FORUM

How to Create a
High-Performance Team

Peter Richardson, D. Keith Denton

This article deals with ways to help create effective teams. Guiding
principles are discussed, and a number of successful examples are provided,
including those of Boeing, Volvo, and Jostens. The importance of team
selection, development, compensation, training, and communication are all
considered. Tips for building effective teams are given throughout the
discussion.

Team management is a big deal. Every organization seems to be implement-

ing some form of team management. A group of people is assembled and
they call it a team. There are ad hoc teams, work teams, cross-functional
teams, and even teams to organize teams. The ultimate team experience
and the one that holds both the greatest challenge as well as opportunity to
improve productivity is the high-performance team. Such a team is not sim-
ply a group of people. It does not simply afford a sense of ownership but
rather provides a real transfer of ownership from management to employees.
This is different from the normal run-of-the-mill team because it entails a
fundamental restructuring of the way we do things. A University of South-
ern California survey of Fortune 1000 companies revealed that 68 percent
of those companies used self-managed or high-performance teams. That
sounds like a lot, but only 10 percent of workers are in such teams
(Dumaine, 1994).
Why are so few people involved in such teams? The explanation may rest with
how we go about developing teams. You cannot have a high-performance team
by simply forming a group of people and saying Youre in charge! That approach
does not work with even the simplest directed or managed teams, namely, qual-
ity circles. Remember quality circles?They seem so 1980s. There were teams
where employees would take off a few hours each week to discuss some problem.
They failed to produce as often as they succeeded. The reasons were not hard to
discover; companies were not grounded in the fundamentals of team growth and
development.

HUMAN RESOURCE DEVELOPMENT QUARTERLY, vol. 16, no. 3, Fall 2005

Copyright 2005 Wiley Periodicals, Inc. 417
418 Richardson, Denton

Does Everything Fit Together?

Before you start creating teams, make sure there is some general plan for where
you want to go. Haphazard improvement occurs when we introduce teams ad
hoc. There will be redundancy, failures, and subpar performers if someone or
some group is not overseeing team formation. Someone must make sure each
is necessary and that each is connected to others in some logical format. True
teamwork depends on good communication, assigning of responsibility and
authorities, and relevant rewards and compensation for team performance. The
Boeing approach is one example of team management with a plan. Boeing used
the team concept to design their 777 passenger jet. It involved ten thousand
employees and more than ve hundred suppliers, and it worked because they
created a logical system of teams (Dumaine, 1994).
Their approach was to create a hierarchy of teams with one goal: satisfy
the customer. Their plan was to create a pyramid of teams rather than have
layers of functional managers. There were more than two hundred cross-
functional teams with members from engineering, manufacturing, and nance.
At the top of this pyramid was the management team, composed of ve or six
senior managers, each from a separate discipline. It was these people who were
ultimately responsible for the project coming in on time. Below this level was
a large group of fty or so leaders, half from engineering and the other half
from operations. These twenty-ve two-person teams were responsible for
directly overseeing the two hundred work teams, which were responsible
for various parts of the plane. Each cross-functional work team consisted of
ve to fteen workers.

Create Conduit
Effective teams depend on continuous communication. At Boeing, senior man-
agement holds weekly meetings. Being somewhat traditional, these second-
tier, two-person teams communicate with the upper-level managers through
their respective leaders in engineering and operations. When needed, they then
return to their work teams with solutions.
Boeing management felt the system worked well for moving information
up and down through their hierarchy of teams but not so well across teams,
so they created integration teams that would act as a go-between for the two
hundred work teams. Each integration team comprised twelve to fteen peo-
ple who were drawn from respective work teams. Their goal was to transfer
information horizontally, back and forth between work teams, so design
glitches could be minimized. In one case, an integration team was formed
when a valve that both the wiring and the cockpit teams were working on
ran into a conict. It seems that each team had designed an oxygen system
and the nozzle that shoots fresh air toward the passengerin the same spot.
One team noticed the problem and called in an integration team, whose pur-
pose was to focus on what was best for the airplane. In a matter of hours, the
How to Create a High-Performance Team 419

cockpit, wiring, and integration teams were able to work out a way to satisfy
both concerns.

Targeting Success
There is an old adage that if you do not know where you are going, any road
will get you there. Volvos plant in Kalmar, Sweden, is a good example of a team
approach with a clear direction. The plant has had a great deal of success,
including reducing lead time by 25 percent, improving quality by 40 percent,
and boosting efciency by 30 percent. When their plant manager was asked
how they did it, he responded, Teamwork. He went on to say that good
teamwork calls for clearly dened targets and a plan for reaching them. Those
targets have to be accepted by everyone on the team, and it must be possible to
measure them. Volvo management sets the target for the teams, but all the
subgoals are left up to team members. Management at Volvo strongly feels that
it is not their responsibility to break down those targets for everyone; targets
are quantied so members can follow up on results.
Targets vary depending on your needs, but at Volvo the target was greater
customer satisfaction, or KLE, which in Swedish stands for quality, delivery,
precision, and economy. Volvo translated this KLE strategy into operational ini-
tiatives that revolved around creating less monotonous work and greater oper-
ator control over the work. An assembly worker, for instance, now has greater
responsibility and signs a card that acts as a receipt indicating he or she is pass-
ing on a perfect product. If problems occur, each worker can still call on
department resource people by sending a signal via a personal pager. If no
assistance is received after the rst two minutes, a new signal is sent. The line
stops if a third signal is transmitted. Along with this greater responsibility has
come the need for greater knowledge. Staff have been given greater under-
standing of the products they work with as well as more knowledge about the
value of each function.
At Volvo, production leaders oversee their teams. At Boeing, it is upper
management that still runs the show. Team management is an evolutionary and
growing process. No team can start out being a mature self-directed team; it
takes time and training. A true self-directed team must rst be able to change
the order of the tasks, have control over the budget, and hold the power to
make decisions on the spot. This requires a lot of self-management.
All team members need to know where they are going, but for a high-
performance team to exist everyone must buy into the concept and accept
greater responsibility and accountability. It is not an easy concept to sell. Many
already feel their jobs are hard enough, so why would they want additional
responsibilities? Standards need to be set, expectations have to be dened, and
coaching is an integral part of managements new role. Resistance and fear
remain. Suppose all this new empowerment leads to success; are they at risk
of being laid off? Will they end up working harder for fewer rewards? Many
420 Richardson, Denton

think, I dont want to be the one to go or the one left behind (to do all the extra work).
Its managements job to show what is bad about the way things are now and
what the new work arrangement will do to make things better. Identify what
is good about the current work, and then show how the new team approach
enhances it. Be honest about what will change, what might change, and what
you do not know.

Easy Does It
Team development is not always going to be a smooth process. It occurs in
spurts as more and more responsibility and accountability are explored. Man-
agers must learn to loosen control and the team members must learn to assume
it. For this reason, it is important not to start a team off making hard decisions
such as hiring, ring, and peer appraisal and review. Instead, start it off with
some easy decisions. The tasks should be easy but not irrelevant. There is a
need to be persistent about team development, but managers also need to exer-
cise patience. As one sage advisor once said, Its easier to change people than
it is to change people. Tell people about why you see a need to change, and
then listen to their concerns. Be willing to adapt; sell them on the vision by
building competencies and successes, and then continue to relinquish control.
It would be nice if everyone naturally assumed more responsibility.
It would be ideal if they were all open-minded and good communicators. It
would also be perfect if everyone honestly communicated. Nevertheless, things
obviously do not work that way. Team members need guidance and nurturing,
and managers also require some support for their efforts. This is why many
companies that want to create high performance do so with the help of a steer-
ing committee consisting of senior ofces who are responsible for overseeing
the construction of a system that supports such teamwork. They concentrate
on eliminating barriers that impede a teams growth. They do a lot of what-if
analysis. What if the wrong people are on a team; do you need to get rid of
them? What if you have an effective team leader? Procedures must be set up
to ensure the best leaders remain in charge. One approach to this problem has
been rotated leadership and other group roles.
It has been said you should reward the things you want repeated. People
seek to acquire skills if they are compensated for them. This is why some com-
pensation plans allow as much as one-third of a teams wages to be determined
by individual and team performance. Pay-for-skills or pay-for-knowledge should
include objective criteria. Along with compensation should come competency-
based training that includes team communication and problem-solving skills.
Kendall-Futuro (K-F) of Newport, Kentucky, has had a great deal of success,
and the company believes a lot of the credit goes to their compensation program.
They use gain-sharing, where team members are nancially rewarded for gains in
productivity. K-F no longer pays on the basis of piecework but rather on team per-
formance. Gain-sharing has been around for decades, but increasingly it is being
How to Create a High-Performance Team 421

used to encourage team performance. Gain-sharing at K-F, as with other such

plans, measures performance against a standard; a bonus is then awarded for high
performance. In gain-sharing, there is normally no penalty for not meeting the
standard. Each team member has a basic salary and receives a gain-sharing bonus.
Steward Witt, a manufacturing engineer at K-F, says, Gain-sharing is an employee
bonus for improving productivity. Because the plan splits gains 50/50 between
employees and the company, partnerships are formed which support further cost
improvement ideas (Gilmour, 1994, p. 43).
K-Fs approach is one way to compensate teamwork, but there are very few
hard-and-fast rules for encouraging team performance. Companies that use
teams best generally still pay members individually, but with a signicant differ-
ence. They make teamworka shared attitude, the ability to deal with others
a key issue in an individuals annual performance pay (Dumaine, 1994). Here
are some other guidelines:

Give higher rating for individuals with a broad range of job-related skills.
Promote cross-training for individuals on the team.
Have the team evaluate each members responsibility to others on the team.
Include being a team player as part of all job denitions.
Evaluators of the team should be identied.
Both the team as a unit and the individuals on a team need to be evaluated.
Evaluation should occur regularly.
Train people how to meet the team goals.

Training for Success

Denton, Texas, is the home of Jostens, the world-class manufacturer of a vari-
ety of products, the most famous item being high-quality class rings. Their
experience with teams helped increase sales and yields and reduce scrap per-
centage. Unknowingly, they began the process in 1988 when they adopted a
quality improvement process. They conducted half-day training sessions for
managers, supervisors, and lead people on adopting new management styles.
In these meetings, they discussed quality issues and were taught how to con-
duct effective team meetings and how to involve employees in problem solv-
ing. Initially, managers were introduced to the concept and the advantages of
employee involvement.
In 1991, management at Jostens sponsored a world-class manufacturing
seminar that included three hours of training for every employee. For most peo-
ple, the seminar did help with a clear vision for where they wanted to go, and
many thought teamwork was a vehicle for getting there. Two high-performance
teams were in fact established by the fall of 1991. By January 1992, there were
eight. Management then decided that plantwide implementation offered
the maximum opportunity, and within six months the entire plant was orga-
nized into high-performance teams.
422 Richardson, Denton

Once the teams were created, the company discontinued recordkeeping

for individual performance and quotas. A gain-sharing plan was begun and
team recognition for performance was emphasized. A new pay system that
more directly rewards team performance is being considered. By November
and December 1992, Jostens was offering workshops for facilitators in
coaching and empowering employees. There were also workshops designed
for team leaders emphasizing communication skills, team leadership roles, and
team development.
Jostenss employees also developed a certication process. It helped to
dene short-term goals for teams and outline desirable behaviors. The certi-
cation process gave teams a road map of development so each could recognize
the stages it could expect to go through in moving from traditional work meth-
ods. When a team is certied as having successfully performed all responsi-
bilities associated with its current level, it is ready for the next stage. An
Advising Resource Team (ART) reviews and makes a nal determination to see
if a team has met all the requirements and successfully performed all respon-
sibilities associated with its current stage.
ART membership included the plant manager, production manager, train-
ing manager, a facilitator, and three hourly employees. In ARTs rst meeting,
members discussed three key issues: (1) Where were they? (2) Where did they
want to go? (3) What improvements could they make along the way? After dis-
cussion, they took these issues back to the teams. At this point they discovered
that team-based training would be a great help. Members said they wanted a
better structure in rotating team leadership roles within the teams. They also
wanted more training for facilitators in coaching and providing guidance. As
a result of the input from team members, ART produced guidelines for
appointing team leaders, including interpersonal skills training within Jostenss
regular training programs.

Concluding Thoughts
Establishing improved communications is essential for smooth teamwork. Rec-
ognizing this, Jostens personnel meet every Monday morning. The entire plant,
not just management, meets for a short time to discuss their current status for
the year; scheduling and results from the previous week are reviewed. They
also examine the performance of their teams. Every day, team leaders meet for
ten to twenty minutes to discuss what they did the day before as well as to
share their current goals (Yeatts, Hipskind, and Barnes, 1994).
Teams and teamwork are not a natural part of American culture. We are
taught the value of individualism and diversity. Once, while conducting a sem-
inar in Australia, I asked someone to describe the Australian personality. He
responded by saying, We have a saying: knocking down the tall poppy. I
asked what he meant, and he said, Whenever someone sees a poppy, they go
over and knock it down! Why? I asked. He responded, The ower thinks
How to Create a High-Performance Team 423

its better than all the others. Here we believe were all the same. We are team
players. Is that the way Americans see it? I said, No; we all want to be a tall
poppy. The truth is we are going to have to learn how to work better together
if we are to prosper in the future.
Remedial team management is essential. Just getting a group of people
together does not make a team. Some are just a group of people, wasting time.
Some, though, really do make a difference. The difference in teams is how they
are grown. Team development is a growth process where each stage can lead
to greater independence and accountability. To create a high-performance
team, you have to:

Have a plan and stick with it.

Make sure team members at all levels are in frequent contact with each
other.
Give teams a clearly dened target and a way to get there.
Measure results.
Strive toward self-sufcient work teams.

References
Dumaine, B. (1994). The trouble with teams. Fortune, 130 (5), 8687.
Gilmour, C. A. (1994, May). Working beyond traditional paradigms through teamwork. Indus-
trial Engineering, p. 43.
Yeatts, D. E., Hipskind, M., & Barnes, D. (1994, July/August). Lessons learned from self-managed
work teams. Business Horizons, 37 (4), 1214.

Peter Richardson is professor of management at Southwest Missouri State University and

senior consultant for Civid 3.

D. Keith Denton is professor of management at Southwest Missouri State University

and founder and CEO of Civid 3.

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