design glitches of earlier programs. When the Seattle aerospace giant set out to design the F77. a massive project eventu— ally involving lGDOO employees and more than 500 suppliers. it knew it wanted an en- tirely tearn~based organization but wasn’t sure how to make it all work. In the end the company created a hierarchy of teams, a structure meant to get all Boeing’s work teams pulling in the same direction. “Our goal.“ says Boeing's Condit. “is a barrier- free enterprise where all are working to sat- isfy the customer.” Boeing’s 7’77 project looks like a tradi— tional organizational pyramid, but instead of layers of management. it has th as layers or" teams. In all there are over 200 cross- t‘unctional teams. each made up of people from departments like engineering, manu- facturing. and finance. At the top of the pyr- amid is a management team oft re five or six top managers from each discipline who, as a group. have responsibility for the plane’s being built correctly and on time. Under- '- neath this management group is a large group of the 50 or so leaders—half each from engineering and operations. set up in 25 to 30 two-person teams—who oversee the ZOO-plus work teams that have respon- sibility for specific parts of the plane. These work teams are typically cross-functional groups of five to 15 workers. Examples: a wing team, a flap team, a tail team. and so on. The top management team holds a weekly meeting. The merri- bers of the second tier communi~ case with the top team through their leaders in engineering and operations. and also hoid meetings in which they handle major issues like schedule delays or quality problems with suppliers. The group of 50 then returns to the work teams with Solutions to big prob» lems. While this team structure worked well to move information quickly up the organization, Boe- ing realized near the end of the 777 project that information wasn’t moving well horizontally. In other words. the wing teams weren’t nec- essarily communicating as well with the cockpit team as Boeing , would have liked, causing design 'glitches. To solve the problem, the 90 FORTUNE company added a fourth layer of what it calls airplane integra- tion teams—five groups. each Most Ith can’t have teams without mist. Reengineering presents a devilish paradox for teams. As a with l: to 15 people drawn Campanies company recngineerg it cuts from the work teams. y out layers of middle manage- These teams act like the cor- don t know merit. pushing work doWn. Eni- pus callosuin. the part of the ho'w to ployees. forced to rind newways brain that transfers information to do more work. naturally back and forth between the left make teams gravitate toward teams. But the and right hemispheres. Top very thing that often gives rise on e. a-ssurethi- work 0' ‘c an managem nttn e e n to teams—reengineertng—cai. tegration 1.6113115 have accss to together have a devastating effect on everyone in t e organization. team spirit. Says Scott Forster. an integra— with other _ Nynex. the Baby Bell for tion team leader: "We can go New York and New England. and get any information now. I teams. must restrucrure itself to pros- can go to the chief engineer. Before. it was unusual just to see the chief engineer." A few months ago. two Boeing work teams discovered a conflict: One had de- signed the passengers’ osygen system in the same spot that the other had put the system for the gasper. the little nozzle that shoots fresh air toward the passenger. One of the teams. noticing the conflict, called in an in- tegration reamwhich got everyone thinking about what was best for the airplane. Within hours the three teams. working together. came up with an ingenious solution: a spe- cial clamp that holds both systems. At the old Boeing a problem like that probably wouldn‘t have been caught until the plane was being manufactured or. as at DEC. would have been pushed up the traditional hierarchy and taken weeks to resolve. per in the Information Age. That means shedding H.000 workers. 30% or" its work force, most of whom work in lo- cal telephone operations. the company’s tra- ditional business. To keep team morale high. Nynex in April signed a iandrnark 1a- bor agreement. Instead of wholesale anot‘fs. Nynex and the Communications Workers of America. a tough union that conducted a bitter four-month strike against the compa- ny in 3989. have a new contract that virtually guarantees no involuntary layoffs. E or work- ers near retirement it adds six years to the person’s age. plus six years of service. and supplements Social Security payments. (it didn’t hurt that Nynex’s pension fund was overfunded.) For thosa who either can‘t or don't want to retire, the contract guarantees training for a new job inside Nynex or one with another company. The training provi- MANAGiNG , ,1 mm; A... ' - sins. is particularly generous: A worker can take two years off and receive S l0.0{)0 a year for tuition or can work four days a week and go to school for the fift. . again for two years. Says CEO Ferguson: "it costs in the short term. but i believe we'll build share- ‘.older value in the future by doing this." ITackte the people issues head-on. So you've created the right types of teams. built an atmosphere of trust. and changed your organizational Structure—and your teams sti 1 seem to be mlsfirisc. What’s the rub? Most likely it's clashing personalities. Asks Robert Bough. a work- place specialist at the ARI..- C.l.O: “How do you get peo- ple who have been at each others throats for years to start to cooperate?” Companies must train managers and workers to deal openly and franidy with other - ream members. While this sounds elemen- ry most companies donit do an adequate ,ob. There's no secret or magic formula. While a motivan’onal consultant or two may help loosen people up, most team members pick up new behavior by watching closely how management acts. A company that set a good example for teamwork is Allina, which runs 17 nonprof- it hospitals in Minnesota. The company tried to form teams through the 19805 but always failed. It had the kind of hostile re- lations with labor unions that could make .1 World Cup match look genteel. A nurses‘ :trike in 1984 basically shut a hospital for six weeks. Some Allina managers who had been working there for as long as 20 years had never even met a union official. The anions weren’t blameless either. A worker "emembers being taught by union officials that all you need to know is that boss spelled )ackward is double SOB. Says lack Dobier, allinais labor-management coordinator: "You’ll fail with teams if you don’t change aeople’s attitude." Allina did this by forming a team of man- igement and union officials and giving it he power to make a difference. For in- itance. it found a way to close one of Alli- :a‘s hospitals without leaving employees tranded. The team set up an employment nter that placed 95% of the closing hos— '. FORTUNE SEWEMBEREJ‘JQ-‘t pital’s employees elsewhere in Ailina or in other companies. Not only did this gesture raise morale generally and save the company 38 million in severance costs. but more important. it also showed that management was serious about working with labor. Allina has since created worker-management teams in 11 of its i7 hospitals. with stunning results. One of these problcm~solvlng teams saved the company $200,000 a year by suggest— ing that maintenance on, some hospital equipment. such as emergency electrical generators and operating room lights, be done by the company’s own staff. Ellen Lord. 21 team leader at Davidson Interiors, a division of Textron in Dover, New Hamp- shire. found that to keep teams happy. managers must have the patience and presence of mind to act like :1 parent, teacher, and referee all at once. Lord’s prod— People days sometimes got into fights. A neatnik sitting next to a slob lost his cool. People were becoming emotional about what kind of coffee was brewing in the pot. The man- ufacturing types thought the engineering members were focused on trivia and bluntly let them know this. Lord argues that no matter how bad it gets. you must keep people together and talking until they feel comfortable. a process that can take months. Says she: “We threw all the people in one room and forced them to work together. If peeple from different functions don’t get to know each other, they can't ask favors. and teamwork stalls." Lord believes the infighting would have been much worse if she hadn’t carefully screened team members before inviting them to join: “As long as all of ...
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