4 X-Team Principle 2 In Matters, Too: Build a Robust Internal Environment
When Anja Koepke, a project manager at the international electrical engineering firm Powercorp (not their real names), was sent to set up a manufacturing plant in Asia, she was nervous. She had a big job to do, although much was accomplished already. Anja and her new business development team had scanned and analyzed the competitive landscape, producing an impressive investment proposal. Then they had successfully reached out to top management back in Europe to sell it. Nevertheless, Anja was nervous because she did not know a lot about the local regulatory environment where she would be launching the project. She decided to invite new members who had specific knowledge about the area to join the team.
During their first team meeting, everyone assured her that the proposed plan would work. But six months later the plant had no clear path to profitability. It turned out that the original plan called for using a cheap outside source of materials, which ran afoul of the country’s laws stipulating the substantial use of local sourcing—prohibitively more expensive than what Anja had budgeted for.
The bigger problem was that no one on Anja’s team had shared that key bit of information, even though several team members had done enough sensemaking to be well acquainted with the regulations. They had simply felt too unsure about how to interact with their new foreign boss to speak up. For her part, Anja charged forward after that initial meeting, operating on limited knowledge and without thinking more or fostering further reflection within her team about the sourcing issue—until it became an irreparable problem. Partly because of the underbudgeted costs for critical material, the plant never reached profitability and was sold two years later.
What exactly went wrong here? The team made all the right moves in the business development phase—engaging successfully in numerous external activities. On the surface, this could look like a simple case of miscommunication, which is common whenever a team is introduced to a new leader, and particularly common in the kind of cross-cultural context in which Anja and her team were operating. And while some of these factors were indeed at play, they were part of a larger story of internal issues with Anja’s team that produced such a disappointing outcome for Powercorp.
In light of the exceeding importance of external activities, which we looked at in the last chapter, one might think that the internal activities for a team like Anja’s would be less important. Think again. An x-team’s role in the distributed leadership of the organization includes practicing such leadership within the team itself. When Anja’s team members were silent about what they knew, they did not take on a leadership role; instead, they abdicated this responsibility. At the same time, Anja did not create the conditions for people to feel safe enough to reveal the information that the team needed.
All of this to say, the significance of external activities has possibly made internal activities even more important—and more difficult. If team members spend considerable time and effort on external sensemaking, ambassadorship, and task coordination, then integrating the products of these efforts becomes a critical job. For example, increased information and demands from the outside require teams to make more complicated trade-offs. When divergent political interests enter the team, those external conflicts can become internal ones. Navigating these factors takes a great amount of internal coordination and execution, which leads to the second of our three x-team principles: build a robust internal environment. X-teams combine high levels of external activity outside the team with a robust internal context—specifically, an environment that supports the additional demands of engaging in external activity and realizing its potential.
For an example of how this may be done, let us return to the Big Bank team introduced in the last chapter, where we saw that in addition to doing great external activity, the team’s members also interacted well with each other. When the team was first formed, members got together at a bar to begin figuring out the expectations of key stakeholders and methods of working with outside groups. This activity set the tone for the team—be active, coordinate and divide up work, listen to everyone’s ideas, and relax and have a good time together. By organizing themselves and working together, team members were able to conquer their anxiety about their new task, gain confidence about themselves as an effective team, and learn to appreciate the input of all team members.
Later, as information began to pour in, team members pulled it together and interpreted what it meant, while simultaneously inventing new ways of working together inside the team and externally with outsiders. When they won support from top management, they celebrated, accelerating internal motivation and bonding. Thus, internal activity and external activity were complementary: the safe and reflective culture inside the team gave members the courage and tools to explore externally and to make good use of the information and expertise that they found. In turn, the time spent on sensemaking, ambassadorship, and task coordination brought the team new ideas for innovation, motivation to succeed, and a set of partners to help do the work.
Three fundamental concepts underlie the kind of robust internal context that Big Bank clearly achieved—and that Anja’s team in Asia lacked: getting the basics right, building psychological safety, and having an effective learning process.
Get the Basics Right
As we’ve noted, the relentless external focus of an x-team creates unique challenges for the internal dynamics of the team. Luckily, however, traditional models of high-performing teams offer some important lessons that x-teams can benefit from when it comes to goals, roles, and norms.
First, members need to have a shared understanding of the team’s goal. This may seem obvious, yet we often find that the taken-for-granted nature of team goals is exactly what makes teams vulnerable to unspoken discrepancies. For example, the goal may be to complete a clearly defined project, but team members may have individual interests pulling the team in different directions.
Second, there needs to be a shared understanding of roles as well. Teams must take care to uncover any possible conflicts in role expectations. For example, while formal role descriptions are often quite clear, the informal expectations held by a diverse set of members may not be. We often find that teams that assume everyone is aligned around role expectations run into problems later on when discrepancies emerge. Therefore, it is good practice to always have a detailed conversation about roles up front.
Importantly, the complexity of external and internal interactions in x-teams adds to the already-high pressures on role structures.1 Our research shows that x-teams often match some of this complexity by operating with three distinct roles that create differentiated types of team membership—core, operational, and outer-net—and that members may perform tasks within more than one role.
The core members of the x-team are often, but not always, present at the start of the team. Core members carry the team’s history and identity. They are usually the first to have the vision and passion that bring the team through tough times—as such, the core often contains the team’s leaders. While simultaneously coordinating the multiple parts of the team, the core members create the strategy and make key decisions. They understand why early decisions were made and can offer a rationale for current decisions and structures. The core is not a management level, however. Core members frequently work beside other members of equal or higher rank and serve on other x-teams as operational or outer-net members.
As a team evolves, more people may join the core. Having multiple people there helps keep the team going when one or two core members leave, and it allows a core member who gets involved with operational work to hand off tasks. This is one mode of distributing leadership across multiple individuals who share core leadership responsibilities.
The team’s operational members do the ongoing work. Whether that’s designing a computer or deciding where to locate a wind farm, the operational members get the job done. They tend to be tightly connected to one another and to the core. There may be a wide range of operational members handling different aspects of the x-team’s task. The key for these team members is to focus on what they have to do and how best to do it. They handle the coordination needed for their own jobs, but they leave full team coordination to the core members. Similarly, operational members seem to be more motivated if they share the vision and values of the team and understand the importance of what the team is working toward. They are usually not the creators of that vision (unless they are also core members), but often they have a large impact on shaping the evolution of the team over time.
Outer-net members join the team to handle some task that is separable from ongoing work. They may be part-time or part-cycle contributors, tied barely at all to one another but strongly to the operational or core people.2 Outer-net members bring specialized expertise, and different individuals may participate in an outer-net way as the task of the team changes. Outer-net members often do not feel as committed to the team or its product because they are not necessarily in the team for long, they may be physically separated from other members, and they do not necessarily participate in integrative meetings or social events. Furthermore, they may report to a different part of the organization.
Finally, in addition to goals and roles, there needs to be a shared understanding of key team norms related to processes and behavior. How are decisions made? What are the expectations related to knowledge sharing? For example, if some members expect decisions to be based on consensus while others expect a voting procedure, or if members have different ideas about what knowledge should and should not be transparently shared, then unhealthy tensions are likely to arise.
Misalignments in the understanding of goals, roles, and norms tend to manifest, sooner or later, in interpersonal conflicts. A team that takes time to nurture alignment across these components, on the other hand, tends to exhibit healthy interpersonal relations characterized by trust and respect. Therefore, it is important to check where team members are from time to time, before any conflicts have surfaced.
In an x-team, clearly defined goals, roles, and norms are a necessary foundation for a healthy internal team environment; however, this is not sufficient to ensure that the internal environment is robust enough to handle the additional challenges posed by an external focus. For that we also need psychological safety and learning.
Build Psychological Safety
When team members spend time carrying out the hard work we illustrated in the last chapter—engaging in activities outside the team—they need to work equally hard to coordinate and integrate the fruits of that labor inside the team. For team members to share their experiences and express their views of how to move forward, the team’s climate must support a frank exchange of views. Such psychological safety means that all members feel the team is a safe place for interpersonal risk-taking.3 It means that team members feel free to express their views, even controversial ones. It means they can bring up problems without fear of being blamed, or worse, being fired. It means people have permission to be candid.
A team with psychological safety sets the stage for sharing vital information, identifying what matters, and learning from mistakes. From a distributed leadership perspective, the internal team dynamics mirror the very activities that teams need to bring to the larger organization and that the organization needs to support throughout the firm.
At Toyota, for example, when a new car comes off the assembly line with a defective door handle, the person responsible for that part does not fix the problem quietly, without the assembly team leader noticing. Instead, the team comes together to identify the root cause of the problem to ensure that it does not happen again. This process often gets noisy, and it requires psychological safety. However, the focus is not on blame but rather on improvement. Without it, quiet fixers would rule the day—leaving the source of the problem and its consequences to crop up again.
Another example of the importance of psychological safety comes from a study of hospital patient care teams.4 The study showed great differences in team members’ beliefs about the consequences of reporting errors in medication. In some teams, members acknowledged errors openly, while in others they kept such errors to themselves. A nurse in one of the studied teams observed, “Mistakes are serious, because of the toxicity of the drugs [we use]—so you’re never afraid to tell the nurse manager.” In contrast, a nurse in a different team admitted: “You get put on trial! People get blamed for mistakes … [Y]ou don’t want to have made one.” The study made an important observation: teams that acknowledged errors also discussed ways of avoiding further errors and improved. This did not happen in teams where errors were not acknowledged.
In teams without psychological safety, members keep information to themselves. They don’t ask for help when they need it. They may be scared that they will be labeled as troublemakers or seen as stupid or weak. Or perhaps they do not think it is their place to rock the boat. Even when information is shared, a far too rare occurrence, it tends to be done privately or offline. As a result, critical knowledge may not be revealed, processed, or used. Research shows that in all teams, members are more likely to share information that others already have rather than information that they alone have obtained.5 However, in a team without psychological safety, this tendency can cause real damage, and the team often loses the unique and critical knowledge of individual members.
How can psychological safety be built? The team leader plays an important role, such as setting explicit norms that members are encouraged to say what they really think and to express doubts. It is also important to get members to agree on what to expect in terms of uncertainty and failure rates. Inviting participation is critical. Modeling this same behavior themselves, team leaders can set an example.
Consider Jerry Ng, the chairman and founder of Bank Jago, an Indonesian digital bank. In the digital banking space, engaging with rapidly shifting industry boundaries is crucial. This requires that the entire executive team is making sense of changes and experimenting with how to take advantage of them, which inevitably will involve failed experiments. As a high-profile leader with a famously successful career, Jerry knows that his presence can be intimidating to the team. Therefore, he often tells the story of how he failed in his first CEO role. He also stresses the importance of “showing your skin” by acknowledging blind spots and asking for help, which he role-models himself.
Perhaps the most important thing a leader can do is to react positively when team members express views that conflict with their own or bring in perspectives that may seem strange or controversial. If people are punished for disagreeing with each other, then they won’t do it very often. When Alan Mulally took over as CEO of Ford when it was hemorrhaging billions of dollars, he asked members of his team at his first business plan review meeting to let him know if they were in the green (good), yellow (some risk), or red (serious trouble) in their top five business priorities. To his surprise, everyone said all was fine and everything was good. Obviously, his team was scared. Legend has it that Alan remarked that unless the plan was to lose $17 billion that year, everything was not green. Several weeks later, when Mark Fields finally held up a red card—admitting that his whole production line was down—he was afraid he would be fired. Mulally did not fire him. Instead, he clapped, asked others to help solve the problem, and Fields became CEO when Mulally retired. Ultimately, psychological safety relies heavily on trust—a commodity that requires consistent nurturing over time. Building it is the job not only of the formal team leader but of all team members, who must at times take on leadership roles too.
Learn, Learn, Learn
The final component of supporting a robust internal environment in x-teams is learning.6 That is, team members need to take the time to reflect on their actions, strategies, and objectives. In many of today’s corporations, there is a push for continuous action, which is not conducive to reflection. Yet without reflection, team members cannot learn what they are doing right and what they are doing wrong. In a world of changing technologies, markets, and competition, team members also need to reflect on how they have to adapt. A robust internal environment requires learning as you go, and reflection helps the team keep this learning a priority.
Such reflective pauses are particularly important at key points in the process—at the beginning, the midpoint, and the end of a team’s task. At the beginning and midpoint, the team is likely to face strategic decisions that will launch them on a long-term trajectory. These times are also when team members are most open to feedback—when they switch from automatically performing tasks to consciously processing the information involved in doing new ones. Reflecting as the team changes phases of work also aligns team learning with moments when people are open to feedback and change.7 And reflection at the end of the project helps the team learn important lessons that can then be recorded and carried forward after it has concluded its work and disbanded.8
Teams with high levels of reflection ask questions, seek feedback, and make adjustments in response to that feedback. Whenever possible, team members do this together and face-to-face for deeper communication. Such teams are also likely to have highly effective debriefings in which—at the midpoint or at key milestones along the way—they talk about what worked and what didn’t and analyze the role that each person played in the successes and failures of the mission. All of these behaviors are in the service of learning.
But truly reflective teams go well beyond debriefings. Members set aside time to think about the big picture, where the team is going, and how things can be done better, and they lean on each other in that effort. This means going beyond what went well and what went poorly. It means asking deeper questions like: What does the team want to achieve, really? Is the team moving in that direction? Are members truly working on the things that they have pegged as the highest priorities? Can the team move away from the day-to-day to discuss its vision for the long term and how to get there? Are members working well together as a team, or do things need to change? If so, how?
The Toyota assembly team that takes time to figure out the root cause of a defect is one example of a reflective team in action. And it’s important that members of top teams take this kind of time even though it might not always be possible in the midst of completing a task. Members of Team Fox, which we met in chapter 2, had frequent debriefings to reflect on how their drug development process was going, but they also took time to reflect on where they were headed at key points. For example, as the team identified and evaluated promising early-stage drugs, members needed to stop and look at the big picture: the ambition of building a franchise in anti-inflammatory drugs. In at least one instance this led the team to reluctantly let go of a promising lead. While the drug performed well in initial tests, the team members concluded that it did not fit the vision and the direction.
In a team characterized by a low level of reflection, on the other hand, members tend to act on what they already know, whether or not there are alternative solutions out there. They tend not to seek feedback or be concerned with changing circumstances, and when they ask questions, it is typically to confirm what they already know rather than to explore what they may not know. Again, without reflection there can be no learning. That seemed to be a tendency in Anja’s Powercorp team. Whether or not Anja intended to encourage this behavior, the team showed an orientation toward uncertainty avoidance—which effectively precludes substantive learning—often in the name of efficiency. Unfortunately, the result may be that the team learns to do the wrong things right. Had Anja helped team members feel psychologically safe and encouraged them to openly express doubts, she might have discovered the local sourcing problem, and members might have had a chance to avoid a situation in which high material costs rendered their venture unprofitable.
How can team reflection be cultivated? Just as with fostering psychological safety, reflection requires that team leaders commit to doing it (in fact, creating psychological safety is itself a central promoter of team reflection). One way is to build in time to reflect by using check-ins at the beginning of each team meeting and check-outs at the end, to see what members have on their minds and to have a process through which everyone in the team can speak.9
Another way to promote team reflection might be to schedule an offsite day with the entire team, where members reflect on their progress in a fundamental way. Typically, such venues are used for in-depth thinking about what’s happening in the team, and the change of scenery and relaxed atmosphere can generate new levels of discussion about norms and strategies. As part of this effort, team members can be encouraged to talk about the best and the worst experiences they have had and about how to improve team functioning overall.
We’ve seen in this chapter how crafting the kind of culture that fosters the robust internal environment needed to coordinate, integrate, and reap the benefits of the external activities is crucial to an x-team. In this way, the x-team model distributed leadership in action for the rest of the organization. Still, there is one final x-team principle we have yet to look at: recognizing that the needs and priorities of a team’s external and internal activities change over time. Next, we will discuss this important temporal dimension of an x-team—what we refer to as making timely transitions.