Why Rely on Teams? - Principles of Management

When asked how this former head of Saks Fifth Avenue achieved Burberry’s transformation, Bravo highlighted the fact that teams, not individuals, are at the core of successful companies, and that a manager’s job is to leverage the power of those teams. “One of the things I think people overlook is the quality of the team,” says Bravo. “It isn’t one person, and it isn’t two people. It is a whole group of people—a team that works cohesively toward a goal—that makes something happen or not.”

Bravo’s observation that teams are important is reflected in a major survey of human resource professionals, which recently concluded, “Teams are now an integral part of workplace management. summarizes a few more interesting numbers, illustrating the importance of team work.

Why are companies paying so much attention to teams? The answer to this question has a long history, dating back to research on British coal mining in the 1940s and the Japanese economic miracle of the 1970s. These early studies and a huge volume of investigations since have revealed that under the right conditions, teams make better decisions, develop better products and services, and create a more engaged workforce compared with employees working alone.

Under the right circumstances, teams are generally more successful than individuals working alone at identifying problems, developing alternatives, and choosing from those alternatives.

Similarly, team members can quickly share information and coordinate tasks, whereas these processes are slower and prone to more errors in traditional departments led by supervisors. Teams typically provide superior customer service because they provide more breadth of knowledge and expertise to customers than individual “stars” can offer.

Teamwork: Some Key Numbers

Teamwork: Some Key Numbers

Consider Celestica’s experience with teamwork at its manufacturing plant in Monterrey, Mexico. The electronics equipment manufacturer formed a “lean team” of five core members, who learned about lean manufacturing practices such as reducing time, space, and movement. The lean team brainstormed with workstation operators to identify and eliminate non–value-added activities. Another team was set up to revamp the manufacturing line so it would be more responsive to small batch production.

The team videotaped the entire process and measured how long it took to complete each step. “We looked at each process and what tools were used,” recalls Christy Mitchell, Celestica’s customer-focused team director. “We looked at floor plans and the amount of time it took to go from one station to the next. We looked at everything.”

After teams had identified and implemented changes, the Monterrey plant cut lead time from almost a week to less than two days, production changeover time from four hours to 30 minutes, the distance employees walked from 1,173 feet to just 358 feet, and scrap levels by 66 percent. It also won the prestigious Shingo Prize for these achievements. Celestica has since extended its lean journey to other plants around the world.

Hundreds of intensive quality improvement investigations of production facilities (called “kaizen blitzes”) have been completed by dozens of production teams, cutting costs by approximately $200 million in one year.


Although most of our attention in this is on formal teams, employees also belong to informal groups. All teams are groups, but many groups do not satisfy our definition of teams. Groups include people assembled together whether or not they have any interdependence or organizationally focused objective. The friends you meet for lunch are an informal group but wouldn’t be called a team because they have little or no task interdependence (each person could just as easily eat lunch alone) and no organizationally mandated purpose (which is why they are “informal”). Instead they exist primarily for the benefit of their members.

Although the terms are used interchangeably, teams has largely replaced groups in the business language referring to employees who work together to complete tasks.

One reason why informal groups exist is that they fulfill the innate drive to bond. People invest considerable time and effort forming and maintaining relationships without any special circumstances or motives beyond the need for affiliation. We define ourselves by our group affiliations, which motivates us to be associated with work teams or informal groups that are viewed favorably by others. We are also motivated to become members of groups that are similar to ourselves because this reinforces our self-perception.

A second reason why people join informal groups is that these groups accomplish personal goals that cannot be achieved by individuals working alone. For example, employees will sometimes form a group to oppose organizational changes because they have more power when banded together than when complaining separately. A third explanation for informal groups is that in stressful situations we are comforted by the mere presence of other people and are therefore motivated to be near them. This is evident when employees mingle more often after hearing rumors that the company might be sold.

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