MIT Sloan School of Management News Briefs — July 2005

Deborah Ancona:
X-Teams: Teams get extroverted

This article is republished courtesy of MIT Industrial Liaison Program's MIT technology insider, where it originally appeared. The article was written by Eric Brown.

Deborah AnconaWhen Deborah Ancona began to study business teams while writing her dissertation in the early 80s, it didn't take long before she realized that something strange was going on. As she studied team after team, it became clear that the ideal model of the tightly-focused and motivated business team taught in the textbooks was not so ideal after all. Group hugs, team T-shirts and trust-building exercises were in. But were profits?

“I was taught that teams must have clear goals and roles, a lot of team spirit and motivation, focused agendas and rules for decision making,” says Ancona, Seley Distinguished Professor in Management at MIT Sloan School of Management and director of the new MIT Leadership Center. “But when I evaluated one hundred sales teams on all those things that are supposed to predict performance, I was in for a surprise. These attributes did predict satisfaction and how well teams thought they were doing, but they had zero predictive value of the revenue the teams brought in.”

The X-Team is much more than just the latest B-school theory, stresses Ancona — it's a well-established, but often hidden, reality. Over the last 25 years Ancona and MIT Sloan School colleagues such as Henrik Bresman and David Caldwell have expanded upon these studies, moving on to product development teams and other groups in a wide variety of industries. The results proved consistent: “All these premises we've read about didn't work,” says Ancona.

It wasn't that traditional team-building qualities were necessarily bad, she discovered, but that a good thing was being pushed too far. The more successful teams, which she dubbed X-Teams, had team spirit, but they also projected upwards and outwards. They established cooperative relationships, sought out key information from other teams and outside sources, evangelized the team's mission to key stakeholders and actively pursued support from management. The poorest-performing teams, on the other hand, focused inward. In short, she says, “there's very compelling evidence that if you're a team that doesn't know how to reach out, you can't do the core work that needs to be done.”

Ancona, who is writing a book on X-Teams along with Bresman, will address the topic at the ILP's Innovations in Management Conference on May 10. She will be joined by representatives of two companies that have successfully implemented X-Teams with the help of the MIT Leadership Center: Jim Breson of BP and Kathy Goldreich of Merrill Lynch.

The X-Team concept is just one of many that will be taught at the new Leadership Center, which formally opens in October. The Center offers individual courses of leadership and entrepreneurship and workshops with courses of leadership and entrepreneurship and workshops with business leaders such as Michael Armstrong, Peter Lynch, and John Reed. It also hosts simulations that stress teamwork and problem-solving, such as a two-day, real-time simulation of an international rescue mission.

Natural-Born X-Teams
X-Teams tend to thrive better in the distributed-leadership environments recommended by the MIT Sloan School. The idea is that a flatter, more flexible, more distributed organization structure enables organizations to react more effectively to fast-changing information and reach across boundaries to achieve common goals.

“The world is growing more complex and people are increasingly working across boundaries, so you have to react quickly,” says Ancona. “In order to be effective in such an environment, leadership must permeate all levels of the firm.” Within teams, leadership does not need to be shared, says Ancona, although with larger teams it's usually a better strategy. The key issue is to promote an external focus and strong communication.

“Effective teams reach out and develop relationships and ways of working with other groups,” she says. “They are much more attuned to top management and the direction it wants to take the firm.” Ancona is not, however, advocating that teams dispense with identity-building altogether. “An X-Team must have a strong identity,” she says. “But that's only half the story. The more you focus only on the internal and the tighter your boundaries, the more likely you are to go into a cycle of decline, a kind of death spiral, where you don't talk to outsiders and you move away from getting the support and the information that you need.”

X-Teams are becoming increasingly relevant, says Ancona, because teams are asked to move across more of the value chain. “In many cases, a team can take a creative idea and move it all the way through to manufacturing,” she says. “Also there's more distributed information and expertise and more work done across disciplinary, functional, geographic and even corporate boundaries. You need to have a very flexible structure to let people come and go and offer their services. An adaptive, entrepreneurial, externally-oriented system can pull in the resources you need.”

Ambassadors and Scouts
One common problem that affects product development teams in particular is a lack of “ambassadorial” activity — upward dialog and political outreach to gain management support. “There's often a lack of vertical integration across levels of the firm,” she says. “The top group is creating the strategy, but they don't always have people who can implement their ideas. People at the bottom know the customers and the technology, but that information isn't always fed back up to the people formulating the strategy. The X-Team offers both a vertical and horizontal integration mechanism to get a dialog going up and down the firm.”

Many product-oriented people, however, are squeamish over such lobbying efforts. “Sometimes engineers say, 'What do you mean? My job is to create the best product. Why should I have to get support for it?.'” says Ancona. “But the reality is that a great product won't bring success if you haven't gotten people excited. You.ve got to get buy-in at an early stage. We've seen team after team fail because they wait until the end and say, 'Here's our product.'” A lack of ambassadorial activity has been responsible for some of the most legendary head-scratchers in Silicon-Valley history. Vertical disconnects were responsible for Xerox giving away GUI technology to Apple Computer, and Apple letting Microsoft walk away with key technology years later.

Without the proper outreach, not only are projects and products likely to fail, but the failures could weaken a team's long-term sense of camaraderie and purpose. “If you don't get your message to the light of day,” she adds, “there are going to be a lot of frustrated, angry people on your team and a lot of people leaving.” Focusing outward can also improve a team's information-collecting ability. Product research involves more than just Web research — it requires continual communications with a variety of people both inside and outside the company to find hidden resources, learn best practices, and better understand customer needs. Often, scouting activity and ambassadorial activity go hand-in-hand as team members spread out to network across boundaries.

Networking can assist in the pursuit of what Ancona's coauthor Bresman calls vicarious learning. “If another team has done all this work, you can build on what they've done so you don't have to start from ground zero,” Ancona says. “There's a huge amount of hidden information and expertise in companies.” Team scouts also need to look outside the company, or even the industry, for source material, much of which is not located on the Internet. Teams can boost their information-acquisition powers when they initially build the team by focusing on the right mix of connections the potential members bring with them. “Connections are really important,” she says.

Flexibility in Four Dimensions
The most successful teams, says Ancona, are usually the most flexible. The team must be supple enough, for example, to extend outward to part-time members, some of whom may not even be employees. The X-Team approach is to set up multiple tiers of involvement and loyalty. In the inner tier sits a half-dozen or so core team members who coordinate and make decisions. Moving outward, there are full-time operational members who do the ongoing work. Finally, there are outer-net members on the periphery who may be consultants or specialist employees shared by several teams.

Successful teams also tend to have fluid job responsibilities. Individuals may be asked to change their tasks depending on the situation and phase of a given project. Roles may shift, for example, as teams expand and compress over the course of a project, or when people leave the team.

As a product moves from idea generation to actually creating some product to exporting the product to other groups, different skills may be necessary,” says Ancona. The changing roles may even extend to top leadership. At one Microsoft team, for example, leadership often changes over the life of a project from someone with entrepreneurial skills to someone with more project management skills.

Even deadlines need to be flexible, says Ancona. Too often, teams stick to deadlines only to find that they've won the battle but lost the war. “If you find out that the competition is going to be there before you anyway, it may not be worth it to run to deadline,” says Ancona. “We studied one team that was so deadline-oriented that they ignored management's request that they take into consideration a customer request. That team ultimately failed.” Still, deadlines should only be altered for compelling reasons, she adds.

Challenges: Riding the Edge Although X-Teams have evolved naturally in a variety of organizations, some make it easier than others. “Many organizations make it hard to form X-Teams,” says Ancona. “If you're told you can't talk to anybody two levels above you, that's very confining to an X-Team. If you're discouraged from talking about your product to anybody on the outside, it pushes you to be too internally focused.”

Other problems may arise when teams get “stuck” and are unable to shift from one phase of activity to another. “We have found teams saying, 'Oh, we need just one more piece of information before we can move on,'” says Ancona. “Some teams are simply unable to make transitions.” Finally, controlling a far-flung team with shifting roles and deadlines runs the risk of chaos. Yet, with proper hands-on coordination, teams can often survive a lot more chaos than many people believe, and with that fluidity comes speed, agility, and better information.

The best way to avoid the potential excesses of a loose team framework, says Ancona, is to set the stage with a solid plan. “When we help companies create X-Teams, we give people checklists to guide them through team building, external outreach, and across phases of work,” says Ancona. “Everybody needs to get to know everybody on the team and find out each others' expertise and resources. Then they develop a work plan for coordination and action, find support for their ideas and figure out what customers want. They also have to create a project idea by a particular date.”

In recent years, Ancona and her colleagues have shifted from merely studying the X-Team phenomenon to enhancing it, with specific attention paid to developing mechanisms and approaches that avoid common pitfalls. The more Ancona works with companies to develop X-Teams, the more she's convinced that the success of this approach will only grow as the business world becomes more decentralized and collaborative. And X-Teams offer an ideal platform with which to explore other new leadership ideas.

“The X-Team is a structure with which you can practice distributed leadership and new models of change,” says Ancona. “It's a structure to help you work in this complex, fast-changing world.”

Related Links:
Deborah Ancona Bio
MIT Leadership Center
2005 Innovations in Management Conference