Here is an excerpt from an article written by Aaron De Smet, Gemma D’Auria, Liesje Meijknecht, Maitham Albaharna, Anaïs Fifer , Kim Rubenstein for McKinsey Quarterly. To read the complete article, check out others, sign up for email alerts, and obtain subscription information, please click here.
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Today, more than ever, cracking the code of team effectiveness is critical to organizational success. At most companies, teams generate value as a primary unit of performance. They are now more autonomous and empowered than in traditional organizational models, while also being part of a dynamic and collaborative structure across a team ecosystem. Yet, many teams struggle to collaborate effectively, and some are worse off than that: research shows that three in four cross-functional teams underperform when it comes to key metrics.1
Team success or failure is often attributed to individuals—particularly the team leader—as the main driver of performance, or to some nebulous sense of team “chemistry.” As with most things, hope is not a strategy. And while upskilling team leaders is helpful, it is not sufficient to ensure performance. The myths of team chemistry (teams just click or they don’t) and the heroic team leader2 (find a capable leader and the team thrives) prevent companies from addressing the harder-to-see contextual and structural factors that affect team dynamics and organizational outcomes.3
When organizations do address team effectiveness, they often focus primarily on senior leadership teams. This is understandable, considering that companies are almost twice as likely to have above-median financial performance when their top team has a shared and meaningful vision.
We agree that leaders should focus on teams at the top, but not only at the top: critical cross-functional initiatives that sit in the middle of the organization need more support to succeed. Companies now rely on value-creating agile teams, project teams, and networks of teams, among others. Teams that are closest to customers also bring in much-needed information about how the organization should orient itself in the marketplace.
How can leaders support teams at all levels to augment value creation? The first step is to understand that while building great teams involves leadership experience and intuition, sometimes that intuition can be wrong. In this article, we use new data to debunk common myths about how teams operate and examine the elements of team effectiveness that have the biggest impact on performance. We also delve into team archetypes and how context determines whether certain behaviors matter more for better functioning. Building effective teams across the organization is a crucial move for leaders as they prepare for the challenges ahead.
Team effectiveness is less art, more science
Hunches and intuition about why teams perform well or poorly abound at organizations. Here are several myths that our new research has debunked.
Myth: Teams should ideally be stacked with top talent in every role to achieve maximum effectiveness.
Reality: Effective teams focus on the individual and collective skills and behaviors that matter most, and every role needs fit-for-purpose talent, not necessarily “top” talent.
A team made up of “superstars” does not inherently make a great team—in fact, it may lead to worse performance. Although individual performance does matter, it’s not enough for each person to perform at their personal best. The dynamics of how those individuals interact are equally (if not more) important—they make the difference between operating as an individual team and operating as a team of individuals.
The US men’s Olympic 4×100 meter relay team is a great example. Despite including some of the fastest individuals on the planet, this team has had trouble passing the baton at multiple Olympics since 2008—leading to the team’s underperformance and even disqualification at the 2024 Olympic Games.4
Unlike other teams that lock in their runners for each leg well before the Olympics and focus extensively on practicing as a team, the US team often made last-minute changes to get the best individual performers in the most crucial roles. This approach left little time for the team to practice together in their respective positions, highlighting that individual talent alone cannot substitute for cohesive teamwork.
There is a growing body of scientific evidence behind team effectiveness,5 which we define as the collective capacity to sustainably deliver results. But many organizations tend to make financial and time investments that address surface-level manifestations of ineffectiveness while leaving the root causes unresolved.
Our research shows that variations in team behaviors matter for performance: teams that exhibit the right behaviors are more productive and innovative and deliver better results to stakeholders. We identified 17 specific team behaviors, which we call “health drivers,” that matter for team performance (see sidebar, “About the research”).
These team health drivers are grouped into four core areas: configuration (the team has clear roles and a mix of perspectives); alignment (team members are clear on the team’s direction and are committed to it); execution (how well the team carries out its work); and renewal (the team’s working environment is set up for long-term sustainability). All four of these categories provide a well-rounded view of the team and reflect on whether team members work effectively together—not just in the near term but over the long haul (table).
| Four areas | Health driver | The degree to which team members … | |
|---|---|---|---|
| Configuration Do we have role clarity and the necessary mix of internal and external perspectives? |
Diverse perspectives | Have a mix of perspectives that move the team’s work forward | |
| External orientation | Are connected to networks outside the core team and/or broader organization to learn new perspectives | ||
| Role definition | Understand the expectations and responsibilities of individual roles and have the right people in them | ||
| Alignment Are we committed to the team and are we clear on our purpose and goals? |
Commitment | Are committed to the team and prioritize its success over their own | |
| Goals | Have individual- and/or team-level goals that are challenging to achieve and are aligned to the priorities of the organization | ||
| Purpose | Are aligned on a clear team purpose and can articulate what the team is meant to accomplish | ||
| Execution Are we effectively carrying out our day-to-day work? |
Collaboration | Have agreed-upon norms that accelerate collaboration and improve ways of working | |
| Communication | Communicate sufficiently and effectively, and choose the right communication methods | ||
| Decision making | Define clear roles in the decision-making process, make quick, high-quality decisions, and learn from poor decisions | ||
| Feedback | Give honest and effective feedback, invite direct feedback, and receive coaching support | ||
| Meeting effectiveness | Focus on actionable items, involve the right people at the right time, and follow through on next steps | ||
| Renewal Do we create the right working environment and enact practices for long-term learning and improvement? |
Belonging | Feel they are a part of the team and can be themselves | |
| Conflict management | Address conflicts effectively and in ways that improve team relationships | ||
| Innovative thinking | Seek out opposing perspectives, have open discussions about change, and encourage out-of-the-box thinking and solutions | ||
| Psychological safety | Feel comfortable making mistakes and taking risks without fear of negative consequences, constructively disagree with one another, and proactively invite each other’s input | ||
| Recognition | Are recognized for excellent performance, celebrate one another’s accomplishments, and hold one another to consistent performance standards | ||
| Trust | Feel they can rely on one another, give each other the space to get work done, and demonstrate good judgment | ||
These team health drivers, when viewed collectively, explain between 69 and 76 percent of the differences between low- and high-performing teams when it comes to three key outcomes: efficiency (the team is productive and meets its deadlines); results (the team delivers on objectives and delights stakeholders, customers, and/or clients); and innovation (the team innovates in a way that is critical to long-term organizational value).
While all these health drivers contribute to team performance, teams do not have to be great at all of them to be effective; in fact, even the best teams have room for improvement. The research found well-performing teams were, on average, very good at only 11 of these 17 behaviors.6
Furthermore, our research shows that four drivers in particular have the greatest impact: trust, communication, innovative thinking, and decision making. Teams that had above-average scores in these four areas were more likely to be efficient and innovative and to produce better results with stakeholders and customers (Exhibit 1).
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Here is a direct link to the complete article.
Aaron De Smet is a senior partner in McKinsey’s New Jersey office, Gemma D’Auria is a senior partner in the Milan office, Liesje Meijknecht is a partner in the Amsterdam office, Maitham Albaharna is a partner in the Dubai office, and Anaïs Fifer is a specialist in the New York office, where Kim Rubenstein is a research science expert.
The authors wish to thank Beliz Eker, Charlotte Seiler, Claudy Jules, Fleur Tonies, Jesus Martinez, Johanne Lavoie, Jordan Gottlieb, Kai Grunewald, Katelyn Young, Kourosh Houshmand, Krzysztof Siuda, Natacha Catalino, and Roger Swaving for their contributions to this article.