All-star teams

A key step any company can take to supercharge performance is to create teams of its top players—we call them all-star teams—and deploy them against its mission-critical initiatives. These teams will produce more results and produce them faster than average teams.

This recommendation is surprisingly unconventional. The usual wisdom, after all, is that all-star teams just don’t work. Egos will take over. The stars won’t play well with one another and will drive the team leader crazy. But it’s time to reconsider those assumptions. When the stakes are high—when a business model needs to be reinvented, say, or a key new product designed, or a strategic problem solved—doesn’t it seem foolish not to put your best people on the job, provided you can find a way to manage them effectively?

We have seen all-star teams do extraordinary work. For example, it took just six hundred Apple engineers less than two years to develop, debug, and deploy OS X, a revolutionary change in the company’s operating system. By contrast, it took as many as ten thousand engineers more than five years to develop, debug, deploy, and eventually retract Windows Vista. There were important strategic differences between Apple and Microsoft, of course. But based on our research and on interviews with executives at both companies, we’re convinced that the approach the two companies took to teaming and deployment explains a significant portion of the almost fiftyfold difference in productivity.

Common sense suggests that all-star teams have at least two big advantages: sheer firepower and synergy.

Sheer firepower. If you have world-class talent of all kinds on a team, you multiply the productivity and performance advantages that stand-alone stars can deliver. Consider auto-racing pit crews. Kyle Busch’s six-man crew is widely considered the finest on the NASCAR circuit. Each member is the best for his position—gas man, jackman, tire carriers, and tire changers. Crew members train together year-round with one clear goal in mind: to get Busch’s #18 racer in and out of the pit in the shortest possible time. The crew can execute a standard pit stop—seventy-three maneuvers including refueling and a change of all four tires—in 12.12 seconds. Add just one average player to Busch’s crew—say, an ordinary tire changer—and that time nearly doubles, to 23.09 seconds. Add two average team members to the mix, and it climbs to well over half a minute. By implication, then, the impact that all-star teams have on productivity is geometric, not linear.⁵ As the percentage of A-level players on a team increases, the output of the team increases geometrically.

Synergy. But it’s not just the quantity of team output that is affected by all-star teams. The quality of output improves as well. Putting the best thinkers together can spur creativity and ideas that no one member of the team would have developed alone. When Mickey Drexler was turning around Gap Inc. in the 1990s, he built powerful product-merchandising capabilities by assembling a merchant and design core team comprising the best of the best. Recognizing that great product is the lifeblood of great performance in retail, he and his team identified the company’s most talented product merchants and designers based on each employee’s track record, both inside and outside the company. Then they created a team of exclusively A-level players. (Many members of this core team have gone on to run highly successful retail operations, including Maureen Chiquet, former CEO at Chanel, and Andy Janowski, formerly of Burberry and Smythson.) Drexler tasked this team with translating his vision into specific products for every season, for each of the company’s stores.

The results were impressive. The team executed one of the most successful turnarounds in retail history, transforming Gap into the leading retailer of own-brand merchandise. It also produced great results for the company’s shareholders. Between 1998 and 2001, Gap was the most successful retailer in the United States, growing far faster and creating more value than any other retail brand.

The ability of all-star teams to produce more and higher-quality output is what we call the force multiplier. The impact on performance can be dramatic. Think about the difference between a professional basketball team and an amateur team. Both groups can play the game, but pit them against one another on the court and you are likely to see a ten- to twentyfold difference in the number of points scored by the pros versus the amateurs.

Mission-critical initiatives

At any given point in time, every company has—or should have—a list of its most important priorities. These initiatives will determine the company’s future prospects; they are the tasks that must be completed successfully if the company is to survive and prosper. The list may include integrating a major merger, developing a new product line, or even redefining the company’s basic strategy and direction (as IBM, say, has done over the past several years). Whatever the specifics, these are the priorities for all-star teams to tackle. They are the arenas where teams of difference makers can have the biggest effect.

Our research and experience highlight an important contrast in the approach companies take to assembling and deploying teams against their mission-critical initiatives. In our survey, for example, about 75 percent of the leaders of the best-performing companies said that they used all-star teams whenever their organization launched an initiative considered critical to business success. The comparable figure for the remaining companies was less than 10 percent—a more than sevenfold difference. Just as significant, bottom performers in our survey were four times as likely as the best to assemble and deploy teams based on who was available.

You can see the impact of all-star teams at key moments in recent business history. In 1990, for example, Boeing recognized that it had a gap in its product lineup: it had no airplane positioned between the jumbo 747 jetliner and its midsized 767 model. To address this gap, the company assembled a team of its best engineers. The team was led first by Phil Condit, who went on to became CEO of Boeing, and then by Alan Mulally, later CEO of Ford.

The all-star team came up with a design effort that was different from anything the company had previously employed. Team members worked with eight major airlines—All Nippon, American, British Airways, Cathay Pacific, Delta, JAL, Qantas, and United—to design the aircraft, the first time customers were so deeply involved in the process. They also designed the 777 wholly on the computer, the first airplane to be designed electronically. Using in-depth customer input and employing the latest technology, the team completed the basic design for the 777 in less than four months, and the company had the plane ready for service in less than five years, nearly two years faster than any other previous program. By bringing together its engineering stars and having them work side-by-side with customers, Boeing was able to launch what many industry analysts view as the most successful airplane program in commercial aviation history (with nearly 950 in service today), and to do it faster than ever before.

More recently, the turnaround at Ford between 2006 and 2010 serves as a powerful example of the impact of teaming. In 2006, though the economy was booming, Ford was struggling. The company’s North American operations were generating sizable losses as consumer preferences moved away from Ford’s profitable trucks and SUVs toward smaller vehicles, a segment where the majority of the company’s products were unprofitable. Bill Ford, then the company’s chairman and CEO, assembled an all-star team comprising Mark Fields (later Ford CEO), Bob Shanks (later CFO), Joe Hinrichs (later president of Ford Americas), and others, to devise a “Way Forward Plan” for the North America division. The plan the team came up with was ambitious: it included shutting down underutilized manufacturing plants and renegotiating labor agreements with the UAW. When Mulally joined Ford as CEO in 2006, he reinforced and broadened the Way Forward Plan, taking on billions of dollars in additional debt, shedding noncore brands (Aston Martin, Jaguar, Land Rover, Volvo, Mazda), and investing in new and revamped cars such as the Focus, Fusion, and Fiesta. In just three years, Ford North America went from losing more than $4 billion a year to making more than $5 billion.

Today, a handful of leading companies are building this model of all-star teams versus mission-critical initiatives into their day-to-day management. The Dell management model, for example, identifies the company’s highest-priority strategic initiatives and ensures that leaders’ time and the company’s best talent are focused on making these initiatives a success. Each year, Dell creates an agenda made up of the company’s highest value at stake and most urgent issues and opportunities. It usually includes fewer than fifteen items. Leadership team meetings then review the relevant facts and data associated with each issue, formulate concrete alternatives, evaluate options, and make choices. A senior executive and a team of A-level players are then assigned to help Dell’s top management address each issue on the agenda. This management approach focuses leaders on mission-critical issues and ensures that all-star teams are deployed to capitalize on the company’s most promising opportunities.

Making all-star teams work

Creating effective all-star teams can be a dicey proposition. Many executives can cite examples of star performers who fought with one another and didn’t get much done. But under the right conditions, all-star teams can turn in extraordinary results. Let’s look at how to help them live up to their potential.

Great leadership. The most important variable, and one that many companies overlook, is who leads the team. Leaders themselves have to be A-level talent, capable of coaxing top performance out of their team members. If you were assembling a chamber orchestra made up of the world’s best players—think Itzhak Perlman, Gil Shaham, Yuri Bashmet, Yo-Yo Ma, and their peers—you wouldn’t put an amateur conductor in front of them. Business is no different. It was no accident that both Gap’s and Boeing’s all-star teams were led by individuals who themselves were difference makers.

Organizations thus need to invest as much time in picking team leaders as in picking members. They need to ask members for feedback on the leader early (and often), and they can’t be afraid to switch generals or even to promote a team member to leader when necessary. In a 2012 study of a large company’s front-line supervisors, the National Bureau of Economic Research concluded that, as one summary put it, “The most efficient structure is to assign the best workers to the best bosses.”⁶ The research found that a great boss can improve the productivity of any team. Put an A-level boss (one in the top 10 percent in leader quality) instead of a poor boss in charge of an average team and she will increase the productivity of the team by 10 percent—about the same as adding another member to a nine-member team. But put that same A-level boss in charge of an all-star team and the team’s productivity will increase by still more: “good bosses … increase the output of stars by more than they do of laggards,” say the researchers. Because of the force multiplier, the performance of the all-star team will be much higher than that of an average team. So great bosses, in effect, act as a force multiplier on the force multiplier of all-star teams.⁷

This kind of leadership ability is a rare commodity, and it may be hard to find enough A-level leaders to head up your all-star teams. One CEO with whom we recently worked told us, “We are fortunate enough to have plenty of ‘A’ talent to deploy against our critical efforts. But our rate-limiting factor is leadership. We have only nine ‘A’ leaders who can drive these teams.” The CEO’s solution: create nine all-star teams and put them on the top-priority initiatives; then have the teams move down the list as they completed each one. These teams were so much more productive than the company’s other teams that they still got through the list faster than a group of balanced teams could have.

Leverage “extra-milers.” Every organization has employees who will go the extra mile. Committed and engaged, they invest extra time and energy in making critical initiatives successful, often contributing well beyond the scope of their role. These extra-milers can play an essential role in team collaboration. They serve as the productive glue between individual team members, helping to keep everyone informed and working together effectively. Research by the University of Iowa’s Ning Li and coauthors found that a single extra-miler can increase team productivity by more than the other members of the team combined.⁸

Identifying these extra-milers and assigning them to all-star teams serves to knit team members together. They provide the assists that enable the all-stars on the team to score more points. Every great team needs an extra-miler to help it function and perform in top form.

The right incentives—and no disincentives. Companies relying on all-star teams need to track and reward team performance, not just individual accomplishment. But some companies’ performance assessment methods get in the way of team success. Microsoft is an example: for many years, the software giant used a “stacked ranking” system as part of its performance evaluation model. At regular intervals, a certain percentage of any team’s members would be rated “top performers,” “good,” “average,” “below average,” and “poor,” regardless of the team’s overall performance. In some situations, this kind of forced ranking is effective, but in Microsoft’s case, it had unintended consequences. Over time, according to insiders’ reports, the stacked ranking created a culture in which employees competed with one another, rather than against other companies. Top performers rarely liked to join groups with other A-level players, because they feared they might be seen as the weakest members of the team. A-level players at Microsoft, so the story goes, were those who could identify B-level and C-level players and get themselves teamed with them, thus maximizing the odds of rating near the top of the stacked rank.⁹

Great support. To do their best, all-star teams need support staff who are all-stars, too. Extremely talented people have often never worked for someone they can learn a lot from; in our experience, most relish the opportunity and pull out all the stops. And high-caliber subordinates allow team members to accomplish more. A gifted administrative assistant, for example, requires less direction and competently shoulders many routine tasks, so the other team members can focus on what they do best.

Big goals to neutralize big egos. Egos can get in the way of team performance. But they don’t have to. In 1992, America’s first “Dream Team”—made up of the very best basketball players in the NBA—swept the Olympic Games in Barcelona, defeating its opponents by an average of forty-four points. This team succeeded because the goal of representing the United States with honor at the Olympics was bigger than even the sometimes oversized egos of these talented players. Again, the business lesson is clear. Since you can’t put all-star teams on every job—there aren’t enough A-level players to go around—you want to save these teams for the mission-critical tasks, and make sure every member understands the tasks’ importance. The teams at Gap, Boeing, and SpaceX were doing jobs that would determine the future of those companies. If you want your top performers to work productively together, you have to inspire them to put the mission first. In effect, the “collective ego” needs to become bigger than any one player’s individual ego.

Avoiding overshadowing. One danger of relying on all-star teams is that it creates a kind of star system, in which the top players get outsize rewards, while everyone else feels undervalued. Since an organization depends on all its participants, not just the top performers, that result can undermine the beneficial impact of the all-stars. One antidote is to ensure that everyone shares in the A-level team’s achievements. George Clooney and the rest of the all-star cast in the movie Ocean’s Eleven created an environment in which cast and crew reveled in their mutual success. Reportedly, most crew members were so pleased with the experience that they sought to sign on for Ocean’s Twelve and Ocean’s Thirteen. Other ways to keep B-level players and others engaged include recognizing performance, whether it’s mission critical or not; using a common performance evaluation system for stars and nonstars; and establishing common rewards shared by all. We discuss some of these methods at greater length in chapters 4 and 6.

Promoting productive teamwork

Not every team at your company can be an all-star team. Since exceptional talent is a scarce commodity, there will always be a limit on the number of all-star teams any company can assemble and deploy. So, many of your teams will necessarily include B-level and C-level players. Countless books and articles have been written on how to make these everyday teams as productive as they can be, and we won’t try to repeat all their prescriptions here. We believe, however, that the lessons of all-star teams apply to other teams as well. Every team needs a respected, competent leader. Every team needs appropriate support and the right incentives.

We want to add a final note of caution. “Collaboration” has become a buzzword in business these days. Employees are encouraged to communicate with their coworkers frequently, work across organizational silos, access the “wisdom of the crowd,” and so on. Much of this is good advice. But when it comes to collaboration and teamwork, more is not always better. Research featured in Harvard Business Review in 2016 noted that the amount of time devoted to collaborative activities has ballooned by 50 percent or more over the last several years. Not all of this additional time has produced bottom-line results; much of it has been wasted on needless meetings, unnecessary emails, and so forth, as we have highlighted earlier in this book. Moreover, value-added collaboration—collaboration that actually advances the cause of an individual or team—is highly concentrated in very few employees. Research on three hundred organizations found that, in most cases, 20 percent to 35 percent of value-added collaboration comes from only 3 percent to 5 percent of employees. As demands on these individuals mount, collaboration overload sets in, leading to higher turnover and, ironically, less value-added collaboration over time. At the same time, what Cal Newport of Georgetown University calls “deep work” suffers. People spend so much time working in teams that they have no time left for uninterrupted concentration on critical tasks.¹⁰

So think about teaming in the spirit of this book. Make sure that every team you set up is really necessary—and that the costs aren’t higher than the anticipated benefits. With all-star teams, the odds are high that you will get what you pay for. And more.

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Hiring great talent—difference makers—puts a company on the road toward overcoming the effects of organizational drag. Assembling that great talent into all-star teams moves it a lot farther down that road, because all-star teams outperform other teams so dramatically. If you can make these teams work well, they will address your company’s mission-critical initiatives and so help it survive and prosper.

Now it’s time to move on to part three of this book, which looks at the organizationwide issues of employee engagement, inspiration, and culture.

THREE WAYS TO CREATE AND DEVELOP ALL-STAR TEAMS

1. Form teams of your best people. Teams of A-level players do things better and faster than mixed teams. They act as a force multiplier.
2. Put these teams on your organization’s most important issues. Since there aren’t enough A-level players for everything, you need to focus the all-star teams on mission-critical initiatives, those that will determine the future value of the company.
3. Manage these teams carefully. All-star teams need great leaders and great support. You need to offer them the right incentives, and to ensure that egos don’t interfere with collaboration.