Turn Your Teams Inside Out

It’s been over 20 years since we first identified a new kind of work group emerging at innovative organizations. Entrepreneurial, externally focused “x-teams” have proved to boost organizations’ agility and speed of execution in the face of rapid change and uncertainty, and have been used successfully in product development, sales, manufacturing, and senior leadership.

However, while x-teams are particularly relevant to today’s challenging business environment, they are still found at only a relatively small number of companies and not-for-profit organizations. The prevailing approaches to training and managing teams haven’t changed much at all.

At most organizations, managers concerned with teamwork still focus largely on internal group dynamics. X-teams, in contrast, combine this internal focus with a strong orientation toward external outreach and learning. They reach out to stakeholders both inside and outside their companies. Their emphasis on networked action helps to distribute leadership to all levels of the company. And, as organizations shed bureaucracy and become more nimble and networked, x-teams become the building blocks of these new architectural designs.

Ongoing studies of x-teams have produced new insights into why they succeed — or don’t — and how to maximize the likelihood of success with this model for organizing collaboration.1 We and other researchers have found that difficulties in adopting the x-team approach are typically caused by outmoded assumptions about teams at all levels, confusion over how to compose x-teams, and a lack of understanding about how to manage these groups’ activities. In this article, we’ll briefly review these challenges — which largely stem from inertia — and describe the success factors we’ve observed among high-performing x-teams.

Old Assumptions Die Hard

Conventional thinking about teams conjures an image of a circle of dots representing the members, with lines connecting them. The work performed by the group — whether a 12-person jury or the eight executives on a senior leadership team — is focused inside the circle. For x-teams, the picture needs to depict not a closed circle but a more permeable boundary: Relationships and activities are not limited to team members but involve many more stakeholders. X-team members are active in crossing team boundaries and bringing others in. But the traditional bounded, internal focus can be hard to dislodge, and its persistence undermines the effectiveness of a would-be x-team.

Managers must also expand their conception of teams as being composed of a stable set of full-time members to one with shifting membership and blurred boundaries.2 We have been trained to choose team members with complementary skills, personalities, and learning styles who are committed to the team for the long term. Yet x-team members come and go as the tasks shift, the need for expertise evolves, and members’ schedules or employment status change. Some teams replace members as the team goes from, say, creative ideation to idea implementation.

The third and perhaps most fundamental mindset shift required to succeed with x-teams is to understand that the very context of the work has changed. Conventional teams often think of the organization as their context: It’s the place where resources, collaborators, and information can be found. But bear in mind that the x in x-teams refers to external: Their advantages stem from their orientation toward the broader context, including the larger business ecosystem.

Accordingly, it is often anxiety about opening up to outside interests and influences that drives resistance to x-teams. For example, when the R&D group at Takeda Pharmaceutical decided to set up its new global product teams as x-teams, some resistance stemmed from the feeling that there was already enough talent and information inside the organization, and some resulted from concerns over the loss of intellectual property and competitive advantage. Employees were also insecure about their ability to successfully undertake the new activities that x-teams demand, such as interviewing patients and senior leaders or coordinating with other organizations. Fortunately, the R&D group had already done some leadership training that included work on x-teams. Participants in that training program briefed others about what they did, how they did it, and what outcomes they achieved. They ultimately encouraged others to focus on the potential benefits rather than downsides. In addition, training on how to be an x-team and conversations about what could be achieved in terms of learning, innovation, and partnerships helped bring people along.

Start Small by Practicing X-Team Skills

Trying out the x-team way of operating on a small scale, rather than beginning with an organizationwide intervention, can help change perspectives and build comfort with the key disciplines of sense-making, ambassadorship, and task coordination. (See “Balance External Activities with Internal Practices.”) Some ways to start:

• Ask each member of a team to meet with one customer in the next week and report back — then move on to another stakeholder group, like competitors or technical experts. This builds comfort with going outside the team’s boundaries. Start with an external constituency that is pivotal for the team task.
• Map your competitive landscape — both current and potential players. This often yields the realization among team members that they lack sufficient understanding of the market and have much to learn from looking outward.
• Find experts in your task inside and outside the organization to provide advice and perspective — and sharpen team members’ ability to locate useful resources in the process.
• Ask each team member to create a presentation of what the team does for the rest of the organization. This helps educate employees on the communication needed to obtain buy-in and cooperation from other stakeholders.
• As your team makes progress, identify gains related to the organization’s strategic priorities, and communicate those to senior leaders. Building alignment with senior management’s strategies and initiatives is key to x-team success.

These small steps can help shift perspectives and ready the group to try x-teaming on a larger scale.

Getting Started: Go Out Before In

We can’t overemphasize the importance of the x-teams mantra “go out before in.” The work of every x-team begins with exploration of the external landscape. Starting by engaging in sensemaking outside the team — and the company — orients the team to that wider context of the full ecosystem.

“Out before in” shifts us away from the assumption that our top priorities are to build internal trust and efficacy. Before members set goals, allocate roles, and decide on the very task of the team, they need to reach out to understand more about why customers might be leaving, what new technologies they need to incorporate, and what competitive threats might need to be addressed. They need to align with senior leadership to get buy-in and secure resources and support. And they need to coordinate with others inside and outside of the organization. (See “An X-Team in Action.”)

The Cascade team at Microsoft, for example, got moving with an “out before in” approach when it set out to develop better tools for teams of software developers. Rather than assuming that they knew what developers wanted or relying on existing solutions, they went out to learn more about the problems and challenges experienced by teams working in different industries and locations, in organizations of various sizes. They met with software developers and learned that collaborating in real time, especially in remote-work situations, was difficult for some, while knowledge sharing across a team was complicated for others because of silos, tools, and processes, among other issues. Going “out” first provided the basis for forming a high-level hypothesis about the way customers were working, how they were trying to work, and how they might work in the future — before starting to build and test possible solutions.

Who’s on the Team?

As noted earlier, the composition of an x-team can be much more fluid and complex than that of a traditional team, requiring managers to consider not only skills but also other team member characteristics needed at different stages of work. Certainly, a diversity of viewpoints and experiences is an asset to any team, but particularly to x-teams, which are often focused on innovation. Staffing an x-team should also take into account people’s networks inside and outside the company. If the team needs customer input or expertise from marketing, you are better off having team members who know whom to contact. For example, it is easier to tap product users for insight if someone on the team has connections to customer organizations.

You also need people with broad networks that extend throughout the organization to facilitate coordination and buy-in from other internal stakeholders. At the same time, managers should make sure that the team is not overloaded with too many people and too many meetings. For example, one team bickered for a bit as to whether to include IT staff members or customers on a particular team; they needed the representation but not the bureaucracy and time sink of managing such a large team. Ultimately, they made these people part-time team members who attended meetings only as necessary. In short, staffing was dynamic rather than stable.

To be sure, it can be confusing when there are members who are part time or join for only part of the cycle. This sometimes makes it unclear who is and who is not a member. INSEAD professor Mark Mortensen calls these fuzzy boundaries.3 X-teams are both comfortable with the ambiguity and able to create different membership types to provide some structure. In particular, x-teams demarcate the core: those managing the team and carrying its history throughout most of the team’s existence (note that they are not necessarily more senior), the operational members who are working on the team’s product at any given time, and the networked members in the broader organization or ecosystem who contribute when necessary. Each member type may or may not be involved at any given moment.

Last but not least, given that x-teams are often created to increase innovation, it can be useful to have people who are excited about shaking up the status quo, eager to experiment and learn, and able to reach out to understand a changing environment.

The key here is to move away from the idea of stable, clearly bounded teams to ones that are diverse, dynamic, and distributed. However the team is composed, x-teams work to onboard all team members, whenever they join the team, and schedule work to help members manage their commitments across teams.

Tame X-Team Complexity in Phases

Running an x-team is more complex than leading a traditional team. You must manage the external activities of sensemaking, ambassadorship, and task coordination across organizations, while still setting members up for success, creating psychological safety, and fostering learning. You must look after part-time and part-cycle members, and in the new world of widespread remote work, support a sizable number of people who are working offsite (and on multiple teams). In short, there are a lot of moving parts, which can be difficult to manage.

Effective x-teams tackle some of this complexity by dividing up their work into three separate phases. The change from one phase of work activity to another signals the need to rethink who is on the team, who will play what role, and what the new work requirements will be.

The first phase, exploration, involves a great deal of sensemaking and ambassadorial activity as team members map their environment, decide on their goals, and begin to establish the key networks inside and outside of the organization that will work with the team. This is also a period of vicarious learning, as team members learn from experts who know more than they do.4 This phase will incorporate a lot of brainstorming and consideration of many alternative task definitions. It’s a time for divergent thinking and getting input from many people.

Next, the team needs to decide on its core tasks, goals, and deliverables and move toward achieving them. This second phase, experimentation and execution, is when the team tries different solutions to their problem until they settle on the best one to take forward. This is the phase in which the size of the team may expand as solution iteration and then prototyping, testing, and creating the actual product, process, or idea take place.

Finally, in the exportation phase, the team works with others around the organization to transfer the enthusiasm and expertise of the team to others who will either further refine, engineer, manufacture, or market the team’s work. Here, the team will need to be staffed with its own experts and those who have links to these other groups.

In terms of managing the rhythm of the internal and external work of the team, research suggests that it’s most useful to cycle between outward-facing and internal activities.5 For example, the team organizes to go out to explore the external environment, but then members come together to discuss what they have learned and what it means for the task, team design, and team culture. The members go out again to make sure that there is support for the plan, and come back in to revise and change it as needed. The team then goes out yet again to learn from others about the best way to do the work, before coming back together to figure out how to make it happen. Finally, they go out to present their work to others, get feedback, and make further refinements so they can export it to the rest of the organization. Later meetings can focus on learning lessons from the team to bring to future teams. This internal-external rhythm helps teams to focus on either internal or external activities over time, and sometimes both at the same time if needed.

Managing both in-person and remote team members is also a challenge. Here, research shows that a good approach is to pulse team activity. Early on, you may want to bring x-team members together frequently to compare notes, decide on future actions, and build the team. Team members then separate to do the agreed-upon work. Social bonds can be forged during these bursts of togetherness, and remote members may be asked to come in for some sessions. In between bursts, team members can still communicate one on one, but their focus is more on task fulfillment.6

In short, through phased work, an in/out rhythm of work, and pulsing work, the x-team is able to better organize its complex membership and evolving challenges. One executive who implemented x-teams talked about the “delights of discipline.” By this she meant that having explicit milestones, deliverables, and deadlines for each phase — exploration, experimentation and execution, and exportation — meant that the team could both innovate and stick to standards and schedules. Such an approach begins to codify the x-team process, which can spread throughout the organization as more people learn to work in this way — and as more people witness the work and become interested in how x-teams are achieving results.

As organizations move from bureaucracies to more nimble, agile forms of operating, they need to learn how to practice distributed leadership. That is, there must be leaders operating not just at the top but at all levels of the organization. These new leaders need to bring others into the process of execution and innovation at a rapid pace to match that of the environment. X-teams can be the vehicle to make these new forms of organization work, and to develop the leaders who are needed to staff them. While some of these shifts in organizational form are top down, x-teams also show that change can start with a few small teams doing amazing things. These teams bring new solutions to new problems, link the organization to the larger ecosystem, and test proofs of concept for new ways of operating. Even if some initiatives fail, x-teams are a vehicle for constant learning for the organization, and a mechanism to unleash talent at lower levels of the company.