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Monday, November 25, 2013

The Hidden Benefits of Keeping Teams Intact 11-26

The Hidden Benefits of Keeping Teams Intact

A few years ago one of us met an orthopedic surgeon with a reputation as the Henry Ford of knee replacements. Most surgeons take one to two hours to replace a knee, but this doctor routinely completes the procedure in 20 minutes. In a typical year he performs more than 550 knee replacements—2.5 times as many as the second-most-productive surgeon at his hospital—and has better outcomes and fewer complications than many colleagues. During his 30-year career he has implemented dozens of techniques to improve his efficiency. For instance, he uses just one brand of prosthetic knee, and he opts for epidurals rather than general anesthesia. But another factor contributes to his speed: Although most surgeons work with an ever-changing cast of nurses and anesthesiologists, he has arranged to have two dedicated teams, one in each of two adjoining operating rooms; they include nurses who have worked alongside him for 18 years. He says that few of the methods he has pioneered would be practical if not for the easy familiarity of working with the same people every day.
Managers understand intuitively that team familiarity—the amount of experience individuals have working with one another—can influence how a group performs. But over the past seven years we’ve examined teams in corporate, health care, military, and consulting settings to understand team familiarity and quantify its benefits, and we’ve found that it is a much more profound phenomenon than most managers believe. They could and should be leveraging it to a far greater extent, especially in an era when teams are constantly forming, disbanding, and regrouping.
To do so they will need to overcome several barriers. Few organizations have integrated systems that track how frequently employees have worked together. Many managers put too much faith in shuffling rosters to prevent staleness and ensure fresh thinking. And realities such as cost pressures, developmental needs, travel limitations, and office politics often make familiarity hard to achieve. But organizations will benefit if leaders learn to surmount those barriers.
Take Advantage of the Learning Curve
We aren’t the first to investigate the importance of team familiarity. Prior research by academics such as the Harvard psychology professor Richard Hackman, who studied the performance of flight crews, has established that teams, like individuals, experience a learning curve. They generally do better as their members become familiar with one another. Other researchers have looked at how the performance of pro basketball teams varies according to how long players have been together. (See the sidebar “Stranger Danger.”) In our work we have tried to better understand the degree to which performance improves with team familiarity, particularly in project-based environments in which so-called fluid teams frequently form and re-form.
Stranger Danger
In a study conducted with the University of Oxford professor David Upton at the Bangalore-based software services firm Wipro, we examined 1,004 development projects involving 11,376 employees, using detailed personnel records to determine which employees had worked together before and to what extent. Then we looked at how well teams did, using criteria such as the number of defects in the software each team produced and the groups’ adherence to deadlines and budgets. Rather than regard team familiarity as an all-or-nothing proposition, we constructed a continuous measure, counting the number of times team members had worked with one another over the previous three years and scaling the results according to the number of people on the team. We found that when familiarity increased by 50%, defects decreased by 19%, and deviations from budget decreased by 30%. We also found that familiarity was a better predictor of performance than the individual experience of team members or project managers.
In a second study at Wipro, we looked at how teams coped with the challenges of diverse experience among their members and found that although such diversity was generally associated with lower performance, teams with high degrees of familiarity were able to use it to improve. A third study one of us conducted with audit and consulting teams (in collaboration with Heidi Gardner and Francesca Gino, both of Harvard Business School) found a 10% improvement in performance, as judged by clients, when teams had members with a high degree of familiarity.
Why does team familiarity have such an outsize effect? Our research suggests that five factors are primarily responsible.

Coordinating activities. Teams made up of diverse specialists are infamous for their inability to get things done. Despite the best-laid plans of the managers who assemble such teams, the differences among members frequently lead to poor communication, conflict, and confusion. Members new to one another simply don’t understand when and how to communicate. Some groups never master this; and even in groups that do, the process takes time, slowing progress toward team goals. Familiarity can help a group overcome this obstacle: Once a team has learned when and how to communicate on one project, it can carry those skills over to the next.

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