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Team Based Organizations

This model grew out of our work at 3M where we implemented new product teams, business teams, and executive teams into operating divisions. What we created was a virtual business organization of high performance teams that dramatically increased the organization's agility and responsiveness. Click on the model to explore this virtual business organization.

— Interactive Diagram: Use Mouse to Navigate  —

Team Based Organization

Team based organizations address two of the major weaknesses of the hierarchical organization — the tendency to do the wrong things and resistance to change. High performance teams have consistently demonstrated an ability to provide people with freedom to be open and honest in determining the right things to do. Team based organizations institutionalize this ability at each level of the hierarchy to create integration points where people regularly come together to determine the right thing to do.

Team based organizations create self-directed employees who understand the business and are empowered to collaborate across organizational boundaries to achieve goals and objectives beyond their level of authority. This creates an agile and responsive organization that does the right things, right the first time in response to learning and changing circumstances.

Cross-Functional Teams

Formal cross-functional teams at the professional, technical and supervisory level of the organization integrate activities across organizational boundaries to do the right things for the business. Team members know what is right for each of their functions, but the team allows them look at the bigger picture to see what is right for the business. Once consensus is reached on the right things to do, team members go back into their functional roles to do things right the first time.

Doing the “right thing” dramatically increases organizational performance on actions that cross boundaries, such as new product development, continuous improvement, and running major projects. It avoids false starts that lengthen cycle time, increase costs, and allow opportunities to slip away.

An additional benefit of team based organizations is development of self-directed employees who need minimal supervision and can quickly respond to learning and changing circumstances. Self-directed employees have more ownership for their actions, which translates into a commitment to follow through on actions to get results.

Global Business Teams

Formal business teams at the mid-management level integrate planning and resource allocation across organizational boundaries to do the right things for the business. Team members know what is right for each of their functions, but the team allows them to look at the bigger picture to see what is right for the business. Once consensus has been reached on the right things to do, team members go back into their functional roles to do things right the first time.

Business integration improves the organizationís performance on doing the “right things” by minimizing functional silos that create “turf wars” over resources and control. It increases managementís ability to understand the consequences of its functional actions on other functions and on the business. Business integration creates synergy between functions so that the whole is always greater than the sum of its parts.

Global Business Teams create self-directed managers who need minimal supervision and can respond quickly to learning and changing circumstances. They have more ownership for their actions and a high level of commitment to follow through on actions to get results — the people who build the business plan are the same people who will implement the business plan. They increase an organizationís agility and responsiveness by adjusting priorities and resource allocations based on learning and changing circumstances.

Strategic Integration Teams

Formal strategic teams at the executive level of the organization integrate strategy development across boundaries to do the right things for the long-term success of the business. Team members know what is right for each of their organizations, but the team allows them to look to the future to see what is right for the long-term survival of the business. Once consensus is achieved on the right strategies, team members go back into their organizations to implement these strategies right the first time.

Strategic integration improves the organizationís performance on aligning the internal organization with the external realities of a changing marketplace. It avoids the creation of functional silos that create “turf wars” over resources and control. It increases Executive managementís ability to understand how its short-term actions are affecting the long-term viability of the business. Strategic integration creates the wisdom necessary for management to set the long-term direction and strategy of the business.

Executive Strategic Teams increase collaboration at executive levels by creating accountability for doing the right things for the business. It provides the knowledge necessary for executives to understand the long term impacts when making decisions on functional budgets and resource allocations.

Business Integration

Institutionalizing boundary-crossing teams creates an unbalanced matrix structure. Team members still report solid line into their boss; but once they enter the team setting, they are free — there are no reporting lines. The matrix is unbalanced because it leaves power and authority within the functional organization and removes it from the team setting. Since it is power and authority within the hierarchy that distorts business decision making in the first place, keeping it out of the team setting provides team members with the freedom to use their collective wisdom to determine the right things to do for the business.

Without teams, critical issues that cross boundaries must be escalated up each functionís chain of command. Throughout the escalation process, each function selects and interprets information to support its position on the issue — therefore, when the issue finally reaches top management, the information and analysis is so distorted that executive management often makes the wrong decision.

Boundary-crossing teams create a virtual business organization that integrates action on critical issues that cross boundaries. Cross-functional teams determine the right things to do for their mission, which can often put them in conflict with other teams or functional management. Conflicts that canít be resolved can be taken to the appropriate business team. The business team creates a forum where the conflict can be looked at in terms of what is the right thing to do for the business. This minimizes personality and politics and maximizes information and analysis when making business decisions. Conflicts between business teams and functional management can be taken to the executive team. Working in concert, the teams create a virtual business organization that resolves conflicts and is agile and responsive to learning and changing circumstances.

Information — Knowledge — Wisdom

Team based organizations turn an organization of learners into a learning organization. This results in better plans, better strategies and better decision making.

Cross-functional teams generate a tremendous amount of information, analysis and learning about every aspect of their mission. This information and learning is gathered and correlated by business teams to expand the organizationís knowledge base. This expanded knowledge base is used by Business teams to develop better business plans and is accessed by functional management to make better business decisions.

The knowledge developed by business teams is integrated and synthesized by Executive Strategic Teams to create wisdom. Executive teams apply this wisdom to interpret the future and set long term strategies that will determine the long term success of the business.

Expanding information, knowledge and wisdom ensures that organizations work smarter, not just harder.

Differentiation

In a team based organization, the hierarchical organization retains power and control to organize its people, process and structure in a way that maximizes its ability to do things right the first time. This allows the organization to maintain the control and accountability it needs to drive strategies, tactics and focused actions down the organization.

In a team based organization, the hierarchy is downsized because of the reduced need for supervision and management. Less constrained by the long chains of command that will not allow anyone to do anything without permission, people have more opportunity to apply learning and take action without first asking for permission. This creates a more agile and responsive organization where change is taking place at all levels of the organization, all the time, in response to learning and changing circumstances.

Strategy — Tactics — Focused Activity

Executives use the wisdom derived from the virtual business organization to drive strategies, tactics and activity down the hierarchical organization, confident that they are doing the right things for the business. This “top down” approach sends a consistent message across the organization and creates alignment up, down, and across the organization.

The bottom-up development of strategies, tactics, and activities ensures they are met with more acceptance as they are driven top-down through the hierarchy. People have more confidence in management direction knowing that they have had the opportunity to shape that direction through participation on or with high performance teams.

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