Thinking Outside the Team

In today's world where team success depends on innovation and speed, leaders need to take an external approach.

What accounts for high team performance? When we ask groups of team leaders this question, the usual answers pour out: “top-notch talent,” “team members work well together,” “clear goals,” “members are committed to the mission,” “highly motivated to perform” and “trust.” 

While lists differ somewhat from one group to the next, the pattern is clear: “Good” team leaders build camaraderie, confidence in members’ abilities and a solid process for working together. 

These leaders have done their homework. Their responses reflect the wisdom found in the business literature and the guidelines in team training sessions. This model of internal team dynamics has been burnt into our brains and is now what we think of as best practice. 

But research shows that “good” teams often fail even with the above attributes. These internal dynamics—while positive—can create a wall between the team and the outside world. And that wall can prevent the team from adapting to change and delivering value to the organization. 

In today’s hyper-competitive business environment, success and survival depend on innovation, speed and organizational synergies that satisfy customer needs. Organizations need to leverage new ideas, expertise, vision and commitment wherever they are found. Teams cannot look solely inward; they must augment their internal focus with an external approach that enables them to innovate and align with leadership up and down the organizational hierarchy. 

What kind of team and team leader are needed in today’s world? What’s needed and what works is a new kind of team, the “X-team,” with the “X” referring to “external” focus. X-team leaders continuously push members to reach outward to fuel the innovation process. X-team members become the eyes that read the changing environment, the visionaries who help shape the future and the inventors of innovative solutions to organizational challenges. 

What Is an X-Team? 

Rather than following the existing wisdom of team performance that focuses primarily on internal team dynamics, X-team leaders also see external outreach as a core mission, mind-set and modus operandi from day one. X-teams differ from traditional teams in three concrete ways: external activity, extreme execution and flexible phases.

External activity.An effective X-team leader engages in high levels of external activity, including scouting, ambassadorship and task coordination. 

X-team leaders engage members in scouting for new ideas, opportunities and resources. Team members keep pace with shifts in markets, technologies, cultures and the competition. This might mean conducting a survey of customer needs, hiring a consultant to outline market trends, performing an Internet search on the competition, or just having coffee with an old college professor who is working on innovative products. Team members also scan the environment inside and outside the organization for new ideas, practices or technologies that may be adapted to the team’s needs. 

For example, one team at IDEO, an innovation and design consulting firm, learned about customer needs while designing a new emergency room by putting a camera next to a patient’s eye. After realizing that the patient spent multiple hours looking at the ceiling, the team brainstormed about how to redesign the ceiling—an often overlooked area of a hospital room. 

In being ambassadors in the organization, X-team leaders encourage members to meet with management to gain buy-in, sponsorship and protection from potential opponents to the team members’ ideas. 

In addition, X-team leaders solicit input from senior management on how the ideas can be improved, persuade these upper-level managers that the team’s work is important and crusade for those things team members feel most strongly about. They show how they have incorporated suggestions from top management and work to communicate the link between their work and unit strategy. 

X-team leaders also engage with others inside and outside the company to get feedback, manage dependencies, and convince or cajole others to help get the tasks accomplished. They put together plans and schedules for how the team will work with other groups. As work progresses, the team leader creates mutual commitments, motivates others to keep those commitments, and builds a culture of innovation and cooperation with other interdependent groups. 

The Razr team at Motorola, for instance, brought together many other groups to contribute ideas on how to mount a tiny antenna on its new, slim phone. It then got a number of other teams to help with the agreed-upon design. 

Extreme execution. X-teams do not throw out the lessons they have learned about internal dynamics. Managers of X-teams develop processes to build a culture of openness and support as well as enable members to coordinate their work and execute effectively while simultaneously carrying out external activity. For example, X-team members gather large amounts of information about their companies’ customers and translate it into product features the customers want. 

One consulting team leader had members spend time getting to know the clients in their districts. They went to client meetings and asked, “If we did this, would it help you to do your work better?” Then team members got together and pooled what they had learned about the various districts before creating new programs. This internal activity was needed to make effective use of the external scouting. 

Flexible phases. X-team leaders shift their team’s activities over time. For instance, members initially engage in exploration—learning about customer needs, the external culture and top management expectations. Leaders then move the team to exploitation—narrowing the focus and moving quickly to develop, test and modify an innovative new product or service. Finally, X-team leaders shift to exportation—transferring their product, expertise and excitement to the larger organization for full-scale implementation. 

By setting up explicit phases with clear milestones for each phase, X-team leaders innovate by moving from diagnosis to design and diffusion. At Microsoft, an X-team created a new social networking product for the Internet generation by reaching out to those users before creating the product. This method became the driving force behind a new model for customer-inspired software development throughout the company. Through these activities, X-teams and their leaders are highly successful at achieving their own tasks, and are highly effective agents of change and innovation across the larger organization. 

Finally, X-team leaders push team members to look outside their own jobs, take on a more corporate focus and actually move from ideas to innovation to organizational implementation—all leadership capabilities needed in organizations experiencing a talent crunch and subsequent need for leadership training.

X-Teams in the Real World

Twenty years of research, by both us and other academics, has shown that X-teams can be very successful at driving innovation, effective leadership and talent development. That’s good news. Even better news is the fact that X-teams can be systematically set up. In all, about 100 X-teams have been trained in MIT’s Sloan School of Management Executive Education program and the MIT Leadership Center. 

At energy company BP, for example, X-teams have delivered a variety of breakthroughs, including new ways to manage the company’s huge oil and gas exploration projects across the world. At Merrill Lynch, the work has produced everything from new interest rate volatility indices to a new and successful distressed equity business. The latter trades companies that are coming out of bankruptcy. At CVRD, the Brazilian mining company, X-teams have been trained to play a key role in taking the company global. 

What should you keep in mind when setting up X-teams?

• Staff your team with members who not only have the right skills but also have networks and connections to keep your team externally focused.
• Make an external approach a priority from day one.
• Provide structure, support and feedback to teams that foster reaching out to external sources.
• Get commitment from top management. X-teams are about ordinary people doing extraordinary things by shifting their focus to include external as well as internal activities. In doing so, they are able to increase sales, produce more innovative products in shorter periods of time and better serve their customers.

Deborah Ancona is Seley Distinguished Professor of Management at MITs Sloan School of Management and faculty director of the MIT Leadership Center. Henrik Bresman is assistant professor of organizational behavior at INSEAD, where he focuses on high-performance teams, innovation and leadership. Ancona and Bresman are co-authors of X-Teams: How to Build Teams that Lead, Innovate, and Succeed (Harvard Business School Press, 2007).

Web Extras

SHRM video: Interview with Deborah Ancona, Seley Distinguished Professor of Management at MIT's Sloan School of Management and faculty director of the MIT Leadership Center

SHRM online newsletter: Managing Smart