No man is an island. As the CEO of a product company, you like to believe you can do it all: generate ideas for new company products, oversee the development and manufacturing of those products, and track and maybe even influence sales.
However, the above phrase exists to remind you that you need to rely on others. You can’t be everywhere at all times, and, in order to avoid overworking yourself and burning out, which would put a major damper on productivity, you need to be able to relinquish some duties to other trusted, talented employees.
That’s one reason why having a reliable team is such an important facet of business. Without a team you can fall back on, the flow of business falters. You also need a sounding board, or else you’re just shouting your ideas to an echo chamber without feedback.
However, a modern company isn’t typically comprised solely of employees who physically clock in and out of the office. Instead, many CEOs and company leaders pick up freelancers and outsource work to other parties that can work from anywhere. These teams operate, in a sense, without borders, an achievable goal for any successful company, but one that takes time, patience, reorganization, and a strong vision to achieve.
The Purpose of Building Teams
So why build teams besides the reasons mentioned above? There are practically countless reasons, and they’re all tied to morale, productivity, and motivation. Above, we touched on how if you, as the CEO, are the only one expressing ideas, it’s like speaking to an echo chamber. With other employees voicing their opinions, an idea can be sharpened into something that’s likely to work.
However, employees need motivation to reach goals. That’s why it’s worth it to take some time to celebrate the big and little victories. Praise and rewards have always been a powerful motivator. This creates a strong team bond and motivates them to do even better next time.
Teamwork clarifies work expectations. An employee who feels like they can talk to their boss with no repercussions is an employee who will feel comfortable asking questions and delving deeper into an assignment so they can do a better job.
As the CEO, you likely created the company policies that drive your office day in and day out. However, beware of being the only one involved in the process of policy-making. By inviting others to participate, the company can create policies and rules that everyone agrees with, thus making employees more likely to abide by those rules.
7 +/- 2
Now that you realize the importance and benefits of teamwork, you may be seriously taking stock of the number of your employees. However, don’t do too much just yet.
There’s actually a perfect balance of employees to strive for: between six or seven people, or, as Robert Galen calls it, 7 +/- 2.
Now, you may be wondering, wouldn’t you want a bigger team of employees to get even more done? Not always. Galen says that between 10 to 13 employees would be alright, but it depends on the type of company and the work they do. If you hire too many employees to do one type of job, some will undoubtedly end up getting paid to sit around and twiddle their thumbs. This kills productivity.
Dropping below six or seven to maybe two or four people means those people have to work that much harder to get more work done. They’ll wear too many hats, which can get tiring and lead to mistakes, another productivity killer.
So how do you know which number will work for you? The only way to find out is through experimentation. Take a few employees and put them one on team, then monitor the results. Pluck team members until you find the ideal balance of employees.
70% Rule and the Effects of Queuing
How do you know when you’ve found the ideal number of people for your team? Use the 70% Rule. “Adding extra resources to the areas where the utilization rates are 70% or higher can significantly reduce waiting time,” says Donald Reinertsen and Stefan Thomke at Harvard Business Review.
How? By focusing on the effective areas of a business process that are already working well, you’re pushing towards a solution, result, or final product more quickly. This doesn’t necessarily have to be through manual effort either; computers and equipment can speed this process along.
That said, Reinertsen and Thomke urge CEOs and business owners to not overload their team with projects. Keep employees working on successful projects that are likely to reach completion.
This supports the HBR writers’ preference for small batch work, which is directly applicable in a product company. “Small batches allow manufacturers to slash work in process and accelerate feedback, which, in turn, improves cycle times, quality, and efficiency,” they write. “Small batches have even greater utility in product development, but few developers realize the power of this method.”
Reinertsen and Thomke go on to say that monitoring batches is a “mostly invisible” process, which can detract from small batch success. If you want to start tracking batch amounts for your product company, where should you start? They relate it to shopping for eggs.
“If you buy a 12-month supply on a single trip, your transaction cost is low but most of the eggs will spoil, increasing your holding cost,” the writers say. “If you buy a one-day supply at a time, your spoilage will be low, but your transaction costs will be high. Intuitively, you try to strike a balance between the two.”
Team Building Blocks
While it’s helpful to keep in mind the ideal number of employees who should be on your team, it’s also helpful to learn more about team building blocks. One of the most crucial blocks necessary to boost the success and competency of your team is known as the core of cores.
Christian Mackin’s White Paper defines the concept thusly: “These are the activities that your company does better and cheaper than its rivals. One of the most powerful actions a company (or any individual, for that fact) can do is to identify and leverage what they are good at. In other words, building on.”
As the CEO of a product company, surely you know of several areas where you excel more than any other similar businesses. Use these areas and your team to your advantage as much as possible. As mentioned, this core of cores will become the foundation for your team building blocks, particularly when it comes to offshore and onshore outsourcing. Failing to sharpen your core of cores could lead to less product output and thus lower revenue.
Team Building Blocks and Popular Organizational Structures
While the core of cores is the foundational building block holding the organizational structure together, it’s far from the only one necessary for a successful business. Erik Devaney at Hubspot identified six other necessary blocks for CEOs to keep in mind. They are as follows:
- Departmentalization — Departmentalization can be loose or rigid depending on a company’s needs. The process involves “grouping jobs together in order to coordinate activities and tasks.” With loose departmentalization, there’s room for all members of a team to have their voices heard when brainstorming ideas. Rigid departmentalization, on the other hand, does not allow for that as much.
- Formalization —With formalization, the focus is “how jobs are structured within an organization.” With informal companies, the employee determines the scope of the job per their skills and duties. With formal companies, the job doesn’t change.
- Specialization — Every company wants diverse employees who can wear several hats. This is known as specialization. With low specialization, an employee may only focus on a few areas of business, while with high specialization, they get to learn, expand their job duties, and grow as a professional.
- Centralization — As the CEO, you’re probably especially familiar with this concept. Centralization deals with who governs the office. A decentralized working environment, for example, allows more parties to make more decisions. A centralized working environment, oppositely, puts that responsibility on a few higher-ups.
- Span of control — Directly related to centralization is span of control. If in a wide span of control, managerial responsibility is released to different employees. If just a few people manage those employees, this is known as a narrow span of control.
- Chain of command — Another related building block is the chain of command. A shorter chain of command means a manager answers to a boss who answers to a CEO. With a longer chain of command, there are more people involved, like vice presidents, directors, senior managers, and specialists.
Types of Team Structures
Based on those building block structures referred to above, a CEO can decide which type of team structure they prefer for their company.
As the name suggests, these teams are the ones to call when there are problems within the company. Through a trusted 12-step program with four phases, these teams can address and solve a problem quickly. Those four phases are:
- Determining what the issue is
- Reviewing the issue, figuring out what’s causing it
- Starting a plan to resolve the issue and changing it if it’s not working
- Reviewing whether that plan worked and if the issue was adequately solved
If a self-managed team sounds like the type of group that doesn’t need a lot of (if any) managing, you’d be correct. Chuck Blakeman at Inc. reveres these teams. “The magic isn’t in the ownership, but in the principle behind it — ownership stemming from the power to make decisions,” Blakeman writes. “When people are encouraged to bring the whole, creative, messy person to work, and make important decisions, they take ownership in ways they never would have.”
It may sound scary and even counterintuitive to allow a team of employees to operate without any corporate overhead. You may think they’ll run roughshod over the office, doing what they want and ditching their responsibilities. However, it all comes back to what Blakeman said about taking ownership; these employees revel in their newfound responsibility, and they want to prove themselves.
That said, Blakeman cautions a CEO to ensure this team is working towards a predetermined goal so they stay on-topic. However, otherwise, the CEO and other managers should take a hands-off approach and only intervene if the project isn’t progressing as expected.
Cross-functional teams consist of “groups that are made up of people from different functional areas within a company — marketing, engineering, sales, and human resources, for example,” says another writer at Inc. “These teams take many forms, but they are most often set up as working groups that are designed to make decisions at a lower level than is customary in a given company.”
So why organize a cross-functional team for your company? Here are three compelling reasons:
- They can speed through the product cycle with their combined expertise, which means no more slow periods struggling to think of new products.
- Their combined knowledge allows them to “span organizational boundaries.”
- They allow more integration and coordination within the company.
Many of these team structures have existed for decades, and virtual teams, although they seem like a newer concept, are no different. In fact, the framework for the idea of virtual teams first appeared in a 1991 book of the same name.
As technology has evolved to where it is today, virtual teams make more sense than ever. By outsourcing work to talented individuals, as mentioned above, there’s less burden on employees who physically work at the company to take on those responsibilities. The CEO gets consistent quality output, sometimes even for less money.
You’ve likely heard the term task force before, but perhaps only in the context of military or governmental work. Task forces can be used in any office environment though, including product companies. These teams are typically only banded together for a specific purpose, and once that purpose has been resolved, the team disbands.
After reviewing the above team structures, you may have some in mind that you favor more than others. You may have read through each one and mentally imagined your employees filling in those roles. So how do you narrow down your options, and how can you be sure the team structure you chose is best for business?
Erik Devaney, in another article for Hubspot, says most organizational structures break down into two broad structure types: organic structures and mechanistic structures.
“Organic structures (also known as ‘flat’ structures) are typified by wide spans of control; decentralization; low specialization and formalization; and loose departmentalization,” Devaney says. “And the chain of command, whether long or short, can sometimes be difficult to decipher.”
“Mechanistic structures are typified by narrow spans of control; high centralization, specialization, and formalization; as well as by rigid departmentalization,” he adds. “And the chain of command, whether long or short, is always clear.”
As you can see, the six building blocks Devaney wrote about before all come into play with organic or mechanistic structures. By deciding whether your team structure is organic or mechanistic, you should have a clearer idea of which team building blocks you want for your employees.
Recruiting Skill Sets into Your Team
Skills have always been a useful marker of an employee’s value. When you combine the skillsets of multiple employees, you should have a comprehensive, talented team that can tackle nearly any task with aplomb.
That said, recruiting employees with well-rounded skills is somewhat more difficult than it seems on its surface. The skills that were important 10 years ago don’t always apply in today’s technological world. Newspaper writers, for example, have had to change with the times and become bloggers.
So which skills are most necessary in today’s work climate? According to some experts, creativity is non-negotiable. An employee’s ability to be curious, versatile, and adaptable and also a good storyteller allows them to stand out compared to other candidates.
Marci Martin at Business News Daily describes the necessity of soft skills, particularly social intelligence. “Although the right skill set may seem like the most important factor in whether a candidate is a good fit for a particular role, the truth is that skills can be acquired, but personalities cannot,” Martin writes.
Overall, instead of necessarily writing job listings looking for duties an employee can commit to, write them seeking out employees with certain skills and personality traits. Create a list of the most important skills and traits for your product company and keep this handy when onboarding new employees.
What should you look for in outsourced employees? How can a CEO find a team that’s comprised of creative individuals with soft skills that gel with the company’s short-term and long-term goals? It’s not always easy. There are challenges associated with working across borders that a CEO will have to overcome for the benefit of the company.
Challenges of Working Across Borders
One of the single biggest mistakes a CEO can make is ignoring cultural rules and values. When you outsource your work, you open up your company to the world. The employees that join your team are often from many different countries. Their cultural attitudes and beliefs as well as their approaches towards work may be radically different than yours.
In most cases, these employees typically have to shape up or ship out, meaning they must adjust to American culture quickly or find themselves without a job. However, this is the wrong mindset to have if you’re trying to break down the border wall that can sometimes separate employees of different cultures.
Sue Freedman at Managing Projects Across Borders says to be careful of these other damaging attitudes and thoughts:
- “I’ve been working with people from a variety of cultures for years. It’s not a problem for me. I can work with anybody.”
- “People are pretty much the same everywhere.”
- “The American way is the way of business around the world. People want to learn our way, not for us to learn theirs.”
- “They are our subordinates or suppliers. They need to learn our language and our way of work. We don’t need to learn theirs.”
What do all these beliefs have in common? They all have one major overtone driving them: the boss’ way is best, and that’s the way the business will be run. We already discussed earlier how important it is to have a supportive and vocal team. By stifling outsourced employees’ voices simply because they’re from another country, the CEO loses out, as does the company. They lose out on unique job approaches. They lose out on skill sets that may be downplayed or hidden for fear of ridicule. They lose out on proud employees who are happy to do work, even if they can’t physically be at the company.
Overcoming Challenges of Managing Across Borders
So what can a CEO do to avoid those outcomes when outsourcing employees from other countries? How can they effectively manage across borders, allowing everyone’s voices to be heard and thoughts to be expressed? How can they foster an environment of happy, productive, motivated employees?
When expanding your company with outsourced employees, it’s important to understand that the company will be operating at nearly all hours and no longer just the standard nine-to-five. Your outsourced employees may be on different time zones. You must find ways to bridge the gap and directly communicate with them when possible. You may have to schedule conference calls at inconvenient hours for you (such as later in the evening or earlier in the morning), but it will mean a lot to your employees.
To prevent fatigue on your end, choose a few days each month where you and your outsourced employees can check in with one another. It may be the first and third Friday of the month, for example. Set a time for the call and stick with it. Your employees will come to expect and even look forward to these calls.
That said, it’s important to be aware of which days are national holidays for your employees. They may not necessarily observe Thanksgiving or Christmas like you do in America, but instead have other holidays that are just as significant in their country. Just like your company is likely closed on Christmas, don’t expect your outsourced employees to work on their holidays, especially if these hold religious significance.
Of course, leading multiple teams across multiple time zones may sound intimidating for even the most seasoned CEO. After all, as we discussed before, no man is an island. It will take multiple leaders to manage employees across time zones and cultural barriers.
International Management: Managing Across Borders and Cultures
For CEOs who want to learn more about the leadership challenges that lie before them, they can always turn to the book “International Management: Managing Across Borders and Cultures, Texts and Cases” by Helen Deresky. Deresky herself has excelled managerially in multicultural leadership, and her book includes case studies and true glimpses into how some major companies have managed the challenges of outsourcing and embracing different employee cultures.
Examples of Well-Structured Teams
Earlier, we discussed team structures, such as problem-solving teams, self-managed teams, cross-functional teams, virtual teams, and task forces. Each of these team structures has its advantages. There are even more types of teams still that a CEO should consider forming. These are also all advantageous in their own ways and allow the CEO to have more options.
Scrum teams, according to the Scrum Institute, consist of three important roles: the Scrum Team itself, a Scrum Master, and the Scrum Product Owner.
“A Scrum Team is a collection of individuals working together to deliver the requested and committed product increments,” Scrum Institute writes. A Scrum Team has three principles they rely on in all they do: respect one another, follow rules, and share the same goal. Just like the ideal teams we talked about before, a Scrum Team follows the 7 +/- 2 team size rule.
The Scrum Master plays a big role. “The Scrum Master is part of the Scrum Team and acts as a servant-leader for the Scrum Team,” says Scrum Institute. Their job is to set up events, keep the line of communication open at all times, aide the Scrum Team to their goals, and take care of anything that could impede progress.
Then there’s the Scrum Product Owner. “He represents the end customer and/or other stakeholders and is responsible for maximizing the value of the product by ensuring that the right work is done at the right time,” the Scrum Institute explains. “As a consequence, this means of course that the Scrum Product Owner has to work very closely with the Scrum Team and coordinates their activities over the whole lifetime of the project.”
The Scrum Product Owner typically has a rule in stakeholder management, release management, and working on the Scrum product catalog, particularly picking the items of most importance and making sure all descriptions within the catalog are accurate.
Lean Startup Teams
According to Erica Swallow at startup tech resource RocketSpace, those who need an example of a lean startup team should look no further than Samsung, ING, or GE.
“While Lean Startup methodology is employed most often by high-growth startups, the iterative ‘build-measure-learn’ process that makes it so popular among tech entrepreneurs also makes it a great framework for corporate innovation teams to test concepts,” she says.”…Lean Startup isn’t a wholesale change to ‘acting like a startup,’ but rather an adaptation of entrepreneurial behaviors.”
Which entrepreneurial behaviors drive performance? These companies may use an accelerator program like ING did to obtain new partners and create more product solutions. They may scale back their product development processes so these too are faster and cheaper, such as what GE did with its FastWorks initiative.
That said, Swallow writes how these teams must be prepared to say “goodbye to traditional corporate thinking” and display a “willingness to really change” for Lean Startups to be truly successful.
Much like a task force, a Tiger Team is assembled on a temporary, as-needed basis. Once their job is done, they typically disband and get back to their primary responsibilities within the company. Tiger Teams as a concept have not always been popular; their temporary nature sometimes gave them license to bend the rules in some companies.
However, today, many companies have realized that Tiger Teams, with rules imposed, can be a valuable asset. These teams, like many other efficient teams we’ve described, include about 10 people (12 is the general limit). Like a cross-functional team, each member is an expert in their chosen field, be that marketing, product development, engineering, and other areas.
“Once we have a problem or challenge defined, the Tiger Team is chartered with specific, aggressive…goals and clearly defined negotiables and non-negotiables,” Deborah Mackin at New Directions Consulting says. “…The team quickly comes together to articulate the high level strategy for goal attainment, the structure, system requirements, resources and approach.”
Mackin notes how this process is often just days long, then moves from the “’forming’ stage of team development” to “the ‘storming’ stage,” where they get the job done.
Of course, as mentioned, there are both rules and metrics for success that must be abided by. “The Tiger Team is always assessing the team’s health as rigorously as it progresses towards the goal,” says Mackin. “They recognize that the two are inter-dependent for success. Behaviors like grand-standing, sarcasm, put-downs — even the ‘meeting after meeting’ — are not tolerated.”
Great Teams in Business History
When describing successful Lean Startup Teams, we mentioned Samsung, ING, and GE. There are other companies still that have created communicative, creative, and hard-working teams. Here are a few of them to look to for inspiration:
- Google — Google, the search engine giant, only came to be once founder Larry Page put aside his differences with co-founder Sergey Brin. They kept things small in the early days, then, as the company grew, recognized the need to change their company size to keep up with growing demand. Your company too should not be afraid of change, but embrace it as it comes.
- Adobe — At Adobe, employees are encouraged to let their creativity shine. There’s no micromanagement here, so that in regard, the software company allows its employees to work on a self-managed team.
- Sun Microsystems Java Development Team — Java, a type of computer language, is used everywhere now, but that wasn’t always the case. Two Sun Microsystems programmers, James Gosling and Patrick Naughton, insisted their company needed Java, and then branched off elsewhere to work on it. The Sun Microsystems managers trusted Gosling and Naughton to get the job done, again, without micromanaging.
- Facebook — When Mark Zuckerburg created social media site Facebook, he probably never dreamed it would become the behemoth platform it is today. To respond to the growing pressures employees faced working for the major company, Zuckerburg had open offices, break rooms, outdoor areas, and conference areas installed. These rooms are flat structures and a space to destress.
- Twitter — Why is Twitter such a popular place to work? They’re big on teams, and their cheery atmosphere makes employees feel social and productive. With generous vacation days, onsite yoga classes, free food, and a rooftop bar, it’s no wonder people want to work there. A happy working atmosphere makes Twitter shine.
An Ideal Team!
You’ve just seen various examples of successful teams in action at major companies. Just what is an ideal team though, especially for a product company like yours?
An ideal team differs from company to company. Even once you find a winning team, company needs may change, necessitating the need for a different type of team. At that point, it may be time to make some reorganizational changes within the company. This doesn’t necessarily always mean firing or hiring new employees, but rather adjusting goals and changing focus. Use a blank-sheet org chart and give employees new roles. Manage these changes over the coming weeks and tweak as necessary.
10 Team Principles
To further help in your efforts to create the ideal team, here are 10 team principles to keep in mind:
- Direction — Without a strong sense of direction from a leader, teams will flounder. They will fail to contribute solutions and act as productively as they could if they had clearer goals.
- Roles — This directly ties in with a lack of direction. If an employee doesn’t have duties they perform regularly, they will likely sit around and do nothing, wasting company time and money.
- Accountability — Teams must be accountable for their actions, both good and bad. If there are no consequences, like rewards for good behavior and admonishments for bad behavior, employees may feel ambivalent and unmotivated.
- Goals — Without a clear-cut goal in mind, teams don’t have anything to work towards. They can’t plan long-term for a bigger goal or short-term for smaller goals.
- Cadence — Cadence in business is related to focus. Teams need to concentrate on the task at hand to avoid making careless errors.
- Contributions — Teams must believe that all members are valuable. Just look at the framework for Lean Startups. Each member brings something to the table. No one else can do their job. If each employee feels like they’re unique, they’ll work harder.
- Communication — Communication is key in all areas of a company. Teams need to hear from their manager. They crave feedback and direction. None of this can happen without clear, honest communication between manager and employee.
- Following timelines — Timelines and deadlines allow a team to break down work by day. These make a huge project manageable. Without deadlines, everyone works at their own pace, which can be disastrous for a project.
- Data management — Teams need to rely on hardware and software to make their jobs easier. These can streamline processes, which promotes productivity.
- Use of tools — Tools, like the above hardware and software, as well as company resources, help make the job easier. Teams that lack access to basic tools may almost feel handicapped.
“Getting Things Done” by David Allen
“Getting Things Done (GTD) is the proven path for getting in control of your world, and maintaining perspective in your life,” says founder David Allen. The GTD methodology consists of five steps:
- Capture — “Use an in-tray, notepad, digital list, or voice recorder to capture everything that has your attention.” Allen says these items don’t have to strictly be work-related. He also says there’s no item too big or too small that’s not worth noting.
- Clarify — “Take everything that you capture and ask: Is it actionable? If no, then trash it, incubate it, or file it as reference. If yes, decide the very next action required.” This allows you to clearly decide what can be done now and what can be done later.
- Organize — “Put action reminders on the right lists. For example, create lists for the appropriate categories — calls to make, errands to run, emails to send, etc.”
- Reflect — “Look over your lists as often as necessary and trust your choices about what to do next.” Allen advises emptying your list each week to start anew the next week.
- Engage — “User your system to take appropriate actions with confidence.”
Overall, while building a team without a border wall is a challenge for any CEO, it’s one worth taking. As the leader of a product design and engineering services company I am very fortunate to participate in hundreds of new product development teams and I have learned that nobody can do everything by themselves. By relying on trusted teams of employees, you can meet more deadlines, achieve more goals, create more innovative products, and get these on store shelves much more quickly than if you did all of this yourself.