The Comparative Advantage of X-Teams

The current environment demands a newbrand of team — one that emphasizes outreach to stakeholders and adapts easily to flatter organizational structures, changing information and increasing complexity.

Often teams that seem to be doing everything right — establishing clear roles and responsibilities, building trust among members, defining goals — nevertheless see their projects fail or get axed. We know one such team that had a highly promising product. But because team members failed to get buy-in from division managers, they saw their project starve for lack of resources. Another group worked well as a team but didn’t gather important competitive information; its product was obsolete before launch.

Why do bad things happen to good teams? Our research suggests that they are too inwardly focused and lacking in flexibility. Successful teams emphasize outreach to stakeholders both inside and outside their companies. Their entrepreneurial focus helps them respond more nimbly than traditional teams to the rapidly changing characteristics of work, technology and customer demands.

These new, externally oriented, adaptive teams, which we call X-teams, are seeing positive results across a wide variety of functions and industries. One such team in the oil business has done an exceptional job of disseminating an innovative method of oil exploration throughout the organization. Sales teams have brought in more revenue. Drug-development teams have been more adept at getting external technology into their companies. Product-development teams have been more innovative — and have been more often on time and on budget.

The current environment — with its flatter organizational structures, interdependence of tasks and teams, constantly revised information and increasing complexity — requires a networked approach. X-teams have emerged to meet that need. In some cases, they appear spontaneously. In other cases, forward-looking companies have established specific organizational incentives to support X-teams and their high performance levels.

Our studies all support the notion that the rules handed down by best-selling books on high-performing teams need to be revised. (See “About the Research.”) Teams that succeed today don’t merely work well around a conference table or create team spirit. In fact, too much focus inside the team can be fatal. Instead, teams must be able to adapt to the new competitive landscape, as X-teams do. X-teams manage across boundaries — lobbying for resources, connecting to new change initiatives, seeking up-to-date information and linking to other groups inside and outside the company. Research shows that X-teams often outperform their traditional counterparts.

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References

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2. Ancona, “Bridging the Boundary,” 634–665.

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4. D.G. Ancona and D.F. Caldwell, “Rethinking Team Composition From the Outside In,” in “Research on Managing Groups and Teams,” ed. D.H. Gruenfeld (Stamford, Connecticut: JAI Press, 1998).

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6. For a recent interpretation of power dynamics in organizations, see G. Yukl, “Use Power Effectively,” in “The Blackwell Handbook of Principles of Organization Behavior,” ed. E.A. Locke (Oxford: Blackwell, 2000), 241–256.

7. Consistent with this logic, John Austin convincingly demonstrated how team members’ knowledge of the location of distributed information has a positive impact on performance. See J.R. Austin, “Knowing What and Whom Other People Know: Linking Transactive Memory with External Connections in Organizational Groups” (Academy of Management Best Paper Proceedings, Toronto, August 2000).

8. For an insightful account of how different tasks require different models of team management, see K.M. Eisenhardt and B. Tabrizi, “Accelerating Adaptive Processes: Product Innovation in the Global Computer Industry,” Administrative Science Quarterly 40 (March 1995): 84–110.