How to Lead Teams in a World Designed for Individualism

Despite the increasing significance of teamwork within organizations, the conventional processes for managing employees have remained largely unchanged. While managers often speak highly of collaboration, the methods they employ for rewards, evaluations, and hiring have yet to catch up.

While collaboration has always been a part of organizational work, the emphasis on teams is growing, driven by various factors. Technological advancements have made it easier to share ideas and information, and the rise of hybrid working has heightened its importance. (This is why it's not referred to as 'Microsoft Silos.') The software industry has played a role in popularizing the concept of teams, with practices like agile, scrums, OKRs, and others extending into various domains.

Recent research, including a paper by Abdullah Almaatouq from the MIT Sloan School of Management, highlights the effectiveness of teams in solving complex problems. It's also been found that individuals often have a stronger attachment to their work group compared to their organization as a whole.

Understanding what drives successful teams has been a subject of increasing interest. Google's Project Aristotle, a well-known research initiative, identified "psychological safety" as a critical element for high-performing teams. This safety encourages open and honest communication. Other factors include dependability, role clarity, and meaningful work. Different teams excel in various aspects; for example, the size of a team can influence the type of scientific research they excel at, with larger teams building on existing ideas and smaller ones introducing disruptive innovations.

Despite the growing recognition of the importance of teams, management practices often don't align with this emphasis. Recruitment processes tend to prioritize individual achievements over collective accomplishments. Performance management remains predominantly centered around individuals, with reviews and bonuses typically based on individual performance. Metrics often focus on tangible outputs rather than softer, team-based indicators such as trust. Adding to the challenge, many managers have limited knowledge of their teams' activities, with some unable to recall up to 60% of what their team members are working on, highlighting the need for better management insight and understanding of team dynamics.

The challenges associated with team-based management practices are indeed significant, but they are not insurmountable. There are valid reasons for the current individual-centric approach:

1. Individual Progression: Career progression often occurs individually, with individuals changing jobs or receiving promotions one by one, rather than in groups.

2. Fairness Concerns: Rewarding people based on team performance can lead to issues of fairness. Some team members may receive undue recognition while others who work hard may be penalized for someone else not pulling their weight.

3. Quantification Difficulties: It can be challenging to quantify individual contributions within a team, which makes it harder to allocate rewards and recognition fairly.

4. Cross-Functional or Temporary Teams: When teams are composed of individuals from different departments or are formed for limited durations, it becomes more challenging for managers to monitor and assess their direct reports' contributions.

However, there are ways to address these challenges and introduce team-based approaches:

1. Assess Team Player Traits: During the hiring process, it is possible to evaluate traits that make individuals good team members. For instance, assessing how well someone can interpret emotions from a snapshot of a person's eyes can be indicative of their ability to work effectively in a team.

2. Peer Reviews: Peer reviews and feedback can provide valuable insights into how individuals are perceived within their teams. These reviews can help in identifying strong team contributors.

By incorporating these considerations and by developing more nuanced and balanced approaches to team and individual performance assessment, organizations can better navigate the complexities of teamwork and individual recognition.

The concern that team-based bonuses might encourage free-riding may be exaggerated. Recent research conducted by Anders Frederiksen of Aarhus University and his co-authors examined the impact of implementing group-based incentives at a manufacturing company. They discovered that this approach led to a significant improvement in overall performance. This improvement wasn't solely due to the scheme incentivizing existing employees to work more efficiently; it also attracted more productive new hires.

While employees are individuals with unique qualities and motivations, it's important for managers to recognize the value of teamwork. Teams can be where much of the innovation and synergy occur, and as a result, it's crucial for managers to have effective strategies for maximizing team performance. Understanding what teams do throughout the day can be a valuable starting point for achieving this.