Management 538: Teams and Projects Session 4 Introduction to X-Teams

X-Teams: Why do bad things happen to good teams? Teams can follow the best models and theories in its design and process (conflict handling, decision making, etc.), but still not achieve the highest performance as a team. Teams may be too inwardly focused Good on team process, but less likely to achieve the highest performance

Inwardly focused teams tend to: Build a wall between itself and the rest of the organization Team members may become ‘close’ and believe they are right since they know what needs to be done and therefore disagree with different external ideas from the organization or others May become more and more rigid in their ways (they have figured out how to work as a team) Rebel against negative feedback

Inwardly focused teams perceives that team success is the result of Developing good team processes Clear identification of the problem How to work with each other as team members

Effective Teams Good internal dynamics is insufficient Best performance achieved from X-teams, who reach out to its sponsoring organization and the external environment

The Old Team Model is no Longer Applicable Organization structures have changed due to the competitive forces organizations face – innovation demands, fierce competition. Structures are looser, more flat, and horizontal vs. older hierarchical designs that were more centralized. Past team theories focused on team process issues or what happens inside the team.

Inward Focus Only one-half the story Teams need to manage upward and outward, outside the team’s boundary as well as inside of it. When teams were coached on their internal processes, they tend to be more satisfied working together and may even perform better at first However, over time, both satisfaction and performance fell.

The externally oriented teams tend to experience greater confusion at the beginning, but results are of a higher caliber The tight boundaries of an internally focused team creates insulation to the rest of the organization and outside of the organization

Should a team focus on internal workings first or the ‘big picture’? Depends on the team, tasks, and goals. If work on internal process first, may miss the larger context of the task or goal. The cost of beginning with a ‘big picture’ approach is that there tends to be less team cohesion and higher levels of confusion early on; but the end performance will likely be higher.

Should all teams be X-teams? Not necessarily “X-teams are not needed when team and organizational goals are clearly aligned and the team has the support it needs, when team members have all the information they require to get their work done and the information and knowledge they need is not changing rapidly, and when the team’s task is not highly interdependent with other work within the organization.” (p. 8-9)

X-Teams Team success requires managing both inside and outside of the team. X-team is eXternally oriented, with team members working outside their boundaries as well as inside them. X-teams are interdependent with other teams or other parts of the organization.

“The X in X-team emphasizes that … while managing internally is necessary, it is managing externally that enables teams to lead, innovate, and succeed in a rapidly changing environment.” (p. 6)

X-Factors Extensive ties to useful outsiders Expandable tiers to structure its own team Exchangeable membership: team members come in and out of team and leadership is rotated

Teams as part of an Organization’s Open System External Environment Transformation Process Organization TEAMS Raw Materials People Information resources Financial Products and Services Input Output

External Environment Organization Team T

The External Environment of Organizations Includes everything outside the organization, but the focus is on the elements that influence the organization and the elements it must respond to.

External Environment for Organizations and Teams (a) Competitors, industry size and competitiveness, related issues (b) Suppliers, manufacturers, real estate, services (c) Labor market, employment agencies, universities, training schools, employees in other companies, unions (d) Stock markets, banks, savings and loans, private investors (e) Customers, clients, potential users of products and services (f) Techniques of production, science, research centers, automation new materials (g) Recession, unemployment rate, inflation rate, rate of investment, economics, growth (h) City, state, federal laws and regulations, taxes, services, court system, political processes (i) Age, values, beliefs, education, religion, work ethic, consumer and green movements (j) Competition from and acquisition by foreign firms, entry into overseas markets, foreign customs, regulations, exchange rates International Context (j) International Sector (a) Industry Sector (i) Socio-cultural Sector DOMAIN (b) Raw Materials Sector (h) Government Sector (c) Human Resources Sector ORGANIZATION AND TEAMS (g) Economic Conditions Sector (d) Financial Resources Sector (f) Technology Sector (e) Market Sector

How X-teams differ from Traditional Teams Team members have high levels of external activity and seek information from external sources (customers, market, technology and competition). Extreme execution: develop productive internal processes to coordinate their activities, particularly information from the external sources. Incorporate flexible phases: exploration of needs, exploitation to develop what customers want, and engaged in exportation to transport product and learn from experience.

Organizational Changes that Led to X-Teams Fast paced and demands from the external environment for growth and competition that hinges on new products and ideas. Organizational structures are more decentralized vs. centralized; less hierarchy Shift in power or empowerment for decision making

X-team Challenges Competitive battles have led to the demand for greater innovation, where teams are charged with developing the vision, creativity and entrepreneurship to generate new ideas at the operational level (vs. executive level). Teams must become interpreters of the environment. Teams need to pursue synergies in their product and service offerings.