'Top management teams': an oxymoron?

Citation

Beyerlein, M. (1998), "'Top management teams': an oxymoron?", Team Performance Management, Vol. 4 No. 2. https://doi.org/10.1108/tpm.1998.13504baa.001

'Top management teams': an oxymoron?

"Top management teams": an oxymoron?

By Michael Beyerlein

An interesting phenomenon has occurred this year in the publications of books about work teams: three books have been published on teams for senior managers/executives (Hambrick, Nadler, and Tushman, 1998; Katzenbach, 1998; McIntyre, in press). I am not aware of any books published in English on this topic prior to this time, although at least a few books have devoted a chapter or so to top management teams before.

A related and widely asked question focuses on when and where to use work teams. The answers to the question vary widely. Answers vary from:

1. 1.

   use them anywhere anytime; to

2. 2.

   don't use them; to

3. 3.

   use them in limited ways in limited places, with the range of limitations varying from a few to a complex set of contingencies.

What do these new books suggest about the "when and where" of teams for executives?

Teams: when and where

Let's look at each type of answer separately and then apply it to one of the most interesting groups: top management. In 1990, when the Center for the Study of Work Teams held the first International Conference on Self-Managed Work Teams in Texas, I had a narrow definition of "work team" that meant self-managed, single-function, manufacturing work group. Most of the published material available then had a similar definition. It took several years for me to realize that models of production teams did not fit the needs of professional technical employees, such as engineers and programmers (some companies already knew that and a few authors, such as Pava (1983), had already warned us about it). Shortly thereafter, I began to understand that SMWT's were only one of many forms that a team could take. The clearest statement of that came from Barry Macy's continuum of team types which listed 11 types ranging from natural work group to SMWT to virtual team (see Appendix 1 for summary). The team types on the continuum include both temporary and permanent teams, co-located and distributed teams, and teams with varying levels of empowerment. And more recently, I have been learning about top management groups and their teaming ­ again that is not a new practice, but it has been written about only a little and practiced only in limited ways.

In those earlier years of 1990-1992, I believed that work teams, and even SMWT's, could be instituted in any work situation. A fair amount of literature has been published that refutes that idea. The standard statement says something like this: (1) the work group must have some focal point that pulls it together or requires togetherness, such as interdependence around a task, goal, reward, feedback, or customer (e.g., Saavedra, Early, and Van Dyne, 1993); (2) the group must perceive itself as a team and be perceived by outsiders as a team (e.g., Cohen and Bailey 1997), and so on. There seemed to be a lot of work situations where such conditions simply did not exist. But could they be designed in?

I have come to agree with these points; unless most of these are in place, the "team" will not function as a team. However, a few authors emphasize theredesign approach (e.g., Hackman, 1986, 1990, 1992) which suggests that the same principles can be built into situations where they are currently missing. For example, at Abbott Labs, a linear assembly line arrangement was used to build kidney dialysis machines; a key feature of the redesign was to bend the assembly line into a square and locate the workers inside it, so they would have enhanced communication opportunities and be able to aid each other and become multiskilled. The redesign made the team possible. I struggle with understanding what the limitations of that approach are: does redesign, based on re-thinking the work, the layout, the nature of responsibility, make it possible to answer the question above with "teams can be used anywhere"?

The second answer to the question was, "don't use teams anywhere." That is an extreme answer, but there are versions of it that make some sense, at least to some groups. For example, in the US, unions or organized labor or the leaders of such groups have fairly often taken the stance that teams are not legitimate at their work sites. They provide a number of reasons, such as:

1. 1.

   organizing in teams would violate key points in our contract with management;

2. 2.

   employees in teams would be making decisions and that is the work of management (e.g., "we don't get paid enough to make decisions");

3. 3.

   organizing in teams is often associated with downsizing or reductions in the size of the work force, so "it would lead to some of our members being fired;" and

4. 4.

   "organizing in teams is just a way to keep unions out of a workplace or to undermine the power of the union in such workplaces."

There is an element of truth in each of these points, however, there are advantages to union members when an organization redesigns and moves to teams.

There are several examples to illustrate union support for teams. At the Boeing plant in Corinth, Texas, the local union president and vice president are among the most outspoken champions for redesigning into work teams. The plant was started as a greenfield site in 1987, but beginning in 1992, a large increase in orders required a fourfold increase in the number of employees that occurred at such a rapid rate that the plant abandoned their carefully created team structure and training and reward systems. Now that the influx of new employees has begun to taper off, management is making an effort to re-institute those team-based systems, and the union spokespersons are quite verbal in supporting the change because of their firm belief that it will improve the quality of work life for the employees.

Another current example is the Saturn plant in Springhill, Tennessee; it is so well known for the successful use of work teams in a unionized environment that many other companies have visited the plant to benchmark with it, i.e., to see the principles being practiced in a world class manner. Recently, the union called for a vote on whether or not to abandon work teams, because their bonus pay had shrunk. But the vote was about 2 to 1 in favor of retaining teams.

Another group that argues against using teams at all includes myself and argues for seemingly incompatible points: "use teams everywhere that redesign is possible" and "don't use teams." In our research, we have found that at least 50 per cent of teams and team implementation attempts fail. The failures result from many causes, but a primary cause is the lack of management support and commitment and the resulting lack of resources needed for a successful transformation. So, the statement "don't use teams" is directed at all managers who are unwilling to make a full, long-term commitment to the transformation to teams ­ it is better not to try it at all, than to do it half-heartedly.

The third answer to the question of where/when to use teams focuses on the contingencies of work situations. It argues that one can use a particular form of teaming within a particular context; goodness-of-fit becomes the key question. For example, again referring to Macy's continuum of team types, one could argue that within a traditional organization quality improvement teams and natural work groups might be acceptable to all of the key stakeholders, whereas in a high tech, cutting edge organization where change occurs at a rapid pace, the work is complex and requires inputs from a number of areas of technical expertise, and customization of products is critical for achieving high levels of customer satisfaction, cross-functional, self-managed work teams would be appropriate around specific projects.

This third answer includes two basic principles of systems thinking:

1. 1.

   "both/and" is likely to be a better type of solution to a problem than "either/or" and;

2. 2.

   "it depends" (i.e., the best solution is contingent on the specific, relevant facets of the situation).

The third answer may be the one that makes most sense for forming teams of top managers.

Top management groups (TMG's) and top management teams (TMT's)

What is a work team? There have been a number of definitions published. Among the most quoted definitions is the one from Katzenbach and Smith (1993): ". . . a small number of people with complementary skills who are committed to a common purpose, performance goals, and approach for which they hold themselves mutually accountable" (Katzenbach and Smith, 1993, p.45). At first glance, there does not seem to be any contradiction between this definition and the nature of work at the executive level. However, a closer inspection suggests that in large organizations, executives will have multiple purposes and performance goals which may lead to conflicts with the purposes and goals of other members of their group.

Why is the issue of teams of top managers an important issue? I suggest there are at least three reasons:

1. 1.

   teaming at the top might improve performance of top managers and hence of the organization as a whole;

2. 2.

   transformation to a team-based organization will not be sufficiently supported from the top until those managers understand and experience what teaming is about;

3. 3.

   the traditional organization depends on a bureaucratic model of design that depends on such rules as authority, decision making, and power come from the top down (and there is very little at the lower levels) ­ teaming at the top challenges those fundamental rules of design and so opens the organization to new possibilities of design.

Hambrick wrote (1994) that the phrase "top management team is an oxymoron." In his extensive research, he has found so few top management groups that he could honestly classify as teams, that he has concluded that it may be impossible to team executives. Katzenbach and Smith are more optimistic. While they were both employed at McKinsey, the huge consulting firm, they did an extensive study of teams that they wrote about in The Wisdom of Teams which was published in 1993. In that book they described a number of top management groups and top management teams. They acknowledged that a team approach with executives may not be worth the effort in some situations. They argued that a work group at the top may be adequate for the challenges that the company faces. And they acknowledged that the change from a work group to a work team may be too difficult and risky at the top of the organization. That does not mean that team work should not play a role in the work group. Naturally occuring work groups can be defined as ". . . a set of three or more people that can identify itself and be identified by others in the organization as a group" (Shea and Guzzo, 1987, p. 25) and are characterized by narrowly defined jobs, low levels of authority, and rewards based on type of job, the individual's performance, and seniority.

Since the publication of The Wisdom of Teams, Jon Katzenbach has published two other books. In 1995, he published Real Change Leaders. Which reports on his investigation of managers who acted as champions for organizational change. This year, he published Teams at the Top: Unleashing the Potential of Both Teams and Individual Leaders. Katzenbach makes a number of key points in Teams at the top; he modified the guidelines that he and Smith published in 1993. Most importantly, recognizing that teams at the top consist of leaders, the question of who would lead emerged as pivotal. Teams require shared leadership. Some bosses are unwilling or unable to share. When the whole team consists of "bosses", teaming becomes nearly impossible. And, it may be inappropriate for general TMG activity. Katzenbach suggests forming teams around specific crises and following the principle of shared leadership then. He further advises avoiding the imposing of a team structure on the TMG the rest of the time; a poor fit will just lead to frustration and decriments in performance.

The members of the TMG may be unable to collaborate; they are likely to be merely a "constellation of executives" (Hambrick, 1994). There are a number of reasons why transforming a top management group into a real team is difficult. Hambrick suggests that members of TMG's differ from others in the organization for several reasons. First, their work involves extremely complex issues in formulating and implementing adaptive responses to the business environment, such as whether or not to build a new plant. Operating at the boundary of the organization, they must cope with vague, competing, and complex information in trying to craft effective decisions and plans. Second, their position in the organization carries a great deal of symbolic significance, i.e., their behavior influences the perceptions and actions of many organizational members and stakeholders, even when they don't intend it to. Each of the TMG members is also typically head of a significant suborganization, such as finance, manufacturing, or information systems, and has his/her own TMG to work with. Third, members of both the top and the second level TMG's tend to be achievement oriented, somewhat aggressive people who prefer quite a bit of autonomy. Rising to the top of the organization was a result of such characteristics and rarely a result of a high need for affiliation and a team orientation. Executives and senior managers may engage in politics. Eisenhardt and Bourgeois (1988) define politics as "observable, but often covert, actions by which executives enhance their power." Political behavior of this type consumes valuable time and causes restrictions that hamper information flow, hence it leads to "diminished organizational performance" (Eisenhard and Bourgeois, 1988).

In one of our own studies, Laurie Mathews (1997) found that the inability to collaborate seemed to directly impact the bottom line. TMG's which scored high on open communication, supportiveness, conflict management, boundary management, facilitation, and collaboration worked for companies that outperformed the companies of TMG's with low scores; there was a significant correlation between teaming and return on assets and sales. The results were comparable to those found by Lawler, Mohrman, and Ledford's (1995) survey of employee involvement.

When does a TMG have a chance to act like a TMT?

First, when interdependence is fairly high teaming is more likely. That situation is more likely to occur when a crisis that affects all the members brings the people together in a way that transcends their disciplinary and organizational boundaries. It is also more likely to occur when the members represent different facets of a single business, rather than a diversity of businesses within one large corporation where the TMG members represent unrelated business units. Hambrick (1994) suggests that such "part-time" teams should be organized around specific strategic issues. Katzenbach (1998) suggests the same thing: team when it is called for, don't force other activities to fit a team process.

Second, rewards and compensation for executives has traditionally not been related to teaming or even to organizational performance. Some companies are changing that. For example, last month Boeing announced that a significant proportion of their senior manager's compensation would be directly tied to organizational performance. When compensation and rewards are tied toteaming, managers will find ways to practice it.

Appendix 1

TYPE OF WORK GROUP OR TEAM

Although this is not an exact continuum, there is a pattern of work group organization represented by this list of team types that moves from simplistic work toward more complex work and from low empowerment to high empowerment.

1. 1.

   Traditional work group: hierarchical reporting relationships; have formal supervisor; work on small components or product or service; no or low decision making by the group.

2. 2.

   Natural work group.

3. 3.

   Quality circle: work group that meets voluntarily an hour or so per week to solve task problems.

4. 4.

   Ad hoc problem solving team: temporary task force team focused on a specific problem or issue.

5. 5.

   Quality improvement team.

6. 6.

   Process improvement team.

7. 7.

   Manufacturing cell team

8. 8.

   Semi-autonomous team: self-directed with reduced hierarchical reporting, have a coach rather than a traditional supervisor, make significant work decisions to solve work and product/service related problems.

9. 9.

   Autonomous team: highly empowered, self-managed with a high level of decision making, accountability, and responsibility, work without a coach and without supervisors.

10. 10.

    Cross-functional team: members represent more than one functional specialty, including suppliers and customers from within the organization.

11. 11.

    Supply chain team: members include suppliers/vendors and/or customers from outside the organization.

12. 12.

    Virtual team: members are not co-located, usually communicate electronically, may meet face-to-face a couple times per year.

from Barry Macy's Successful Strategic Change (1998, in press).