by: Claudio Fernández-Aráoz
In my early years as an executive search consultant in Argentina, I was frequently asked to hire senior investment bankers. Citibank and J.P. Morgan were the leading players in the region at the time, but as I contacted and interviewed most of their key bankers, I saw something strange going on. While both had top people, one was dramatically more successful in the market.
How did the stars at that firm manage to shine brightly together, while those at the other merely twinkled on their own?
For years, I puzzled over the huge performance gaps I often saw between teams that, on paper, looked as if they would be equally effective. You see it in business, in sports, in creative endeavors from movies to magazines. What made the difference? And what was the secret to both evaluating and enhancing team, rather than individual or organizational, dynamics?
My questions were answered in the late 1990s when Elaine Yew, my great colleague at Egon Zehnder, led a firm-wide project called the Team Effectiveness Review, or TER. This proprietary model analyzes six critical team competencies:
- Balance: How well a team understands the importance of diversity of skills and strengths and is willing to incorporate them.
- Energy:How ambitious the team is, and how much it takes the initiative and maintains long-term momentum at a high level.
- Alignment: How well team members understand the larger team purpose, and focus their actions and those of the team on that objective.
- Resilience: How well a team can hold itself together even under severe internal or external stress and remain effective.
- Efficiency: How well a team understands the need to optimize resources and time and drives efficiently for results.
- Openness: How much a team values engaging with the broader organization and the outside world and builds the connections do so.
The underlying premise is that it’s not enough to just hire the right people — those with strong values, great potential, and high competence — and develop them as individuals. You also have to help them work together. Indeed, based on our firm’s 50 years of practice and research, we believe that team effectiveness explains perhaps 80% of leaders’ success.
Don’t believe the popular myth that groups of all-stars don’t work. Of course they do, if you structure and lead them properly. Bain Company’s Michael Mankins, Alan Bird, and James Root illustrate all sorts of wonderful examples in the article “Making Star Teams out of Star Players.” Some are huge project teams, like the 600 Apple engineers who successfully developed the revolutionary OS X operating system in just two years (compared with the five years it took 10,000 Microsoft engineers to develop, and eventually retract, Microsoft’s Windows Vista). Others are relatively small creative teams, such as the one that so successfully developed the digitally animated marvel Toy Story (which included not only Pixar’s top artists and animators but also Disney’s veteran executives and Steve Jobs himself). And then there are great sports examples, including Kyle Busch’s amazing six-man NASCAR pit crew.
You can and should create an A-team. But remember that it will only thrive when you’ve made it balanced, aligned, resilient, energetic, open, and efficient. In fact, big weakness in any of those six competencies can lead to big problems. For example, teams low on efficiency turn into debating societies that can’t prioritize or make decisions and miss deadlines as a result. Teams low in diversity often succumb to groupthink; they agree with each other too quickly and fail to consider novel courses of action.
You and Your Team
To understand the strengths and weaknesses of your existing team (and perhaps build a better one), rate the group on each of the TER dimensions, using psychometrics, questionnaires, and (most effective) interviews and reference checks with objective assessors. Do you have enough diversity of skills and strengths? Is everyone aligned with your fundamental purpose? Are you all properly prepared to face the inevitable hard times? How ambitious is your team? Have you developed a wide array of internal and external networks? Are you optimizing the use of your time and resources?
Just as no executive will ever be perfect, neither will any team shine on all six TER dimensions. But you can work to improve your scores – for example, by making sure to draw out everyone’s perspectives and encouraging debate at meetings to boost openness or by instituting new communication and decision-making protocols to improve efficiency.
Remember that different situations require different team patterns. For example, turnaround teams need to be very strong in efficiency and while groups working on a post-merger integration need to excel at balance and alignment. Your job is to make sure the group can meet its specific challenges.
Revisiting those teams of investment bankers, I realized that the winning firm had a group that was much more diverse in terms of skills and backgrounds (in fact, one top player was a college dropout and still whole-heartedly embraced by his colleagues with business and finance degrees). Members were incredibly aligned with each other and fully committed to the organization, making it almost impossible to hire anyone away, even at a huge premium in compensation. They were upbeat and engaged, open to new ideas, and able to bounce back from adversity. And, thanks to solid processes and protocols, they were able to collaborate efficiently and effectively.
They were bright stars, brought together in a beautiful constellation.
Adapted from It’s Not the How or the What but the Who (Harvard Business Review Press, 2014).
About the Author
Claudio Fernández-Aráoz is a senior adviser at the global executive search firm Egon Zehnder and the author of It’s Not the How or the What but the Who (Harvard Business Review Press, 2014).
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