X-Teams, Revised and Updated: How to Build Teams That Lead, Innovate, and Succeed [updated] 1647824761, 9781647824761

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x-teams: how to build teams that lead, innovate, and succeed deborah ancona + henrik bresman

x-­teams: how to build teams that lead, innovate, and succeed deborah ancona + henrik bresman

HARVARD BUSINESS REVIEW PRESS BOSTON, MAS­SA­CHU­S ETTS

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Copyright 2023 Harvard Business School Publishing Corporation All rights reserved Printed in the United States of Amer­i­ca 10 9 8 7 6 5 4 3 2 1 No part of this publication may be reproduced, stored in or introduced into a retrieval system, or transmitted, in any form, or by any means (electronic, mechanical, photocopying, recording, or other­w ise), without the prior permission of the publisher. Requests for permission should be directed to permissions@harvardbusiness​.­org, or mailed to Permissions, Harvard Business School Publishing, 60 Harvard Way, Boston, Mas­sa­chu­setts 02163. The web addresses referenced in this book w ­ ere live and correct at the time of the book’s publication but may be subject to change. Cataloging-­in-­Publication data is forthcoming. ISBN: 978-1-64782-476-1

The paper used in this publication meets the requirements of the American National Standard for Permanence of Paper for Publications and Documents in Libraries and Archives Z39.48-1992.

​This book is dedicated to Marisa, Anna, Laura, and Bertie Elsa and Max

Contents

Preface to the New Edition

ix

Introduction 1 When Bad ­Things Happen to Good Teams

Part 1

Why Good Teams Fail 1 Avoid the Downward Spiral

21

Our Old Models D ­ on’t Work

2 An Exponentially Changing World

39

New Kinds of Organ­izations, New Kinds of Teams

Part 2

What Works 3 X-­Team Princi­ple 1

53

Out before In: Engage in External Activity

4 X-­Team Princi­ple 2 In ­Matters, Too: Build a Robust Internal Environment

77

viii Contents

5 X-­Team Princi­ple 3

91

Pivot along the Way: Make Timely Transitions

Part 3

How to Make It Work 6 X-­ifying the Team

111

Six Steps to Make It Happen

7 From One Team to Many

137

The X-­Team Program

8 Crafting an Infrastructure for Innovation

153

Embedding X-­Teams

Notes

175

Index

181

Acknowl­edgments

191

About the Authors

193

Preface to the New Edition

Working in small groups and teams has been essential for h ­ umans from the beginning of our existence, and it is now more impor­ tant than ever. While the need for teams has always been ­there, the exponential changes we live with ­today are having a dramatic impact. As we write this, the world has been ravaged by a global pandemic and has seen a potpourri of responses, fundamentally changing the way we work. A war is raging in Eu­rope and climate change is intensifying, putting the current world order in question, with implications for orga­nizational life that are hard or impossible to predict. The recent h ­ uman experience is deeply disorienting, even disturbing. This context pre­sents monumental challenges—­and only teams, with their diverse talents and the ability to realize their potential, are equipped to take them on. We wrote the first edition of X-­Teams sixteen years ago. Both of us are still professors at the same institutions as we w ­ ere then, Deborah at MIT and Henrik at INSEAD. However, the world was unmistakably a dif­fer­ent place then, which makes looking back at the original edition a daunting task. Is the book still relevant? We think so. It’s even more so, in fact, considering that the forces driving the emergence of x-­teams as a critical vehicle for distributed and innovative leadership have only accelerated. Furthermore,

x

Preface to the New Edition

recent research has supported our original x-­teams theory, while adding some exciting new twists. We have been encouraged to continue and expand our work on x-­teams by the stories of the thousands of ­people who have benefited from our model: x-­teams bringing new public-­private partnerships to countries suffering in a postpandemic world, nonprofits finding better ways to teach c­ hildren, big pharma pursuing biotech innovation, hospitals improving patient care, and banks increasing diversity. It has been incredibly rewarding to watch as ­people “x-­ify” their teams, be it by changing an ongoing team, creating a new proj­ect group, starting an x-­team program, or shifting the entire organ­ization to be nimbler and more entrepreneurial. We are also encouraged by the incredible leaders across industries who have stepped up to take on the enormous challenges of this sometimes dystopic world to make a difference. ­These are the p ­ eople ­doing the work—we see your f­ aces in every­ thing we do—­and we are happy and challenged to continue to set up the guideposts. We have updated and shortened this edition, replacing material that we found less relevant in ­today’s landscape with novel examples from around the world that illustrate the new real­ity of x-­teams working in a global and virtual context. We have added new research findings and provided a new chapter 6 to guide ­people on their x-­team adventures. In substantially rewritten final chapters, we provide guidance on setting up an organization-­ wide x-­team program (chapter 7) and crafting an infrastructure for innovation by creating an environment where x-­teams thrive (chapter 8). Rewriting this book, writing this new preface, and making edits large and small has been a gift for us, an opportunity to



Preface to the New Edition

xi

reflect on our work in the context of an exponentially changing world. The revision pro­cess helped us see that t­ here are still many ways to update the common conceptualization of what a team is—­even as p ­ eople remain stuck in a more traditional view. Together with our colleague Mark Mortensen, we recently took stock of the research on teams that has been done to date.1 We found that the developments of the last de­cade, notably the pandemic, sped up some trends (which we call evolutionary changes) and introduced ­others (revolutionary changes). Let’s take a look at them.

Evolutionary Changes Several evolutionary changes w ­ ere already underway when we wrote the original X-­Teams book, but the uptake has increased exponentially. T ­ hese changes are now firmly embedded in orga­ nizational life. From stable membership to dynamic membership. ​The traditional model of teams assumed a stable set of members for life, which is rarely the case anymore. In pushing ­people ­toward working remotely, the pandemic reduced the cost of switching membership, accelerating fluidity. From one team to multiple teams. ​The traditional organ­ ization assigned employees to one team at a time, but now most employees are balancing multiple memberships. The pandemic and other forces have expanded this trend as organ­izations seek resilience and efficiency through cross-­staffing.

xii

Preface to the New Edition In addition to asking individuals to work on multiple teams, organ­izations increasingly ask teams to work with each other—in what are often referred to as teams of teams—to take on challenges that are too complex for one team to tackle on its own. Often t­ hese teams of teams work across orga­nizational bound­aries to bring combined resources to the challenges of the day. From clear bound­aries to fuzzy bound­aries. ​The traditional model assumed clear team bound­aries, whereas we now see many contexts in which team membership itself is contested. Remote knowledge work and multiple commitments mean that members have differing views about who is actually on the team. Now t­ here are p ­ eople working part-­time, cycling in and out of the team, or simply advising. Are ­these team members? This trend has undoubtedly been increasing over the past few years. From ­humans only and machines only to ­humans and machines. ​The trend t­ oward increased reliance on technology in teams has been underway for a long time. However, this development has sped up dramatically. Witness how Zoom turned into a h ­ ouse­hold name and a verb seemingly overnight; how AI prompts help us write emails and finish tasks; how robots advise us on improving team dynamics. As we rewrite this book, the jury is still out on ­whether other ideas from the technology world, such as decentralized autonomous organ­izations (or DAOs), w ­ ill make their presence felt in the world of organ­ization design.2



Preface to the New Edition

xiii

From internal focus to internal and external focus. ​As the first edition of this book made clear, the traditional model of teams, which focuses on internal composition and dynamics, is no longer enough—an external focus is critical too. Adapting to a postpandemic world in which technology and markets change in an instant is just one way that the new environment w ­ ill require sensemaking and collaboration across bound­aries. In short, the world of stable teams with fixed bound­aries, an internal focus, and a clear mandate was already on its way out when the first edition of this book was published, and by now it has been all but obliterated. Our x-­team model takes ­these trends into account with an external perspective (a view we call out before in), flexible and changing membership, fluid bound­aries, and pulsed activity that enables rapid learning and response to changes in the outside world.

Revolutionary Changes While the shifts described above are evolutionary, ­there have also been some significant disruptions to the ways we work and teams operate. Hybridity. ​Remote work that relies on mediating technology is not new, but what is new is that what used to be a domain of a few is now the real­ity of many. With a massive proportion of the workforce now ­doing their jobs remotely, we are faced with fundamental questions about how to

xiv

Preface to the New Edition structure and manage collections of teams in a way that drives integration, collaboration, and identification across ­those in and out of the office. How should we design tasks to best utilize the dynamism of hybridity while managing the challenges? Decontextualized socialization. ​Scholars have long argued that socialization is critical to establishing solid teams. While technology helps, many ­people have lost their felt experience of work. Not being physically pre­sent in an office poses new challenges for team members around joining and understanding the context in which they operate.

­These disruptive changes notwithstanding, we believe that the story of the last de­cade is not one of moving from one state to another but rather one of a long-­shifting arc of change. Indeed, we believe that externally oriented teams ­w ill remain the indispensable agent of action and change, b ­ ecause our challenges are more complex than ever. We remain convinced that ­these challenges can never be successfully taken on by one or a few leaders at the top of an organ­ization. Instead, leadership needs to be distributed at ­every level, and the best vehicle for such distributed leadership is teams—at e­ very level. This conviction is supported by continued academic research, which we cite throughout the book. Some of this g ­ reat work by ­others we bring in more fully. For example, Amy Edmondson’s research on psychological safety is a cornerstone of the robust internal context needed for effective external outreach. Mark Mortensen’s work on hybrid teams and “fuzzy” bound­aries has



Preface to the New Edition

xv

challenged us to think more deeply about the changing context facing teams ­today. Relatedly, Christoph Riedl and Anita Woolley’s research on collective intelligence, nudges, and “burstiness” has focused our gaze on the technological and temporal aspects of context. Furthermore, we have benefited tremendously from many scholars who have advanced our knowledge of multiteam systems over the past de­cade.3 In the practitioner community, the upsurge in the agile organ­ ization of teams illustrates the value of relying on externally focused teams, which we argued for in the original edition. While agile frameworks have sometimes been l­ imited to short-­term creative teams, x-­teams can bring agile frameworks to the full organ­ization. They are part of this revolution involving sensing the environment, hearing the voice of the customer, and moving quickly. Indeed, one impor­tant reason the first edition of this book resonated widely in the practitioner community is that it introduced an effective approach for moving from agile teams working on their own to systems of agile teams working together, relying on the x-­team model as the basic structure. Our faith in the x-­team model was further reinforced, with gratitude, by the decision of our publisher to republish the book with this new preface. The editors encouraged us not to make too many substantive changes to this edition. We ­were happy to hear that the book holds up well as it is. × × × Reading, writing, consulting, and teaching about x-­ teams over many years and with many ­people has been a humbling experience.

xvi

Preface to the New Edition

The dedication, creativity, and drive that we have seen as ­people own the x-­team model has been remarkable. We, like them, continue to experiment and learn as the conceptual frame and its applications continue to evolve in the face of uncertainty. We are proud that the core idea has stood the test of time, while expanding to take on new challenges.

Introduction

When Bad Things Happen to Good Teams

Paul Davidson (not his real name) and his team of three engineers had just received permission to work on the second version of a software product that promised exciting ­things for the com­pany. They brought in ten more engineers and set about including all the features they thought customers wanted. Paul had just finished a course in machine learning and was anxious to apply his new knowledge. A ­ fter working hard to get an elegant design and prototype, the team put together an overall plan, identifying tasks and setting achievable delivery dates. The team members committed to the schedule, agreed on a clear set of goals, and moved into full-­scale implementation. Excitement was high. They knew what they wanted to build and hoped to show top management just how well they could deliver on t­ hose specs.

2 Introduction

Then, a few months into the schedule, an upper-­level man­ag­er suggested that the product be changed to meet some needs that customers had raised. Paul was reluctant to make the changes, ­ ere committed to the schedule saying that the team members w and d ­ idn’t want to do anything to jeopardize meeting their deadlines. They ­were on a crusade to show that machine learning works, and they would meet their schedule no m ­ atter what. The team members saw the man­ag­er as engaging in some kind of power play; the man­ag­er felt that the team was inflexible and unresponsive. When layoffs came, the team lost two members and resentment grew. Paul’s request that more ­people be assigned to the proj­ect was denied. Deadlines slipped, two more team members left, morale dropped, and Paul left the com­pany—­feeling that he had no f­ uture with such an inhospitable organ­ization. None of the other three original engineers wanted to fill the void, and the ­ ehind—­while they all team just kept falling further and further b circulated their résumés. How did a team that started off with so much talent and enthu­ ere was a group that considered cussiasm end up failing? H tomer needs—or at least what members thought the customer needed—­and strove for efficiency. ­Here was a set of ­people who worked well together, committed to a plan, and ­were motivated to make that plan a real­ity. They w ­ ere excited and energized, and then it all fell apart for one primary reason: the team was too inwardly focused. This diagnosis may surprise you, given that focused, inward-­ looking teams have traditionally been considered ideal. But this approach can lead to negative outcomes. For example, the team’s inward focus caused it to build a wall between itself and the

Introduction

3

outside world. Team members came to believe that they had the answers and that anyone who disagreed with them was wrong, and perhaps even had bad motives. They became more and more rigid in their practices and beliefs, eventually seeing every­thing through an us-­versus-­them lens. The more negative feedback they received, the more they rebelled against what the com­pany and customers ­were asking of them. A vicious downward spiral ensued. We have seen many teams fail, or slowly decline, just as Paul’s did. One such team in the financial ser­vices industry had a highly promising product, but ­because members failed to get buy-in from division man­ag­ers, they saw their product slowly starve from lack of resources. Another group, in a computer com­pany, worked well as a team but did not gather impor­tant competitive information. Its product was obsolete before launch. ­These stories are doubly sad b ­ ecause they are about good teams made up of talented, committed individuals. ­These are teams that seem to be ­doing every­thing right—­establishing roles and responsibilities, building trust among members, defining goals—­ and nevertheless see their proj­ects get axed. Why do bad ­things happen to good teams? As we have already begun to explore in our analy­sis of Paul’s story, teams often fail ­because their members are following the models and theories presented in bestselling books on team effectiveness. This view of per­for­mance, which dominates executive team training, asserts that to succeed, teams simply need to focus within—on their own pro­cess, on the prob­lem at hand, and on their members as collaborative colleagues. This is the m ­ ental model that often guides our actions when we create teams and set their agendas. This is the model that feels comfortable to most p ­ eople—­they want to be

4 Introduction

part of a team whose members care about each other and get the job done quickly. And this is the model that makes us effective at shaping the internal dynamics of teams—­how to build team spirit and work around a conference ­table, how to make rational decisions and allocate work, how to set goals and create roles for individual members. The prob­lem is that this model of internal focus d ­ oesn’t work so well anymore. Fierce innovation-­driven competition has forced dramatic changes in orga­nizational life. As competitive wars rage, ­battles are being won with weapons of creativity, agility, and orga­ nizational linkages, creating synergies that efficiently satisfy customer needs. Orga­nizational teams are increasingly called on to lead ­these ­battles. In this new world, leadership can no longer exist only at the top of the organ­ization; it must also be distributed throughout the organ­ization and shared with teams. When innovation is king and keeping your fin­ger on the pulse of technology and changing markets is critical, it is no longer the case that someone at the top ­w ill figure it all out and every­one ­else w ­ ill execute the plan. When organ­izations are faced with complex prob­lems and resources are dispersed, leadership needs to be spread across many players, both within and across organ­izations, up and down the hierarchy—­wherever information, expertise, vision, commitment, and new ways of working together reside. In this world of distributed leadership, teams cannot look solely inward.1 Called to take on a new leadership role, they must become the eyes that read the changing environment; the p ­ eople who bring commitment and energy to the task; the visionaries who help shape a new f­ uture; and the inventors of innovative solutions for business. Now teams

Introduction

5

must work with ­others to enact distributed leadership as they innovate and create change. Therefore, the old way of carry­ing out teamwork, with its focus on the team’s internal dynamics, is only half of the story. The other half—­managing externally, across team bound­aries—­gets ignored. And being only half right means that you are half wrong. We are not suggesting an either/or. The ideal is to have an internal focus combined with an external approach. Evidence now exists to suggest that a team’s success at leading, innovating, and getting ­things done requires managing both inside and outside the group. That’s where x-­teams come in.

The Other Half of the Story: X-­Teams What does managing both inside and outside the team look like? Consider the Cascade team at Microsoft. The team was formed in 2016 when com­pany management, led by Amanda Silver, a vice president in the developer division, was grappling with the question of ­whether Microsoft could grow a profitable tools development business, leveraging Microsoft platforms for use by a broader range of developers than they ­were currently serving. In the spirit of distributed leadership, a team was formed to move ahead. They realized that the market for software developer tools was rapidly evolving to meet the needs of an emerging generation of web developers. Such a set of products could help the com­pany adapt as industry preferences shifted over time, a trend accelerated by the cloud. The team’s challenge was to see if they could unlock entirely new experiences and ways of developing in the

6 Introduction

era of the cloud. To remain competitive and spearhead industry transformation, Microsoft would need to get to know the new generation of developers and create novel tools for them. To understand this new customer segment, Cascade brought in exploratory market researchers to carry out in-­depth interviews with next-­generation developers—­a move that it felt was justified given top management’s views about ­people having the freedom to think and act differently for greater innovation and learning. The research team eventually saw patterns in the work challenges and experiences that modern developers described. Most notably, the market was in dire need of products that facilitated teamwork. Software development is like a team sport—­yet at the time, all the tools on the market ­were focused on the individual experience. None offered capabilities for developers who worked in teams and needed to collaborate. To address this prob­lem, Cascade developed a real-­time collaboration tool called Live Share, a multiauthor collaboration system that enabled simultaneous editing regardless of the programming language a member was using or the apps they ­were developing—­l ike a Google Doc but for coding. The team’s efforts resulted in tremendous success. Live Share was one of the very first forays into the subscription ser­vice space for developer tools, and it helped with Microsoft’s customer acqui­ fter Live Share, the team continued sition in the developer space. A to innovate based on Cascade’s early research. Another set of products came out of the idea that you could have an AI “buddy” called Intellicode to help with coding. This took some time to develop, since the technology was mostly science fiction at the time of the early research. Fi­nally, the early research showcased the prob­lem of developer machine setup and consistency for both teams and

Introduction

7

individuals. This spark led to another series of products. The com­ pany is now the dominant provider of software tools in terms of global usage, with over 25 million users—­more than 50 ­percent of the world’s developer population. Furthermore, competitors are now mirroring what Cascade started. The challenge now is where to focus, given the many insights from the early work. Beyond Cascade’s successes in the market, the Cascade team itself had a huge impact on how Microsoft approached innovation (explained in greater detail below), demonstrating how a small innovative group can fundamentally change a larger organ­ ization. The team served as the poster child for the shift from a know-­it-­a ll culture to a learn-­it-­a ll one—­a shift that had been championed by the com­pany’s CEO, Satya Nadella. Not surprisingly, Live Share became a central example used to teach new employees how to engage in continuous learning and distributed leadership, accessing expertise and talent wherever pos­si­ble both within and outside of Microsoft. The Cascade team is what we call an x-­team. The “x” underlines the point that the team is externally oriented, with members working outside their bound­aries as well as inside them. The “x” also emphasizes what years of research and practice have shown: while managing internally is necessary, managing externally enables teams to lead, innovate, and succeed in a rapidly changing environment.2 An x-­team differs from a traditional team in three main ways. • X-­teams focus externally (outside the team). ​To create effective goals, plans, and designs, members must go outside the team; they must have high levels of external activity—­both within and outside the com­pany as well as

8 Introduction

the team. Cascade did this in many ways. For instance, within the com­pany, the team sought regular feedback from se­nior leaders and interacted with them on an ongoing basis. When team members gave pre­sen­ta­tions to leadership, ­these pre­sen­ta­tions ­were two-­way conversations. One of the product developers noted: “We would still do a deck and we would pre­sent, but it w ­ asn’t like we ­were ­doing an end-­of-­the-­quarter business review kind of ­thing. It was a ­little more like [se­nior leaders] ­were part of the ­ istakes or prob­lems, so we team. They knew all the m reported back to them and ­they’d give us pointers.” This approach allowed team members to consider how much enthusiasm leadership showed for dif­fer­ent ideas in the pre­sen­ta­tions, helping them pinpoint ideas with the greatest business interest. The team also remained externally oriented in how it looked outside the com­pany. Members spent hours with customers to understand what work prob­lems they had, which industry sectors mattered most, where their products could make the most difference, and which ones customers would pay for. They also looked to competitors to ascertain where they ­were in their development. They found that most of their competitors had impractical solutions or w ­ ere ­doing a less sophisticated version of what they w ­ ere contemplating. They also learned that they had identified impor­tant, solvable prob­lems that o ­ thers had not. Thus, the Cascade team found the closest approximation to competitors’ products and examined what Microsoft could do differently or better. For example, the team looked at Google Docs, b ­ ecause it already had a solution for how

Introduction

9

multiple authors collaborate in a document. Cascade translated this knowledge into its own work, considering the differences in how two ­people work on one document and how they work on a large codebase with many dif­fer­ent files. Despite all of this looking, GitHub actually came out with a similar product on the same day—­both companies had been working ­behind closed doors, so this was a surprise. They ended up collaborating on solutions. • X-­teams combine their productive external activity with robust pro­cesses inside the team. ​They achieve this by developing internal pro­cesses that enable members to coordinate their work and execute effectively. For example, in its product development phase, Cascade fostered a sense of openness to new ideas, which allowed team members to feel comfortable making m ­ istakes and sharing novel product concepts. As one team member noted, “We did so much learning. . . . ​It was a constant, continuous learning pro­cess from start to finish. That’s the t­ hing that sticks in my mind. We just never s­ topped learning.” As a result, the team seamlessly coordinated external pro­cesses, remained cohesive, and integrated new information and expertise. Cascade also constantly incorporated new customer feedback in creating Live Share and set up a Slack channel to get suggestions on Live Share. E ­ very day the research team would go into the Slack channel, read through the messages that had come in, and share the input with the rest of the team. • X-­teams incorporate timely transitions, shifting their activities over the team’s lifetime. ​Cascade members

10 Introduction

engaged in exploration—­learning about customer needs, orga­nizational expectations, and their own passions about what they wanted to create. Then they continued on to experimentation and execution—­a ctually developing the software that customers wanted and that competitors did not yet have. Fi­nally, they moved to exportation—­ transferring their learnings to the developer division more broadly. Across ­these transitions, the Cascade team shifted ­people and pro­cesses. For example, Cascade members entered and exited the team as dif­fer­ent expertise was required for dif­fer­ent phases of the work. So, while the external market research group was brought in at the beginning, once the team had developed a strong understanding of its clients, Microsoft product designers ­were brought in, then employees in software engineering, then ­people in marketing, and so on. As with other effective x-­teams, Cascade changed its pro­cesses over time to keep the product moving along and to deal with the demands that dif­fer­ent phases of a task presented. Together, ­these three ele­ments—­external activity, a robust internal environment, and timely transitions—­form the princi­ ples by which x-­teams guide themselves. X-­teams have helped firms solve complex prob­lems, adapt to changing conditions, innovate, and gain competitive advantage. Their entrepreneurial focus aids them in getting resources and in seeking and maintaining buy-in from stakeholders. Their links to top management, customers, competitors, and technologies enable them to link high-­level strategy with knowledge and ideas from the ground up. Their external focus helps them respond more

Introduction

11

nimbly than traditional teams can to the rapidly changing characteristics of work, technology, and customer demands, and to more effectively link their work to other orga­nizational initiatives. X-­teams consistently outperform traditional teams across a wide variety of functions and industries. One x-­team in the energy business has done an exceptional job of disseminating an innovative exploration method throughout the organ­ization. X-­teams in sales have brought in more revenue to a telecommunications com­pany. Drug development x-­teams have been more a­ dept at getting external technologies into their companies. Product development x-­teams in the computer industry have been more innovative and have outperformed traditional teams on time and bud­get metrics. Management consulting x-­teams have been better able to serve client needs. Startup x-­teams have attracted more investments from venture capital firms. C-­suite x-­teams have executed strategic change initiatives more effectively. ­Will ­every team that is internally focused fail? Should e­ very team be an x-­team? The answer is clearly “no.” X-­teams are not needed when team goals and orga­nizational goals are clearly aligned and the team has the support it needs, when team members have all the information needed to get their work done, and when the team’s task is not highly interdependent with other work within, and outside, the organ­ization. However, as ­we’ve said, the world has changed, and we believe that x-­teams are better equipped to deal with the challenges that this new world holds. Specifically, the shift from command-­and-­ control leadership to more distributed leadership requires additional dialogue and alignment up and down the organ­ization. This book is the story of x-­teams. It is a story about ordinary ­people ­doing extraordinary ­things simply by shifting to a more

12 Introduction

external approach. The book contains many examples of specific teams but also examines forward-­looking companies that have established structures, incentives, and pro­cesses to create and maintain ­whole systems of x-­teams. We ­will see how such systems are established, how they are structured, how they are nurtured, and what the subsequent results are of ­these endeavors. We w ­ ill focus on the full story—­the integration of the internal and external approaches to team management—­and the orga­nizational context needed to make it all work.

Who Should Read This Book? In any organ­ization in which teams are impor­tant, man­ag­ers at all levels ­w ill find this book useful. This includes a broad range of p ­ eople: senior-­level executives whose organ­ization’s per­for­ mance depends on the success of its teams; team members in the trenches responsible for getting the job done; ­those tasked with creating the conditions and incentives to make teams successful; ­those responsible for team member training and development; individuals working on large, complex proj­ects involving cutting-­edge technologies and hundreds of ­people; and, fi­nally, ­those working in small groups trying to make ongoing improvements in their work or community. For this broad audience, the book answers impor­tant questions: How can firms move to more decentralized structures and become more innovative? How do we shift leadership to lower levels within the firm? How do we get ­people who are already overwhelmed with day-­to-­day work to focus on new directions for the f­ uture? How do we unleash the creativity of ­people who want to make a difference

Introduction

13

and create change but ­don’t know how to make it happen? How do we link top-­level strategy with new initiatives? And, at the most basic level, how can we improve per­for­mance and satisfaction in the teams that form the core of ­today’s organ­izations? We hope that this book w ­ ill be a valuable resource to academics, con­sul­tants, or anyone ­else struggling with the challenges of understanding and managing teams in a new orga­nizational environment. We hope to provide a framework that w ­ ill reshape some of the fundamental assumptions that permeate the world of small-­g roup research and practice. We hope to shift the research lens from one that rests on the team’s boundary and focuses inward, to one that moves inside and outside the team. We also hope to shift your ideas about what a team is, how to make it function effectively, and, ultimately, how to create innovation in organ­izations.

Research Approach The ideas b ­ ehind the x-­team concept emerged from a research program that occurred over many years and featured several coauthors. We watched real teams discover that taking a more external approach enabled them to succeed. The research included many dif­fer­ent kinds of teams, including executive teams, sales teams, consulting teams, startup teams, and product development teams. T ­ hese teams spanned multiple industries, from telecommunications, education, energy, and phar­ma­ceu­ti­cals to big tech, health care, nonprofits, and financial ser­v ices. The results have been written up in many journal articles, some of which are referenced in this book for t­ hose readers who would like to

14 Introduction

see more of the statistics and sampling procedures that provide the basis for this book. By collecting both qualitative and quantitative data, looking at the logs of team member activity, and interviewing scores of members and leaders in consulting teams, product development teams, drug development teams, and oil exploration teams, we saw answers begin to emerge. What differentiated high-­and low-­ performing teams was an external emphasis paired with a robust internal environment, as well as an ability to shift activities over time and not get bogged down in one phase of work. But ­these high-­performing teams ­were ones that already existed within their organ­izations. The next question was this: Could we create such teams? Furthermore, could teams work with top management to lead change? ­Here, we moved into consulting and executive education mode and actually intervened in organ­izations to create x-­teams. At Accenture, Boehringer Ingelheim, the Broad Institute of MIT and Harvard, Li & Fung, Merrill, Takeda, and within our own institutions, our interventions have been very successful, with teams developing new products, pro­ cesses, strategies, and business models. ­We’ll look at some of ­these teams—­and how companies can develop their own x-­teams—in the last part of this book.

About the Book We have divided this book into three parts. Part 1 (chapters 1–2) describes the dominant “internal view” and explains how the world has changed in fundamental ways, rendering the old paradigm of teams obsolete and surfacing novel challenges. Part 2

Introduction

15

(chapters 3–5) builds a framework to overcome the challenges teams face t­ oday. It outlines the building blocks (or what we call x-­team princi­ples) needed for teams to engage in a complex web of complementary internal and external activities. Part 3 (chapters 6–8) pulls it all together and explains how man­ag­ers can make the x-­team model work for them.

Part 1: Why Good Teams Fail Before offering a solution, we need to understand the true nature, scope, and depth of the challenge. Thus, we begin this book with a journey through the landscape of existing thinking on teams. Chapter 1 describes the view of team effectiveness that we have all learned, the one we carry with us in our heads and execute daily, the one that has always made the most sense to us. We then begin looking at the evidence showing that this dominant view does not work anymore. In chapter 2 we explain why the old model does not work. The reason? Driven by increasingly fierce, fast, and innovation-­ based competition, orga­nizational life has changed in several fundamental ways. First, orga­nizational structures t­oday are loose, spread-­out systems with numerous alliances rather than multilevel centralized hierarchies. Second, organ­izations are dependent on information that is complex, externally dispersed, and rapidly advancing. Third, teams’ tasks are increasingly interwoven with other tasks both inside and outside the organ­ ization. Fi­nally, all ­these shifts are taking place against the backdrop of an increasingly volatile, uncertain, complex, ambiguous, diverse, and asynchronous real­ity that is changing at a furious pace. We refer to this context in which we live and work

16 Introduction

as an exponentially changing world. ­Because of ­these changes in orga­nizational life, distributed leadership is now part of the landscape. All of ­these changes have had a profound impact on teams’ job descriptions; in fact, they have fundamentally changed the rules of the game. We explain how.

Part 2: What Works To deal with the new realities, teams need to engage in a range of external activities. This is the first princi­ple of x-­teams and the subject of chapter 3. The range of activities we address are sensemaking, ambassadorship, and task coordination. First, sensemaking helps a team gather information located throughout the com­pany and the industry. It involves searching inside and outside the organ­ization to understand who has knowledge and expertise. It also means investigating markets, new technologies, competitor activities, and orga­nizational cultures. Second, ambassadorship is aimed at managing upward—­that is, marketing the proj­ect and the team to the com­pany power structure, maintaining the team’s reputation, lobbying for resources, and managing allies and adversaries. Third, task coordination is for managing the lateral connections across functions and the interdependencies with other units both within and outside the firm. Team members negotiate with other groups, trade their ser­v ices, and get feedback on how well their work meets expectations.3 As chapter 4 lays out, internal pro­cesses are needed to complement external ones. The second princi­ple of x-­teams, build a robust internal environment, refers to what’s needed to seamlessly coordinate the external outreach of an x-­team, hold the

Introduction

17

team together, and enable members to integrate information and expertise. By using the term robust, we underline the fact that external activity does not eliminate the need for internal teamwork; rather, it expands that need. External activity brings additional information, divergent opinions, and po­liti­cal bickering into the team. A robust internal environment is needed to keep the team moving in the face of ­these additional challenges. Such an environment, as we ­w ill explain, has three components: get the basics right, build psychological safety, and learn. Chapter 5 describes the third princi­ple of x-­teams: make timely transitions. This is a model consisting of three stages—­exploration, experimentation and execution, and exportation—as illustrated by the story of a team at Merrill.4 The chapter is a critical part of the x-­team story ­because it lays out how team activities need to shift over time to maintain innovation and speed. We outline a set of structural features that support making such shifts while still executing on the other princi­ples of x-­teams (engaging in external activity and setting up a robust internal environment).

Part 3: How to Make It Work In the final part we pull every­thing together that the book has described so far and offer a hands-on guide to creating x-­teams— or, as we like to put it, “x-­ifying” your team. In chapter 6 we provide concrete steps for teams to move from a more traditional form to an x-­team approach. Chapter 7 shows how systems of x-­teams can be developed into an infrastructure of innovation and change, illustrated by examples from Takeda and other companies operating in an exponentially changing context. Chapter 7 also invites you to dig into the step-­by-­step pro­cesses of

18 Introduction

building systems of x-­teams. If your organ­ization is not at the stage of detailed implementation just yet, then you can safely skip both this chapter and the next one. You can always come back to them when you are ready. Chapter 8, our final chapter, outlines how top management can build an organ­ization in which x-­teams thrive. We show how the Museum of Modern Art, Takeda, and HubSpot create an environment of learning and innovation through x-­teams. H ­ ere we see distributed leadership in action. The chapter articulates the key functions of distributed leadership, the leadership skills needed to work in such an organ­ization and in x-­teams, and what top management can do to foster such an organ­ization. ­A fter all, x-­teams cannot meet their full potential to lead without a supportive orga­nizational context. While building such a context only happens over a long period, and with a lot of work, organ­ izations need to foster the pro­cesses, structures, and culture necessary to unlock the potential of x-­teams. In turn, x-­teams help to model and shape ­these pro­cesses, structures, and cultures.

Part 1

Why Good Teams Fail

1 Avoid the Downward Spiral Our Old Models ­Don’t Work

When teaching executive programs on teams, we often start the session by asking participants, “What do you think is the most impor­tant characteristic of successful teams?” Without much prompting the answers pour out: clear roles and goals, conflict management, trust, team spirit, rational decision-­making, diversity among members, accountability, rewards for teamwork. The list goes on and on. While lists differ somewhat from one session to the next, the pattern of responses is clear and continues year in and year out: team members need to support each other, set goals, and figure out a structure and a way of working together to meet t­ hose goals. This notion that effective per­for­mance depends on what goes on inside the team is ubiquitous—it is drilled into all of us in

22

Why Good Teams Fail

team-­building sessions and training guides. It is the basic model of teams that most of us carry in our brains and use in practice. And for good reason! Good internal team functioning is essential for success, so it ­isn’t surprising that teams focus inward. The prob­lem, though, is that it ­isn’t enough. In fact, having an exclusively internal focus can be dangerous for teams and their goals, particularly in the fast-­paced, uncertain world we live in ­today. An inward focus, then, is only half the story when it comes to high-­functioning, successful teams. The crucial other half is the external work—­the “x” in x-­teams. This is the half that stresses managing upward and outward, outside the team’s boundary. This is the half that looks at the team not solely as a setting for teamwork but also as an agent for innovation and a vehicle for orga­nizational leadership in action. This is the half that helps organ­izations be nimble and innovate in the face of uncertainty. For this role, ­people need to monitor, market, and manage across the team boundary, as well as engage members and build strong ties and pro­cesses within the team. But how do we know all of that is true?

Go Out before In Our doubts about the internal model of teams started de­cades ago, in a quality-­of-­work-­life proj­ect in a prominent New York hospital.1 One part of the proj­ect focused on improving the satisfaction and per­for­mance of nursing teams. Turnover and conflict ­were high. Enter a consulting firm. The con­sul­tant trained team



Avoid the Downward Spiral

23

members in skills such as prob­lem-solving, communication, group decision-­making, and conflict resolution. A lot of time and energy went into the training. The con­sul­ tant emphasized the importance of understanding teammates’ viewpoints and reaching consensus. During the proj­ect, the unit did improve communication and increase problem-­solving capabilities. ­People learned interpersonal skills, and the number of work conflicts decreased. Unfortunately, ­after thousands of dollars and many hours spent, ­these changes ­were short-­lived. Furthermore, it became clear from nursing audit data that ­there was ­little proof that t­ hese interventions improved the per­for­mance of the nursing teams. More proof that internal pro­cess was not enough came in a study of 100 sales teams in the telecommunications industry. The study focused on ­whether sales teams performed better when they had clear roles and goals, practiced open communication, and supported one another. The results showed that though such teams’ members ­were more satisfied and considered themselves high performers, t­ hese internal pro­cesses did not predict per­for­ mance. Instead, team per­for­mance, as mea­sured by revenue attained by the team, could not be predicted in any way by looking solely at how members interacted with one another. The old model we all believe in simply did not tell the w ­ hole story.2 And then a series of studies led us to a major “aha” moment about what did affect per­for­mance. First, a study of forty-­five product development teams in the tech industry showed that ­those that scouted new ideas from outside sources, received feedback from and coordinated with outsiders, and got support from top man­ag­ers w ­ ere able to build innovative products faster than

24

Why Good Teams Fail

­those that dedicated themselves solely to efficiency and working well together.3 Still more evidence came from studies of consulting and pharma. The consulting teams that ­were more externally focused performed better in terms of client satisfaction and ratings of se­nior leaders than did teams that focused only on their internal interactions. Similarly, the pharma teams that w ­ ere externally focused ­were better able to identify usable molecules and evaluate ­those molecules’ potential for the com­pany than ­were teams that focused exclusively on their own knowledge base.4 By now, other team studies have replicated ­these results.5 They show that, when adapting to rapidly shifting external conditions or implementing a new strategy, an exclusively internal focus can be lethal. When success depends on keeping up with technology, markets, competitors, and other external stakeholders, an external focus combined with an internal focus is essential. The new research is quite compelling. One study of phar­ma­ ceu­ti­cal drug development teams showed that vicarious learning (the pro­cess of learning from prior related experiences of other teams) shows productivity gains only if it is paired with a robust internal pro­cess. Similarly, a lab experiment shows that both pro­cess work and learning are needed for teams to perform well. The inpatient medical teams at a US c­ hildren’s hospital rely on the interdependence of both internal pro­cess work and external connectivity for success. Another study shows the importance of external connectivity that can be carried out through storytelling.6 Further, technology developed since the first edition of our book is offering us highly detailed information about teams. For



Avoid the Downward Spiral

25

example, large studies across multiple industries that actually track team member interactions using wearable devices show that teams’ ability to connect across and outside of the organ­ ization are critical for productivity and innovation.7 This is ­because teams in a rapidly changing world need to rely on both familiar practices known to team members and fresh ideas from outside the team and the organ­ization. In a business plan competition at MIT for $100K, teams that spend more time with venture cap­i­tal­ists and other experts on their first day are more likely to be chosen for awards months ­later, as shown by ­these wearable devices that track team member interactions. Fi­nally, new AI is currently being developed with algorithms that connect ­people in organ­izations with similar responsibilities and high interdependencies.8 And yet, despite the wealth of research against it, the internal model remains lodged in our brains and our actions. Executives continue to believe that per­for­mance depends mainly on internal team dynamics. The data that supports combining external activities with internal ones is ­there in black and white, and has been for some time, but much to our chagrin, it has been largely ignored. The current world demands that teams take a more active role outside their bound­aries. Indeed, we know from our work with many teams over the years that, in almost e­ very organ­ization, some teams do take an internal approach while o ­ thers integrate internal and external work—­and the latter have outperformed the ­others. ­These are the teams that have provided us with the lessons in this book. Now w ­ e’re g ­ oing to delve more deeply into what teams with an exclusively internal focus miss out on by overlooking the external.

26

Why Good Teams Fail

A Tale of Two Teams Let’s compare two consulting teams from their formation through to the ultimate dissolution of one team. Both teams w ­ ere created by a young, dynamic state education commissioner who wanted to reor­ga­nize how the state’s Department of Education supported schools. In his view, the department reacted too much to the needs of the state’s school districts rather than proactively finding out how they could support districts with new and more effective academic programs and curricula. To achieve this, he asked that teams be or­ga­nized to consult to school districts in a par­tic­u­lar geographic area. This approach was more streamlined than the previous one, in which department employees worked within academic silos (e.g., writing curriculum specialists, science curriculum specialists, ­etc.) and across functional silos (e.g., elementary education, vocational schools, ­etc.). ­These new geographic-­based teams ­were headed by team leaders who ­were ­free to or­ga­nize and motivate their teams as they saw fit. From the very beginning, two par­tic­u­lar teams had very dif­fer­ent orientations, which set them on dif­fer­ent paths that would never converge. The Southeast team, headed by Sanjay, had an internal focus. Its members saw themselves as a team set up to satisfy their own goals and to complete a task. The Northwest team, headed by Neema, melded the internal and external in a much more integrated way. Its members saw themselves as change agents working with se­nior management to create innovative solutions for district prob­lems. Why Sanjay chose to focus primarily inwardly and Neema chose to move externally as well as internally is not entirely clear.



Avoid the Downward Spiral

27

What is clear, however, is that the Southeast and Northwest teams show how small decisions made at the beginning of a proj­ect can set the stage for how teams w ­ ill evolve over their life spans.

Two Teams, Two Strategies As seen in ­table 1-1, the internal (Southeast) and integrated (Northwest) approaches differed along a number of dimensions: (1) primary goal (get to know how to work as a team versus get to know the external environment); (2) secondary goal (inform the region of the team’s intentions and decisions versus create team cohesion and organ­ization); (3) initial amount of interaction with the environment (low versus high); (4) source of information used to map the environment/task (i.e., use existing member knowledge versus seek new information from outsiders); (5) direction of communication with the environment (one-­way, or sustain the status quo, versus two-­way, or see the regions from a new perspective, diagnose needs, get feedback, and invent new ways to provide ser­v ices); and (6) overall focus (build a team versus help the organ­ization build a new strategy). Interestingly, (7) team building was the only area where the two approaches overlapped—­both leaders wanted to create cohesive teams; they just went about it differently. But small differences in emphasis and focus at the very start ended up making a big difference l­ ater. Sanjay’s approach pulled members together around a solution that did not meet stakeholder expectations. Neema’s approach opened the team up to other viewpoints and dialogue to find creative solutions and

28

Why Good Teams Fail

TA B L E 1 - 1

The internal versus the integrated approach Sam’s “internal” team (Southeast)

Ned’s “integrated” team (Northwest)

Primary goal

Create an enthusiastic team

Understand the needs of the external regions

Secondary goal

Inform the region of what the team has decided

Create team cohesion and organization

Initial amount of interaction with the environment

Low

High

Source of information used to map the environment/task

Inside team; old, secondary sources

Outside team; new, primary sources

Direction of communication with the environment

One-way: inform

Two-way: diagnose/feedback/ invent

Overall focus

Build a team

Help the organization implement a new strategy

Team building

Come together as a team by learning about each other and sharing knowledge

Come together as a team while learning about the region

brought members into a pro­cess of discovery. ­These choices had implications in both the short term and the long term. In the short term, the Southeast team members ­were more satisfied, felt more like a team, and thought they w ­ ere making pro­ gress on the task. The Northwest team members, on the other hand, felt more confused, felt less like a team, and felt unsure about what they w ­ ere d ­ oing together. So, the internal focus did initially help p ­ eople feel safe, directed, and satisfied with their pro­gress. But over the long term, this early satisfaction turned on itself, as the Southeast team failed to produce. While a lot of time was



Avoid the Downward Spiral

29

spent early on trying to define goals and roles, as the proj­ect continued many team members missed meetings and enthusiasm declined. In contrast, the Northwest team had high levels of interaction with both the region and the top management team. Team meetings ­were a bit confused at first but improved over time. This integrated team sacrificed some internal cohesion early on for greater understanding of its external world, while the other team made the opposite choice. And it was the wrong one.

The Vicious Downward Spiral ­A fter a year of work, a survey of the top management team, the superintendents in the regions, and team members themselves found the Southeast team (Sanjay’s internally focused group) scored the lowest. The Northwest team, on the other hand—­w ith its more integrated focus—­was one of the top performers. Why do a few dif­fer­ent steps at the start lead you to success—or over a cliff? Why does a sole internal focus disable your ability to see, act, and gain ac­cep­tance outside? The exclusively internal focus poses numerous prob­lems that together become a vicious downward spiral (see figure 1-1). Let’s look at each phase of the spiral in turn.

Starting from ­Behind In the short term, members of the Southeast team (Sanjay’s internally focused team) w ­ ere able to get to know each other well and pull together information about the regions. They even started to brainstorm what they might do in the regions. Unfortunately,

FIGURE 1-1

The vicious downward spiral • Team members are unable to diagnose and update existing views of the needs and expectations of external stakeholders, including management and customers.

Starting from behind

• The team does not establish relationships with key stakeholders, so they do not feel as if they are partners. • Members rely on the existing knowledge of other members and are unable to change their initial problem definition based on new information. • Members cannot link the team’s work to the organization’s goals since they don’t communicate with senior leaders.

Stuck on the old, missing the new

• Members do not have allies in other parts of or outside the organization. • Members miss the ability to learn best practices and borrow new ideas from others.

• Others in the organization realize that team members are unable to meet outside expectations or chart a new direction for change.

• Team members miss new trends and major shifts in technology, markets, competition, and the organization.

The organization as an echo chamber

• The team develops a reputation as a losing team, which spreads throughout the organization. • There are no allies in the organization to block these perceptions.

Blaming the enemy out there

• All of the negative perceptions about the team, coupled with poor performance, push the team into failure mode. • Members blame each other as well as the “unfair” outside world.

Failure—inside and out

• In the face of criticism, members begin to see people outside the team as the enemy who does not appreciate or understand them.



Avoid the Downward Spiral

31

they did not do a good job on the latter. Since they did not often venture beyond their own team bound­aries, they d ­ idn’t r­ eally know what superintendents wanted and so could not create highly valued interventions. They also had a hard time determining management’s expectations. Thus, the team’s members ­were left ­behind from the start—­unable to move to a new way of thinking and operating. In contrast, the Northwest team members (Neema’s integration-­ focused team) rated themselves as having a high ability to predict regional needs b ­ ecause of high levels of interaction with ­those regions. Meeting notes showed that this team was closest to the pulse of current issues in the region and in the organ­ization. Team members w ­ ere asked to report on impor­tant events in the districts so that every­one knew what was g ­ oing on. Sharing information from the field helped team members get to know each other and feel like they ­were collectively tackling a tough challenge. Neema’s team was also involved with top management and helped the education commissioner design some of the organizationwide regional interventions. When the commissioner had to miss a meeting, Neema was asked to chair it. ­There was, however, an initial downside to Neema’s approach. Her early decision to send members outside kept them from coming up with solutions quickly and caused stress all around. Neema dealt with that stress by providing the team with a focused task: understand the context in which you operate first. This direction helped members to be patient and gave them a better sense of what was ­going on with clients and executives. Once they had a more accurate view of the situation, they could invent ways to improve what was ­going on in the regions. Furthermore, while they ­were interacting with the regions, they ­were

32

Why Good Teams Fail

building relationships with key stakeholders—­people who would then be more likely to help them in the ­future. Essentially, they set the stage for dialogue with the outside world. The price they paid was lower team cohesion and higher levels of confusion about their team identity early on.

Stuck on the Old, Missing the New Since Sanjay’s (internally focused) team members relied on existing mindsets and dated information, they missed critical cues. Their region was looking for new types of curricula, but the team ­ ere trying to get members never picked up on that. Se­nior leaders w team members to move away from their professional specialties and act as generalists—­but this message was never internalized by members. In short, Sanjay’s team operated with an old map of the ­ eople they situation, leaving its members out of step with the very p needed to satisfy. They w ­ ere working hard but c­ ouldn’t seem to get the right answers, and they ­didn’t know why. The initial prob­lem of using outdated information and an old mindset was amplified by poor per­for­mance. Thus, the vicious spiral began. Neema’s (integration-­focused) team, on the other hand, picked up on key trends and designed innovative programs to meet the new needs in its region. Among them was a better way to judge how well a school was ­doing, so the team created a school evaluation proj­ect. In meetings, Neema asked members to put their specialist hats aside and to act as generalists in diagnosing regional needs and brainstorming solutions. ­Here a positive, or virtuous, spiral began, with good ideas spurring positive results as well as positive feelings inside and outside the team.



Avoid the Downward Spiral

33

The Organ­ization as an Echo Chamber At a team leader meeting about three months a­ fter the launch, leaders ­were asked to report on their pro­g ress. Since Sanjay’s (internally focused) team members had not been active in the region, had not done a good job on their regional profiles, and had not understood what was expected of them, they ­were labeled as a “prob­lem team.” Soon word spread, and every­one was talking about Sanjay’s prob­lems. Now the team was ­really in trou­ble—­not only had it received a bad evaluation, but it had a bad reputation within the organ­ization. In contrast, Neema talked about the advances that her (integration-­focused) team had made on the school evaluation proj­ect. The education commissioner saw this as a good example of initiative and a way to bring his new strategy to life. He held Neema’s team up as an example to follow. Now the team was flying high. Members ­were proud that they had come up with a good idea and pleased that o ­ thers w ­ ere asking their advice. Neema’s team was suddenly the one to watch.

Blaming the E ­ nemy Out T ­ here As news of the Southeast (internally focused) team’s failures spread, team members became dispirited. Looking for someone to blame other than themselves, they focused on outsiders. For example, Sanjay told his team that the head of the organ­ization constrained their activity and that team leader meetings w ­ ere a waste of time. Members began to blame top management and a nonresponsive region for all their prob­lems. Relations between

34

Why Good Teams Fail

the team and its key stakeholders only continued to decline. The vicious spiral was accelerating. In contrast, Neema told her integration-­focused team that she did not want them to complain as some other teams w ­ ere ­doing, and since her members ­were getting positive feedback on their ideas from the education commissioner, they began to see the ­whole change effort positively. They used their new knowledge of the region to create solutions that worked, their achievements ­were complimented, word spread, and they started to bond around their newfound success. They ­were partners with top management in leading the organ­ization in a new direction. This virtuous spiral built on itself in a positive direction.

Failure—­Inside and Out Once the Southeast (internally focused) team had developed a bad reputation and members refused top management’s offer to coach them, the situation went from bad to worse. Negative initial impressions w ­ ere cast in concrete. A ­ fter five months, Sanjay fi­nally responded to complaints by asking the team, “How can we address the specific needs the department wants to accomplish?” But that agenda approximated the activities that other teams had implemented months ­earlier, and it was too late. Management dismissed the team’s attempts to change. Eventually, members of Sanjay’s team started to blame him and each other, and even internal relations went sour. One year a­ fter the teams w ­ ere formed, the Southeast team still had a negative reputation despite efforts to change. The team eventually disbanded. In contrast, the Northwest (integration-­focused) team was evaluated as having done a “super job” a­ fter the first year. Team



Avoid the Downward Spiral

35

members felt that the experience had stretched their abilities and that they had all developed in-­depth knowledge of the region. They also felt that their ideas had been listened to and that they had been able to create some in­ter­est­ing and exciting programs. The positive feedback from outsiders fed on itself, propelling the team to work harder and do more.

Bottom Line: Balance Is Key While this chapter has focused on the failures of one internally oriented team, we have seen many teams fall into this vicious spiral. Not one of ­those teams was led by someone who was stupid or had bad intentions; all the leaders wanted to create a highly motivated group that would perform well. They wanted to cultivate a nurturing environment in which team members got along. Early meetings usually had high levels of energy as members got to know each other, pooled information, set goals, and began the ­ ere lucky and set the right task at hand. And sometimes they w strategy. But more often they enthusiastically started a negative vicious spiral without even knowing it. ­These teams did not realize that in creating tight, protective bound­aries, they made it more difficult to step outside them to keep up with a changing world. They did not realize that by moving quickly to build the team, they forgot to check in with impor­ tant stakeholders and create buy-in. They did not see that in sharing existing information, they developed trust but built solutions for a real­ity that no longer existed. While each step they took may have built internal cohesion, they ignored the outside world at their peril. The result was lower per­for­mance and ultimately a

36

Why Good Teams Fail

dampening of the very cohesion they tried to create. The bottom line is this: balance is key. ­There are some circumstances in which the internal model works. Internally focused and self-­reflective teams work well when they operate in stable environments. They work well when they have all the information they need within their borders and do not have to collaborate with other groups in the organ­ization. They work well when the task is clear and stable and when they already have support within the organ­ization. They work well when all the necessary resources are within the team and when changes in technology, markets, and strategy are not relevant. ­ ill examine more closely in the next Unfortunately, as we w chapter, the world of ­those specific conditions is almost completely gone. The good news is that with a few carefully chosen steps, a team can move from a total internal focus to a more balanced, integrated one. What’s more, a team can move from acting alone to working with ­others as part of a distributed leadership effort, engaging top management and multiple teams in creating new, innovative solutions and in improving orga­nizational per­ for­mance. Such a move may create challenges to the team’s internal harmony, at least initially. However, making the shift can help the team escape a vicious spiral and turn it into a virtuous one, finding satisfaction along the way. × × × In this chapter we have shown that our old models of teams ­don’t work. When teams focus solely on building a solid team (i.e., on clear roles and goals, conflict management, trust, team spirit, rational decision-­making, diversity among members, account-



Avoid the Downward Spiral

37

ability, and rewards for teamwork), they wall themselves off from achieving their full potential. By instead reaching outside their bound­aries, teams can become agents for innovation and vehicles for orga­nizational leadership in action. In the next chapter, we ­w ill explain the new environment that has made our traditional models of teamwork obsolete and introduce the three core princi­ples of x-­teams.

2 An Exponentially Changing World New Kinds of Organ­izations, New Kinds of Teams

Walk into many businesses t­ oday and you’ll see organ­izations that resemble neither the hierarchical behemoths of a de­cade ago nor the companies in which the “organ­ization man” of the 1950s worked.1 Instead of org charts where arrows point from the boss’s name to row upon row of employees, ­today the lines may radiate out horizontally or circularly, illustrating cooperative rather than linear reporting relationships. Even the look and feel of companies, from software firms to banks to small businesses, has loosened up. The boss’s corner office has been replaced by a room with sofas and ­tables where small groups collaborate; the man­ag­er’s designated parking spot has transformed into a picnic area for lunchtime brainstorming sessions. All of this, furthermore, took

40

Why Good Teams Fail

place before the Covid-19 pandemic, which injected hybrid work into orga­nizational life, and the effects of that change are still emerging as this book is ­going into print. Similarly, where ­there was once a strict hierarchy for making decisions, leadership has been pushed down. T ­ here’s still an executive level that crafts strategy and vision, but ­people at the operational level are being asked to take on a w ­ hole new brand of responsibility—­including entrepreneurial and strategic leadership. Centralized organ­izations have given way to looser, decentralized networks within and outside the com­pany. Tasks that used to be designed and executed in clearly delineated silos now span multiple functions and product areas. And the dominant structure of ­these new organ­izations is the team. What brought about this sea change? Necessity, as they say, is the ­mother of invention. Competition has become increasingly fierce. ­Today growth relies on innovation, and competitive survival hinges on new products and ideas. What’s more, the number of nimble players in the arena is increasing. Perhaps most importantly, the speed of change in knowledge, technology, and innovation continues to accelerate, slowing decision-­making and complicating execution. Information technologies that lower communication costs allow smaller firms and emerging nations (notice India’s new prominence as an IT empire) to enter markets with greater speed, less capital, and more knowledge than ever before. We refer to this environment as an exponentially changing world. It is characterized by volatility, uncertainty, complexity, and ambiguity (often captured by the acronym VUCA); furthermore, it is diverse, asynchronous, and changing at a furious pace. In this exponentially changing environment, firms are facing challenges qualitatively dif­fer­ent from ­those they w ­ ere facing in a more ordered world.



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Three Challenges for ­Today’s Teams The new environment has radically shifted the context in which teams must manage the challenges ­they’re now tackling—­ specifically, changes in (1) the power structures in which teams operate, (2) the structure of knowledge with which they work, and (3) the structure of tasks they perform. To deal with ­these challenges, teams are increasingly put in the hot seat. In fact, the shifts we have been describing are precisely what make x-­teams necessary. But what, exactly, are teams being asked to do? To address the first challenge, it has fallen on teams on the front lines to provide the vision, creativity, and entrepreneurship needed to come up with new ideas and to link them to the strategies at the executive level, or to propose new strategies for se­nior man­ag­ers. Why? Competitive b ­ attles are being won in the arena of innovation—­and innovation happens at e­ very level, not just at the executive level. In effect, teams are now seen as partners with top management in the leadership task of meshing new strategic directives with innovative products and solutions. This activity, which we refer to as ambassadorial activity, requires high levels of interaction up, down, and across the firm. To address the second challenge, firms must be on the leading edge of knowledge in multiple areas si­mul­ta­neously in order to stay ahead—­which can be accomplished only at the operational level. The space of critical knowledge is ever expanding, becoming more complex, differentiated, and fast-­changing. Therefore, teams must be responsible for understanding the current technical, market, cultural, and competitive situation and where

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expertise and information can be found. They are becoming the organ­ization’s interpreters as they do sensemaking in the business environment. To address the third challenge, firms are turning to a strategy of bundling products and pursuing cost savings by working on similar platforms across products. In the exponentially changing world, they are ­under more pressure to pursue synergies in their offerings. Teams, in turn, are being called on to carry out the organ­ization’s necessary but increasingly complex task-­coordination activities, which result from t­hese new strategic imperatives. Furthermore, as the competitive environment changes and new interfirm partnering arrangements emerge, teams are required to engage in such coordination across orga­nizational bound­aries. Simply put, the dominant internal focus described in the previous chapter may have been sufficient in the old command-­and-­ control structure, when a com­pany was working with stable knowledge structures and clearly partitioned tasks. In the new distributed organ­ization, it is not. T ­ oday teams need to find ways to proactively engage the external environment as well and to exert bold orga­nizational leadership. This is what x-­teams do best. To understand why, let’s look at a few examples of teams working in the new, loose orga­nizational context, followed by a look at the attendant changes in the structures of knowledge and tasks with which t­ hese teams must work.

Shifting Power: From Tight to Loose As one of the world’s largest phar­ma­ceu­ti­cal firms, Pharmaco (not its real name) is a true poster child for the recent sea change



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in the drug industry. New technologies for developing innovative drugs have shown such breathtaking potential that they seem the stuff of science fiction. In par­tic­u­lar, the deciphering of the ­human genome has unraveled the mysteries of ­human life and radically increased our understanding of disease. At the same time, the new technologies have moved drug discovery from a pro­cess of randomly mixing chemicals in a tube to one of combining disparate pro­cesses such as ge­ne­tic modification. In this new environment, most of the innovation in phar­ma­ceu­ ti­cals has come from small new firms. As a result, many Big Pharma companies have shifted their R&D efforts ­toward identifying, evaluating, and buying promising molecules from ­those smaller firms. Witness the relationship of Pfizer and BioNTech in the development of Covid-19 vaccines based on mRNA technology. In accordance with industry trends, Pharmaco had started to loosen up its orga­nizational structure. It had also gone through two mergers in a row. As a result, administrative systems w ­ ere not fully in place, and the executive level was more involved with structural and ­legal issues—­and with jockeying for position in the emerging power structure—­than with the core business of drug development. One new strategic cornerstone was in place, though: in the absence of internal breakthroughs, Pharmaco was looking outside for new innovations by using specially designated teams. For ­these teams, the new strategy, combined with a loosening orga­nizational structure, meant a lot of room to do ­things their own way. But it also implied a g ­ reat responsibility to keep creating value. One specific team, Team Fox, had a particularly challenging task: to buy and develop a class of drugs—­anti-­ inflammatories—­that Pharmaco had no patents or experience

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Why Good Teams Fail

in. This goal was reflected in the team name, inspired by Archilochus’s parable about the hedgehog and the fox. As the story goes, the hedgehog needs to know only one ­thing, while the fox needs to know many ­things. The idea, one member explained, was that “this team needed to do it all.” Just a few years e­ arlier, the team would have received an explicit and exclusive mandate from the executive level to complete its task. The pro­cess would have been rigid and tightly controlled through bureaucratic procedures, but the team would have been assured of management support and consistent attention. For a few reasons, however, Team Fox’s members would have to operate differently from the internally focused teams that had dominated Pharmaco u ­ ntil now. First, with the executive level taking a hands-­off approach, Team Fox would have to build a case for pouring resources into an expensive and risky proj­ect and then pitch it to management in competition with other proj­ects. That’s quite dif­fer­ent from starting out with the resources and mandate already secured. Second, with many proj­ects competing for staffing and a ­limited pool of researchers, Team Fox’s leaders would have to convince line man­ag­ers to assign scarce talent to their team. In the following chapters we w ­ ill return to Team Fox and how it overcame ­these challenges. But the point we want to make h ­ ere is that to accomplish its mission, Team Fox had to work and communicate across bound­aries in ways teams at Pharmaco had not done in the past. The story of Team Fox, as we w ­ ill see l­ ater in this book, is not an isolated incident. While all teams are distinct in what they do, t­ hey’re all facing the same exponentially changing world. Loosening orga­nizational structures, driven by innovation-­based



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competition, means that teams have gained more autonomy to do their work. But with increased autonomy comes increased responsibility. Teams have to convince the executive level that ­ oing is worth ­doing, and that their work lines up what they are d with the organ­ization’s overall strategy or represents a new strategic direction t­ oward success. This task, in turn, has become even more challenging b ­ ecause of changes in the structure of knowledge.

Information Dispersion: Islands of Knowledge The nature of competition ­today means that, to survive, firms must command leading-­edge information. The challenge is compounded by recent changes in the nature of knowledge. The knowledge structures on which businesses depend have always been flat—­a collection of islands rather than a mountain. But impor­tant changes have emerged in them. Driven by the same competitive dynamics that have led to shifts in orga­nizational structures, the collection of knowledge islands is expanding and transforming rapidly—­now consisting of many more islands of many more dif­fer­ent kinds and growing rapidly. In fact, to a ­great extent, ­these changes have had a role in accelerating the need for the adaptive, loose structures that we just described. Three major changes have affected knowledge structures. First, scientific and technical knowledge that’s critical for success in innovation-­driven environments is becoming much more complex and advanced, and much more dispersed. Technical data is increasing so quickly that the speed and scope of change is rendering existing knowledge obsolete much faster than even in recent years. Second, t­here is a growing need to keep track of

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Why Good Teams Fail

rapidly changing markets, as industry bound­aries are evolving constantly. And third, ­there’s a need to capture real-­time knowledge about competitors who are also racing ahead. Fi­nally, in a garage somewhere, ­there is almost certainly a startup taking aim at the established business model. Consider the first change. The dependence on increasingly advanced—­and fast-­evolving—­scientific and technical knowledge has driven value-­creating activity in organ­izations to become ever more specialized. This shift is reflected in the growing number of p ­ eople with doctoral degrees not only in engineering-­heavy industries, such as biotechnology and computing, but also in ser­ vice industries, such as banking and insurance. To stay on top of their respective fields, ­these experts need to spend a lot of time staying abreast of new knowledge in their specialties and socializing with their peers. As knowledge specialization has increased, so has the dispersion of knowledge—in both the orga­nizational and the geographic senses. Partly this is a direct effect of specialization: ­there is only so much room for breadth in the knowledge repository of one organ­ization or one orga­nizational unit. It is also an effect of changes in industry structure. For example, in the wake of the molecular biology revolution, knowledge seen as key in modern drug development was suddenly found outside the established phar­ma­ceu­ti­cal firms, such as in biotech startups scattered around university campuses in Oxford, Silicon Valley, and Boston. That brings us to the second major change in knowledge structures—­and the mirror image of more complex yet more dispersed technical knowledge: a fast-­moving marketplace with sophisticated and differentiated customers whose requirements



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can change in the blink of an eye. Often ­these customers are used to having their needs met easily via the apps in their pockets. For example, if a car is not available quickly enough on one ride-­ hailing platform, such as Lyft, then another option is likely just a click away at Uber. Fi­nally, the third change: more competitors than ever before are waiting in the wings, ­eager to take advantage of disruptive change and outmaneuver slow incumbents. In addition to their larger numbers, t­hese competitors are smart and aggressive. Keeping track of ­these players is not easy, but firms’ competitive success depends on it. What does all this mean for teams? In their roles as leaders of innovation, they must find the knowledge they need outside their immediate environments, and often outside their organ­izations, and bring it in. The knowledge may be technical—­such as input from the latest science in a par­tic­u­lar discipline—­but it could also be information related to what customers demand and what competitors are d ­ oing. Lack of such real-­time information can spell disaster for a product development team—­such as when creating a technically sophisticated product that customers no longer want for a market segment that competitors have already filled. But ­there’s still more reason for teams to tap outside sources for knowledge: the time pressure to stay abreast of the competition means that teams cannot afford to reinvent the wheel. Odds are that other teams within the organ­ization or in other firms have found solutions to the very prob­lems the team is facing. Teams need to find ­these other teams, learn from them, and borrow best practices. The prob­lem that Team Fox and many other groups described in this book have in common is that, while competitive demands

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have become tougher, the critical knowledge needed to beat the competition is ever more complex, fast advancing, and spread out. More and more, the knowledge that teams need to accomplish their tasks c­ an’t be found within the team or even the com­pany itself. Instead, t­ hese teams find it critical to push their bound­aries in pursuit of the information they seek. The changes in knowledge structures also have far-­reaching implications for the structure of the very tasks in which teams are engaged. We discuss ­these expanding task bound­aries next.

You ­Can’t Do It Alone: Expanding Task Interdependencies Let’s return to Team Fox at Pharmaco, which faced a challenging job indeed. First, team members had to work overtime just to identify a potential blockbuster drug outside Pharmaco and the expertise needed to evaluate and develop it. Second, they had to constantly stay in touch with the executive level to make sure they would have the resources and buy-in to keep the proj­ect on track. But they had to keep a third ball in the air as well: throughout the pro­cess they needed to coordinate and synchronize their work with that of other teams. For example, Team Fox had to coordinate with colleagues when planning the design of labs, purchasing active ingredients, and so on. In addition, the team needed to coordinate its marketing message with ­those of other drugs in the pipeline. Having a unifying message for potential customers was impor­tant for building a brand in anti-­inflammatory drugs. Fi­nally, Fox needed to coordinate with external parties, notably the firm that they acquired the anti-­inflammatory molecule from and patient groups that wanted the drug as soon as pos­si­ble.



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All of this is to illustrate, of course, that the same competitive pressures that have driven changes in power structures and knowledge structures have also had a profound impact on the structure of work—­they have expanded the bound­aries of teams’ tasks themselves, changing the scope of the work that they do. For example, a team may have to create a lateral link to another team that has the key knowledge it needs, then synchronize efforts, schedules, and so on. Such interdependencies increase the complexity and difficulty of a task considerably. Consider Microsoft’s bestselling Office suite of apps. If you are working on the team responsible for Power­Point, you better know exactly how the app is interdependent with Word and Excel. If you do not, the outcome w ­ ill be disastrous. Relatedly, the increased necessity of speed has triggered a move from sequences of subtasks to iterations between interdependent tasks. No longer do design engineers simply design a car model and throw it over the wall to manufacturing. Instead, they talk to manufacturing engineers about what t­hey’re thinking, to see ­whether the new ideas can be implemented effectively. The approach is interdependent and iterative, not sequential. The agile approach to software development is another case in point: In contrast to the traditional waterfall method, which is sequential, the agile approach relies on rapid experimentation and iteration. As a result, interdependencies are strong across dif­fer­ent stages of software development. The necessity of speed also creates task decomposition. A task may be broken down into multiple pieces to be completed by dif­fer­ent work units. This increases the demand for coordination across teams to make sure the pieces come together again effectively.

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At the center of this pro­cess, we find teams that need to coordinate with each other to make sure that what they do seamlessly fits the product ­family, the system solution, or the manufacturing platform. To make t­ hings even more complicated, in an ever-­ changing competitive landscape, this has to be done fast. New strategic imperatives of speed and synergies for firms, then, have created greater interdependence and more work for teams. The changes we have illustrated in this chapter are what led us to develop the concept of x-­teams and to further delineate their core princi­ples. T ­ hese princi­ples are the subject of part 2 of the book. × × × We live in an exponentially changing world. The challenges facing organ­izations are dif­fer­ent from ­those they faced in the more ordered world of the past. In par­tic­u­lar, organ­izations face changes to (1) the power structures in which teams operate, (2) the structure of knowledge with which they work, and (3) the structure of tasks they perform. X-­teams are well suited to managing such changes.

Part 2

What Works

3 X-­Team Princi­ple 1 Out before In: Engage in External Activity

BellCo, a telecommunications com­pany that sells equipment to businesses, was undergoing a major reor­ga­ni­za­tion. From now on, rather than offering products to a general market, the firm would sell sophisticated systems that bundled several products and had specialized features for specific customer needs. The shift was intended to help sell higher-­margin products through industry specialization, thus improving profitability and hopefully increasing market share. As part of this change, the sales force was being reconfigured into teams to serve par­tic­u­lar industry segments, like banking, software, and phar­ma­ceu­ti­cals. One such team was called Big Bank (not its real name). Big Bank consisted of five members: two salespeople (Jean-­Yves and Vicki, who was the formal team leader), two implementers

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(Randy and Russell), and one systems designer (Roberto). While they ­were sitting around a ­table at a bar ­after the reorg was announced, Vicki put a stop to the conversation about “waiting for the new guidelines.” She suggested that waiting was a complete waste of time and said that the directives from leadership ­were not g ­ oing to clarify t­ hings anyway. Vicki was right, of course. While top management had a g ­ reat new strategy, the implementation effort would have to fall to the teams themselves. Corporate directives could cover only so much ground; each team would have to invent its own way of meeting the challenges posed by the new approach. Leadership shifted from the executive suite to the teams that would breathe life into top management’s ideas. To take on this leadership role, the team members would need to tackle a ­whole new set of questions. How would they go about getting all the information they needed? And once they uncovered that knowledge, how would members get se­nior management on board with the pitch they wanted to make to customers? ­A fter se­nior management approved their plans, they would face additional challenges like matching their product with customers’ specific needs, getting their bids accepted, and coming up with an installation strategy and pro­cess. ­These w ­ ere just the basic tasks that Big Bank faced. Now Vicki and her team needed to find a way to accomplish them. Up to this point w ­ e’ve looked at examples of groups—­like the Northwest consulting team and the Cascade software development team—­facing the same kinds of dilemmas as Big Bank, and ­we’ve watched them begin to resolve t­ hose dilemmas. But what specific actions did they use to accomplish what they did? How would a team like Big Bank begin to address the issues it faced



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while avoiding the vicious downward spiral we described in chapter 1? A good place to start is by engaging in rigorous, continuous external activity in addition to managing internal team dynamics. High-­performing teams work across their bound­aries, reaching out to find the information they need, understanding the context in which they work, navigating the politics and power strug­gles that surround any team initiative, getting support for their ideas, and coordinating with the myriad other groups that are key to a team’s success. This is the first of our three x-­team princi­ples: x-­teams engage in high levels of external activity. But what does effective external activity consist of, exactly? As summarized in the conclusion of chapter 2, ­we’ve found that it falls into three distinct subactivities: sensemaking, ambassadorship, and task coordination. Sensemaking, a term coined by Karl Weick at the University of Michigan, involves understanding o ­ thers’ expectations, updating information about key stakeholders, and learning where critical information and expertise reside, both inside and outside the organ­ization. Teams need to take stock of how the world has changed and what new threats and opportunities have emerged. They need a good model of what the outside world is like so that they can shift and adapt accordingly. Ambassadorship brings in a po­liti­cal dimension, as team members need to lobby for resources, get early buy-in for their ideas, and keep working for support from top man­ag­ers. Fi­nally, task coordination is crucial, as teams need to manage the interdependencies with other parts of the firm and groups outside it, rather than remaining isolated within their own confines.

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Next, w ­ e’ll look more closely at what the first of ­these activities, sensemaking, does to help teams break out of their often myopic internal focus.

Sensemaking Let’s return to our opening example of the Big Bank team. When Vicki, the official team leader, halted the conversation about waiting for more direction from the top, she had an alternative plan in mind. ­Wouldn’t it be quicker and more informative if the team members spread out and asked other groups in the com­pany how they expected to work with Big Bank in the new design? And so sensemaking began with small, careful steps. Members split into pairs and went to talk to ­people in technical support, installation, and sales. They asked lots of questions: When we have a potential sale and we need help, whom should we contact? What are you ­going to need to know? How can we best prepare to work with you on ­these kinds of accounts? Sometimes the ­people they spoke to had the answers, sometimes team members got sent to someone ­else, and sometimes no one knew and they started to make up some procedures that they thought might work. And then the team members met and pooled the information they had gathered. With a clear task of sensemaking and data flowing in about what their new world looked like, the Big Bank members began to feel less anxious and more confident. They started to create a ­mental map of how ­things might work and set out to learn more. Think of sensemaking as scouting in the wilderness to carefully explore and gather information about the surrounding



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terrain to see w ­ hether it is safe to move ahead. Sensemaking is aimed at understanding what’s out ­there so that team members know ­whether they can proceed or ­whether they need to make adjustments to what they are currently ­doing. It allows the team to predict the coming rough spots and to get a sense of how dangerous the terrain ­really is. As Big Bank came to understand, sensemaking includes learning about the expectations of other key constituencies and gathering relevant information throughout the com­pany and the industry. It involves extensive searching to understand who has knowledge and expertise and what the current trends in the marketplace are. It means investigating customers, new technologies, and the competition. It may even mean discovering that the firms you thought ­were the competition are not your biggest threat. In short, sensemaking means being open to new trends and updating your view of the world, enabling team members to make sense of the environment around them and to come up with a common map of that external terrain.1 Teams we have met and worked with use many dif­fer­ent modes of sensemaking, from the ambitious and expensive (e.g., hiring con­sul­tants) to the quick and cheap (e.g., spending an hour browsing the internet or having a cup of coffee with an old college professor). While a lot of sensemaking is done through observation and conversation, team members also have used surveys, interviews, archival data, and con­sul­tant and analyst reports to learn more about what dif­fer­ent groups are thinking and ­doing. The Cascade team did this effectively in its product development work. Members d ­ idn’t start with an idea for a product, but instead de­cided to learn about developer work as much as pos­si­ble so that they could assess how best to respond to developer concerns from

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the bottom up. Consider Visual Studio Code, one of Cascade’s most successful innovations. It is an open product, so the team can take part in continuous customer interaction to improve it. Engineers are always in contact with customers about how Visual Studio Code can be adapted to better meet their needs, and since the customers are software engineers themselves, this open communication allows for thoughtful and detailed engagement. Switching to external sensemaking mode may require a nudge and active engagement from the top of the organ­ization. When Elcin Barker Ergun took on the role of CEO at the Italian phar­ ma­ceu­ti­cal firm Menarini, she concluded that the R&D organ­ ization needed to scout externally for transformational ideas as part of an innovation-­driven strategy. However, she also knew that this constituted a shift in mindset. To encourage the firm’s many talented R&D teams to go on sensemaking missions outside, she not only communicated that they w ­ ere empowered to do so but also delayered the organ­ization to allow direct communication and agile iterations between herself, the head of R&D, and the teams at the front lines. She further role-­modeled the new modus operandi by joining the firm’s scientists at vari­ous events where they explored transformational opportunities. One result of ­these efforts has been a successful foray into breast cancer treatments, an area where Menarini had not previously been active. Sometimes sensemaking continues throughout a team’s lifetime, ­because each phase of work demands sensemaking in new directions and changes in the environment may render the team’s work obsolete. But for other teams, extensive early sensemaking to get the lay of the land is all that’s needed. For t­ hese teams, too much



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sensemaking can lead to analy­sis paralysis and impede the movement from exploring an idea to actually implementing it. In short, sensemaking is a multifaceted activity that involves three tasks: investigating the orga­nizational terrain, investigating customers and competitors to uncover current trends, and engaging in vicarious learning. Let’s dig into each of ­these.

Investigating the Orga­nizational Terrain ­Here, the key goal of sensemaking is to understand what a team’s task actually is, who the key players are, and what every­one expects the final product to be. Sensemaking also involves uncovering the often tacit, unwritten cultural expectations that ­others have for the team. While team members may think they know the answers to ­these questions, their answers may be outdated, biased, or simply wrong. Starting with a fresh outlook, then, and spending the time to figure out how other groups view their work is critical. For Big Bank, that meant ­doing some initial sensemaking and then getting in touch with corporate to ask questions such as how the new compensation system would work, how much team members would have to sell in order to get bonuses, and what teams ­were expected to do in what period of time. During this pro­cess, Big Bank members came to understand that the corporate design group had created a new orga­nizational design that would not just improve the com­pany’s competitive position but also require cultural changes. Whereas customers who needed products used to come to the team, now the team would have to be much more active in searching out customers

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and tailoring solutions to their needs. This had never been done before at BellCo, and it was clear that the guidelines from corporate did not explain how team members would gain the expertise and cooperation they needed from ­others or how they would learn to sell. While other teams waited for instructions and continued to work in the old way, the Big Bank team de­cided to meet this new challenge head-on.

Investigating Customers and Competitors to Uncover Current Trends Some sensemaking takes place within the organ­ization, but a large part revolves around understanding what goes on outside the organ­ization. This includes learning about customers, suppliers, competitors, technical and scientific communities, con­sul­ tants, industry experts, and so on. The key is to figure out which groups team members need to understand and then to go out and learn what t­ hose p ­ eople are thinking, feeling, considering, expecting, admiring, fearing, and wanting. For Big Bank team members, the focus of external sensemaking became the customer and the competition. They ­were the new kids on the block, and they felt the pressure to move quickly up the learning curve. So, the team leader and her fellow salesperson started reading about the banking industry, looking for trends and needs. Since they w ­ ere the ones who would have to do most of the selling, they had to know how to talk to their customers in new ways and with more knowledge than they currently had. They visited some of their existing clients, the ones with whom they had ­great relationships, and told them about the changes at BellCo. They asked ­whether t­ here was a need for their specialized



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communications systems and what clients might want in terms of features and price ranges. They asked, “If we gave you something like this, would you be interested?” and “If not, why not?” While this was g ­ oing on, other team members w ­ ere busy trying to learn about what kinds of systems their competitors w ­ ere installing. They went to a bank that had switched to another vendor to get a more complex system and asked why the customer had made the change. They studied the system and compared it to what they could produce. Then they got on the web and looked at the offerings from all their competitors. This led to the creation of a comparison chart that the team would ­later use to show what the com­pany could do that the competition could not. While the Big Bank team’s sensemaking activity focused on the customer and the competition, members of Team Fox at the phar­ ma­ceu­ti­cal firm Pharmaco, which we met in chapter 2, had to search for scientific knowledge outside its borders. Their challenge was to find the type of molecule needed for a new drug that was not available inside the organ­ization itself. Hence, the first order of business for team members was to scan the globe for leads. This involved attending conferences, mining databases, and tracking down old friends in the industry as well as in academia for advice. In the end, the molecule that became the raison d’être of the proj­ect was found via a tip from a subsidiary an ocean away.

Engaging in Vicarious Learning Sensemaking also involves what we call vicarious learning, in which team members learn how to do a task by observing o ­ thers outside the team, both inside and beyond their organ­ization, or

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talking to them about their experiences.2 In this case, sensemaking is not about understanding the expectations of ­others within the firm or incorporating information from customers, competitors, or suppliers. Rather, team members are learning ways to do their task by copying or modifying what other teams have done. In ­doing so, they might ask such questions as: What ­mistakes did you make (so that we d ­ on’t have to repeat them)? Which team was most successful before, and what did its members do? Who gave you the best information, and whom do we need to talk to about this? How did you do this part of the task, or can we use your data? Within their organ­izations, teams can build effectively on the work of e­ arlier proj­ects, creating a stream of learning. For example, team members can save time by borrowing machinery, copying documents and contracts, and adapting them to the needs of their task. Over time, w ­ e’ve seen this kind of vicarious learning help teams become more and more successful. In addition to vicarious learning within their own organ­ ization, teams can learn from other organ­ izations and even other industries. For example, when a team from BP wanted to learn more about standardization, members ­didn’t look at oil and gas companies but at car companies that had already developed the idea of common platforms across dif­fer­ent car models. When a team in the financial ser­v ices industry wanted to learn about improving customer satisfaction, members did not look at other companies in the industry but at Neiman Marcus, a leading department store known for treating customers well. When the product design firm IDEO wanted to redesign hospital operating rooms, it spent a day observing how a NASCAR pit crew



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worked together when faced with emergencies, time constraints, numerous experts, and safety concerns. This kind of vicarious learning can help teams take quantum leaps in innovation, since ideas that are totally new to the industry can be more quickly ­adopted into practice. By learning vicariously, then, team members can avoid making the same m ­ istakes as o ­ thers, speed up the tasks they have to do, and start working at a higher level of understanding and competence than teams that d ­ on’t engage in this type of sensemaking activity.

When Sensemaking Goes Overboard While this section has been full of examples of ­doing sensemaking effectively, teams can often get stuck in sensemaking mode or do a poor job of it.3 In the former case, team members never feel as if they have enough information, and they just keep collecting more and more. But at some point, deadlines kick in, and the team needs to segue from exploring the terrain to moving ahead. For some teams this transition is impossible to make, and they flounder.4 ­These groups get caught in a continuous search, start to let deadlines slip, and are never able to move on. Teams can also flounder because even if they engage in external outreach with new eyes, they ­don’t take the time to digest what they learn so that they can make use of the information. In the case of poor sensemaking, teams also can learn the wrong t­ hings, or innovation can be stifled as they simply copy old ideas without creating ­ hese groups fall into the one-­mold-­fits-­all-­situations new ones. T trap, and then have a harder time in another facet of external activity: ambassadorship.

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Ambassadorship Let’s return to our example of the Big Bank team. ­After members combined all the information they collected from their sensemaking activities, they needed to turn that knowledge into a pitch for the customers whom they saw as having the highest potential for buying the systems they planned to build and deliver. As team members prepared to bid on a big proj­ect, they asked the vice president of commercial clients to go along with them to show that the organ­ization’s upper levels ­were committed to the product. In preparing him for this meeting, they ­were able to showcase all the work they had done and demonstrate an ability to work within the new orga­nizational design. The vice president, for his part, was relieved to find that ­there ­were teams in his organ­ization that w ­ ere making the changes that corporate required. He was able to report this pro­gress to his superiors, while si­mul­ta­neously using the Big Bank team as an example of success. As this example begins to illustrate, ambassadorship is aimed at managing up the orga­nizational hierarchy. It includes marketing the proj­ect and the team to top management, lobbying for resources, maintaining the team’s reputation, and keeping track of allies and adversaries. When visiting the MIT Sloan School of Management, James McNerney, the former CEO of 3M and Boeing, told us the importance of integrating vertically—of linking the top level of the firm to the operational level (not to be confused with strategic vertical integration used in many firms). In this way, an organ­ization can achieve alignment between t­hose who set the strategy and ­those who must implement it. Ambassadorship supports this alignment by creating dialogue up and down the hierarchy.



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Integration up and down the organ­ization thus has impor­tant applications throughout the firm: it can allow for linking to strategic initiatives and getting early buy-­in; it can be used to lobby .

for the team and members’ ideas; and it can aid in cultivating allies and containing adversaries. ­We’ll look at ­these three in more detail next.

Linking to Strategic Initiatives and Getting Early Buy-­in One of the major prob­lems in organ­izations ­today is finding a way to link top management and its strategic initiatives to lower-­level ­people who interact with customers, design and build products, and carry out the firm’s core work. Ambassadorship is one way that a team can be proactive in connecting its work to new strategic directions. By linking to t­ hese new directions, the team often finds it easier to get top management’s attention and support. ­ on’t get top management’s attention and supWhen teams d port, it can be disastrous. That was the case with a software development team we know of, which ended up not getting managerial support and buy-­in.5 This software team heard that one of its Japa­nese customers was interested in a new version of its product, Entry, that would work on a recently developed plat­ ere managing the form. The six engineers in the team who w proj­ect (known in the com­pany as the “gods”) de­cided that such a step would be impor­tant to the team, so they s­ topped all work on the current version of the product in order to adapt Entry to the new platform. Team members worked long hours and weekends, but ­after weeks of effort, the proposal was rejected by top leaders. Members viewed the rejection as a declaration of war

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with management. They felt that the leaders just d ­ idn’t appreciate or understand their ideas. Shortly ­after, the “gods” left the com­pany. It is impor­tant to note that the Entry team members did bring their proposal to top management—­but only ­after it was finished. Turns out that the timing of ambassadorial activity is extremely impor­tant. Getting buy-in and support early in the pro­cess is essential. Early involvement helps mesh new product ideas with top management’s directives, allowing input to truly be incorporated into the team’s work—­before that work is a fait accompli. Perhaps the most critical ele­ment of early involvement is that once the top man­ag­ers have had a say in the idea, they are more committed to ensuring its success. The Entry team members did not think about getting buy-in and support, ­because they could not imagine that the top management team ­wouldn’t see this opportunity the same way that they saw it. It was so clear to them that this was the way to go that they slipped back into the old internal model. They worked to motivate all the team members and allocate work, and they met deadlines. Furthermore, they assumed that since they ­were engineers, it w ­ asn’t their job to get buy-­in; they thought it was their job to come up with good ideas, and top management’s job to recognize quality. Given t­hese assumptions, the lack of funding came as an extra-­hard blow and left a sense of betrayal.

Lobbying for the Team and Members’ Ideas Beyond failing to get buy-in early, the Entry team also missed out on a key opportunity of ambassadorship: lobbying for the team and its members’ ideas. Often team members have unique views



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of customers, markets, products, pro­cesses, and changes in technologies that come from their sensemaking activities. They tend to be the ones who have direct access to shifting trends and to the ­people who do the firm’s primary work. Thus, sometimes the task of ambassadorial activity is to lobby for the team’s ideas, to fight for what members think is right, even if top management does not agree. The team members’ job then becomes one of converting top man­ag­ers to their point of view; their task is to give voice to their passion and to paint a picture of their vision for the ­future. As noted above, however, ­these conversations need to start early, when top man­ag­ers are able to provide input and suggestions on what the final proposal should look like. For example, the proj­ect leader of a computer design team engaged top management from the very beginning of a new proj­ ect. As the work was being discussed by the operating committee (a group of top man­ag­ers that led product development proj­ects for the firm), the team leader met often with committee members, who wanted the new computer to be a slight change from the existing model. But the leader worked to convince committee members that they should go with a revolutionary design rather than a s­ imple upgrade. Using data that other team members had pulled together in a report on estimated schedules and bud­gets, he insisted that they had the talent and motivation to make a g ­ reat product and make it quickly. Furthermore, he thought that the competition was moving faster than any of them expected—­they had to act now. In the end, the proj­ect got the green light. The leader asked the president of the com­pany and the vice president of R&D to come to the first meeting to explain the importance of the product to the com­pany and to communicate their support for the team. The leader remained in close

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contact with the president throughout the proj­ect—­which was ultimately a success.6 In some cases, however, top management simply does not want to listen to new ideas or thinks that such ideas are not a priority. ­Here team members can choose to continue their lobbying efforts or move on to something ­else. ­There is a fine line between g ­ oing ­after what one truly believes in and being labeled a visionary—­ and continuing to argue and being labeled as someone who d ­ oesn’t understand the word “no.” Since the latter is often viewed as career-­limiting be­hav­ior, it can undermine attempts to change the system in a new direction. This is where being in an x-­team takes courage and determination, ­whether the decision is to fight ­because members believe in the idea or not to fight ­because it is not in the best interests of the organ­ization or the team. Basically, the goal of lobbying is to create this vertical integration between the top of the organ­ization and the operational level. Teams and se­nior leaders need to find a match that satisfies both levels. This is where companies can best leverage the work of the teams, and teams can have their ideas heard and implemented.

Cultivating Allies and Containing Adversaries Organ­izations are po­liti­cal entities. They are arenas in which power gets played out between t­ hose who have it and t­ hose who want it. ­People hoard resources and hold grudges; they guard their turf and strike at t­ hose who try to take it away. Even in such a context, however, ambassadorship helps you find p ­ eople with authority and influence who can protect the team from po­liti­cal machinations and manage the conflicts that inevitably occur as ­people try new t­ hings that upset the power balance.



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For example, the Big Bank team members ­were meeting one eve­ning in a conference room to brainstorm how they might approach a customer who was leaning ­toward a competitor. Members considered lowering their price or discounting f­ uture products that could be added to the systems. But the par­tic­u­lar package that they wanted to offer fell outside the normal guidelines, and they ­were told that the pricing was unacceptable. This was when the team asked the vice president to step in and make an exception. And he did.

A Cautionary Note on Ambassadorial Be­hav­ior While ­there is no question that ambassadorial be­hav­ior is a key predictor of success for many kinds of teams, ­there is one impor­ tant caveat: not all teams that engage in ambassadorial activity are successful.7 If a team’s product or idea is a dud, then all the ambassadorial be­hav­ior in the world ­can’t make it a winner. Said differently, you can put lipstick on a pig, but it’s still a pig. For teams that excel at marketing but do not come through on implementation, top man­ag­ers eventually begin to realize that the team made empty promises. Unfortunately, the outcomes for ­these teams are often quite negative. Top man­ag­ers are left feeling manipulated and as if they w ­ ere not given the real story. They are often embarrassed about having backed a team that they thought was creating a real contribution to the firm, putting their reputations on the line. ­These man­ag­ers then react in anger and may fire, demote, or transfer key members of ­these teams. The core lesson ­here is that ambassadorship alone, with nothing to support it, is like a smoke-­and-­mirrors show that w ­ ill eventually be exposed for the fraud that it is. Ambassadorship works

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well only when teams are managed soundly and tasks are accomplished well—­and when ambassadorship accompanies sensemaking and task coordination.

Task Coordination For the Big Bank team, selling communications systems to businesses would involve a fairly complicated set of steps. The team would have to meet with customers to understand their needs, create a solution that matched ­those needs with the firm’s technology, bid for the contract when ­there ­were other competing vendors, configure a solution if the bid was accepted, and then install the system at the customer’s premises. Succeeding at all of ­these stages meant team members needed to rely on the input and cooperation of lots of other individuals and groups inside and outside the firm. In other words, the Big Bank team had to engage in task coordination. For example, at the very start of the pro­cess, team members often needed the help of the ­legal department to create special clauses in the contract. While the Big Bank team wanted to make the sale, the ­legal group was often very cautious and wanted to spend more time dotting the i’s and crossing the t’s. It took a lot of compromise and coordination between the two to make timely pro­gress. The Big Bank team also needed help from technical ser­vices to design the system that would be shown to the customer. While the team received some technical support from a colleague, a systems designer, customers often needed specialized support that required the expertise of the com­pany’s technical support p ­ eople, who w ­ ere



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in high demand and preferred to work on in­ter­est­ing prob­lems. Gaining their attention and input was not always easy. Once a system was designed, it needed to be configured and ­ here was a ­whole unit, separate from the sales unit, installed. T that handled installations. ­These p ­ eople had their own set of incentives and queued ­orders in a way that was most efficient for them. This did not always result in a delivery date that would land a major product at the customer site when the sales team wanted it to be ­there. ­There was a need to negotiate. All of this is to say that members of the Big Bank team had to ­ reat deal of their time managing the myriad interdespend a g pendencies with other parts of the organ­ization. They needed to negotiate with other groups, trade their ser­vices, and get feedback on how well their work met expectations. They had to cajole and push other groups to follow through on commitments so that the team could meet its deadlines. Like sensemaking, task coordination involves linking to p ­ eople throughout the com­pany; it involves prioritizing lateral and downward connections. Let’s take a closer look at the three key activities of task coordination: identifying dependencies; getting feedback from other groups; and convincing, negotiating, and cajoling other groups inside and outside the firm to help the team get the task done.

Identifying Dependencies The first step in task coordination is identifying the myriad groups that the team must depend on. Such dependencies occur when another group has something that the team needs to do its work, such as expertise. Or a de­pen­dency might arise when

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another group is g ­ oing to take over the team’s proj­ect when it finishes, or when someone from that other group w ­ ill join the team to facilitate an aspect of the work. The Big Bank team depended on installation, l­ egal, and repair, to name a few. ­A fter identifying a de­pen­dency, the next step is to determine the nature of the de­pen­dency and then figure out a way to coordinate. Coordination can take the form of setting shared deadlines, having discussions about how the two groups might work together, or establishing mechanisms to move work from one group to the other and back again. What­ever the mode, teams often need to spend time managing the workflow in and out of the team.

Getting Feedback Coordination is facilitated when team members get feedback from other groups on what they are planning to do. To the extent that the team’s work ­will affect ­these other groups, or other groups ­w ill expect to be involved in the team’s effort, this work becomes even more impor­tant. Sometimes getting feedback can be a one-­ off activity. For example, when a brainstorming team at IDEO wants creative ideas, it brings in lots of employees who are not core team members but who have broad expertise. By drawing on dif­fer­ent perspectives, t­ hese teams foster out-­of-­the-­box thinking, thus improving the ultimate solution. Other times, getting feedback is a continuous pro­cess. The product development team that was working on a revolutionary computer design, mentioned ­earlier, started its work in isolation. But before the design was written in stone, the team members knew they needed some input from colleagues if they hoped to



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coordinate with other groups. (Note, however, that this kind of coordination is dif­fer­ent from the sensemaking that the team engaged in when it sought other groups’ input for the purpose of avoiding a flawed design.) The team checked that par­tic­u­lar ­people in R&D could live with the team’s decisions and would be willing to commit to their part of the proj­ect work. With this input in mind, team members went back to their design work—­ but now they frequently consulted with other engineers who had provided them with ideas and critiques. This continuous feedback helped them improve their design and coordinate their work with ­others who ­were working on specific pieces of the design. The team went on to get feedback from manufacturing, the folks who would actually make the new computer. Team members wanted input on the ease of manufacturing the new components that they planned to put into the machine. If manufacturing thought that ­those components would impede getting the product out on time, then ­others might have to be used.

Convincing, Negotiating, and Cajoling Perhaps the appropriate heading ­here would be “begging, borrowing, and beguiling.” So often, outside groups have other agendas, incentives, and priorities. They are not particularly concerned with the team’s needs, and even if they are, ­they’re not always clear on how to meet ­those needs. Sometimes the functional bound­aries and divergent cultures within a firm act as barriers to cooperation. So the team must work to achieve cooperation. The Big Bank team knew that one of its new banking customers was not happy with the product—­and that the bank was looking at other companies for its next purchase. Since Big Bank

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­didn’t want to lose this account, team members went on a major campaign. They got the technical folks to put a demo together and brought it to the bank. They pushed for a major discount even though it was not yet the end of the quarter. They even got one of their other customers to call the bank man­ag­er who made key purchasing decisions to tell him how pleased he was with his system and why. The team members constantly checked in with all the other groups to make sure that every­one showed up when they said they would and delivered on all the other commitments. On the day of the demo, they hired a ­minivan and drove the techone nical folks across town. They worked hard to pull every­ together. And they kept the customer—­and rewarded all of the people who helped them with pizza. × × × As ­we’ve seen, team effectiveness is not just a ­matter of managing well around the conference t­ able. Success also depends on reaching across borders to find information and expertise. Teams need to access information about key trends in the industry, markets, and technology; link to the firm’s strategic goals; survive the power dynamics and politics; get buy-in for their product; and manage their dependencies on other groups. Through ­these activities, x-­ teams practice distributed leadership—­ working with ­others in the com­pany to shape new visions and make them a real­ity. All of this involves the teams becoming very a­ dept at managing across their bound­aries. And yet, as we ­w ill show, effective external activity requires effective internal pro­cesses as well. A robust internal environment is needed to coordinate the team’s external forays, to strat-



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egize about how to deal with the new information that comes into the team, and to allocate work to the most appropriate members. Externally oriented teams not only need to get the basics of teamwork right but also need to establish a climate of safety and reflection, one that enables them to hold together the team members who must deal with the pulls of external viewpoints and internal conflict. Thus, as we have already begun to show in this book, the key to high team per­for­mance is an integrated approach, combining an external and an internal focus. That requires sensemaking, ambassadorship, and task coordination, coupled with a robust internal environment—­which is the focus of our next chapter.

4 X-­Team Princi­ple 2 In M ­ atters, Too: Build a Robust Internal Environment

When Anja Koepke, a proj­ect man­ag­er at the international electrical engineering firm Powercorp (not their real names), was sent to set up a manufacturing plant in Asia, she was ner­vous. She had a big job to do, although much was accomplished already. Anja and her new business development team had scanned and analyzed the competitive landscape, producing an impressive investment proposal. Then they had successfully reached out to top management back in Eu­rope to sell it. Nevertheless, Anja was ner­vous b ­ ecause she did not know a lot about the local regulatory environment where she would be launching the proj­ect. She de­cided to invite new members who had specific knowledge about the area to join the team.

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During their first team meeting, every­one assured her that the proposed plan would work. But six months l­ ater the plant had no clear path to profitability. It turned out that the original plan called for using a cheap outside source of materials, which ran afoul of the country’s laws stipulating the substantial use of local sourcing—­prohibitively more expensive than what Anja had bud­geted for. The bigger prob­lem was that no one on Anja’s team had shared that key bit of information, even though several team members had done enough sensemaking to be well acquainted with the regulations. They had simply felt too unsure about how to interact with their new foreign boss to speak up. For her part, Anja charged forward ­after that initial meeting, operating on ­limited knowledge and without thinking more or fostering further reflection within her team about the sourcing issue—­until it became ­ ecause of the underbud­geted an irreparable prob­lem. Partly b costs for critical material, the plant never reached profitability and was sold two years l­ ater. What exactly went wrong ­here? The team made all the right moves in the business development phase—­engaging successfully in numerous external activities. On the surface, this could look like a s­ imple case of miscommunication, which is common whenever a team is introduced to a new leader, and particularly common in the kind of cross-­cultural context in which Anja and her team ­were operating. And while some of ­these ­factors ­were indeed at play, they w ­ ere part of a larger story of internal issues with Anja’s team that produced such a disappointing outcome for Powercorp. In light of the exceeding importance of external activities, which we looked at in the last chapter, one might think that the



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internal activities for a team like Anja’s would be less impor­tant. Think again. An x-­team’s role in the distributed leadership of the organ­ization includes practicing such leadership within the team itself. When Anja’s team members w ­ ere ­silent about what they knew, they did not take on a leadership role; instead, they abdicated this responsibility. At the same time, Anja did not create the conditions for p ­ eople to feel safe enough to reveal the information that the team needed. All of this to say, the significance of external activities has possibly made internal activities even more impor­tant—­and more difficult. If team members spend considerable time and effort on external sensemaking, ambassadorship, and task coordination, then integrating the products of ­these efforts becomes a critical job. For example, increased information and demands from the outside require teams to make more complicated trade-­offs. When divergent po­liti­cal interests enter the team, ­those external conflicts can become internal ones. Navigating t­ hese f­ actors takes a ­g reat amount of internal coordination and execution, which leads to the second of our three x-­team princi­ples: build a robust internal environment. X-­teams combine high levels of external activity outside the team with a robust internal context—­specifically, an environment that supports the additional demands of engaging in external activity and realizing its potential. For an example of how this may be done, let us return to the Big Bank team introduced in the last chapter, where we saw that in addition to d ­ oing ­great external activity, the team’s members also interacted well with each other. When the team was first formed, members got together at a bar to begin figuring out the expectations of key stakeholders and methods of working with

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outside groups. This activity set the tone for the team—be active, coordinate and divide up work, listen to every­one’s ideas, and relax and have a good time together. By organ­izing themselves and working together, team members ­were able to conquer their anxiety about their new task, gain confidence about themselves as an effective team, and learn to appreciate the input of all team members. ­Later, as information began to pour in, team members pulled it together and interpreted what it meant, while si­mul­ta­neously inventing new ways of working together inside the team and externally with outsiders. When they won support from top management, they celebrated, accelerating internal motivation and bonding. Thus, internal activity and external activity ­were complementary: the safe and reflective culture inside the team gave members the courage and tools to explore externally and to make good use of the information and expertise that they found. In turn, the time spent on sensemaking, ambassadorship, and task coordination brought the team new ideas for innovation, motivation to succeed, and a set of partners to help do the work. Three fundamental concepts underlie the kind of robust internal context that Big Bank clearly achieved—­and that Anja’s team in Asia lacked: getting the basics right, building psychological safety, and having an effective learning pro­cess.

Get the Basics Right As w ­ e’ve noted, the relentless external focus of an x-­team creates unique challenges for the internal dynamics of the team. Luckily, however, traditional models of high-­performing teams offer



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some impor­tant lessons that x-­teams can benefit from when it comes to goals, roles, and norms. First, members need to have a shared understanding of the team’s goal. This may seem obvious, yet we often find that the taken-­for-­granted nature of team goals is exactly what makes teams vulnerable to unspoken discrepancies. For example, the goal may be to complete a clearly defined proj­ect, but team members may have individual interests pulling the team in dif­fer­ent directions. Second, ­there needs to be a shared understanding of roles as well. Teams must take care to uncover any pos­si­ble conflicts in role expectations. For example, while formal role descriptions are often quite clear, the informal expectations held by a diverse set of members may not be. We often find that teams that assume every­ one is aligned around role expectations run into prob­lems ­later on when discrepancies emerge. Therefore, it is good practice to always have a detailed conversation about roles up front. Importantly, the complexity of external and internal interactions in x-­teams adds to the already-­high pressures on role structures.1 Our research shows that x-­teams often match some of this complexity by operating with three distinct roles that create differentiated types of team membership—­core, operational, and outer-­net—­and that members may perform tasks within more than one role. The core members of the x-­team are often, but not always, pre­ sent at the start of the team. Core members carry the team’s history and identity. They are usually the first to have the vision and passion that bring the team through tough times—as such, the core often contains the team’s leaders. While si­mul­ta­neously coordinating the multiple parts of the team, the core members

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create the strategy and make key decisions. They understand why early decisions w ­ ere made and can offer a rationale for current decisions and structures. The core is not a management level, however. Core members frequently work beside other members of equal or higher rank and serve on other x-­teams as operational or outer-­net members. As a team evolves, more ­people may join the core. Having multiple p ­ eople ­there helps keep the team ­going when one or two core members leave, and it allows a core member who gets involved with operational work to hand off tasks. This is one mode of distributing leadership across multiple individuals who share core leadership responsibilities. The team’s operational members do the ongoing work. ­Whether that’s designing a computer or deciding where to locate a wind farm, the operational members get the job done. They tend to be tightly connected to one another and to the core. ­There may be a wide range of operational members h ­ andling dif­fer­ent aspects of the x-­team’s task. The key for t­ hese team members is to focus on ­ andle the coorwhat they have to do and how best to do it. They h dination needed for their own jobs, but they leave full team coordination to the core members. Similarly, operational members seem to be more motivated if they share the vision and values of the team and understand the importance of what the team is working ­toward. They are usually not the creators of that vision (­unless they are also core members), but often they have a large impact on shaping the evolution of the team over time. Outer-­net members join the team to h ­ andle some task that is separable from ongoing work. They may be part-­time or part-­ cycle contributors, tied barely at all to one another but strongly



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to the operational or core p ­ eople.2 Outer-­net members bring specialized expertise, and dif­fer­ent individuals may participate in an outer-­net way as the task of the team changes. Outer-­net members often do not feel as committed to the team or its product ­because they are not necessarily in the team for long, they may be physically separated from other members, and they do not necessarily participate in integrative meetings or social events. Furthermore, they may report to a dif­fer­ent part of the organ­ization. Fi­nally, in addition to goals and roles, ­there needs to be a shared understanding of key team norms related to pro­cesses and be­hav­ ior. How are decisions made? What are the expectations related to knowledge sharing? For example, if some members expect decisions to be based on consensus while o ­ thers expect a voting procedure, or if members have dif­fer­ent ideas about what knowledge should and should not be transparently shared, then unhealthy tensions are likely to arise. Misalignments in the understanding of goals, roles, and norms tend to manifest, sooner or ­later, in interpersonal conflicts. A team that takes time to nurture alignment across t­ hese components, on the other hand, tends to exhibit healthy interpersonal relations characterized by trust and re­spect. Therefore, it is impor­tant to check where team members are from time to time, before any conflicts have surfaced. In an x-­team, clearly defined goals, roles, and norms are a necessary foundation for a healthy internal team environment; however, this is not sufficient to ensure that the internal environment is robust enough to ­handle the additional challenges posed by an external focus. For that we also need psychological safety and learning.

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Build Psychological Safety When team members spend time carry­ing out the hard work we illustrated in the last chapter—­engaging in activities outside the team—­they need to work equally hard to coordinate and integrate the fruits of that ­labor inside the team. For team members to share their experiences and express their views of how to move forward, the team’s climate must support a frank exchange of views. Such psychological safety means that all members feel the team is a safe place for interpersonal risk-­taking.3 It means that team members feel ­free to express their views, even controversial ones. It means they can bring up prob­lems without fear of being blamed, or worse, being fired. It means ­people have permission to be candid. A team with psychological safety sets the stage for sharing vital information, identifying what ­matters, and learning from ­mistakes. From a distributed leadership perspective, the internal team dynamics mirror the very activities that teams need to bring to the larger organ­ization and that the organ­ization needs to support throughout the firm. At ­Toyota, for example, when a new car comes off the assembly line with a defective door ­handle, the person responsible for that part does not fix the prob­lem quietly, without the assembly team leader noticing. Instead, the team comes together to identify the root cause of the prob­lem to ensure that it does not happen again. This pro­cess often gets noisy, and it requires psychological safety. However, the focus is not on blame but rather on improvement. Without it, quiet fixers would rule the day—­leaving the source of the prob­lem and its consequences to crop up again.



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Another example of the importance of psychological safety comes from a study of hospital patient care teams.4 The study showed ­g reat differences in team members’ beliefs about the consequences of reporting errors in medi­cation. In some teams, members acknowledged errors openly, while in ­others they kept such errors to themselves. A nurse in one of the studied teams observed, “­Mistakes are serious, b ­ ecause of the toxicity of the drugs [we use]—so ­you’re never afraid to tell the nurse man­ag­er.” In contrast, a nurse in a dif­fer­ent team admitted: “You get put on trial! ­People get blamed for ­mistakes . . . ​[Y]ou d ­ on’t want to have made one.” The study made an impor­tant observation: teams that acknowledged errors also discussed ways of avoiding further errors and improved. This did not happen in teams where errors ­were not acknowledged. In teams without psychological safety, members keep information to themselves. They d ­ on’t ask for help when they need it. They may be scared that they w ­ ill be labeled as troublemakers or seen as stupid or weak. Or perhaps they do not think it is their place to rock the boat. Even when information is shared, a far too rare occurrence, it tends to be done privately or offline. As a result, critical knowledge may not be revealed, pro­cessed, or used. Research shows that in all teams, members are more likely to share information that o ­ thers already have rather than information that they alone have obtained.5 However, in a team without psychological safety, this tendency can cause real damage, and the team often loses the unique and critical knowledge of individual members. How can psychological safety be built? The team leader plays an impor­tant role, such as setting explicit norms that members are encouraged to say what they ­really think and to express

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doubts. It is also impor­tant to get members to agree on what to expect in terms of uncertainty and failure rates. Inviting participation is critical. Modeling this same be­hav­ior themselves, team leaders can set an example. Consider Jerry Ng, the chairman and founder of Bank Jago, an Indonesian digital bank. In the digital banking space, engaging with rapidly shifting industry bound­aries is crucial. This requires that the entire executive team is making sense of changes and experimenting with how to take advantage of them, which inevitably ­w ill involve failed experiments. As a high-­profile leader with a famously successful ­career, Jerry knows that his presence can be intimidating to the team. Therefore, he often tells the story of how he failed in his first CEO role. He also stresses the importance of “showing your skin” by acknowledging blind spots and asking for help, which he role-­models himself. Perhaps the most impor­tant ­thing a leader can do is to react positively when team members express views that conflict with their own or bring in perspectives that may seem strange or controversial. If p ­ eople are punished for disagreeing with each other, then they ­won’t do it very often. When Alan Mulally took over as CEO of Ford when it was hemorrhaging billions of dollars, he asked members of his team at his first business plan review meeting to let him know if they ­were in the green (good), yellow (some risk), or red (serious trou­ble) in their top five business priorities. To his surprise, every­one said all was fine and every­thing was good. Obviously, his team was scared. Legend has it that Alan remarked that ­unless the plan was to lose $17 billion that year, every­thing was not green. Several weeks l­ ater, when Mark Fields fi­nally held up a red card—­admitting that his ­whole production line was down—he was afraid he would be fired. Mulally did not



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fire him. Instead, he clapped, asked ­others to help solve the prob­lem, and Fields became CEO when Mulally retired. Ultimately, psychological safety relies heavi­ly on trust—­a commodity that requires consistent nurturing over time. Building it is the job not only of the formal team leader but of all team members, who must at times take on leadership roles too.

Learn, Learn, Learn The final component of supporting a robust internal environment in x-­teams is learning.6 That is, team members need to take the time to reflect on their actions, strategies, and objectives. In many of ­today’s corporations, ­there is a push for continuous action, which is not conducive to reflection. Yet without reflection, team ­ oing right and what they members cannot learn what they are d are ­doing wrong. In a world of changing technologies, markets, and competition, team members also need to reflect on how they have to adapt. A robust internal environment requires learning as you go, and reflection helps the team keep this learning a priority. Such reflective pauses are particularly impor­tant at key points in the process—at the beginning, the midpoint, and the end of a team’s task. At the beginning and midpoint, the team is likely to face strategic decisions that ­w ill launch them on a long-­term trajectory. ­These times are also when team members are most open to feedback—­when they switch from automatically performing tasks to consciously pro­cessing the information involved in ­doing new ones. Reflecting as the team changes phases of work also aligns team learning with moments when p ­ eople are

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open to feedback and change.7 And reflection at the end of the proj­ect helps the team learn impor­tant lessons that can then be recorded and carried forward a­ fter it has concluded its work and disbanded.8 Teams with high levels of reflection ask questions, seek feedback, and make adjustments in response to that feedback. Whenever pos­si­ble, team members do this together and face-­to-­face for deeper communication. Such teams are also likely to have highly effective debriefings in which—at the midpoint or at key milestones along the way—­they talk about what worked and what ­didn’t and analyze the role that each person played in the successes and failures of the mission. All of ­these be­hav­iors are in the ser­v ice of learning. But truly reflective teams go well beyond debriefings. Members set aside time to think about the big picture, where the team is ­going, and how ­things can be done better, and they lean on each other in that effort. This means ­going beyond what went well and what went poorly. It means asking deeper questions like: What does the team want to achieve, r­ eally? Is the team moving in that direction? Are members truly working on the ­things that they have pegged as the highest priorities? Can the team move away from the day-­to-­day to discuss its vision for the long term and how to get t­ here? Are members working well together as a team, or do ­things need to change? If so, how? The T ­ oyota assembly team that takes time to figure out the root cause of a defect is one example of a reflective team in action. And it’s impor­tant that members of top teams take this kind of time even though it might not always be pos­si­ble in the midst of completing a task. Members of Team Fox, which we met in chapter 2, had frequent debriefings to reflect on how their drug development



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pro­cess was g ­ oing, but they also took time to reflect on where they ­were headed at key points. For example, as the team identified and evaluated promising early-­stage drugs, members needed to stop and look at the big picture: the ambition of building a franchise in anti-­inflammatory drugs. In at least one instance this led the team to reluctantly let go of a promising lead. While the drug performed well in initial tests, the team members concluded that it did not fit the vision and the direction. In a team characterized by a low level of reflection, on the other hand, members tend to act on what they already know, ­whether or not ­there are alternative solutions out ­there. They tend not to seek feedback or be concerned with changing circumstances, and when they ask questions, it is typically to confirm what they already know rather than to explore what they may not know. Again, without reflection ­there can be no learning. That seemed to be a tendency in Anja’s Powercorp team. W ­ hether or not Anja intended to encourage this be­hav­ior, the team showed an orientation ­toward uncertainty avoidance—­which effectively precludes substantive learning—­often in the name of efficiency. Unfortunately, the result may be that the team learns to do the wrong ­things right. Had Anja helped team members feel psychologically safe and encouraged them to openly express doubts, she might have discovered the local sourcing prob­lem, and members might have had a chance to avoid a situation in which high material costs rendered their venture unprofitable. How can team reflection be cultivated? Just as with fostering psychological safety, reflection requires that team leaders commit to d ­ oing it (in fact, creating psychological safety is itself a central promoter of team reflection). One way is to build in time to reflect by using check-­ins at the beginning of each team meeting

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and check-­outs at the end, to see what members have on their minds and to have a pro­cess through which every­one in the team can speak.9 Another way to promote team reflection might be to schedule an offsite day with the entire team, where members reflect on their pro­gress in a fundamental way. Typically, such venues are used for in-­depth thinking about what’s happening in the team, and the change of scenery and relaxed atmosphere can generate new levels of discussion about norms and strategies. As part of this effort, team members can be encouraged to talk about the best and the worst experiences they have had and about how to improve team functioning overall. × × × We’ve seen in this chapter how crafting the kind of culture that fosters the robust internal environment needed to coordinate, integrate, and reap the benefits of the external activities is crucial to an x-­team. In this way, the x-­team model distributed leadership in action for the rest of the organ­ization. Still, t­ here is one final x-­team princi­ple we have yet to look at: recognizing that the needs and priorities of a team’s external and internal activities change ­ ill discuss this impor­tant temporal dimenover time. Next, we w sion of an x-­team—­what we refer to as making timely transitions.

5 X-­Team Princi­ple 3 Pivot along the Way: Make Timely Transitions

The ProPrint team at a large West Coast computer com­pany was launched with much fanfare. Charged with developing a revolutionary printer, the team began work with the support of top man­ag­ers, who hoped to take the com­pany in a new direction. ProPrint set out with ample financial and personnel resources and six months to “play in the sandbox,” experimenting with dif­ fer­ent technologies. Team members worked on separate aspects of the printer and got input from groups inside and outside the organ­ization. They had a ­great deal of information about the market potential, technology applications, and design ideas. The team was excited and happily worked long hours, brainstorming innovations.

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­A fter nine months, however, team members still could not agree on what exactly the printer was ­going to do or what components they would use in its design. They responded to being ­behind schedule by seeking additional ideas and changing the product design. Although top leaders had been lenient early on, eventually they started applying pressure, hoping to get commitments on the schedule. Still, the team was always late. In addition, the team leader was often hard to find—­always promising that the solution was “coming soon,” he avoided meetings with top man­ag­ers. ­Because the team never settled on one plan to implement, the promised solution never came, and in the end, the division man­ag­er was forced to put together a new team to continue ProPrint’s work. The original team leader never understood why his group could not get past the continuous search and move on to solutions.1 How did such a promising team lose its way? It appeared to be ­doing every­thing the best x-­teams do. It engaged in high levels of sensemaking of the market and orga­nizational expectations; ambassadorial activity leading to managerial support; and task coordination so that team members knew how to work with other groups. Moreover, the ProPrint team also had an exemplary internal pro­cess, whereby team members divided up work and did intense amounts of brainstorming. The prob­lem was this: ­whether a team is creating a product, suggesting a new orga­nizational pro­cess, consulting to a par­ tic­u­lar geographic region, selling complex ser­v ices, or writing software code, members need to shift their core focus over time—­ and ProPrint ­didn’t understand that. As the demands of the



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task change, team members must be flexible enough to shift gears and change what they do and how they do it.2 Pivoting along the way, then, represents the third x-­team princi­ ple: x-­teams make timely transitions. This ensures that they ­don’t get stuck in any one mode of operating. More specifically, effective teams move through three phases, each with a dif­fer­ent focus: exploration, experimentation and execution, and exportation. Team members need to be able to shift from an emphasis on exploration—in which they work to thoroughly understand the product, pro­cess, opportunity, or task that the team has undertaken—to experimentation and execution, using the information from exploration to innovate and actually transform their ideas into something real, and fi­nally to exportation, in which they transfer their expertise and enthusiasm to ­others who ­will continue the work, bringing the product into the organ­ization and possibly the marketplace. Each of ­these phases requires a dif­fer­ ent focus and dif­fer­ent amounts and kinds of x-­team activity. For some teams, t­ hese transitions seem impossible. Not all realize that, at some point, members must shift from exploring the terrain to moving ahead. Not all understand that, at some point, their idea needs to extend beyond their bound­aries and be integrated into ongoing orga­nizational routines. Too many teams become stuck in one mode and fail ­because they are unable to shift into the next one.3 Like the ProPrint team, they become so enamored of playing in the sandbox during exploration that they ­don’t want to come out. Or they keep waiting for one more piece of data, or one more report, before continuing on. What­ever the reason, sometimes the shift never happens. ­These teams may even have members who thrive on viewing a prob­lem in new ways,

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questioning prior assumptions, and pondering the myriad pos­si­ ble directions that the team can take. This is fine for exploration, but then the team must move ahead. Other teams have the opposite prob­lem. Instead of getting stuck in the exploration phase, they err by skipping right over it and beginning with experimentation and execution. The drive to get t­ hings done is so intense that they just start with the first solution that comes to mind. Sometimes management can unknowingly emphasize this “solution-­mindedness” by pushing the team to make tough targets quickly. The trou­ble h ­ ere is that members may be moving quickly in the wrong direction or fail to think outside the box. Fi­nally, some teams never want to let go of their product; no one takes responsibility for easing the product out of the team and into the rest of the organ­ization (the exportation phase). Without this transfer of enthusiasm and owner­ship, team members may find their work rejected or simply ignored. Before we launch into a more detailed look at the three phases, we want to offer an impor­tant insight into how they overlap with and inform the sequence of external activities described e­ arlier in the book: sensemaking, ambassadorship, and task coordination. In general, while ­those external activities support the basics of x-­teams, timely transitions dictate the “sentence structure” or “grammar” by which ­these basic ele­ments are ordered and combined. To be specific, sensemaking occurs in all three phases, but it is highest during exploration. Ambassadorship also occurs in all three phases, but it’s most impor­t ant during exploration and exportation. Likewise, tasks are coordinated in each of the phases, but that coordination becomes much more critical as the team moves ­toward the last two.



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TA B L E 5 - 1

Phases of x-teams P HASES

Tasks

Exploration

Experimentation and execution

Exportation

Discovery:

Design:

Diffusion:

• See the world through new eyes; get inspired; map the context, the issues, the task, the customer, the technology, the individuals involved

• Choose one option and move from ideas to reality

• Create enthusiasm on the part of those who will carry on the work of the team in the organization or the marketplace

• Create understanding and multiple possibilities

• Engage in rapid prototyping and search for best practices to hone the product, process, or idea

• Get buy-in from top management

• Get feedback from top management and the customer about how the team has met expectations

Key leadership activities

• Sensemaking

• Visioning

• Relating

• Inventing

Core x-team activities

• Scouting

• Ambassadorship

• Task coordination

• Ambassadorship

• Task coordination

• Ambassadorship

• Relating

­Table 5-1 summarizes the key tasks of each phase and the leadership and team activities that need to occur to successfully move from one phase to the next. Let’s look now at each phase in turn, beginning with exploration.

Exploration A team of equity traders from Merrill with eight to ten years of experience at the firm was charged with designing a new product.

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The goal was to use cutting-­edge ideas about financial risk as outlined by Professor Andrew Lo in an investments course taught at Merrill by MIT Sloan School of Management faculty. Coached by one of us to take an x-­team approach, team members began by sensemaking about their industry. At the time, financial ser­vices was g ­oing through a tough period: margins w ­ ere getting compressed and the business was getting more automated, resulting in increased cost-­cutting. In both equities (stocks) and debt (bonds), markets had become too efficient. If word got out that something good was ­going on at Coca-­Cola or Citigroup, every­one joined the feeding frenzy, and t­here was no way to make money. The Merrill team determined that it wanted to find a place where the market was not so efficient—­where ­there was not so much coverage on Wall Street in terms of research and information. With this goal in mind, the team went into intense sensemaking, looking for ideas and buy-in for a new product. One team member or­ga­nized his colleagues to engage in exploration, saying that the team had to divide and conquer to get ­things done. He identified a series of tasks: (1) interview customers about their interests, (2) look at research, (3) explore technology and compliance issues, and (4) network within Merrill to find interest, support, and ideas inside the com­pany itself. With the tasks or­ga­nized and spread out before them, team members volunteered for the ­things they wanted to do, from tapping connections in departments like technology and compliance, to gathering information at Merrill’s New York headquarters, to organ­izing all the data the team was gathering. Soon the team’s queries brought in lots of ideas. The energy in the team heightened as members began reaching out to o ­ thers in the com­pany. For example, a team member and a se­nior desk ana-



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lyst brainstormed several ideas, but the one that seemed to stick was the notion of trading distressed equities—­that is, trading stocks of companies that ­were coming out of bankruptcy. But they pushed beyond just having their own side of Merrill—­equity—­ involved. Top management had been stressing the importance of getting the debt and equity groups to work together more. The team’s idea did this and presented a real opportunity: it was something new where Merrill had a competitive advantage, an answer to one of top management’s needs, and something that the team would have real interest and energy to pursue. And it presented the possibility of financial gain. Trading distressed equities was only one of three ideas that team members ­were considering, but they agreed that it was the best. Now their exploration took a more focused turn to learn more by involving both debt and equity. At this point, they w ­ ere already ahead of the ProPrint team mentioned e­ arlier in the chapter. The Merrill team was able to collect lots of ideas but also to figure out a way to winnow t­ hose ideas down and move ahead. The key for timely transitions, remember, is to keep the pro­cess moving by shifting gears as needed. To push the idea forward, one team member drew up a list of twenty-­five ­people to contact who might have some expertise in distressed equity trading, and the team talked to all of them. As one member told us, by talking to other p ­ eople around the com­ pany about the idea, “the ­whole ­thing just blossomed. If you start ­ eople who have more experience than you do, then talking to p they ask, ‘What about this and what about that? And maybe you should think about this’—­and suddenly it just took on a life of its own.” As team members’ enthusiasm and expertise started to rise, they garnered some sponsorship from top management. Talking

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to top management pushed them beyond their early idea of having just one liaison person to link debt and equity. One se­nior leader said that the com­pany was struggling with siloes and this was a solution to that prob­lem. He recommended a new debt-­ equity trading desk—­a set of ­people working on the trading floor, matching buyers and sellers for one par­tic­u­lar product or market—­that combined sales with analy­sis to trade distressed equities. The team was now creating a w ­ hole new structure for this new business. With this new idea in mind, the conversations with the debt folks shifted to how to make this new desk work. The idea had evolved from the debt department offering advice to the traders to actually having debt and equity work together at the same desk. The debt folks now had more skin in the game. As the Merrill example demonstrates so well, the goal of exploration is to collect lots of information and multiple perspectives ­ oing forward. Basically, on what exists now and what is pos­si­ble g this first phase is sensemaking. Sensemaking within exploration becomes a learning activity, with team members trying to comprehend all they can about the terrain that surrounds them. So, initially members need to brainstorm ideas with ­others around the com­pany, talk to customers to discover needs that are not being met, look at the competition to see what their own com­ pany is missing, and interview other employees to understand where the pain is. Team members also need to talk to colleagues to uncover cultural and po­liti­cal traps that threaten the feasibility of their ideas. Fi­nally, they need to talk to ­people who have tried to solve the prob­lem before so that they do not repeat the same ­mistakes. Ultimately, for the Merrill team, one of the most fruitful encounters during this phase was a discussion with a



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se­nior leader who expanded the scope of the proj­ect b ­ ecause it served his needs as well as theirs. But exploration is not solely the realm of sensemaking. Of course, one of a team’s primary relationships is with top management, and so a large amount of ambassadorial activity is aimed at representing the team’s interests and ideas, lobbying for resources, and linking the team’s work to the firm’s strategic direction. This is also the time to get input and buy-in from se­nior leaders so that they feel some owner­ship of the team’s ideas and become sponsors of its activity in the organ­ization’s broader po­liti­ cal arena. Leaders also may have a good perspective on how to link the team’s work to orga­nizational initiatives and to provide a broader perspective of the prob­lems that it ­faces. By the end of a successful exploration phase, a set of ­people are committed to the team, patterns of interaction within the team have been developed, and the product or proj­ect that the team is working on has been investigated and defined. Hopefully, team members have discovered that the team’s goals are feasible and that they can work together to meet ­those goals. If the team has done its external work well, then this phase also results in a set of external relationships that can help it adapt to its environment and get the information, expertise, and support it needs. Then the major challenge becomes moving from the world of ideas and possibilities into the world of real­ity and focus.

Experimentation and Execution Unlike exploration, during which a team determines what’s out ­there and looks for options, the experimentation and execution

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phase is about choosing one option and making it happen. This is when the team transforms its abstract ideas into real­ity. In this stage, team members must focus internally on creating a concrete product, strategy, or other offering that meets expectations while still maintaining and building relationships with outside groups. The team still needs the support and blessing from upper-­level man­ag­ers, still needs external information and expertise—­and now needs to work even more closely with other teams, with whom coordination is essential. The shift ­here is from seeking lots of information and viewpoints and seeing the world with new eyes, to choosing one direction and figuring out the best way to make it happen. The shift is from divergent thinking about multiple options to commitment and convergence around one.4 Once a direction has been chosen, team members must produce a prototype of what they are trying to create or enact a plan ­ ill get feedback on the prototype and then sell it. for how they w What specific features and form ­will the product or offering have? What options are most impor­tant, and what trade-­offs ­w ill have to be made? In the experimentation and execution phase, sensemaking, ambassadorship, and task coordination are of a very dif­fer­ent nature than they w ­ ere during exploration. Sensemaking is generally about looking at how other teams have implemented similar efforts and searching for best practices; it may also be about getting potential customers’ reactions to the team’s ideas. But compared to the exploration phase, sensemaking activity decreases during experimentation and execution. Ambassadorship during this phase is about keeping upper-­level man­ag­ers informed, maintaining their interest, and getting their ideas on



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how to move into specifics. Once buy-in is achieved, ambassadorship activities begin to decrease. Task coordination then takes on a much larger role as the team finds other groups whose input ­w ill be essential for bringing the new idea into the light of day. ­These groups need to be linked to the team’s schedule and sometimes cajoled into helping. Let’s look at the experimentation and execution phase via the Merrill team. The Merrill team members knew that they ­were at a transition point. They spent time discussing their vision to have a distressed equities desk that spanned debt and equity—­something that had never been done before. They knew they had a ­great idea, but now they had to figure out how it could be implemented. Meeting the goal of having their proj­ect be a real­ity in three to six months (if the team received the go-­ahead) would require sense­making to determine the systems that would need to be put in place, how the desk would work, who would have to be involved, and how much money they thought they could make. The team ran scenarios to get a better understanding of the kinds of situations the desk might face. Such scenarios ­were critical given the complexity of distressed equities—­one week t­ here might be one hundred companies coming out of bankruptcy, and another week ­there might be only one. They looked at four companies that had recently come out of bankruptcy to determine the kinds of volumes they traded, the resulting number of shares Merrill would have traded, and how much they would have made if they created this new desk. Team members went through a variety of scenarios with dif­fer­ent interventions. Then they worked through staffing: How many ­people would be needed, and how much would they have to be paid? And where would the desk be, in debt or equity?

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As the Merrill team wound its way through experimentation and execution, its product idea started to move from concept to real­ity. Team members ­were clear on and committed to the vision of what they wanted to create, and they had to invent the structures and pro­cesses to get them ­there. H ­ ere the team was working on the execution part of the process—­that is, getting the job done. The team continued its sensemaking, but now it was focused on the details of how this desk would actually operate. Members continued to garner support and engage in ambassadorial activity—­but not as much as in the exploration phase; the goal was to report pro­gress and questions to se­nior leadership. And now the team members ­were more focused on task coordination—­getting ideas and feedback about the functioning of the desk and coordinating with the systems and compliance ­people who had to design the systems and approve the activities that would take place ­there. Next, it would be time to see ­whether the team could spread that enthusiasm and expertise to ­others and test-­market its new product to get feedback and further refine it.

Exportation Exportation involves taking what the team has done and moving it out into the organ­ization and the marketplace. H ­ ere team members need to transfer their knowledge and enthusiasm to ­others ­ ill continue their work. Exportation might mean shifting who w from a prototype to large-­scale manufacturing and marketing, taking a tool that worked very well in one department and implementing it elsewhere, or executing a new strategy. In exportation,



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team members are challenged to effectively communicate all the tacit knowledge they have to ­others and to motivate ­others to take on something that ­those ­people might not understand or want to do. Team members also have to figure out the best way to pre­sent the work that they have done. This is another transition, and it is often a tough one. Sometimes team members cannot let go. They feel that what they have created is never quite right and they need to keep working on it. But even if the team is OK with the transition, sometimes ­there is no one waiting at the other end. What­ever prob­lem moving from experimentation and execution to exportation pre­sents, without this transfer of enthusiasm and owner­ship, team members may find their work rejected or simply left to wither and die. The Merrill team made this transition by first focusing on sense­ making and ambassadorship. Their sensemaking now aimed at understanding how best to pre­sent their case to the top brass and convince them that their ideas should be implemented. They continued their ambassadorship by getting the support of as many man­ag­ers as they could. They wanted commitments that ­these man­ag­ers would work with the new desk if it was created. They continued to do task coordination, trying their ideas out on other groups and creating new ways that the desk could operate. And they continued to work as a highly honed team, with members in what ­were now their established roles. Ultimately, the team was given two chances to pre­sent to management, and they w ­ ere determined to make their case successfully. At this point, internal task coordination became critical. One team member put together pre­sen­ta­tions and set up all the logistics. Other members chipped in with suggestions. They thought long and hard about how best to communicate their

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ideas. The team had united around their proposal—­now they wanted every­one ­else to know what a ­great idea they had. On the day of the pre­sen­ta­tion to the executive vice president and the president of global markets and investment banking, team members ­were ner­vous; however, the pre­sen­ta­tion went well, and they got positive feedback. It was a happy team that left the conference room that eve­ning to head out to dinner. ­Later, team members learned that the executive vice president had de­cided to move ahead with their idea, and the new desk was created. In this chapter, w ­ e’ve discussed exploration, experimentation and execution, and exportation as three phases of activity that follow one another sequentially. In real­ity, the pro­cess is not always so smooth, as other teams at Merrill illustrate. While developing a new product, one group was well into experimentation and execution when it heard that Merrill’s ­lawyers found the product too risky and would not give their approval to move ahead. The team, therefore, had to move back into exploration mode and return to one of the ­earlier options on the ­table. Yet another team learned that an idea its members ­were trying to implement had been tried before and that one set of customers had been very resistant. This group went back to experimentation and execution and tried to make some changes to the product that would appeal to that customer base. Yet despite the twists and turns of ­these two examples, successful x-­teams often find that using the road map of exploration, experimentation and execution, and exportation helps them stay focused and shift gears as needed. For the Merrill team’s new desk, following ­these three phases led to huge success. The first year was about learning and building, but the team still managed to generate millions of dollars in



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revenue. In the second year, the desk was restructured to achieve a better allocation of ­people and tools and to broaden its responsibilities. The desk grew from two ­people to six, and the number of companies covered doubled. Daily trading volume was up about fifteenfold, and revenue was on pace to generate twenty times that of the first year. Trading distressed equities had proved to be a valuable business, and Merrill has enjoyed a first-­mover advantage.

Pulsing Activity This chapter has illustrated how shifting across phases prompts a team to change its focus and mode of operation. Another way to think about it is that team members are constructing a rhythm of activity that periodically shifts. ­There are also other rhythms that can be created to help x-­teams deal with complexity and signal changes in activity. We call this creating a pulsing rhythm that segments internal and external activity as well as in-­person and remote activity.5 In terms of managing the rhythm of the internal and external work of the team, research suggests that it’s most useful to cycle between outward-­facing and internal activities.6 For example, the team organizes to go out to explore the external environment, but then members come together to discuss what they have learned and what it means for the task, team design, and team culture. Then members go out again to make sure that t­ here is support for the plan, and then come back in to revise and change it as needed. Then the team goes out yet again to learn from o ­ thers about the best way to do the work, and then comes back together to figure

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out how to make it happen. Fi­nally, members go out to pre­sent their work to ­others, get feedback, and make further refinements, and then they export it to the rest of the organ­ization. ­Later they can focus on learning lessons to bring to f­uture teams. This internal-­external rhythm helps teams focus on e­ ither internal or external activities at any given moment in time. A pulsing rhythm is also an effective way to manage teams with both in-­person and remote members, an increasingly standard scenario. Early on, you may want to frequently bring the team together to compare notes, decide on f­uture actions, and build rapport. Social bonds can be forged during t­ hese spurts of togetherness. Then team members separate to do the agreed-­upon work. Members can still coordinate between spurts, but their focus is more on task fulfillment. If all of this sounds difficult, that’s b ­ ecause it is. But many of the teams we describe in this book show that while the road may be hard and long, the benefits to individuals, teams, and organ­ izations are profound. The good news is that the ­recipe for translating the theory of x-­teams into effective action—­“x-­ifying” the team—­can be laid out in a series of concrete steps, making the task easier. This is the topic for the final part of the book. × × × In this chapter we discussed the third of the x-­team princi­ples: make timely transitions. In essence, it means that as the demands of the task change, team members must be flexible enough to shift gears and change what they do and how they do it. This ensures that teams ­don’t get stuck in any one mode of operating. To make timely transitions, team members need to be able to



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shift from an emphasis on exploration—­thoroughly understanding the product, pro­cess, opportunity, or task that the team has undertaken—to experimentation and execution, in which they use the information from exploration to innovate and actually make their ideas into something real, and fi­nally to exportation, when they transfer their expertise and enthusiasm to o ­ thers who ­will continue the work, bringing the product into the organ­ization and possibly the marketplace. Having reviewed the three x-­team princi­ples in part 2 of the book, we now turn to part 3, which offers a r­ ecipe for translating the theory of x-­teams into effective action.

Part 3

How to Make It Work

6 X-­ifying the Team Six Steps to Make It Happen

Suppose that you are a man­ag­er charged with creating an x-­team. It might be a product development team, a research team, a sales team, a manufacturing team, a task force, or even a top management team. What would you need to do to jump-­start the team’s work and enable it to follow an out-­before-in, externally focused approach? How can you facilitate a team’s ability to engage in distributed leadership to bring the organ­ization’s core mission and strategy to life? Using data from groups we have worked with, research studies, and existing theory on team per­for­mance, this chapter provides a guide with concrete steps that can lead your team to ­great results. It covers both what happens inside your team and how the group should reach outside its bound­aries. Inside the team, you need to focus on setting up the basics for smooth operations, creating an environment of psychological safety, and establishing

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a culture of learning. Outside the team, you need to focus on sensemaking (learning about your team context), ambassadorship (building relationships with leaders to get resources and support), and task coordination (forming connections across units to collaborate with ­others). Let’s start with a look at how to create a robust internal environment.

Steps to Success inside the Team While the x-­team model emphasizes external activities b ­ ecause they are often missing in teams, it is impor­tant not to throw the baby out with the bathwater. A focus on internal pro­cesses and setting members up to interact well together and succeed is even more impor­tant when the team has the added work of external activities.

Step 1: Set Up the Basics for Smooth Team Operations Organ­izing the team ­w ill involve fleshing out the nature of your task, setting goals, and creating the norms, roles, and tools needed for innovation and execution. Norms are the expectations about pro­cesses and acceptable be­hav­ior in a team. It is impor­tant for team members to agree on how to work well together, how to coordinate across disparate geographies, and how to assure continuous improvement. Roles are specific activities taken on by par­tic­u­lar individuals. Within a team, roles enable team members to distribute work and ensure that every­one stays on target. Given the huge demands on teams to get a lot of work done, it is imperative that multiple tools like agendas, priority lists, and



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work plans be used to help or­ga­nize that work. H ­ ere are some methods for setting up the team to operate smoothly.

Define the task: ​When you are given a task to perform, it is often not fully formulated. Your team must take the time to create more clarity about what you are g ­ oing to do. A g ­ reat way to begin is to have each team member talk about what they think the task is. Sometimes it is easier to start at the end and consider what your final product might be, and then work your way back to what that outcome might require. Define the task by asking specific questions. Does “improving customer relations” mean all customers or just certain markets or geographies? Does it mean coming up with a new strategy, or a strategy plus an implementation plan? ­Will the plan need to be tested? You should also take the time to identify the assumptions you have made about the task. Are you assuming that you have to create something new? Are you assuming that ­others ­w ill support your ideas, or could ­there be re­sis­tance? ­A fter you have some ideas as to what your task is and what assumptions you have made, go out and check to make sure that key stakeholders within the organ­ization share your view. This group may include other teams, se­nior leaders, partners, and ­those evaluating the team. Make changes as you gather this external information.

Set goals: ​Once you have a better sense of your task, it is time to think about your goals for the team. Do you want to work as efficiently as pos­si­ble given your existing workloads, or is this proj­ ect a priority that comes above all o ­ thers? Are you g ­ oing to focus on execution alone, or do you want to work on your own learning

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and leadership development? Is this team all about work, or do you want to make it a priority to spend time together and have fun? Explic­itly talking about what you want to achieve ­w ill help to surface differences and get every­one on the same track. Keep in mind that t­hese goals are tentative and w ­ ill shift over time as you become more engaged in the task and bring in the views of outsiders. From an external perspective, you ­w ill want to make sure that your goals match ­those of your key stakeholders.

Establish norms: ​Norms are expectations about pro­cesses and ­ hese are the written and acceptable be­hav­ior in the team. T unwritten rules that guide team be­hav­ior. They may cover, for example, how work w ­ ill be distributed, how decisions w ­ ill be made, and how meetings w ­ ill be conducted. Discuss who w ­ ill conduct interviews, who ­w ill do quantitative analy­sis, and who ­w ill write and pre­sent the findings. Determine if decisions are ­going to be made by consensus, majority rule, or a designated leader. Decide how often the team w ­ ill meet, how p ­ eople ­w ill communicate between meetings, and how to share information. Decide if every­one has to be at a meeting and w ­ hether leadership ­w ill rotate or stay with one person. Decide ­whether teams need to meet in person or electronically. Devise ways to periodically reflect on how the team is operating and how to improve. Following reflection, norms may have to be renegotiated or changed.

Assign roles: ​Roles are specific activities taken on by par­tic­u­lar members. For example, someone should facilitate meetings, making sure the team follows an agenda, has broad participation, and deals with conflicts. A proj­ect man­ag­er should create a work



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plan and keep track of who is ­going to do what, check that milestones are being met, and push members to follow through on their commitments. ­There should be a cheerleader who keeps ­people motivated and moving t­ oward team goals—­while also urging them to have fun and support the team. ­These roles can be fixed, or they can rotate to even the load and give every­one a chance to participate. Roles may also need to change as the task and team membership changes. They can be assigned according to who has the most expertise or based on who wants to learn or hone a skill. From an external perspective, roles may include boundary spanners, ­people who work across the team bound­aries, such as liaisons who communicate with other groups or organ­izations, or sensemakers, who monitor the external environment for changes. Your team w ­ ill also need ambassadors and task coordinators. The roles of core members, operational members, and outer-­ net members must also be considered. Roles may evolve as relationships with external stakeholders do, and as the team moves from exploration to experimentation and execution, and fi­nally to exportation.

Use tools: ​Tools help the team work efficiently and effectively. They may be s­ imple to use, like work plans, or involve sophisticated artificial intelligence (AI) technologies. Take advantage of meeting management tools and online spaces for sharing data confidentially. Use work plans to track who is d ­ oing what and by when (see t­ able 6-1). Use statistical packages to find key themes in interview data and to determine statistical significance in survey data. Use the checklists at the end of the chapter to make sure that you are building an effective team. Identify online tools

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TA B L E 6 - 1

X-team work plan What? Key tasks 1.

When? Due date

Who? Key person/assisting person

2. 3. 4.

Next meeting dates:

that can track customer interactions, sales and manufacturing data, and revenue attainment. Find AI tools that can help the team monitor participation and send cues about pro­cesses and when to do which tasks. Examples include Basecamp, Monday, and Oracle NetSuite for proj­ect management and Asana, JIRA, and Trello for collaboration. Consult your IT department for their help in choosing the tools that are appropriate for your team.

Step 2: Create an Environment of Psychological Safety Team members should work together to create an environment ­ eople trust each other and feel safe enough to be canin which p did and take risks. Research shows that this safety is key for getting team members to share information that the team may need and for getting full participation from every­one.1 It is impor­tant



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to build psychological safety not just within the team but also with the most impor­tant external stakeholders that the team engages. For example, if the internal team exhibits psychological safety but external relationships are toxic, this ­will lead to tension within and across bound­aries. ­Here are some ways to create the safety that’s so essential.

Encourage candidness: ​Show team members that they can be candid and honest. For example, you might want to set aside time ­ eople to be open about their doubts before each decision to ask p and concerns. Or during each meeting you might want to assign one person to poll members about what could go wrong if the team did every­thing it had committed to. Agree to critique what ­people do, not who they are, and ask quiet members ­whether they simply have nothing to say or if they feel inhibited about speaking up. ­These techniques can also be used with team partners to make sure that every­one feels ­free to participate.

Think outside the box: ​Encourage the team to be open to new ideas, no ­matter how strange they might seem. Innovation requires that ­people feel safe offering suggestions that may be outside the norm but may spur creative thought. ­Others in the team should commit to listening to new and dif­fer­ent ideas and should try not to dismiss them too quickly. Innovation starts with creative and wild ideas that then get adapted to a par­tic­u­lar structure.

Reflect on your behavior: ​Build in time during each team meeting to talk about what went well during the meeting, what did not go so well, and what members want to change ­going forward.

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Be sure to consider ­whether p ­ eople feel safe in communicating doubts, new perspectives, wild ideas, and minority views. Keep a rec­ord of what is discussed and start the next meeting with a summary of what changes the team de­cided upon to improve safety g ­ oing forward.

Step 3: Establish a Culture of Learning Building a psychologically safe environment sets the stage for engaging in learning activities. However, team members need to take additional steps to ensure that learning actually happens. Learning is particularly challenging in exponentially changing ­ ecause team members must execute at the same environments b time as they absorb new knowledge.2 ­Here are some ways to establish a learning culture.

Create explicit learning pro­cesses: ​The path to engaging in learning is similar to the path to building psychological safety— it starts with establishing pro­cesses. For example, you might want to set aside time in team meetings to share new knowledge and information related to the work. You might want to start by identifying when you are g ­ oing to rely on existing knowledge and when you are ­going outside the team to learn new ­things.

Set up tools for gathering and exchanging information: ​Team members are rarely all in the same room, yet the need for learning never stops. Therefore, it is critical to have an information system that can catch concerns, questions, and lessons learned on the fly. For example, teams can create a channel in a collaborative platform dedicated to learning.



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Collect information: ​ Once tools for gathering information have been set up, team members should be invited to contribute. For example, members might be encouraged to capture pro­cess and per­for­mance data, but they should also rec­ord their questions, concerns, ­mistakes, and ideas.

Foster continuous reflection: ​The objective of collecting information ­w ill depend on the context. In highly uncertain and innovation-­driven environments, the goal may be to generate better ideas. In more routine environments, the purpose may be to understand what goes right and what goes wrong, and to prevent repeating ­mistakes. ­Either way, reflection needs to be disciplined and consistent to create the “muscle memory” for effective learning. Now we move on to exploring the external pro­cesses that teams need.

Steps to Success outside the Team In order to be a high-­performing team, you w ­ ill need to reach out to p ­ eople in the rest of the organ­ization and even outside of it. Focusing on the team’s internal environment is simply not enough. Members need to be sensemakers, scouting for information and ideas; be ambassadors for the team with upper management; and work on task coordination with other parts of the organ­ization and the larger ecosystem.

Step 1: External Sensemaking It’s essential to go outside of your organ­ization to get ideas and information about your task. Although you may think that you

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understand your issues, the key to creativity is to see a prob­lem through new eyes, bringing new information and viewpoints to the ­table. You should consider finding out how other companies solve your prob­lem and how they react to customer needs, market and technology trends, and competitive threats. In addition, you should look within your organ­ization for pockets of expertise and information that might be relevant to your proj­ ect. The nature of your external sensemaking ­w ill depend on the proj­ect. A team that is considering opening up a new retail business ­w ill need to speak to analysts, traders, customers, marketers, and economists, while one considering ways to shift the com­pany strategy and structure ­w ill want to speak to firms that have dif­fer­ent configurations or that have recently experienced change. In both examples, team members ­w ill need to look both within the firm, to assess who e­ lse has considered t­ hese issues before and what knowledge they can add, and outside the firm to learn from ­others. ­Here are some methods for external sensemaking.

Seek expert advice: ​L ook for experts who have information about your task/problem domain, and schedule time to talk to them. You should consider speaking with analysts, academics, and con­sul­tants. Ask them about their current approach to your proj­ect domain, their list of key experts in this area, and which companies exhibit cutting-­edge practices. Also ask who has been leading the way ­until now and who they think ­w ill be leading in the ­future—­and w ­ hether t­ hey’re willing to make introductions to ­these ­people so that you can continue your sensemaking. Find out what market, technology, po­liti­cal, and economic trends ­w ill impact your work.



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Before scheduling ­these interviews, do a thorough search on the web to see how you can deepen your knowledge about who the key external experts are and what they know. Hone your questions accordingly. When you have finished collecting information, make time to share your findings with the rest of your team and look for patterns and trends. Sensemaking requires new information—­but also a way of interpreting and mapping that information.

Get customer perspectives on your proj­ect: ​The word customer ­here can be replaced by contractor, partner, supplier, or any other key constituent who is impor­tant to your proj­ect output. Interview current customers and ask about their satisfaction with the status quo as well as their dissatisfaction. Find “lead users” who are demanding the most innovative solutions and find out why they chose your product and which competitors’ products they considered. If you can, talk to customers who have left your com­pany: Which competitor did they go to and why? Talk to customers that you want to attract, too: What are the prob­ lems they are trying to solve? What kinds of solutions would they be willing to buy? Provide some prototype solutions to them and ask if any of ­these would compel them to come to you. Then get together as a team and decide how ­these findings should influence your proj­ect. If pos­si­ble, capture customer voices in quotes, audio, or video to make your case stronger.

Map your competitive landscape: ​Use a variety of information sources to better understand who your major competitors are now and w ­ ill be in the f­ uture. Who are the key players, and how do they compare to you? What are t­ hese companies planning in your proj­ect domain? Are ­there new startups that are about to enter

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the marketplace? What do they offer that you do not? Are ­there new business practices or models that might threaten your strategy? Are ­there companies that you might want to acquire or partner with to stay ahead of the innovation curve, or to gain a foothold in a new market?

Engage in vicarious learning: ​A sk your contacts within the organ­ization for the names of ­people who have worked on similar proj­ects in the past. Find ­these ­people and ask them what worked and what d ­ idn’t, who helped and who hindered them, and what lessons they would pass on. Search out additional experts in the organ­ization and the larger ecosystem and ask for their opinions about what you are ­doing and how you are ­going about it. Solicit feedback and advice. Bring in the perspectives of p ­ eople from all functions and divisions of the organ­ization, from upper to lower levels and from the front end to the back end. Repeat the analy­sis with ­people outside of the organ­ization who have done what you want to do. Using interviews, surveys, and observations, combine the input of ­others and analyze them to determine trends and opinions. Use this analy­sis to rework your task and goals.

Take a new read on your corporate structure, politics, and culture: ​You need to keep your fin­ger on the pulse of changes in the organ­ization so that your actions are congruent with ­these new directions. Consider the organ­ization’s strategic design, po­liti­cal dynamics, and orga­nizational culture.

Step 2: Ambassadorship Ambassadorship is all about gaining sponsorship from a network of leaders so that you have a greater chance of success. As such, your



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team needs to establish relationships with vari­ous leaders from the very start of the proj­ect. Explain to them the task and goals you have set, and get feedback on—­and try to get buy-in for—­what ­you’re ­doing. You should strive to align your proj­ect with strategic initiatives and to lobby for resources and support from both allies and adversaries. ­Here are some methods for ambassadorship.

Meet with leaders who have strategic linkage to your proj­ect: ​ Discuss your plans for the team and ask how well the plans fit with current priorities in the com­pany. Also, ask if the leaders have any suggestions or recommendations for changing your plan to better fit with strategic initiatives. Ask for their support for your proj­ect and ­whether they think you should talk to anyone ­else to get input and buy-in. If they suggest getting in touch with ­others, see if they can introduce you. If ­there are areas of disagreement with ­these leaders, push for ­those issues that your team members are most passionate about.

Be a cheerleader for your proj­ect throughout the organ­ization: ​ Think creatively about how you can pre­sent your ideas and pro­ gress throughout the team’s life. Use graphs, videos, pictures, quotes, stories, and numbers to back up your claims and to bring your ideas to life. Let some leaders preview your recommendations to make sure they are on board. Use feedback to improve your pre­sen­ta­tion. Think about framing your ideas in terms of where ­there is “pain” if nothing is done and where ­there is “gain” if your proj­ect succeeds.

Keep communicating throughout your proj­ect: ​You do not simply want to get input from multiple leaders and then dis­

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appear u ­ ntil you are finished. Continue to update your sponsor and o ­ thers on your pro­gress and continue to consider their feedback and ideas. If you are having difficulties, ask for help, w ­ hether it is in the form of resources, connections to o ­ thers, or information about new initiatives.

Step 3: Task Coordination Just like the saying “no man is an island,” no team is an island. Teams need to search for pockets of information, resources, and expertise that may be relevant to their proj­ect. Collaborating with other teams and brainstorming ideas with other groups allows teams to build on existing expertise and workflows, thus creating synergies across the organization. To do so requires significant coordination. This may involve getting commitments from people who can assist your team and setting expectations and schedules for joint work so that every­one knows what inputs are needed and by when. Here are some ways to do task coordination well.

Identify relevant individuals and groups inside and outside of your com­pany: ​Seek out p ­ eople who have something that your team might need—­know-­how, expertise, ideas, services—­ and ask for their help in formulating what you might do and how to do it. Determine if it makes sense to work together. Then think about ­people who w ­ ill be the recipients of the team’s work. Begin to develop ­these relationships and ask what you can do to facilitate the transition.

Create synergies across the organ­ization: ​Explore options for leveraging existing initiatives and offerings to create efficiencies



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and economies of scale and scope. For example, if you are looking for new retail opportunities in Eu­rope and another team has already established a plan for the clothing market, determine if ­there are ways for your team to use the same designers or to sell in the same retail chains. Could you work with o ­ thers to have multiple offerings for a new set of customers or additional offerings for established customers? × × × This chapter has identified both the internal and external activities needed to create an effective x-­team. If you are planning to set up an x-­team or x-­ify an existing team, t­ hese six steps can provide a useful guide to help you get ­there. Next, we provide a shortened checklist that summarizes the steps and can serve as a tool for x-­teams to track their pro­gress.

Checklists for X-­Teams So far in this chapter we have laid out all of the ­things that x-­team members have to do to be effective. Not all teams ­will need to do every­thing, so choose what is most impor­ tant for you and your task. Below we offer a brief checklist for each of ­these activities to give x-­teams a quick way to check on ­ whether they are engaging in the necessary activities.

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Checklists for Creating a Robust Internal Environment Set up the basics for smooth operation DEFINE THE TASK

■ Identify what members think are the major tasks and deliverables for the team. ■ Determine what assumptions underlie t­ hese perceptions of the task. ■ Check your view of the task and core assumptions with key stakeholders. ■ Edit and revise the tasks and deliverables based on external feedback and on what you discover when shifting from exploration to experimentation and execution to exportation. SET GOALS

■ Identify key goals for the team—­including goals for the task, ­people, innovation, and learning. ■ Make sure that every­one, both inside and outside the team, is on board with t­ hese goals. ■ Where ­there are differences of opinion, discuss and revise the goals as needed. ■ Check in with external stakeholders over time to make sure that you are communicating the team’s pro­gress and prob­lems, as well as changes to the goals and deliverables.



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ESTABLISH NORMS

■ Set norms around work, decision-­making, meetings, and values. ■ Think about ways to enforce ­those norms and deal with violations. ■ Assess norms periodically to determine how well they are working, which ones to keep, and what to do differ­ oing forward. ently g ASSIGN ROLES

■ Establish roles such as facilitator, proj­ect man­ag­er, and cheerleader. Also, establish the roles to take on sensemaking, ambassadorship, and task coordination. ■ Determine who would best serve in t­ hese roles, w ­ hether ­because they are experts, have the required connections, or want to develop new skills. ■ Assess roles periodically to determine who is well suited to take them on, w ­ hether they should be rotated, and how best to shift when change is needed. USE TOOLS

■ Identify tools that can help with r­ unning meetings, monitoring tasks, and assessing how well the team is achieving its goals. ■ Try out new tools as well as established ones to make sure your team is benefiting from the latest ones that fit member needs.

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■ Assess tools periodically to determine how well they are working, which ones to keep, and what to do differently ­going forward.

Create an environment of psychological safety ENCOURAGE CANDIDNESS

■ Establish pro­cesses that encourage ­people to communicate what they are truly thinking and feeling but are afraid to express. ■ Agree to critique ideas, not ­people. ■ Try to create a culture of psychological safety not just within the team but with all stakeholders. THINK OUTSIDE THE BOX

■ Encourage members to think big and offer up wild ideas. ■ Make sure you react in a way that is open and supportive. Even if you disagree with a new idea, give yourself time to digest it and fairly evaluate it. ■ Encourage external stakeholders to offer their ideas and perspectives with the knowledge that they w ­ ill be taken seriously. REFLECT ON YOUR BE­H AV­I OR

■ Establish reflection time at the end of meetings to assess how well psychological safety has been created within the team and with outside partners. ■ Watch your own reactions to determine if you are getting in the way of psychological safety.



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■ As you collect information in safety check-­ins, brainstorm ways that you can improve and set targets for change.

Establish a culture of learning CREATE EXPLICIT LEARNING PRO­C ESSES

■ Provide pro­cess guidelines that help team members share new knowledge. ■ Identify gaps in knowledge that require learning. ■ Build in time to reflect by using check-­ins at the beginning of each meeting and check-­outs at the end to see what members have on their minds and to set a pro­cess in which every­one in the team speaks. ­These conversations can go hand-­in-­hand with discussions about psychological safety. ■ Schedule an offsite day with the entire team that’s devoted to reflecting on learning and pro­gress. ■ Separate the sharing of new information from making judgments about the relevance of the information, to ensure team members do not self-­censor their ideas. SET UP TOOLS FOR GATHERING AND EXCHANGING INFORMATION

■ Select a collaborative platform fit for the purpose of learning. Ease of use is key. Or, if you already use a platform, dedicate one channel specifically to capturing learning. ■ Establish norms and best practices for how the platform should be used.

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COLLECT INFORMATION

■ Invite team members to contribute information to the collaborative platform. ■ Provide examples of high-­quality entries for guidance. FOSTER CONTINUOUS REFLECTION

■ Set up regular meetings to reflect on the work that has been done by members. This helps p ­ eople decide how to integrate and interpret information and how to plan for action. ■ Take time to make sense of both direct and vicarious experiences. What have you learned by yourselves and what have you learned from ­others? ■ Emphasize that time for reflection is not done at the expense of productivity. In an exponentially changing world, learning and execution are mutually reinforcing pro­cesses.

Checklists for Success outside the Team External sensemaking SEEK EXPERT ADVICE

■ Investigate the prob­lem, issue, or opportunity that you are working on. Learn from ­others who have already done work in ­these domains, ­whether they are inside your organ­ization or are an external expert or competitor. Find out what worked and what d ­ idn’t.



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■ Scan the environment for new ideas, practices, or technologies that may be relevant to your goal. ■ Consider who might know about coming trends and find out how their perspectives link to the work you are planning. ■ Find out from experts how they view the team’s plans, and see if o ­ ther stakeholders agree. GET CUSTOMER PERSPECTIVES ON YOUR PROJECT

■ Interview current customers to understand what they like and do not like about your offerings. What are they looking for now? ■ Interview new customers that you want to attract. What prob­lems are they trying to solve? What solutions can you provide that might meet their needs? What can be learned about potential solutions from lead users? Get feedback on your ideas. ■ Think about who might know what trends w ­ ill be coming and find out how their perspectives link to the work you are planning. ■ Capture what you have learned and spread the word to see who can help to both understand the customer and create new solutions. MAP YOUR COMPETITIVE LANDSCAPE

■ Work to understand the competitive environment that you are facing.

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■ Create images of your competitive landscape, highlighting key players, threats, and opportunities now and in the ­future. ■ Think about what changes you w ­ ill need to make to your goals, given the competitive landscape. ENGAGE IN VICARIOUS LEARNING

■ Find experts who have already done what you want to do. Ask them for the keys to their success and what got in the way. Ask them what they would do differently if they w ­ ere starting now. ■ Compile all the data you collect and look for patterns, trends, and novel ideas that can improve your plans. ■ Create a revised definition of your task and what you ­will need to do to accomplish it. Rework your goals with this new information. TAKE NEW A READ ON THE COM­PANY

■ Map your current orga­nizational structure. Who has information, decision-­making rights, and skills that you might need? What is the best way for you to work with the formal organ­ization, reward system, and control system? Adjust your work plan accordingly. ■ Map your current po­liti­cal structure. Who has power, influence, and resources? Who supports your work and who does not? Use ­these insights as input for the ambassadorial work that you w ­ ill do to influence the ­people you have identified.



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■ Map your current culture. What are the written and unwritten values? What assumptions exist about how to get ­things done, what success looks like, how to behave, and how to succeed? Does the organizational culture mesh with what the team wants to do? If not, find a way to resolve differences.

Ambassadorship MEET WITH LEADERS WHO MATTER TO YOUR TEAM

■ Meet with se­n ior leadership to discuss your plans and how well they are strategically linked to orga­ nizational goals. Find ways to improve the fit or shift ­those plans. ■ Once you have gotten feedback from se­nior leaders, discuss how your task and goals may need to change. ■ Continue to meet and to negotiate goals u ­ ntil you have the support of allies. Ask se­nior allies to help garner support from adversaries and o ­ thers with influence. BE A CHEERLEADER FOR YOUR PROJECT

■ Create compelling pre­sen­ta­tions about what your team is d ­ oing, why the task is impor­tant, and what pro­gress you are making. Make sure to get this message out across key strategic networks inside and outside the organ­ization. ■ Ask se­nior leaders to become spokespeople for your team across strategic networks.

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KEEP COMMUNICATING THROUGHOUT YOUR PROJECT

■ Keep upward communication open, providing information on both the positives and the negatives. If you need help, ask, w ­ hether it’s for resources or po­liti­cal influence. ■ Ask for information from se­nior leaders so that you are aware of key events, decisions, and changes that may have an impact on your team’s work. Update your plans accordingly. ■ Continue to make sure that the team’s interests and accomplishments are vis­i­ble to leaders throughout the organ­ization.

Task coordination IDENTIFY RELEVANT INDIVIDUALS AND GROUPS

■ Task coordination begins with explicit sensemaking about groups that have potential inputs for the team, or that might take over a ­ fter the team has finished its work. Evaluate this information and decide who to contact and who to negotiate with for planned interdependencies. Convincing, negotiating, and cajoling may be needed to keep task interdependencies active and working. ■ Continuously monitor the larger set of relationships with ­these external groups to make sure that they are r­ unning smoothly in terms of relationships, work schedules, and quality. Check in periodically. ■ Take stock of external task coordination to decide if new interdependencies have emerged and need to be managed, and w ­ hether existing relationships are still necessary.



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CREATE SYNERGIES ACROSS THE ORGANIZATION

■ In working on your task and goals, look for solutions that build on synergies with other parts of the organ­ization. Creatively work with o ­ thers to formulate win-­win solutions. ■ Continue to meet and to negotiate goals u ­ ntil you have the support of other groups and of se­nior leaders who must sign on to t­ hese new synergies.

7 From One Team to Many The X-­Team Program

We’ve shown how to create an x-­team and provided checklists to help in its development. But suppose you are a CEO or the director of a large division and you ­don’t want to create just one x-­team. What if you want to create a set of x-­teams to establish an infrastructure of innovation—­multiple groups that come up with innovative products and ideas year ­after year and eventually reshape the way your organ­ization functions? This goal calls for an x-­team program. ­There are many reasons to establish such a program, but ­doing so is likely to meet with a lot of re­sis­ tance. Let’s explore why and how to move forward despite the inertia.

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Distributed Leadership through X-­Team  Programs Since the first edition of this book, we have worked with dozens of companies to set up x-­team programs. What do t­hese companies have in common? We’ve found that companies often choose to create an x-­team program b ­ ecause they face a set of dilemmas that they hope x-­teams can solve. While we have spoken about ­these vari­ous dilemmas in e­ arlier parts of this book, we summarize them in a more orderly manner h ­ ere. Companies see x-­teams as a way to improve business as usual, but also as an instrument of change, a mechanism for innovation, and a way to link a firm’s top, ­middle, and lower levels so that they are moving in the same direction. As such, x-­teams are a structure to engage in distributed leadership. While ­these outcomes can come from individual x-­teams, an x-­team program does more to institutionalize the changes, creating a broader and deeper impact on orga­nizational culture and practices. In short, x-­team programs help man­ag­ers solve four dilemmas that plague firms t­ oday.

Dilemma 1: Innovation Is Hard When the Workforce Is Burned Out How can companies build a competitive advantage through ­ eople are already overworked? More innovation when their p and more firms are finding that the key to competitive advantage in a highly competitive global market, with an exponentially accelerating pace, is innovation. But in an environment where resources are stretched and margins are shrinking, organ­izations



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have already cut out all the fat and some of the muscle. Employees are exhausted just as companies need to mobilize their organ­ izations to act and think in new ways; focus is key to helping employees put effort and energy into core priorities and innovation. X-­teams can help to provide that focus. Focus is harder than ever as employees are being inundated with lots of information, multiple leadership initiatives, and technologies designed to pull ­people to the screen. X-­team programs begin with a clear set of issues and priorities from se­nior leadership. Ambassadorship helps teams to then align with t­ hese priorities, while sensemaking helps the team to focus on what is most impor­tant in markets, technologies, and competitive pressures. Man­ag­ers need a mechanism that provides the time, structure, and focus for new ideas—an infrastructure that ­will move them ahead in an ever more competitive environment in a way that is deliberate rather than scattershot. Enter x-­teams. Organ­izations can set up x-­team programs to help establish the structure, the time, and the culture for innovation. The focus that x-­teams add to proj­ects, ­whether they are aimed at improving execution or aimed at innovation, can help to solve the overwork prob­lem.

Dilemma 2: No One Is Following the Vision How can top man­ag­ers get the rest of the organ­ization to implement the programs needed to realize their strategic plans? We’ve all seen t­ hose Power­Point pre­sen­ta­tions as management lays out the purpose, the vision, and the strategy for the firm. More difficult is finding the talent to implement the strategy and to figure out how to translate the big idea into concrete proj­ects and action. More difficult is creating broad understanding of the

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new direction throughout all levels of the firm. More difficult is gaining cooperation across groups that have never worked together before. X-­teams can help. X-­teams can help the organ­ization align with top management’s strategic ideas from the very first meeting. X-­team programs typically start with a big launch, ­whether with new proj­ect teams or existing ones that take on a more x-­ified approach. This launch is an opportunity for se­nior leaders to pre­sent their vision for what the proj­ects might cover. While participants are not required to follow the dictates of top management (in a distributed leadership organ­ ization, se­nior leadership influences rather than o ­ rders), they often seek some guidelines about what prob­lems and issues are most impor­tant to the se­nior management team. In this way, x-­teams become the vehicle of implementation. And this is just the start of the dialogue. F ­ uture interactions between participants and man­ag­ ers allow both groups to pre­sent ideas, get feedback, and work ­toward aligning their interests and passions. Or x-­teams might find new strategies that can mold se­nior leadership’s ideas into even better ones. Influence is both top-­down and bottom-up. In this way, top man­ag­ers find teams that move their ideas into concrete proj­ects that align with deep knowledge of current market and competitive conditions. With an x-­team program, man­ ag­ers often get multiple solutions to their prob­lems and multiple teams committed to change—so the impact is much larger than it would be with only one or two x-­teams in place.

Dilemma 3: Leaders Feel Powerless to Change ­Things How can x-­teams support man­ag­ers up and down the hierarchy who know what the firm needs but feel powerless to



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make change happen? Many man­ag­ers we speak with have their fin­gers on the pulse of the customer, the market, and new trends in technology. They know which competitors are outbidding them and what customers are complaining about. But t­ here is a prob­ lem: They want to create new modes of operating but feel that no one is listening or providing support. They feel repressed by the orga­nizational hierarchy, hemmed in by the rules and regulations. And this frustration often spreads. X-­teams, then, become a vehicle of voice. An x-­team program provides orga­nizational members their moment in the sun: they have the ear of top man­ag­ers and can make their case. The rule in an x-­team program is that no idea can move ahead ­unless ­others across and further up the hierarchy support it. So the onus is on the team to bring ­others along. This usually ­isn’t a prob­lem in x-­teams, since team members are often quite passionate about their ideas. They even find that input helps fine-­tune ideas, uncover fatal flaws in members’ reasoning, or fit their initiatives into new strategic directions. It’s impor­tant to note that se­nior management has to be listening for all of this to work; two-­way communication must be ensured. Interaction across levels in the firm enables information about customers, technologies, and markets to align with strategic initiatives.

Dilemma 4: Too Much Power Is Concentrated at the Top How can leaders at the top involve underused talent in solving complex prob­lems? The myth of the strong leader at the top who w ­ ill solve all our trou­bles is just that—­a myth. While it is certainly impor­tant to have strong leadership, many p ­ eople need to

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be mobilized to get the full expertise and drive needed for real change. That’s where x-­teams come in. X-­teams are the vehicle for distributed leadership. They are the mechanism by which p ­ eople within and across organ­izations are harnessed to the task of understanding the prob­lems we face, generating multiple solutions, building on prior knowledge, and then working with ­others to get the wheels of change moving. Given all of the prob­lems that x-­teams can solve and the opportunities they can exploit, why ­don’t we see more of them? And how can we better embed them in our organ­izations?

Recurring Re­sis­tance and Old Assumptions That Refuse to Die As the above discussion has shown, x-­teams can help solve some of the most critical challenges facing organ­izations ­today. Indeed, in the twenty years since we started researching x-­teams, our work and that of ­others has shown ­t hese entrepreneurial, externally focused teams to be the building block of agile organ­izations and a key to action in chaotic times. Yet most teams and team training still focus on building up internal team dynamics. We have argued that this mindset has to change. We need to move from the idea of fixed bound­aries to fuzzy ones, from a focus on internal team dynamics to one of internal and external dynamics, from fixed to changing membership across the life cycle of the team, and from teams working solely within the organ­ization to working within the larger ecosystem as well.



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So, how do we combat this inertia, move on from our old models, and get ­people to think and act differently? T ­ here are lessons to be learned from an x-­team program started in 2017 at Takeda R&D to change the organ­ization to be more externally oriented at a time when the pharma industry needed to learn and partner with other organ­izations. Re­sis­tance to the plan was readily evident from the very beginning. Inertia stemmed from a number of sources. Some ­people believed that ­there was enough talent and information inside the organ­ization already, and that ­going outside would put the firm’s intellectual property and competitive advantage at risk. ­Others ­were ner­vous about their ability to reach across bound­aries: How do you approach se­nior leaders? Why would competitors talk to us? Biotechs think we are too slow, so why would they want to partner with us? Still o ­ thers just d ­ idn’t believe the new approach would work. Taking the plunge to create an x-­team program is a big decision. Man­ag­ers w ­ ill need to figure out where x-­teams might be most useful to the organ­ization. We have seen them used for short-­term innovation, ­doing such ­things as figuring out how best to use artificial intelligence (AI); shortening the product development pro­cess; finding new ways to collaborate with customers, patients, and partners; searching for new market arenas; and redesigning parts of the organ­ization or the supply chain. They can also be initiated to reset existing or new long-­term teams that need to take on more of an externally oriented, learning, networked mode of operating. So yes, building an x-­team program is a big decision, but it’s one that can help you move from inertia to action, from fear of chaos to concrete pro­gress. ­Here is how to get a program ­going.

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The Road Map to X-­Team Program Success Step 1: Staff for Success X-­team composition can be more fluid and complex than that of more traditional teams, as members rotate in and out and take on dif­fer­ent roles to move the team along and prioritize innovation. However, as in any team, effective staffing is a crucial starting point. As with traditional teams, x-­ team staffing should include a diverse set of members representing dif­fer­ent areas of expertise, function, and mindset, particularly in the exploration phase. The diversity should be a function of the team task. Diversity helps the team to brainstorm, break existing ­mental models, and showcase alternative perspectives. X-­teams should also include p ­ eople with diverse networks inside and outside the firm. If the team is rethinking a marketing campaign, then you want members with strong ties to marketing inside and outside the organ­ization. Similarly, if the proj­ect involves partnering with outside companies, then it is helpful to have p ­ eople connected to other companies, universities, and industry gurus. If such connections do not exist on the team, consider creating an advisory group to connect ­people to the outside. While you want breadth of perspective and connection, you do not want to overload the team with too many members and cumbersome meetings. More specialized team members, such as ­those representing the commercial or ­legal departments, may join part-­time or part-­cycle and attend meetings when needed to provide input or liaise with their part of the organ­ization. To be sure, having ­people who are not full-­time can be confusing—­ are ­these p ­ eople team members or not? (If I want to buy team



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T-­shirts, do I buy five or thirty-­five?) In other words, bound­aries are fuzzy.1 To help manage the ambiguity, x-­teams create dif­fer­ent membership types, as we discussed in chapter 4. To briefly review, ­there are core members, who manage the team, carry its history, and make key decisions, though they are not necessarily the most se­nior ­people. Next are operational members, who work on the team’s task at any given moment, even if ­they’re part-­time. Fi­nally, ­there are outer-­net members, who work across the organ­ization or broader ecosystem and contribute when their expertise is needed. In addition, since x-­teams often focus on innovation, it is helpful to have ­people who are excited about change, e­ ager to experiment and learn, and able to act and think in new ways. The key h ­ ere is that when staffing for this type of team, throw away the idea of the stable, clearly bounded team and celebrate membership that is more diverse, dynamic, and distributed. And remember, staffing may need to change as the team moves across the phases of exploration, exportation, and experimentation and execution. The key question is, What kind of expertise is needed when?

Step 2: Beginnings ­Matter, So ­Counter Re­sis­tance Early A strong x-­team launch includes showcasing se­nior leadership support and overcoming re­sis­tance to a new way of operating. Management’s active involvement not only provides legitimacy ­ thers in the organ­ to the program and ensures the support of o ization; it also helps to motivate participants and ensure that se­nior leaders ­w ill remain involved in the work that x-­teams undertake. In short, top management sets the tone and creates a

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culture of dialogue and distributed leadership. Then leadership needs to walk the talk, helping to maintain that culture, and helping teams overcome barriers. Even if you get top management involved from the beginning, however, ­there may still be re­sis­tance. Some of the re­sis­tance to the x-­team design at Takeda R&D, for example, came about ­because p ­ eople did not fully understand what an external approach was. So one of leadership’s first tasks was to brainstorm with ­people all the ways they could move outside the bound­aries of the com­pany. It was not just about partnerships but also about learning, finding new innovations, and mapping the external ­ fter that, we asked what positives might come out of such world. A an approach, while also recognizing potential downsides and responding to p ­ eople’s fears. Luckily the R&D group had already done leadership training in the past that included work on x-­teams. Some of ­these past participants told their stories and presented both their successes and how they had gotten over obvious challenges like ­legal blocks, resource constraints, and knowing who to contact. T ­ hese real-­life stories helped to show ­people that it could be done and reduced the anxiety p ­ eople ­were feeling. Fi­nally, ­people had training and tools to learn the model and practice of x-­teams. The checklists from the previous chapter were a good way to start.

Step 3: Start with Small Steps ­Whether you are initiating an x-­team approach with existing teams that need to act differently, or with new proj­ect teams taking on a specific form of innovation, it is fine to start small. Some initial steps for all teams in the program might be:



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• Ask team members to meet with one customer in the next week to find out what customers like and ­don’t like about existing products. Then members can report back on what they learned. This can be followed by meetings with competitors to learn how they are meeting similar challenges. Teams can then continue like this with other specialists or stakeholders, such as technical experts or industry analysts. ­Doing so w ­ ill build team members’ comfort with g ­ oing outside bound­aries. Team members should start interviews with external groups that are pivotal for the team task. • Have teams map their competitive landscape, including both current and potential players. In d ­ oing so, team members often realize they do not understand the market as well as they should and have much to learn from looking outward. • Teams should find task experts inside and outside the organ­ ization to provide advice and perspective. This helps team members sharpen their ability to identify useful resources. • Ask team members to pre­sent an overview of what they do for the rest of the organ­ization, to show why it’s impor­tant. This helps employees learn that communication is needed to obtain buy-in and cooperation from other stakeholders. • As teams pro­gress, have them identify gains related to the organ­ization’s strategic priorities and communicate t­ hose to se­nior leaders. Aligning with se­nior management’s strategies and initiatives is key to x-­team success. ­These steps support an out-­before-in mindset (that is, a focus on mapping external territory before turning to internal concerns)

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that readies the group for its next steps as an x-­team. At Takeda R&D, where the x-­team program helps global teams be more externally active, planning ­these first steps during the launch with a work plan meant that teams w ­ ere pushed into early action. Taking on t­ hese tasks created momentum for exploration and beyond.

Step 4: Focus on Support, Feedback, Check-­ins, and Recognition Since teams ­w ill be moving ahead with a new way of operating, it is helpful to offer support, feedback, check-­ins, and recognition. Support can come in many forms, ­whether it’s helping teams understand pro­cesses, offering effective information systems, or even training p ­ eople in AI tools. Checklists like t­ hose mentioned in the previous chapter help to make sensemaking, ambassadorship, and task coordination—as well as key internal processes—­ more concrete and thus doable. Introducing the phases of exploration, experimentation and execution, and exportation is also useful. Additional support at Takeda R&D came in the form of coaches who could sit in on team meetings to offer suggestions about how to take an x-­team approach and how to resolve conflicts as they emerged. Fi­nally, specific man­ag­ers w ­ ere assigned to x-­teams to help facilitate their work, ­whether that was checking in on whom to contact, preparing for a se­nior leadership report, or trying to better align the work with key strategic priorities. Designing effective information systems is particularly impor­ tant for x-­teams operating in a context of widely dispersed and changing knowledge. Such systems may include databases that give access to critical know-­how, but just as impor­tant, they may



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include “know-­who” databases and expert-­finding systems. Information systems can also include access to websites, blogs, and other communication vehicles that enable team members, as well as members of multiple teams, to share information and solve prob­lems together. Having access to a wide range of talent and expertise is part of how an x-­team works, and an effective information system can support this activity. AI tools that monitor participation patterns among team members, as well as offer prompts when it is time to do vari­ous tasks, are also helpful. T ­ hese tools are evolving quickly and can be useful for sensemaking and helping teams be successful. One such tool, developed in the MIT Media Lab, shows teams their participation patterns, such as one or two members dominating all discussions, which team members can then quickly respond to. Feedback is another key component of x-­team success, as a mechanism to begin creating a culture of learning within teams and across organ­izations. It can come from coaches, man­ag­ers, and x-­team members themselves, and should follow the s­ imple formula of the “plus-­delta” system: What is the team ­doing that is working, and what can the team do better? In the spirit of distributed leadership, feedback can also come from peers and other ­ ere periodic meetings in which x-­teams. At Takeda R&D, t­ here w members from one team could pre­sent their work and results to the rest of the organ­ization and get suggestions and ideas for how to improve. T ­ hese pre­sen­ta­tions also offered the opportunity for sensemaking, ambassadorship, and task coordination, since they ­were a forum that brought together orga­nizational members from across, up, and down the hierarchy. As the x-­team model permeates an organ­ization, feedback can come in regular review sessions with man­ag­ers throughout the year.

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And while the idea of x-­teams is to provide autonomy and out-­ of-­the-­box thinking, members appreciate when regular check-­ins are built into the schedule. Thus, at dif­fer­ent phases of the proj­ ect, teams may be asked to report on their external activity, such as whom they contacted, what they learned, and w ­ hether any kind of f­ uture connection or partnership seems useful and doable. As x-­teams become the standard way of operating in an organ­ ization, regular check-­ins can serve to generate metrics that can eventually be developed into key per­for­mance indicators. Fi­nally, offering recognition is a ­great way to solidify x-­team be­hav­ior. For example, one of the original designers and coaches in the Takeda R&D program set up a contest to promote more x-­team innovation, create a funnel to separate the ­g reat ideas from the not-­so-­great ones, and reward innovative be­hav­ior. The “Dragon Award,” created by Karen Wolf, required that teams submit their innovation ideas, which w ­ ere then evaluated by a panel of internal and external judges with clear criteria for success. The winners of the award got a cool dragon sculpture, which became a status symbol in the organ­ization, as well as an hour with the head of R&D to pitch their ideas. But recognition does not have to be this complex. Simply calling out teams that are d ­ oing a good job, promoting team leaders and members on successful x-­teams, letting x-­teams tell their stories to the rest of the organ­ization, and publishing the names of top teams can incentivize p ­ eople.

Step 5: Have a Clear Endgame The last critical success f­ actor is managing the closing of x-­teams. If they are proj­ect teams with a specific end date, then t­ here should be a clear ending ceremony. If they are ongoing teams,



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they can report out ­after the vari­ous phases of team activity. At such meetings, top man­ag­ers should listen to the proj­ect results and recommendations, praise the x-­team members for the work they have done, decide which proj­ects w ­ ill move forward and which w ­ ill not, and begin to ensure that what­ever follow-up activities need to take place are assigned to the appropriate man­ag­er. The final pre­sen­ta­tions are an opportunity for x-­team members to have the visibility and voice that they ­were promised. For ­those proj­ects that are not ­going to be ramped up, man­ag­ers should provide a clear rationale for the choice. The decision not to go ahead with a proj­ect should be celebrated as much as the deci­ ecause significant work goes into discovsion to move forward, b ering that a proj­ect is not ­v iable. Indeed, every­one learns a ­great deal, and all members develop skills, experiences, and understanding that they did not have before. What’s more, celebrating proj­ects that do not move forward is another way of creating a climate of psychological safety. Another activity that should take place at the end of a proj­ect is for team members to assem­ble lessons learned and think about what they want to carry forward to their next team assignments. Key h ­ ere is writing reports—­not long proj­ect reviews that no one ­w ill ever read, but short lesson documents. ­These might include the ten ­things that an x-­team should never do and the ten ­things that an x-­team must always do, or a list of the ­people who ­were most helpful to the team and the leads that took the team down blind alleys. Impor­tant, too, are success stories. Once one or two stories that embody the spirit, activities, and outcomes of successful x-­teams are out t­ here, they should be broadcast widely. This is the surest way for time-­pressured team members to take note and for culture change to begin.

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The x-­team program at Takeda resulted in p ­ eople learning a lot about their com­pany and industry, and learning how to reach across bound­aries. Participants found that they w ­ ere better able to innovate in this new mode, and operations got smoother over time. Fi­nally, the number of partnerships with other groups and companies in the larger ecosystem went up dramatically. × × × X-­team programs create an infrastructure of innovation within companies. They pull team members out of their everyday jobs and mindsets, challenging them to move from passion to action—­ through new products and new ways to improve key business processes—­and then to make their innovative ideas part of ongoing orga­nizational practice. This chapter has outlined concrete steps to launch an x-­team program. For a program to take root, however, the organ­ization needs to have a structure in place that provides a fertile soil for distributed leadership through x-­teams. The steps that top management can follow to create a supportive context is the topic of our concluding chapter.

8 Crafting an Infrastructure for Innovation Embedding X-­Teams

Throughout this book we have talked about ­today’s exponentially changing environment. Not only is it a VUCA world (volatile, uncertain, complex, and ambiguous), but it’s a VUCA world on ste­roids. Added to the equation is the incredible speed of change. The technical data being created in the world is increasing rapidly, and the pace of innovation is skyrocketing. In response to this environment, organ­izations have been changing—­moving rapidly from command-­and-­control bureaucracies with centralized leadership and formalized roles to more nimble, agile, networked firms with leadership at all levels.

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To be sure, this transition was pushed forward by the Covid19 pandemic, which resulted in more remote and distributed work, more use of artificial intelligence, and greater reliance on teams and on teams of teams. For example, multiple teams working across bound­aries in phar­ma­ceu­ti­cals, biotech, government, and universities, and working with financial backers, led to the development and distribution of vaccines and medi­cations that helped to stem the pandemic death rate. Competitors became collaborators, and regulators, usually seen as blocks to getting drugs to the market quickly, became facilitators of faster testing and access. ­These trends continue ­today and support the use of x-­teams to create distributed leadership and more-­nimble forms of operating. Distributed leadership emphasizes giving ­people—up and down the hierarchy and across the ecosystem—­the autonomy to innovate and collaborate. It involves flipping the organ­ization on its head, allotting employees lower down in the organ­ization the freedom and power to come up with new ideas, products, and pro­cesses that further the organ­ization’s goals. We have seen this distributed leadership in action with x-­teams. In many cases, se­nior leadership sets the stage to empower such teams. The Cascade team at Microsoft felt empowered to step back and redefine the product development pro­cess to find the voice of the customer and innovate b ­ ecause Satya Nadella, the CEO, created a culture of learning and distributed leadership. In turn, the team was or­ga­nized to share power with other p ­ eople and parts of the organ­ization when their input or expertise was needed. Similarly, the Spin-­In team at Takeda—­started ­after the implementation of x-­teams—­was tasked with creating a more agile drug development pro­cess a­ fter Andy Plump, the head of



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R&D, started the com­pany’s Dare to Discover culture of innovation. We w ­ ill come back to this team ­later in the chapter. But creating a distributed leadership organ­ization through x-­teams does not happen with a snap of the fin­ger. ­There are three key steps that need to occur at the orga­nizational level to establish an environment where x-­teams can thrive: (1) designate the right leadership roles, (2) power up your ­people with leadership skills so that they are capable of leading at all levels, and (3) create an incubator of x-­teams to support a nimble, networked learning approach. Let’s explore each of ­these steps.

Designate the Right Leadership Roles: Flip the Hierarchy A study found that in nimble, distributed leadership organ­ izations, ­there w ­ ere clear leadership types at the bottom, ­middle, and top of the com­pany (although leaders at all levels could play any role at any given time). The study identified three types of leaders—­entrepreneurial leaders, enablers, and architects—­that are needed to create distributed leadership throughout the organ­ ization and across its bound­aries.1

Entrepreneurial Leaders Entrepreneurial leaders are ­those who come up with the products, pro­cesses, and business models needed to keep pace with a steady stream of innovation in an uncertain world. T ­ hese are the leaders who create and work in x-­teams, and they have three key attributes. First, they are self-­confident and willing to act, b ­ ecause

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in a nimble, distributed leadership organ­ization ­there is less order giving and more autonomous action. Second, they have a strategic mindset. That is, they understand the goals and strategy of their organ­ization, unit, or team so that their innovations are aligned with key strategic initiatives. Fi­nally, ­these leaders attract ­others so that they can create the support for the change initiative to gain momentum in the organ­ization.2 For example, when the Museum of Modern Art (MoMA) in New York completed a major expansion in 2004, se­nior curators immediately began thinking about what would come next. ­These entrepreneurial leaders understood that the museum was competing with not only existing art museums but also an expanding cadre of commercial-­sized, private con­temporary art galleries.3 MoMA would need to find a new way of presenting its collection to a new generation of museumgoers whose preferred way of observing and learning is informed by their experiences with digital searching and browsing. Curators eventually settled on the idea that, rather than the traditional chronological approach, featuring paintings of the same artist or artists of the same period, the museum’s collection should be combined around themes, like movement or shape. An extraordinarily large donation to the museum in 2016 allowed ­ fter a massive this new strategy and mission to come to life. A redesign of its galleries and a three-­month closure, the new MoMA reopened its doors in the fall of 2019. In one exhibit a Picasso is paired with a painting of a race riot by Faith Ringgold from the 1960s. Paintings, drawings, prints, and even per­for­mance art are paired with photography and architecture rather than being shown in their own exhibits. The plan is to have sixty galleries reconceptualized on a regular basis.



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The other entrepreneurial leaders in the story are the curators and their teams who create ­these galleries on an ongoing basis. For example, the chief curator of architecture and design, Martino Stierli, who worked with a team on “Design for Modern Life,” an homage to the Bauhaus school of the 1920s that blended paintings by Paul Klee, chairs by Ludwig Mies van der Rohe, a Soviet film, reams of fabrics, and a kitchen from 1926, noted that it made historical sense “­because ­these ­people ­were all ­doing architecture, painting, and every­thing at the same time.” 4 Other curators and their teams create continuous innovation by taking regular trips across the globe to learn and listen, while also inviting colleagues from all over the world to ­ hese leaders are stepping up with a comment on their work. T strategic mindset while stretching the nature of exhibits in the museum.

Enabling Leaders Enabling leaders assist entrepreneurial leaders in their innovation efforts, since innovation often breeds re­sis­tance and entrepreneurial leaders may be too inexperienced to weather the challenges.5 ­These enabling leaders coach and develop their less-­ experienced colleagues and connect them to the broader orga­ nizational and stakeholder community. Since entrepreneurial leaders often create and work in x-­teams, taking an external approach, enabling leaders can help find the appropriate experts, sponsors, and allies that x-­teams need. Fi­nally, ­these leaders communicate with entrepreneurial leaders, making sure that they are aware of key strategic priorities and the vision so that they can align their goals with ­these priorities.

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Ann Temkin, MoMA’s chief curator of painting and sculpture, knew that the entrepreneurial department leaders (i.e., the curators) and their teams ­were not experienced at creating the new interdisciplinary exhibits that w ­ ere part of her vision. Thus, she took on the role of an enabling leader by creating mandatory meetings where t­ hese leaders could work on joint proposals. H ­ ere they could argue, strug­gle, and experiment in a safe environment to refine their approach. Moreover, Temkin provided coaching and direction to help the change along.

Architecting Leaders Architecting leaders are most often found at the top of the organ­ ization. They create strategy, vision, and orga­nizational change, often taking their cues from both the external environment and the internal ideas coming from below. T ­ hese leaders mold culture and redesign the organ­ization when necessary. Returning to the MoMA example, we see an architecting leader in Glenn Lowry, the museum’s director, who set the stage for the change by committing to move from focusing primarily on temporary exhibitions to showcasing the w ­ hole collection in rotating theme-­based exhibits. As Lowry noted in a New York Times article, “We as institutions are so trained to treat our temporary exhibition program as the main tent. And we made the commitment, financially, programmatically and intellectually, that ­we’re ­going to shift that. That our main tent is our collection.”6 Se­nior curators followed the lead, working to create this shared vision and culture. They established an in-­house think tank and rewarded new cross-­disciplinary ideas. They studied other museums, like the Centre Pompidou in Paris. They initiated a “try



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every­thing once” man­tra and worked with ­others to set the vision to become, in Temkin’s words, a museum “of our time.”7

Power Up Your P ­ eople with Leadership Skills As seen in the examples above, creating a distributed leadership organ­ization filled with x-­teams requires individuals to step up in new ways, requiring members to build up their leadership skills. A study examining two dif­fer­ent leadership approaches to rolling out sustainability initiatives identified the individual capabilities that differentiated success in an x-­team-­led distributed leadership program: sensemaking, relating, visioning, inventing, and building credibility, collectively known as the 4-­CAP+ leadership model.8 Let’s examine each capability. • Sensemaking. ​For x-­teams to succeed, individuals need the core skill of sensemaking—­and notably, it’s key for individual se­nior leaders as well as the x-­team members who innovate and execute on key strategic initiatives. Sensemaking involves making sense of the context in which the organ­ization is operating—­seeing the world with new eyes to determine the opportunities and threats of a changing environment.9 It involves learning from experts, from ­people who have done a task before, and from ­those with dif­fer­ent perspectives, to see what might work for ­ fter collecting a lot of information, indiyour proj­ect. A viduals and teams need to consolidate what they have learned and begin to map customer demands, cultural norms, competitive challenges, technological advances,

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How to Make It Work and market opportunities. Since sensemaking is always flawed given the uncertainty in the world, it also involves ­running experiments to test where the map may need to be edited.

• Relating. ​Developing key relationships within and across organ­izations is the task of relating. It requires an ability to put yourself in someone ­else’s shoes to understand why they think, feel, and act as they do. But it also requires the ability to advocate for your point of view, not by ordering ­people to do ­things but rather by convincing them and negotiating for desired outcomes. In a world of distributed leadership, relating leaders must be able to coach and develop o ­ thers who undergo setbacks or who are trying to lead in new ways. Fi­nally, given the external nature of leadership, relating calls for the ability to connect and create trusting relationships both within and outside the organ­ization. Relating is a key capability needed for the x-­team activities of sensemaking, ambassadorship, and task coordination, as well as for establishing productive norms, psychological safety, and learning in the team. • Visioning. ​While sensemaking is about “what is,” visioning is about “what is pos­si­ble” in the f­ uture. Visioning goes beyond the posted vision statement; it is a pro­cess of articulating what members of an organ­ization may be able to create g ­ oing forward for the organ­ization and the world. Visions need to be framed in a way that showcases values and aspirations that have meaning for many in the organ­ ization and that provides the rationale for why ­people should be working hard. At Apple, the employees working



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on the early Macintosh understood that they ­weren’t just creating a product; they ­were creating a revolution by changing the way that p ­ eople would innovate, work, and learn. Visions give employees a sense of working on something bigger than themselves. In an exponentially changing world, visions are also about the urgency for change. They help to focus and motivate members of both the organ­ization and x-­teams, while sharpening their strategic mindsets. • Inventing. ​The final leadership capability is about coming up with innovative solutions and designing new ways of collaborating to realize the vision. Inventing involves developing creative methods to get around roadblocks and keeping the organ­ization moving as it shifts in new directions. It’s about building a work environment that encourages equity and inclusion but also timely decision-­ making. As such, inventing leaders need to be ambidextrous—­able to execute on existing goals and priorities while also establishing a learning environment that enables new innovations for the f­ uture.10 X-­team members need inventing skills to or­ga­nize themselves over and over again as they move from exploring, to experimenting and executing, to exporting. • Building credibility. ​While the four capabilities represent the be­hav­iors needed for distributed leadership and x-­team effectiveness, leaders also need to build credibility (the + in the model name), or their leadership may be challenged. Building credibility involves acting as a principled leader, ­doing what you say you are g ­ oing to do, and

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How to Make It Work acting in accordance with your values. It also means ­doing ­things for the good of the unit, rather than just to augment your ­career. Credible leaders act to meet challenges and solve prob­lems rather than acting solely to advance their careers or stroke their egos.

It is impor­tant to note that t­ hese capabilities hold for leaders at all levels. Entrepreneurial, enabling, and architecting leaders all need ­these capabilities, although their scope may be dif­fer­ent. In addition, most leaders develop a unique leadership signature, their own way of leading. Remember, leaders are not perfect—­ they cannot be g ­ reat at all of the capabilities. That’s why most develop a par­tic­u­lar style—or leadership signature—­that builds on a few of them. The key is to have ­these capabilities represented in the team so that leaders with dif­fer­ent skill sets can complement each other. Kristina Allikmets at Takeda R&D showcases ­these capabilities. When she signed up to head the Spin-­In team to shift the way that drug development was done, she knew she was g ­ oing to be working in a new way. She created an x-­team within the com­pany’s learning culture. Allikmets and her team engaged in sense­making to understand their context, visiting biotechs and startups to learn about their practices and to consider how to introduce them into a more mature com­pany. Sensemaking continued with their competitive analy­sis of the marketplace and an analy­sis of their own internal po­liti­cal environment. Relating happened by team members reaching out to se­nior leaders to understand their priorities and explain their own. They continuously communicated with colleagues and partners in the organ­ ization and the broader ecosystem to report on pro­gress and how



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their work could integrate with the work of ­others. ­There was also a ­great deal of listening and compromise within the team, another aspect of relating. Members developed a vision to “aspire to inspire bold drug development ­because patients are waiting,” which captured the idea of not only changing the way drug development was done but also bringing o ­ thers along.11 Allikmets was continuously inventing, creating an internal board of directors to expedite decision-­making and streamline governance; a small, agile team; and innovative designs for clinical t­ rials. She built her credibility by working for her team and delivering on what she said she would do. In short, her leadership skills enabled her to successfully create an x-­team in which all members contributed and improved their own leadership skills. The result: their molecule found a new home, and the organ­ization had a new way of operating.

Craft an X-­Team Incubator Throughout this book we have seen how x-­teams—­through their structures, pro­cesses, and successes—­can change the culture of organ­izations to be more entrepreneurial and innovative. They can also be the engine of distributed leadership as members take on the tasks of sensemaking, relating, visioning, and inventing, plus credibility building, and spread them throughout the organ­ization and beyond. Se­nior leaders—­architecting leaders—­however, can help speed up the pro­cess by shaping the orga­nizational structure and culture to create more fertile ground for distributed leadership and innovation in general, and for x-­teams in par­tic­u­lar. Lower-­level leaders can also pitch in. Our

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work of supporting organ­izations in shifting from bureaucracies to more distributed leadership through x-­teams has highlighted six management activities that can help x-­teams thrive.

Activity 1: Set the Course A com­pany’s strategy, vision, and priorities make up the engine that drives the actions of distributed leadership and x-­teams. Without a clear direction, leadership at the front lines is lost and unaligned, and it is difficult for x-­team leaders to achieve a strategic mindset and help move the organ­ization forward. Distributed leadership organ­izations need to find ways to make the strategy, vision, and priorities vis­i­ble and shared, turning them into a playbook for action. One com­pany, HubSpot, does this by posting its culture deck online as a statement for customers, observers, and employees alike. Its mission, as the deck states: “To help millions of organ­izations do better.” The tenets to get t­here include prioritizing the customer, being transparent, working with autonomy and accountability, and striving for long-­term impact. The 128-­page slide deck then provides more detail. One goal: not only satisfying customers but helping them succeed.

Activity 2: Manage Overload and Empower Being on an x-­team can be an exhilarating and empowering experience. But it can also add to the already heavy workloads that ­people have. The key is not to assign ­people to an x-­team on top of their regular day jobs, but to ­either give them some time off from their regular jobs to do x-­team work or have them work full-­ time on new dedicated x-­teams. The transition to x-­ification may



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require some extra effort and strain; overwork can be further exacerbated by a misguided attitude that “good” man­ag­ers do more than every­one ­else. But overloaded team members are not likely to think creatively and come up with fresh ideas and breakthrough innovations. Thus, a focus on d ­ oing more is counterproductive. HubSpot captures this idea in its culture deck: “Results ­matter more than the hours we work. We think that even hamsters get tired of being on a hamster wheel.” In short, mea­sure output, not time spent working. To manage overload, ­people need to get the time for innovative proj­ects, the resources to do more with less, and the freedom to prioritize f­ amily time when necessary. They also need to be freed from dealing with lots of bureaucracy. Instead, “­simple rules” should guide work.12 As the HubSpot deck says, “We ­don’t have pages (and pages and pages) of policies and procedures.” Instead, the deck says, employees should “use good judgment—­basically, do what’s best for the com­pany and the customer.” It further offers a ­simple rule for good judgment: “­Here’s the cheat sheet on good judgment: customer > com­pany > individual.” Related to the theme of overload is the theme of empowerment. X-­team leaders have to believe that they can step up with new ideas. This means that they need to feel confident that their ideas ­will be heard and have a fair shot. HubSpot creates an equal playing field by giving ­every employee access to all the data, making it easier to share. For example, decisions are made with data and the philosophy that “debates should be won with better insights, not bigger job titles.” While distributed leadership is the goal, often man­ag­ers can undercut change efforts. Top management may verbally encourage empowerment but then reject all new initiatives. Furthermore,

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se­nior leaders may be si­mul­ta­neously encouraging innovation while pushing lower levels to achieve tougher and tougher per­ for­mance targets, thus prioritizing output over new ideas. Teams should monitor their culture of support and send up a f lare when demands are too high or the culture of empowerment is threatened. Other ave­nues for employees to communicate prob­ lems without fear of retribution include having an ombudsman, anonymous electronic bulletin boards, and open-­door policies. Periodic flash surveys at HubSpot allow trou­ble to be noticed and acted upon quickly.

Activity 3: Set Up for Networking, Leading at All Levels, and Learning If innovation through x-­teams and distributed leadership is the goal, then the organ­ization needs to work on enabling out-­ before-in be­hav­ior. G ­ oing out before in means engaging in high levels of external activity to build networks across the organ­ ization and the larger ecosystem. ­Doing this, however, requires a time commitment. And that means teams have to constantly rid themselves of extraneous work that gets in the way. At HubSpot, this is called the SCRAP approach: stop generating unused reports, cancel unproductive meetings, remove unnecessary rules, automate manual pro­cesses, and prune extraneous pro­cesses. Beyond the time commitment, ­people may also be reluctant to go out before in b ­ ecause of concerns about how to approach ­others or the fear of giving away intellectual property. Se­nior leaders can help, first by modeling external outreach and learning as critical tasks. Next, they should coach ­people who are



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ner­vous about interviewing a se­nior leader or someone in a dif­ fer­ent industry. Third, they can provide resources such as open networks and opportunities to go to conferences, trade shows, and cross-­industry events. They could also let ­people go to executive training sessions with a ­whole team or unit, or even with customers. Networks are created and nurtured by mixing employees from dif­fer­ent levels, functions, and organ­izations together for tasks or training. Fi­nally, tracking and rewarding external activity can bolster it. Once networking starts, x-­team members should be encouraged to sense the environment and seize the opportunities that are uncovered. That is, the goal is not simply to learn and map the world but also to use sensemaking as a springboard to action. Providing forums, hackathons, and even contests to showcase new ideas and choose the best ones to move forward keeps innovation on the front burner. Setting clear criteria for which ideas ­w ill get the green light communicates that the choice pro­cess is fair and transparent. The message is “please come up with ideas, but only the best ones w ­ ill move forward.” Then give internal entrepreneurs the freedom to take the proj­ect forward. External forays into the exponentially changing world ­will showcase new opportunities and may render old ideas obsolete. When that happens, it is critical to have the flexibility to form and reform teams as opportunities emerge and to cut proj­ects that are no longer relevant. It’s also an opportunity to collaborate across orga­ nizational bound­ aries, creating teams of teams to meet new challenges that no group can solve alone. The Covid-19 pandemic was a g ­ reat example of a time of almost instant change, when resources needed to be redeployed t­ oward new modes of delivering food, developing vaccines fast, using more technological tools for

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remote work, and establishing new partnerships. If all of that could be done during the crisis, it can continue to be done now. Perhaps the most impor­tant part of enabling x-­ification is prioritizing learning. Learning is optimized when t­here is free-­ flowing information, learning from m ­ istakes, a lack of blaming ­people, re­spect between colleagues, and diverse voices and perspectives. It often requires a focus on the customer and the use of new technologies. Creating a learning culture means identifying what it is—­where is your culture deck?—­and building it into day-­to-­day practices. For example, ­every meeting could end with a short discussion about ­whether learning or blaming is more prevalent and ­whether external activity is being fostered. M ­ istakes must be owned. The HubSpot deck includes one slide that reads: “Founder Confession: (diversity) is an aspiration we wish we had prioritized a long time ago. (Like when we first started the com­ pany.)” By modeling how errors can lead to improvement, leaders signal one way that learning takes place. Culture is difficult to change, and ­doing so takes a long time, but it ­w ill lead to big rewards.

Activity 4: Become a Conductor What, you might ask, does being a conductor have to do with distributed leadership and x-­teams? The idea h ­ ere is to create a rhythm of activities to bring the w ­ hole organ­ization into synchrony. Imagine the difficulties inherent in managing x-­teams. Members have to align with top management, which operates on a fiscal calendar; ­middle management, which operates on bud­ geting and planning cycles; other functional groups, each with its own time frame for operating; and customer deadlines. Add to



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this the fact that x-­teams may need to shift resources, p ­ eople, and ideas from one team to another, a pro­cess made more difficult when teams have their own schedules. If this ­were an orchestra, with each group representing a dif­fer­ent instrument, it would produce a cacophony of sounds as each instrument followed its own score. Now consider a temporal redesign. Suppose sets of x-­teams ­were on the same schedule, launched si­mul­ta­neously, and ­were working ­toward common deadlines. Each interim deadline then becomes a common place to pause, and a “temporal crossing point” during which cross-­team activity can take place.13 During such pauses, ­ eople and resources, starting new teams decisions about shifting p and ending existing ones, and comparing pro­gress and per­for­ mance can be done more effectively, since all teams have paused and can move on in sync. This intervention is even more useful if the stopping point corresponds to key shifts in the task, such as the move to experiment and execute or to export, or a shift at the beginning or the end of key cycles such as bud­geting. Let’s take the temporal design one step further. Create an orga­ nizational rhythm whereby all groups within a unit or across several units synchronize the transfer of products and ser­v ices. Now t­ here is one common score. This might mean getting a new product out at the same time ­every year or breaking the day in half, with morning time reserved for interruptions and joint work while after­noons are reserved for individual concentration.14 Or this might mean that all groups must get their code in by 3 p.m. for the joint testing of the prototype, or that a hospital schedule centers on patient needs, not clinical ser­v ices schedules. By setting up such rhythms and cycles, the cacophony of sounds turns into a real musical composition. In this scenario it is easier

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for x-­teams to mesh their activities with other x-­teams and units, as well as with deadlines set by key external stakeholders. Now every­one shares the same rhythms around pausing, reflecting, and shifting to a new form of work.

Activity 5: Model the Way and Send the Right Signals ­There are several mechanisms by which leaders send signals to model and embed new modes of action.15 The first is through their calendars—­how they spend their time. If members of an x-­team program are told to be ambassadors, but ­those above them never have time to meet, team members ­will realize that ­there is no real commitment. Similarly, if innovation is touted as a top priority but all ideas are shut down, innovation ­w ill dry up. On the other hand, when se­nior man­ag­ers save a day to listen to x-­team ideas, team members work to deliver. Second, signals are sent through promotions, mea­sure­ment systems, and resource allocation. Who gets the next plum job? If se­nior leaders talk about innovation but reward only short-­term financial results, then the message is to play it safe and make your numbers. On the other hand, if integrity is a core value and a toxic man­ag­er who takes all the credit is passed over for promotion, word w ­ ill spread that the top group is serious. At the same time, you ­can’t encourage innovation and integrity without mea­sur­ing them. If they are not mea­sured, they are often ignored, and it is harder to make promotions or allocate resources in the absence of data. Fi­nally, signals are sent through stories. Leaders at all levels can signal changes in a culture by telling stories that highlight



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new role models or be­hav­iors. At one airline, a story about the heroic deeds of an employee who saved an el­derly ­woman’s suitcase from the garbage is told over and over again to highlight that ­every customer is impor­tant and e­ very person can help. Stories of g ­ reat distributed leadership w ­ ill spread new practices in a way that Power­Points just c­ an’t.

Activity 6: Be Ambidextrous Research has shown that firms that practice ambidexterity—­that can both innovate and execute, explore and exploit, experiment and fine-­tune—­are more successful in managing sustained innovation.16 ­There are a number of ways that companies can act with more ambidexterity using x-­teams. One way to shift organ­izations is to create separate x-­teams that take on the role of innovation. T ­ hese teams can be tasked with finding new solutions to strategic issues, which can then be melded into the rest of the organ­ization. At Takeda R&D, ­there was a leadership acad­emy where teams engaged in leadership training by coming up with innovative ways to connect to patients, provide drugs to emerging markets, and shrink the product development cycle. The difficulty h ­ ere is in moving innovations into the regular businesses. On the positive side, ­doing so provides a stream of innovative solutions to core challenges. Ambidexterity can also be created by designing separate orga­ nizational units, one of which focuses on making existing businesses more efficient while another focuses on coming up with next-­generation ideas. At a newspaper, for example, part of the organ­ization worked on improving the print version of the paper and another part designed the digital version. The prob­lem with

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this kind of arrangement is in how to join t­ hese units together, or at least how to coordinate across them. A third possibility exists at Microsoft, where ­there are x-­teams that focus on innovation. ­These teams send their ideas to implementors who bring the innovations into existing product lines and platforms. T ­ here is a clear overlap and hand-­off pro­cess to make sure the transfer does not result in a not-­invented-­here dynamic. Fi­nally, existing x-­teams can be used to shift gears as needed. They can be used to orient work around innovation and experimentation or around fine-­tuning and execution. B ­ ecause x-­teams are agile, they provide a flexible mechanism for enabling organ­ izations to focus on the tasks that are most impor­tant at any given moment. In sum, if leaders set the course through strategy and vision, manage overload and empower members, set up for networking and learning, create temporal rhythms, and structure for ambidexterity, they are more likely to architect organ­izations with distributed leadership powered by x-­teams.

X-­Teams: A Challenging Choice with ­Great Rewards We are living in scary times, as climate change, war, floundering economies, high energy costs, and high levels of competition have become the order of the day. Moreover, social in­equality, poverty, and po­liti­cal upheaval are constants. It is in such a world that we believe x-­teams can be a power­f ul tool to not just survive but thrive. In this book we have mostly provided examples of teams



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in competition-­driven businesses, but the forces of change that we have described touch all corners of society. And p ­ eople from all walks of life ­w ill need to work together to solve ­these prob­ lems. In fact, the concept of distributed leadership started in the educational sector, where ­there was a need to bring teachers, students, families, and communities together to find the best solutions for students. We have also seen the x-­team princi­ples followed successfully in the social sector, in government, and in groups that mesh government, the private sector, and nongovernmental members. We expect to see ­these princi­ples benefit teams of ­every stripe that are charged with adapting to the challenging and complex world we now face. X-­teams are increasingly becoming the modus operandi wherever innovation, adaptation, and flexibility are prerequisites. They are the perfect vehicle for reaching out to far-­flung islands of expertise and information and for creating new synergies across units and organ­izations. They are a highly effective vehicle for connecting and aligning ­people inside and outside the organ­ ization. They are the mechanism to move from fear and inertia in the face of uncertainty to confidence and action. Yes, choosing to create x-­teams ­w ill challenge every­one—­from individual team members to the organ­ization as a ­whole. Yet we have seen the joy and accomplishment that comes from successful x-­teams around the world. As the famous American anthropologist Margaret Mead is said to have declared, “Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only ­thing that ever has.” That is the essential message and truth ­behind x-­teams.

Notes

Preface   1. ​Deborah Ancona, Henrik Bresman, and Mark Mortensen, “Shifting Team Research a­ fter COVID-19: Evolutionary and Revolutionary Change,” Journal of Management Studies 58, no. 1 (2021): 289–293.   2. ​Vivianna He and Phanish Puranam, “Some Challenges for the ‘New DAOism,’ ” working paper, 2022.   3. ​Amy Edmondson, “Psychological Safety and Learning Be­hav­ior in Work Teams,” Administrative Science Quarterly 44, no. 2 (1999): 350–383; Mark Mortensen, “Constructing the Team: The Antecedents and Effects of Membership Model Divergence,” Organ­ization Science 25, no. 3 (May–­ June 2014): 909–931; Christoph Riedl and Anita Williams Woolley, “Teams vs. Crowds: A Field Test of the Relative Contribution of Incentives, Member Ability, and Emergent Collaboration to Crowd-­Based Problem-­Solving Per­for­mance,” Acad­emy of Management Discoveries 3, no. 4 (December 2017): 382–403; Margaret M. Luciano, Leslie A. DeChurch, and John E. Mathieu, “Multiteam Systems: A Structural Framework and Meso-­Theory of System Functioning,” Journal of Management 44, no. 3 (2018): 1065–1096; Thomas A. de Vries et al., “Managing Bound­aries in Multiteam Structures: From Parochialism to Integrated Pluralism,” Organ­ization Science 33, no. 1 (2021): 311–331.

Introduction   1. ​Peter Gronn, “Distributed Properties: A New Architecture for Leadership,” Educational Management Administration and Leadership 28, no. 3 (2000): 317–338; Peter Gronn, “Distributed Leadership as a Unit of Analy­sis,” Leadership Quarterly 13 (2002): 423–451; Peter Gronn, “The ­Future of Distributed Leadership,” Journal of Educational Administration 46 (2008): 141–158.

176 Notes   2. ​Deborah G. Ancona and David F. Caldwell, “Bridging the Boundary: External Activity and Per­for­mance in Orga­nizational Teams,” Administrative Science Quarterly 37, no. 4 (1992): 634–665; Anna T. Mayo, “Synching Up: A Pro­cess Model of Emergent Interdependence in Dynamic Teams,” Administrative Science Quarterly, no. 3 (2022): 821–864.   3. ​Ancona and Caldwell, “Bridging the Boundary”; Mayo, “Synching Up.”   4. ​The three-­stage model was first introduced in Deborah G. Ancona and David F. Caldwell, “Making Teamwork Work: Boundary Management in Product Development Teams,” in Managing Strategic Innovation and Change: A Collection of Readings, eds. Michael L. Tushman and Philip Anderson (New York: Oxford University Press, 1997), 433–442.

Chapter 1   1. ​Martin D. Hanlon, David A. Nadler, and Deborah Gladstein, Attempting Work Reform: The Case of “Parkside” Hospital (New York: Wiley & Sons, 1985).   2. ​Deborah L. Gladstein, “Groups in Context: A Model of Task Group Effectiveness,” Administrative Science Quarterly 29, no. 4 (1984): 499–517.   3. ​Deborah G. Ancona and David F. Caldwell, “Bridging the Boundary: External Activity and Per­for­mance in Orga­nizational Teams,” Administrative Science Quarterly 37, no. 4 (1992): 634–665.   4. ​Deborah G. Ancona, “Outward Bound: Strategies for Team Survival in an Organ­ization,” Acad­emy of Management Journal 33, no. 2 (1990): 334– 365; Henrik Bresman, “External Learning Activities and Team Per­for­mance: A Multimethod Field Study,” Organ­ization Science 21, no. 1 (2010): 81–96.   5. ​For an overview, see Mary M. Maloney et al., “Contextualization and Context Theorizing in Teams Research: A Look Back and a Path Forward,” Acad­emy of Management Annals 10, no. 1 (2016): 891–942.   6. ​Bresman, “External Learning Activities and Team Per­for­mance”; Anita Woolley, “Means vs. Ends: Implications of Pro­cess and Outcome Focus for Team Adaptation and Per­for­mance,” Organ­ization Science 20, no. 3 (2009): 500–515; Anna T. Mayo, “Synching Up: A Pro­cess Model of Emergent Interdependence in Dynamic Teams,” Administrative Science Quarterly 67, no. 3 (2022): 821–864; Christopher G. Myers, “Storytelling as a Tool for Vicarious Learning among Air Medical Transport Crews,” Administrative Science Quarterly 67, no. 2 (2022): 378–422.   7. ​Alex “Sandy” Pentland, “The New Science of Building ­Great Teams,” Harvard Business Review, April 2012, 60–69; Oren Lederman et al., “Open Badges: A Low-­Cost Toolkit for Mea­sur­ing Team Communication and Dynamics,” 2016 International Conference on Social Computing,

Notes

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Behavioral-­Cultural Modeling, and Prediction and Be­hav­ior Repre­sen­ta­tion in Modeling and Simulation, Washington, DC, June 28–­July 1, 2016.   8. ​Pentland, “The New Science of Building ­Great Teams.”

Chapter 2   1. ​William H. Whyte, The Organ­ization Man (New York: Doubleday, 1956).

Chapter 3   1. ​Karl E. Weick, Sensemaking in Organ­izations (Thousand Oaks, CA: Sage Publications, 1995).   2. ​For more on vicarious team learning, see Henrik Bresman, “Changing Routines: A Pro­cess Model of Vicarious Group Learning in Phar­ma­ceu­ti­cal R&D,” Acad­emy of Management Journal 56, no. 1 (2013): 35–61; and Christopher G. Myers, “Storytelling as a Tool for Vicarious Learning among Air Medical Transport Crews,” Administrative Science Quarterly 67, no. 2 (2022): 378–422.   3. ​Deborah G. Ancona and David F. Caldwell, “Bridging the Boundary: External Activity and Per­for­mance in Orga­nizational Teams,” Administrative Science Quarterly 37, no. 4 (1992): 634–665.   4. ​For more on transitions in teams, see Connie J. G. Gersick, “Time and Transition in Work Teams: ­Toward a New Model of Group Development,” Acad­emy of Management Journal 31, no. 1 (1988): 9–41; J. Richard Hackman and Ruth Wageman, “A Theory of Team Coaching,” Acad­emy of Management Review 30, no. 2 (2005): 269–287; and Ancona and Caldwell, “Bridging the Boundary.”   5. ​Ancona and Caldwell, “Bridging the Boundary.”   6. ​Ancona and Caldwell, “Bridging the Boundary.”   7. ​Ancona and Caldwell, “Bridging the Boundary.”

Chapter 4   1. ​Anna T. Mayo, “Syncing Up: A Pro­cess Model of Emergent Interdependence in Dynamic Teams,” Administrative Science Quarterly 67, no. 3 (2022): 821–864.   2. ​Deborah G. Ancona and David F. Caldwell, “Bridging the Boundary: External Activity and Per­for­mance in Orga­nizational Teams,” Administrative Science Quarterly 37, no. 4 (1992): 634–665.

178 Notes   3. ​Amy Edmondson, “Psychological Safety and Learning Be­hav­ior in Work Teams,” Administrative Science Quarterly 44, no. 2 (1999): 350–383; Henrik Bresman and Amy C. Edmondson, “Research: To Excel, Diverse Teams Need Psychological Safety,” hbr​.­org, March 17, 2022, https://­hbr​.­org​ /­2022​/­03​/­research​-­to​-­excel​-­diverse​-­teams​-­need​-­psychological​-­safety.   4. ​Information and quotations about the hospital study came from Edmondson, “Psychological Safety and Learning Be­hav­ior in Work Teams.”   5. ​For a review, see Gwen M. Wittenbaum and Garold Stasser, “Management of Information in Small Groups,” in What’s Social about Social Cognition? Research on Socially Shared Cognition in Small Groups, eds. Judith L. Nye and Aaron M. Brower (Thousand Oaks, CA: Sage Publications, 1996), 3–28.   6. ​Michael West, “Reflexivity and Work Group Effectiveness: A Conceptual Integration,” in Handbook of Work Group Psy­chol­ogy, ed. Michael A. West (Chichester, UK: Wiley, 1996), 555–579.   7. ​­Others have explored establishing rhythms for output. See Deborah Ancona and Chee-­L eong Chong, “Cycles and Synchrony: The Temporal Role of Context in Team Be­hav­ior,” in Research on Managing Groups and Teams, vol. 2., ed. Ruth Wageman (Stamford, CT: JAI Press, 1999), 33–48; Kathleen M. Eisenhardt and Shona L. Brown, “Time Pacing: Competing in Markets That ­Won’t Stand Still,” Harvard Business Review, March–­April 1998, 59–69.   8. ​Connie J. G. Gersick, “Time and Transition in Work Teams: ­Toward a New Model of Group Development,” Acad­emy of Management Journal 31, no. 1 (1988): 9–41.   9. ​Edmondson, “Psychological Safety and Learning Be­hav­ior in Work Teams”; West, “Reflexivity and Work Group Effectiveness.”

Chapter 5   1. ​The ProPoint team example has previously been described in Deborah G. Ancona and David F. Caldwell, “Bridging the Boundary: External Activity and Per­for­mance in Orga­nizational Teams,” Administrative Science Quarterly 37, no. 4 (1992): 634–665.   2. ​Deborah G. Ancona, “Outward Bound: Strategies for Team Survival in an Organ­ization,” Acad­emy of Management Journal 33, no. 2 (1990): 334–365; Connie J. G. Gersick, “Time and Transition in Work Teams: ­Toward a New Model of Group Development,” Acad­emy of Management Journal 31, no. 1 (1988): 9–41; Leigh L. Thompson, Making the Team: A Guide for Man­ag­ers (Upper ­Saddle River, NJ: Prentice Hall, 2000); Deborah G. Ancona and David F. Caldwell, “Making Teamwork Work: Boundary Management in Product Development Teams,” in Managing Strategic

Notes

179

Innovation and Change: A Collection of Readings, eds. Michael L. Tushman and Philip Anderson (New York: Oxford University Press, 1997), 433–442.   3. ​Ancona, “Outward Bound”; Ancona and Caldwell, “Bridging the Boundary.”   4. ​See, for example, Charlan Jeanne Nemeth and Julianne L. Kwan, “Minority Influence, Divergent Thinking, and the Detection of Correct Solutions,” Journal of Applied Social Psy­chol­ogy 17, no. 9 (1987): 788–799.   5. ​We are building on the work of Anita Woolley and her colleagues, who speak of “bursts of activity.” See Christoph Riedl and Anita Williams Woolley, “Teams vs. Crowds: A Field Test of the Relative Contribution of Incentives, Member Ability, and Emergent Collaboration to Crowd-­Based Prob­lem Solving Per­for­mance,” Acad­emy of Management Discoveries 3, no. 4 (2017): 382–403.   6. ​Anna T. Mayo, “Syncing Up: A Pro­cess Model of Emergent Interdependence in Dynamic Teams,” Administrative Science Quarterly 67, no. 3 (2022): 821–864.

Chapter 6   1. ​Amy Edmondson, “Psychological Safety and Learning Be­hav­ior in Work Teams,” Administrative Science Quarterly 44, no. 2 (1999): 350–383; Henrik Bresman and Amy C. Edmondson, “Research: To Excel, Diverse Teams Need Psychological Safety,” hbr​.­org, March 17, 2022, https://­hbr​.­org​ /­2022​/­03​/­research​-­to​-­excel​-­diverse​-­teams​-­need​-­psychological​-­safety.   2. ​Amy C. Edmonson, “The Competitive Imperative of Learning,” Harvard Business Review, July–­August 2008, 60–67.

Chapter 7   1. ​Mark Mortensen, “Constructing the Team: The Antecedents and Effects of Membership Model Divergence,” Organ­ization Science 25, no. 3 (2014): 909–931.

Chapter 8   1. ​Deborah Ancona, Elaine Backman, and Kate Isaacs, “Nimble Leadership,” Harvard Business Review, July–­August 2019, 74–83.   2. ​Ancona, Backman, and Isaacs, “Nimble Leadership.”   3. ​Jason Farago, “The New MoMA Is H ­ ere. Get Ready for Change,” New York Times, October 3, 2019.   4. ​Farago, “The New MoMA Is H ­ ere.”

180 Notes   5. ​Ancona, Backman, and Isaacs, “Nimble Leadership.”   6. ​Farago, “The New MoMA Is H ­ ere.”   7. ​Farago, “The New MoMA Is H ­ ere.”   8. ​Deborah Ancona and Henrik Bresman, “The Five Key Capabilities of Effective Leadership,” INSEAD Knowledge, November 14, 2018; Deborah Ancona et al., “In Praise of the Incomplete Leader,” Harvard Business Review, February 2007, 92–100.   9. ​Karl E. Weick, Sensemaking in Organ­izations (Thousand Oaks, CA: Sage Publications, 1995). 10. ​Charles A. O’Reilly III and Michael L. Tushman, “The Ambidextrous Organ­ization,” Harvard Business Review, April 2004, 74–81. 11. ​Deborah Ancona and Henrik Bresman, “Turn Your Teams Inside Out,” Sloan Management Review, Winter 2023, 24–29. 12. ​Donald Sull and Kathleen M. Eisenhardt, ­Simple Rules: How to Thrive in a Complex World (Boston: Houghton Mifflin Harcourt, 2015). 13. ​This term first appeared in Deborah G. Ancona, Gerardo A. Okhuysen, and Leslie A. Perlow, “Taking Time to Integrate Temporal Research,” Acad­emy of Management Review 26, no. 4 (2001): 512–529. 14. ​Leslie A. Perlow, “The Time Famine: ­Towards a Sociology of Work Time,” Administrative Science Quarterly 44, no. 1 (1999): 57–81. 15. ​Edgar H. Schein, Orga­nizational Culture and Leadership, 3rd ed. (San Francisco: Jossey-­Bass, 2004). 16. ​O’Reilly and Tushman, “The Ambidextrous Organ­ization.”

Index

Accenture, 14 adversaries, containing, 65, 68–69 agility, xv, 10–11 task interdependencies and, 49 allies, cultivating, 65, 68–69 Allikmets, Kristina, 162–163 ambassadorship, 16–17, 41, 64–70, 115, 122–124 allies and adversaries in, 65, 68–69 cautions on, 69–70 checklist on, 133–134 defined, 55 experimentation and execution and, 100–101 exploration and, 99 exportation and, 103–104 lobbying for team and member ideas, 66–68 at Merrill, 102 transitions and, 94–95 x-team programs and, 139 ambidexterity, 171–172 ambiguity, 15–16, 40, 153 Anderson, Philip, 176, 179 Apple, 160–161 architecting leaders, 158–159, 162 artificial intelligence, xii, 25, 116, 149 assumptions, 142–143

asynchrony, 15–16 autonomy, 44–45, 154

balance, 35–36 Bank Jago, 86 BioNTech, 43 blame, 33–34, 85 Boehringer Ingelheim, 14 boundaries, xii, xiv–xv, 142–143, 144–145 boundary spanners, 115 BP, 62 brainstorming, 124 Broad Institute of MIT and Harvard, 14 bundling, 42 burnout, 138–139 buy-in, 35–36 exploration and, 99 in Merrill, 96 to strategic initiatives, 65–66

cajoling, 73–74 candidness, 117, 128 Cascade, Microsoft, 5–10, 57–58, 154 celebrations, 151 check-ins, 89–90, 117–118, 150

182 Index checklists, 115, 125–135, 148 cheerleaders, 115, 123, 133 collaboration, 124 collective intelligence, xv communication ambassadorship and, 134 direction of, 27–28 open, 123–124 psychological safety and, 84–87, 116–118 competition, 40, 44–45 information dispersion and, 45–48 mapping, 121–122, 131–132, 147 monitoring, 47 sensemaking and, 60–61 work structures and, 49–50 complexity, 15–16, 40, 153 conductors, 168–170 consulting, 24 contests, 167 context, xi–xii, 31 research on, xiv–xv sensemaking and, 56–57 shifting, 41–42 socialization and, xiv convergence, 100 convincing, 73–74 core members, 81–82, 145 Covid-19 pandemic, xi hybrid work and, 39–40 pace of change in, 167–168 vaccine development, 43 creativity, 41, 120 credibility building, 161–162, 163 cross-staffing, xi–xii customers changing needs of, 46–47 focus on, 8–9 perspective of, 121, 131 sensemaking and, 60–61 x-team links to, 10

Dare to Discover, 154–155 decentralized autonomous organizations (DAOs), xii decision-making, 26–27 dependencies, identifying, 71–72. See also task coordination “Design for Modern Life” exhibition, 157 de Vries, Thomas, 175 distressed equities, trading, 96–98, 101–102, 104–105 distributed leadership, 4–5, 36, 79, 145–146 autonomy to innovate and, 154 conductors and, 168–170 leadership skills for, 155, 159–163 the need for, ix–x, xiv psychological safety and, 84 teams in, 37 through x-team programs, 138–142 x-teams as vehicle for, 142 divergent thinking, 100, 117, 128 diversity, 15–16, 72 downward spiral, 29–35 being stuck on the old, missing the new and, 32 blaming outside enemies for, 33–34 failure in, 34–35 organization as echo chamber and, 33 starting from behind and, 29–32 Dragon Award, 150

echo chambers, 33 Edmondson, Amy, xiv. See also psychological safety Eisenhardt, Kathleen, 178, 180 education, teams in, 26–35 electrical engineering industry, 77–79

Index 183 embedding x-teams, 153–173 incubators for, 163–172 leadership roles and, 155–159 leadership skills and, 155, 159–163 empowerment, 164–166 enabling leaders, 157–158, 162 entrepreneurial leaders, 155–157, 162 entrepreneurship, 41 Entry, 65–66 environment challenges for teams and, 41–50 exponentially changing, 40 initial interactions with, 27–28 internal, 6, 16–17, 35–36, 77–78 mapping, 27–28, 121–122 of safety, 28–29, 75, 80, 84–87, 116–118 sensing opportunities in, 167 Ergun, Elcin Barker, 58 evolutionary changes, xi–xiii execution, 10, 17, 99–102 core x-team activities in, 95 leadership activities in, 95 tasks in, 95 expectations. See also norms of management, 31 sensemaking and, 57, 59–60 setting, 124 experimentation, 10, 17, 93, 99–102 core x-team activities in, 95 leadership activities in, 95 tasks in, 95 expert advice, 120–121, 130–131, 147 expertise, 145 exploration, 9–10, 17, 93, 95–99 core x-team activities in, 95 goal of, 97–99 leadership activities in, 95 tasks in, 95

exponentially changing world, 40 exportation, 10, 93, 102–105 core x-team activities in, 95 defined, 102 leadership activities in, 95 tasks in, 95 external activity, 53–75 ambassadorship, 55, 64–70 defining, 55–56 effects of on internal activity, 79 sensemaking, 55, 56–63 setting up for, 166–168 task coordination, 55, 70–74 external focus, xiii, 5, 53–75 balance with, 35–36 combining with internal focus, 24 innovation and, 25 knowledge sources and, 47–48 performance and, 23–24 proactive engagement and, 42 productivity and, 25 roles of in teams, 22 team activities and, 16–17 in x-teams, 7–9

feedback, 34 on cheerleading, 123 at Microsoft, 8 reflection and, 88 responses to, 34–35 task coordination and, 71, 72–73 vicarious learning and, 122 in x-team programs, 149 Fields, Mark, 86–87 flexibility, 3, 167–168

184 Index focus burnout and, 139 in experimentation and execution, 100 on innovation, 4 inward, 2–5 team strategy and, 27–28 in x-team programs, 148–150 Ford, 86–87 forums, 167 4-CAP+ leadership model, 159–163

Gersick, Connie, 177, 178 GitHub, 9 global context, x goals, 27–28, 81, 83 checklist on, 126 setting, 113–114 Google Docs, 8–9

hackathons, 167 health care psychological safety and, 85 quality-of-work-life project in, 22–23 hierarchy, 39–40 ambassadorship and, 64–70 HubSpot, 18, 164, 165, 166, 168 hybrid work, xii, xiii–xiv, 39–40, 106

ideas, winnowing down, 97 IDEO, 62–63, 72 information collecting, 119, 130 dispersion of, 45–48 outdated, 32 psychological safety and, 84–85 sharing, 31–32, 78

sources of, 27–28 technical data, 45, 153 tools for gathering and exchanging, 118 information systems, 148–149 innovation, 40 ambidexterity and, 171–172 distributed leadership and, 154–155 drug development and, 42–44 external connections and, 25 forums, etc. for, 167 infrastructure for, x, 153–173 knowledge dispersion and, 47–48 leadership roles and, 155–159 organizational life and focus on, 4 teams as agents for, 37, 47 x-team programs and, 138–139 integrated approach, 27–29, 75 ambassadorship and, 64–70 intellectual property, 166–167 Intellicode, 6 internal environment, 9, 16–17, 77–90 balance with, 35–36 checklists for creating, 126–130 getting the basics right in, 80–83 how to create a robust, 112–119 learning and, 80, 87–90 internal focus, xiii, 2–5, 11 combining with external focus, 24 distributed focus and, 4–5 downward spiral with, 29–35 integrated approach vs., 27–29 negative outcomes from, 2–3 research on, 22–25 volatility and, 24 when it works, 36 inventing, 161

Index 185 knowledge changing nature of, 45–48 know-it-all vs. learn-it-all views of, 7 outside sources for, 47–48 sensemaking and, 57, 60–61 specialization in, 46 structure of, 41–42, 45–47 technical and scientific, 45, 46 transferring, 102–105

leaders and leadership, 12 ambassadorship and, 64–70, 123, 133 architecting, 158–159, 162 distributed, 4–5, 36 enabling, 157–158, 162 entrepreneurial, 155–157, 162 exploration and, 99 hierarchical organizations and, 39–40 roles for, 155–159 skills for, 155, 159–163 teams in, 54 views of teams by, 33 x-team links to, 10 in x-team phases, 95 learning, 7 closing teams and, 151 creating a culture of, 118–119, 129–130 internal environment and, 80, 87–90 at Microsoft, 9 prioritizing, 168 sensemaking and, 57 streams of, 62 vicarious, 61–63, 122, 132 liaisons, 115 Li & Fung, 14

Live Share, 6, 7 Lo, Andrew, 96 lobbying, 66–68. See also ambassadorship exploration and, 99 Lowry, Glenn, 158 Luciano, Margaret, 175

Malone, Thomas, 180 Maloney, Mary, 176 managers and management, 11 across boundaries, 74 ambassadorship and, 64–70 determining expectations of, 31 empowerment and, 165–166 exportation and, 103–104 linking to strategic initiatives, 65–66 managing upward and outward, 22 x-team links to, 10 x-team programs and, 139 of x-teams, 168–170 x-team thriving and, 18 markets keeping track of, 45–46, 47 researching, 6 sensemaking and, 57 Mayo, Anna, 176, 177, 179 McNerney, James, 64 Mead, Margaret, 173 meetings, 144 coaches in, 148 with competitors, 147 facilitation of, 114 learning in, 118 norms for, 114 reflection time in, 128, 130 SCRAP approach to, 166 Menarini, 58 mental models, 3–4

186 Index Merrill, 14, 95–98, 101–102 exportation at, 103–104 transitions at, 104–105 Microsoft Cascade team, 5–10, 57–58, 154 innovation teams at, 172 Office, 49 mindsets, 144 out-before-in, xiii, 147–148, 166–168 strategic, 156–157 MIT Media Lab, 149 Sloan School of Management, 64 modeling, 170–171 Mortensen, Mark, xi, xiv–xv, 175, 179 Mulally, Alan, 86–87 Museum of Modern Art, 18, 156–157, 158–159 Myers, Christopher, 176, 177

Nadella, Satya, 7, 154 Nadler, David, 176 NASCAR, 62–63 negotiations, 73–74 Neiman Marcus, 62 networking, 166–168 Ng, Jerry, 86 norms, 83, 112, 114, 127

offsite days, 90 Okhuysen, Gerardo, 180 online tools, 115–116 openness, 9 operational members, 82, 145 O’Reilly, Charles, 180 organizational culture ambassadorship and, 64–70 of innovation, 154–155 know-it-all vs. learn-it-all, 7

of learning, 118–119, 168 mapping, 133 of safety, 28–29, 75, 80, 84–87, 116–118 sensemaking and, 59–60, 122 organizational life, 4, 15–16 changes in, 153–154 evolutionary changes in, xi–xiii hybrid work and, 39–40 organizational structure, 39–50 changes in, 153–154 hierarchical, 39–40 mapping, 132 power shifts and, 42–45 sensemaking and, 122 organizational terrain, 59–60 out-before-in mindset, xiii, 147–148, 166–168 outer-net members, 82–83, 145 overload, 164–166

partnering, 144 passion, 67 Pentland, Alex, 176, 177 performance, 11, 14 in downward spirals, 32 internal focus and, 21–25 research on what affects, 23–24 Perlow, Leslie, 180 perspectives, 98, 121, 131 Pfizer, 43 pharmaceutical industry, 24, 42–45 combating inertia in, 143 reflection in, 88–89 sensemaking in, 58 task interdependencies in, 48–50 Plump, Andy, 154–155 plus-delta system, 149 politics, 65, 68–69, 79 exploration and, 98

Index 187 mapping, 132 sensemaking and, 122 power structures, 41, 42–45, 141–142 processes, 9, 16–17 external activity and, 74–75 for learning, 118, 129 productivity, 24 external connections and, 25 progress, monitoring, 147 project managers, 114–115 ProPrint, 91–92 prototypes, 100 psychological safety, xiv, 28–29, 75, 80, 84–87 checklist on, 128–129 closing teams and, 151 creating, 116–118 pulsing rhythm of activity, 105–106, 169–170

questions reflection and, 88 in task definition, 113

recognition, 150, 170–171 reflection, 75, 87–90, 119 fostering, 130 psychological safety and, 128–129 regulatory environments, 77–78 relationship skills, 160 remote work, xiii. See also hybrid work reports, 151 research, x, xiv–xv on internal focus, 6 on markets, 6 on performance, 23–24 on x-teams, ix–x, 13–14 resistance, 142–143, 145–146, 157

resources, 170–171 ambassadorship and, 64, 66 making the case for, 44 responsibility, 44–45 revolutionary changes, xi, xiii–xv reward systems, 170–171 Riedl, Christoph, xv roles, team, 81–83, 112–113, 114–115, 127 root cause analysis, 88

safety, xiv, 28–29, 75, 80, 84–87 scenarios, 101 scheduling, 124 Schein, Edgar, 180 SCRAP approach, 166 sensemakers, 115 external, 119–122 sensemaking, 16–17, 42 checklist on, 130–133 customers and competitors in, 60–61 defined, 55 experimentation and execution and, 100–101 exploration and, 98 exportation and, 103 external, 58 getting stuck in, 63 leadership skills and, 159–160 at Merrill, 96, 102 organizational terrain and, 59–60 task coordination and, 73 transitions and, 94–95 vicarious learning and, 61–63 signals, sending the right, 170–171 Silver, Amanda, 5 socialization, decontextualized, xiii specialization, 46 staffing, 144–145

188 Index stakeholders, 113, 147 buy-in from, 35–36 starting from behind, 29–32 Stasser, Garold, 178 statistical packages, 115 Stierli, Martino, 157 storytelling, 170–171 strategic mindset, 156–157 strategy ambassadorship and, 65–66 architecting leaders and, 158–159 of bundling, 42 external vs. internal focus and, 27–29 setting the x-team course and, 164 x-team links to, 10 x-team programs and alignment with, 139–140 streams of learning, 62 success stories, 151 Sull, Donald, 180 synergies, 42, 124–125, 135

Takeda, 14, 18, 143, 146 distributed leadership at, 154–155 leadership academy at, 171 leadership skills at, 162–163 learning at, 152 recognition at, 149, 150 support at, 148 task coordination, 16–17, 41, 42, 70–74, 124–125 checklist on, 134–135 convincing, negotiating, and cajoling in, 71, 73–74 defined, 55 experimentation and execution and, 100–101 getting feedback for, 71, 72–73 identifying dependencies for, 71–72

interdependencies and, 48–50 transitions and, 94–95 task coordinators, 115 task decomposition, 49 task definition, 113, 126 team building, 27–28, 31 teams. See also x-teams boundaries and, xii, 142–145 challenges for today’s, 41–50 cohesion in, 31–32 common conceptualizations of, xi core members in, 81–82, 145 decision making in, 26–27 downward spiral in, 29–35 externally vs. internally focused educational, 26–35 goals in, 81 inwardly focused, 2–5 membership in multiple, xi–xii Microsoft Cascade, 5–10 the need for, ix norms in, 83, 112, 114 operational members in, 82, 145 outer-net members in, 82–83, 145 revolutionary changes in, xiii–xv roles in, 81–83, 112–113, 114–115 satisfaction in, 31–32 stable vs. dynamic membership in, xi starting from behind, 29–32 steps to success inside, 112–119 of teams, xii tools for, 115–116, 127–128 traditional theories on effective, 3–4, 21–37 traditional vs. x-teams, 7–10 why they fail, 15–16, 21–37 technical data, 45, 153 technology, xii artificial intelligence, xii, 25, 116, 149 decontextualized socialization and, xiv

Index 189 telecommunications industry, 23, 53, 56, 59–60 internal environment and, 79–80 task coordination in, 70–71, 73–74 Temkin, Ann, 158, 159 temporal design, 169–170 Thompson, Leigh, 178 time commitments, 166 time management, 170–171 tools, 127–128, 129, 146, 149 Toyota, 84, 88 trade-offs, 79 training, 146 transitions, 9–10, 17, 91–107 experimentation and execution and, 10, 17, 93, 99–102 exploration and, 9–10, 17, 93, 95–99 exportation and, 10, 93, 102–105 pulsing rhythm in, 105–106 from sensemaking, 63 trust, 87 Tushman, Michael, 176, 179, 180

uncertainty, 15–16, 40, 153 us-versus-them perspective, 3

vertical integration, 64–70 lobbying and, 68 vicarious learning, 61–63, 122, 132 virtual contexts, x vision, 41, 67, 68, 158–159, 164 x-team programs and, 139–140 visioning, 160–161 Visual Studio Code, 58 volatility, 15–16, 24, 40, 153

Wageman, Ruth, 177, 178 Weick, Karl, 55, 177, 180

West, Michael, 178 Whyte, William, 177 Wittenbaum, Gwen, 178 Wolf, Karen, 150 Woolley, Anita, xv, 175, 176, 179 workloads, 164–166 work plans, 115–116

x-teams, 5–12 ambassadorship by, 122–124 checklists for, 115, 125–135 closing, 150–152 compared with traditional teams, 7–10 creating and making them work, 17–18, 106 culture of learning in, 118–119 defined, 7 embedding, 153–173 external focus in, 7–9, 53–75 internal environment and, 77–90 leadership skills for, 155, 159–163 managing, 168–170 member types in, 145 the need for, ix–x performance of, 11 processes in, 9 psychological safety in, 116–118 relevance of, ix–x research on, ix–x, 13–14 rewards of, 172–173 sensemaking by, 119–122 staffing, 144–145 steps to making them happen, 111–135 steps to success inside, 112–119 steps to success outside, 119–125, 130–135 task coordination by, 124–125 transitions in, 9–10, 17, 91–107 when to use, 11

190 Index x-team programs, 137–152 closing, 150–152 distributed leadership through, 138–142 focus in, 148–150 incubators for, 155, 163–172 launching, 145–146 leaders and the power to change with, 139–140 managing overload and empowering, 164–166

power structures and, 141–142 resistance and assumptions and, 142–143 road map for success in, 144–152 setting the course for, 164 small steps in, 146–148 staffing and, 144–145

Zoom, xii

Acknowl­edgments

First and foremost, we would like to thank our x-­teams—­those featured in the book and t­ hose that w ­ e’ve studied and worked with over the years. You have been the catalyst for our theory, and you have brought the theory to life in your proj­ects. You have inspired us with your work, spirit, enthusiasm, and ­great ideas and innovations. Thank you for taking us along on the ­ride. We would also like to thank the organ­izations that have let us come in to observe, work, and experiment. We owe a ­great intellectual debt to David Caldwell, who helped to build the theoretical foundations of this book. Thanks also to David for being a g ­ reat friend, scholar, and coauthor. We want to thank our academic mentors and colleagues who have helped us get to where we are ­today. From Deborah, thanks to the late David Nadler, who provided access to nursing teams and sales teams, and who offered guidance and then let me learn on my own. David also showed me the benefits of linking practice and theory. Thanks to the late Richard Hackman for helping us push the theoretical envelope and for the wisdom. Thanks to Michael Tushman for mentoring and friendship over the long term. Thanks to Sue Ashford and Jim Walsh for helping us through t­ hose early academic years. At MIT, thanks to the folks in Executive Education for creating the architecture for

192

Acknowl­edgments

x-­teams and to Andrew Lo for opening doors and believing. Thanks to Lotte Bailyn and Wanda Orlikowski for advice and for being t­ here when needed. For Henrik, Deborah is not only a coauthor—­long before the writing of this book, she was also the best academic adviser any doctoral student could have. Many thanks go to Amy Edmondson, an extraordinary mentor during the early days who has been an incomparable source of inspiration and support ever since. Thanks to Örjan Sölvell and the late Gunnar Hedlund for encouraging me to take a closer look at an academic ­career and to Julian Birkinshaw for motivating me to pursue it seriously. Thanks to Eleanor Westney for generously opening the doors to MIT all ­those years ago and to all the extraordinary p ­ eople found inside ­those doors. My fellow doctoral students from MIT form a community of scholars and friends that I am grateful to be a member of. Fi­nally, thanks to the students, staff, alumni, and colleagues at INSEAD who keep feeding my curiosity and disciplining my thinking. We thank the MIT Sloan School and INSEAD for providing the environment, resources, and infrastructure needed for our work. Thanks to the Harvard Business Review Press staff, especially Jeff Kehoe, for advising and shepherding us from manuscript to finished product. And big thanks to our editor Lynn Selhat, who helped us move from confusion to clarity as we pulled together this book’s second edition. Fi­nally, thanks to our friends and families for encouraging us despite all the times we w ­ eren’t available and w ­ eren’t in the best of moods. We dedicate the book to our ­children—­you make us happy and proud.

About the Authors

DEBORAH ANCONA is the Seley Distinguished Professor of Management and founder of the MIT Leadership Center at the MIT Sloan School of Management. She has consulted on leadership and innovation to premier companies such as Bristol-­Myers Squibb, the Broad Institute of MIT and Harvard, Takeda, Accenture, YPO (Young Presidents’ Organ­ization), and the International Development Bank. Her pioneering research into how successful teams operate led to the concept of x-­teams as a vehicle for driving innovation within large organ­izations. Ancona’s work also focuses on the concept of distributed leadership, moving from bureaucracies to more nimble forms of organ­izing, and individual models of leadership and change. She is known for the development of research-­based tools, practices, and teaching/ coaching models that enable organ­izations to foster creative leadership at ­every level. Ancona is the author of several Harvard Business Review articles on leadership, including “In Praise of the Incomplete Leader,” “Nimble Leadership: Walking the Line Between Creativity and Chaos,” and “­Family Ghosts in the Executive Suite.” Two of her articles have appeared in HBR’s 10 Must Reads on Leadership. Her research has been published in the Administrative Science

194

About the Authors

Quarterly, the Acad­emy of Management Journal, Organ­ization Science, and the MIT Sloan Management Review, as well as media outlets such as Fast Com­pany, Financial Times, Forbes, Latin Trade, and Strategy & Business. She received both the Jamieson and Seegal prizes for teaching excellence at MIT. Ancona holds a BA and an MS in psy­chol­ogy from the University of Pennsylvania and a PhD in management from Columbia University. HENRIK BRESMAN is a professor of orga­nizational be­hav­ior at INSEAD and a recognized expert on leadership, high-­performance teams, and orga­nizational change. He regularly works with companies and public-­sector organ­izations embarking on large-­scale transformations. Bresman’s research draws on data from multiple contexts, including biotechnology, phar­ ma­ ceu­ ti­ cals, aerospace, software development, health care, and government. His work has appeared in leading academic and practice journals, such as the Acad­emy of Management Journal, Harvard Business Review, MIT Sloan Management Review, and Organ­ization Science, as well as many media outlets, including the Economist, Financial Times, Forbes, the New York Times, Time, and the Wall Street Journal. Bresman’s teaching currently focuses on developing leaders for an exponentially changing world. He directs INSEAD’s flagship general management program for emerging leaders, the Management Acceleration Program, and the se­nior executive program Leading for Results. Before entering academia, Bresman worked in several roles as a man­ag­er, management con­sul­t ant, and entrepreneur. He cofounded a venture capital



About the Authors

195

firm focused on early-­stage technology businesses. He is an experienced board member and a highly sought-­after keynote speaker. Bresman holds a BS and an MS in economics from the Stockholm School of Economics and a PhD in management from the Mas­sa­chu­setts Institute of Technology.