The strength of the team is each individual member.

The strength of each member is the team.

―Phil Jackson

As we've journeyed through the stages of enterprise evolution, you may have noticed one term appearing more and more frequently on these pages—namely, teams. At stage 1, the independent contributors who come together to form a business are barely a team—they're more of a loose confederation. At stage 2, you might see teams beginning to form around different functions or projects, but they're less important than the hierarchical reporting relationships that connect the business functions to the directive leader. At stage 3, however, teams become critical. The matrix structure of a stage 3 organization is not just a matrix of individuals; it's a matrix of teams—specifically, intact teams with clear leadership. So our discussion of stage 3 would not be complete without taking a closer look at teams—what they are, how they work, and how they can become high performing.

This last point—the creation of high-performing teams—is really the focus of this chapter and of the rest of the book. It's one thing to organize your structure around teams; it's quite another to have those teams be high performing. In a thriving stage 3 organization (and in stage 4, as we'll discuss in the next chapter) high-performing teams become the engine of growth, transformation, value creation, and innovation. The Seven Crucial Conversations in Part III of this book are the roadmap by which teams become high performing. But before we get there, let's take a closer look at what teams are and what makes them tick.

Teams at Work

What comes to mind when you think of the word team? Ask that question 50 years ago, and the answer would have been easy—sports. Today, however, the concept of the team is increasingly associated with the workplace as well. In their 2019 Human Capital Trends survey,¹ Deloitte found that 31 percent of respondents structure and operate their businesses wholly or largely on teams, while another 65 percent said that while their structure remains hierarchical, they do some cross-functional team-based work. And among those organizations that have not yet made the transition, many see the writing on the wall: 65 percent of respondents viewed the shift from “functional hierarchy to team-centric and network-based organizational models” as important or very important. And you only have to glance at some of the highest performing organizations today to see that the shift pays off, for those who execute it well. World class companies among my consulting clients that implement a structure built on high-performing teams include Chicos, Pfizer, Edward Jones, Johnson & Johnson, Lancôme, Mars, and Merck, just to name a few. As the report concludes, “The global trend toward team-based organizations is growing for a reason: It is a more effective model for operating in the dynamic, unpredictable business environment typically seen today. In the long term, we believe there will be no leading organization that does not work primarily on the basis of teams.”

I would wholeheartedly agree with this assessment. And yet teams by themselves don't a thriving organization make. A team at its best is far more than the sum of its parts—it's dynamic, intelligent, responsive, inspiring, and infectious in the best way. But it can also be nothing more than a grouping of people. To create a thriving, agile, intelligent team-based organization, we need high-performing teams at every level. This is a significant challenge for stage 3 companies—not just designing a team-based structure but unleashing high performance within those teams. And as the Deloitte survey noted, “deeper in the enterprise, many organizations are struggling to build programs and incentives that support teaming.”²

Teams in an organization are like cells in the body. They may not stand out to the naked eye, but beneath the surface, they are determining the health of the entire system. If you want to transform your organization at a level that affects the functioning of the whole system, that means affecting the functioning of the cell itself—optimizing the power and capability of the team. A body, from one point of view, is a system of cells. Likewise, an organization can be considered a system of teams. I like to think of high-performing teams as the “secret agents” of transformation in a complex adaptive social system. Like transformation at a cellular level, transformation in a team is deep and sustained. And unless transformation happens at the level of teams, the organization will struggle to truly achieve high performance.

I have written quite a bit in these pages about the nature of an organization being a social system. Well, it doesn't get much more “social” than examining an organization and a business through the lens of teams. After all, the fundamental currency of teams is relationships, and the currency of those relationships is the conversations we have with one another. Therefore, transforming the social system of an organization ultimately means transforming the many conversations that collectively are defining that social system—its culture, its norms, its ways of working, its shared language, its perspective on the business and on the world. Those crucial conversations, as we'll see in Part III of this book, take place in teams.

If we're working to transform the social system, building new performance attributes into the system itself, that means affecting the ways in which individuals interact—how they come together and define their roles; how they solve problems; how they understand their work; how they organize around leaders; the quality of purpose and meaning they find in their work; and ultimately, the conversations they have about all of it. Indeed, if you want to get at the heart of the transformational journey in today's organizations, you have to directly impact the conversations that define and power its teams.

Understanding Teams

Let's begin at the beginning. Before there are high-performing teams with motivated members initiating crucial conversations, productively resolving creative tensions, building effective strategies, increasing competitive advantage, traveling together on a journey of transformation, and powering great organizations, there are just people. There are individuals with needs to be met, problems to impact, and issues to be resolved. Inevitably, they band together to do all those things, and as they do, again and again, teams are born—and in some cases, those teams form an organization. The story is as old as time. In fact, most teams evolve naturally. A natural team or work group is a group working together to achieve common interests in a way that is not structured by design. Families are probably the most common kind of natural team. In stage 1 and even early stage 2 organizations, work groups develop naturally, with little intentional structure. Shared ways of working are developed ad hoc, implicit agreements are formed about how things get done and who does what, power dynamics are navigated, culture develops, and so on. When a team gets a designated leader, it becomes an intact team.

The “performance” of a team—its effectiveness at achieving its aims—is, in the simplest sense, the sum total of the performance of its individual members and their ability to work in alignment with each other toward a common goal: to manage the complexity of their particular social system in order to optimize results. In a natural team, performance may not be something people are thinking too much about, let alone trying to improve. But for a leader who seeks to grow an organization or business, high performance becomes both an aspiration and an urgent necessity. Consider the difference between a group of kids who meet up at the local park to play a game of soccer, and a serious high school soccer team. The first group just happens to come together, and they play with whoever shows up that day. Some may be naturally gifted athletes, others less so. There's no coach or training program to help them improve. The second group is much more intentional in its creation. Kids have to try out for the team. They practice regularly, work with coaches to improve their skills, and create strategies for playing together in such a way that maximizes their talents. They are focused on becoming high performing in order to win more games.

It's the same in business, or any complex organization. But too many organizations take their teams for granted. They don't invest in them. They don't invest in coaches, training, or leaders. They don't develop a shared language for understanding and encouraging higher performance. They don't acquire the best technology to help support them. They don't pursue best practices. Perhaps most fundamentally, they don't consciously and actively commit to their success.

Mature stage 3 organizations are very conscious about how they build, structure, and run teams. Like the soccer team, they understand that high performance cannot be assumed. Certain conditions enable leaders, team members, and businesses to optimize their performance, individually and collectively. At Growth River, we've broken those down into a series of crucial conversations that will fundamentally alter the social system of your team and ultimately your organization.

The Building Blocks of High-Performing Teams

The amount of ink that has been spilled in an effort to improve the performance of teams is daunting. And yet, we forge ahead. Why? Because any little advantage in the quality and performance of teams is like discovering a vein of gold in the walls of a business. It yields extraordinary dividends. Here are a few important lessons I've learned from observing and creating HPTs over several decades.

• HPTS are built by design. They are intentional. They are purposeful. They don't happen by accident. They are built consciously.
• HPTs are not too big, not too small. Teams should ideally be about 6–10 people but not more than 12. Too many people on a team will inhibit performance and reduce its effectiveness.
• HPTs are led. In natural teams, leadership might organically form. But in an HPT, there is a leader who is explicitly responsible and accountable. That doesn't mean leadership has to be “command and control,” but neither is it vague, spontaneous, or organic.
• HPTs are authentically a team. This may seem obvious or repetitive, but it's crucial. Members authentically feel like they're “in it together.” The journey of an HPT is deeply shared. There is a sense of collective purpose, not just an individual one. Team members are accountable to each other, develop camaraderie and trust, and feel a sense that each person has the other's back.
• HPTs are on a mission. Perhaps most important, high-performing teams don't just exist in a vacuum. They are on a mission—a continuous improvement journey, fulfilling their own purposes and the purposes of the organization.

Now that we have those basics in mind, we need to turn to another key element of HPTs that is easy to take for granted. It involves the shared information ecosystem that will inevitably develop among team members. This needs to be explicit and transparent. How are we going to work together? What role is each person representing? What skillsets do we need to achieve our team goals? Don't assume the answers to these questions are naturally understood. Make sure that everyone is singing from the same hymnbook, and understands the words to the songs! Such clarity begins with the most simple but underappreciated cultural achievement that all high-performing teams exhibit—a shared language.

Shared Language

George Bernard Shaw is said to have once described England and the United States as “two nations divided by a common tongue.” The same could be said of many individuals working together in teams and organizations today. They might use the same words and utter the same sentences, but their meaning is continents apart. You might be sitting in a meeting discussing a business problem when someone exclaims, “We need marketing!” Everyone agrees. And then you leave the meeting and the sales guy walks out thinking he's going to create a brochure, while the product guy thinks he's going to do a study to design a new value proposition. Both of those are meanings assigned to the word “marketing.” This happens all the time in business. Trains crash and lots of damage is done only because people use the same words to mean different things. It's little wonder they often find it hard to align and coordinate, let alone to grow and thrive.

All tribes, big and small, develop their own language. It's a natural part of being human. It's part of how we define in-groups and out-groups. Indeed, we've all had the experience of being in a group of people who share a lexicon—perhaps the jargon of a particular industry, the fan-speak associated with a sport, the lingo of a subculture. It can be frustrating to feel like you're on the outside of such a group. Certain words or phrases are sacred, but you don't appreciate why. Everyone else is laughing but you don't get the jokes. They finish each other's sentences, while you don't understand the references. For those on the inside, the common meaning they associate with certain words or phrases creates not only mutual understanding but also a sense of camaraderie. The laughter they share is bonding, creating a tribal sense of connection. They're “in it together” because they speak the same language. From a cultural standpoint, we want our teams to feel camaraderie and mutual understanding and avoid the common misunderstandings that can lead to mistrust and breakdowns in relationships. Teams, as social systems, are fragile constructs. Small misunderstandings, miscommunications, and assumptions can derail even successful teams and cause doubt, mistrust, and insecurities. The surest way to avoid miscommunications is simple—communicate! If you want to ensure understanding and alignment all around, you must discuss the issues out loud so that everyone in the room can respond. You must resolutely insist on achieving something all too rare in the business community—a commonly understood language for working together.

High-performing teams are conscious and deliberate about the language they are using. It's important to know that everyone is on the same page. It will help bind the group together. In a very real sense, the shared language of a team creates a kind of cell membrane around the team that defines what is inside and what is outside. Don't ever take for granted the importance of developing and cultivating a shared language that everyone understands. And this is not something that is done once and put aside; it's an ongoing process, a shared experience that must be continually cultivated.

Creating a shared language, clear roles, explicit ways of working, and a clear structure for team interactions doesn't have to result in a team dynamic of conformity. We're trying to inspire autonomous team members, not create drones! Diversity of opinion is fine. Disagreement is fine. Creative tension is essential to HPTs. But tension is much more likely to be creative if that diversity of opinion and disagreement is happening in the context of a shared language, and the basic structure of team interactions is understood. If the roles that team members play are clear, and if the overall direction and goals of the team are transparent, it's much easier to have productive discussions and even disagreements. In that context, the energy of creative tension has the power to move the team forward, not waste energy in unproductive conflict, often driven by miscommunication.

Shared language needs to be developed intrateam, but that also highlights the importance of interteam communication. Do different teams in different parts of the organization communicate effectively? Does the organization as a whole have a shared language for common business activities and protocols? When language gets codified across the organization, we begin to develop more effective cross-functional business processes. All the little confusions and disharmonies that come from singing in different keys begin to work themselves out. Suddenly, and often surprisingly, disparate teams and functional silos start to sync up.

At Growth River, we have developed a language that has very specific meaning, and in our methodology, we strive to be clear and precise about language and attentive to the relevant audience lives inside our shared language membrane. I have shared some of that language in these pages, calling out key definitions. Honestly, if you revisit our methodology in five years, I expect the language to have changed and evolved. That's simply due to the fact that we are always working on our language, striving to be clearer, endeavoring to express our meaning with greater precision. I encourage you to do the same, whether you are working with a Growth River methodology or on a system of your own creation. A huge degree of complexity in organizational social systems can be ascribed to a failure of shared language, to the dangers of assuming others know what you're talking about. A glossary and a snapshot of the current key terms in the Growth River Operating System is included at the end of this book.

Developing a more conscious, explicit method of communication, and knowing—not hoping or assuming—that team members understand exactly what you are saying, is an indispensable step in the process of forming and sustaining an HPT.

Secret Agents of Transformation

For some teams, major renovations will be required to attain high performance. The entire social structure will need to be rebuilt from the ground up. A new lexicon of shared language and perspectives will need to be established. Multiple ways of working will need to be redesigned and implemented. Key skillsets will need to be developed. In other cases, there may be simpler changes needed—a new coat of paint, a reinforcing beam, a few key realignments. Whatever it takes, the team shares an intention to become the most effective version of itself, and all team members recognize that this process is a developmental journey to be navigated, not an initiative to be checked off.

When a team attains high performance, it will be obvious. High-performing teams get noticed. They may be a functional team, a business team, or an enterprise team, but wherever they sit on the org chart, the quality of the group dynamics and the power of their shared work will be felt in the organization. They have impact. They grow, learn, and improve. They become more and more effective. They inevitably put positive pressure on the rest of the organization. They are hard to ignore. And over time, they will naturally break out of their own internal workstreams and connect with other teams (or HPTs) in the organization. In fact, one way to think of a company is simply as a system of teams that interact with each other in similar ways to the way members within the team interact. If intrateam dynamics are powerful and positive, it's more than likely interteam dynamics will be as well. An HPT will only fly under the radar for so long. Its influence, power, and obvious effectiveness will tend to infect those around it. It will stand out. It may even be disruptive. It may challenge conventional organizational wisdom, and in so doing, even step on a few less-than-high-performing-toes. Sooner or later, it will be noticed.

HPTs are, for lack of a better word, awake. They are intelligent, adaptive, and continuously learning. In their emergence, the promise of distributed leadership becomes realized. The business, the organization, the social system is no longer sleepwalking, semiconscious, and responsive to only the biggest shocks from the market or from management. It's alive and attuned, capable of adapting, adept at learning—driven forward by the types of conscious conversations that inspire teams, and ultimately individuals, to realize their potential.

High-performing teams are the essential driver of high-performing organizations. They commit to the journey, they do the work, they don't skip steps, they're in it for the duration, and they reap the rewards. In fact, the journey of a high-performing team could provide the material for an entire book of its own. It's that important. But it's also a fitting amalgamation of the Growth River journey, as we've described it throughout. So much of the work to create high performing stage 3 and 4 organizations will stand or fall, succeed, or fail, based on the development of high-performing teams.

Another important reason for developing teams is that most individuals in organizations, even most leaders, simply do not have the authority to implement change initiatives at the scale of the entire organization. Their transformational ambitions must inevitably start on a more limited canvas. But most people in organizations are part of teams. And teams can be powerful agents. They can surprise. That's why I call them the secret agents of transformation.

Besides, top-down initiatives so often flounder. Even the most well-intended initiatives rarely reach all the way to the ground, and therefore fail to have the desired impact. Leaders fall in love with the adrenaline rush of designed change, and as a result they keep looking to the next big re-org. In fact, the most transformative changes are often small, even mundane. Transformation happens because of a million little choices plus a few big collective ones. The question is, how do you create energy and commitment to the million, not just the few? I think you create that through building them into teams at every level. Establishing HPTs is something more resembling an “inside-out” transformation. A true HPT—confident, empowered, and intelligent—knows how to digest a transformational journey. It can understand its components, appreciate how it intersects with the team, identify the capabilities involved, connect it to the team's purview, and implement and adjust where necessary. And it can even start to engage other teams around those issues and help facilitate its smart adoption throughout the organization.

Indeed, HPTs are infectious. Eventually, if enough teams in the social system begin to exhibit these characteristics, they will influence those around them. That will drive curiosity and interest in this methodology, and possibly some resistance as well. That is natural. When one team achieves higher performance and begins to advocate for its perspective with a single voice, others will start to listen. Initially, it may challenge the status quo. But it will also inspire and uplift. And as other teams rise up, they will emerge with their own distinct voices. That generates creative tension across the organization—a sort of race to the top. After all, once you've been part of the journey of a truly HPT, you won't ever want to go back to the status quo. It's hard to put the genie back in the bottle. When HPTs align with other HPTs through applying the Seven Crucial Conversations, the organization as a whole is profoundly impacted. Build enough HPTs and eventually the result will be as inevitable as it is desirable—a high-performing organization.

To actualize stage 3 potentials, it doesn't matter whether the team is a functional team working deep down in the organization on one side of the Business Triangle or a high-profile executive team overseeing multiple businesses, the same principles apply. If you want to initiate a transformative journey in your organization, I invite you to begin a series of crucial conversations with the people on your own team.