How To Structure Teams For High Performance

Only recently has real research gone in to how teams form and the best way of going about structuring them to perform effectively. Data from the worlds of Anthropology, Psychology and Sociology can tell us much about the way a business should structure small teams and how to scale these when they require real resource to get to Maturity and beyond.

Dynamic Duos

These are obviously the easiest of teams to establish. The world is littered with Dynamic Duos from family life, friendships and working teams. We speak to each other one on one, even if presenting to a room full of people. We pair up in relationships and marriage. We collaborate easily with another person. There are simple biological reasons for which pair-bonding is important as well as for working on all manner of less intimate tasks.

Pairs are the simplest building blocks on which every team is built. Studies have shown that there are 12 types of pair formations. Too numerous to expand on here (maybe in another post) they range from those that have each other’s back to those which work because they are Yin and Yang and the mentor/protégée.

Tricky Trios

These are the least stable of the team types, typically because the Dynamic Duo is so strong a unit, that one member is always on the sidelines. However, there have been some very strong three person teams throughout history.

There are three kinds of trios –

2+1 trios can be strong partnerships, partly because of the strength of the pairing, where the third person acts as an outside consultant or specialist. But these are short lived and generally it is the pair which gets credit for the work done. Another worthwhile scenario is where the +1 dips in to the team as and when needed. One famous 2+1 team is that which invented the transistor in the 1930s at Bell Labs – Walter Brattain, John Bardeen and, their +1, William Shockley. It was Shockley who suggested the first two work on the project and pretty much left them to it. He added his brilliance when the pair came across issues, but the acrimony came when they project was complete and he attempted to file the patent under his own name, leaving the two who had done all the work out.

Parallel Trios are where two pairs of people working together share a member, whilst the other two members rarely interact. These are typically the most powerful of the combinations possible. One reason for this is the pair which don’t interact much. This enables the combination to consist of two individuals with outside roles who can be the best at what they do without having to worry about being compatible with everyone. Only their compatibility with the inside member need be of concern. An important parallel trio in history was that which invented the microprocessor whilst at Intel in 1970 – Federico Faggin, Masatoshi Shima and Stan Mazor. Rarely where these three seen in the same room. Faggin was the intermediary between the two outsiders.

In Serial Trios, rather than one member acting as go between, the three individuals divide their time, sequentially working with each other in pairs. Here there is no need for compromise between team members and therefore the unit is powerful in its output. As each member is free to run at full speed with their individual tasks, the unit can recruit the very best people for the job. Looking at Intel again, the company’s founders are a famous serial trio – Bob Noyce, Gordon Moore and Andy Grove. These three built what would at one point be the most valuable manufacturing company on the planet and have been credited for creating the modern digital world. Not bad for a tricky trio. It worked so well because their talents aligned nicely with typical management at the top of a company – CEO, R&D Director and COO. Also, the relentless pace of growth at Intel meant that they were all constantly fully engaged in their individual tasks.

7±2

These are the most stable of teams. 5-7 members especially so, but team stability can experienced as high as twelve members. This has been seen throughout the history of humankind, with Anthropologists looking at teams of 12 in hunting parties going back 2.3 million years, of which the remains have been found in Ethiopia. However, other experts have found stable groups occurring regularly and functioning effectively at 4-9 members.

The British Army’s single ‘fire teams’ compose of four soldiers, a ‘section’ of two fire teams (8 members) are commanded by a corporal for a full team of nine. These historic groupings have formed for practical reasons. A ‘squad’ in ancient times was seen as the number of soldiers who could effectively hear the orders of a commander in the heat of battle – 8 – and in Roman Legions was the number who could share a standard tent, also 8.

There also seem to be genetic reasons for 7±2 being such a stable unit for humans. Our short term memory is cable of capturing and briefly holding between five and nine items of information and 7±2 has been coined a ‘magical number’ by psychologist George Millar for this very reason. The number six has a singular relationship with each number below it and can encompass two trios, three pairs or with a separate leader a pair/trio team. Seven has historical resonances with good luck. The Egyptian pharaohs, for example, reserved the number seven for themselves and organised their lives around it. Ever wondered why casino slot machines often have a ‘Lucky 7’ on their wheels?

The largest 7±2 teams are at the limits of our individual span of control. If we look at the combinatorics of teams of these numbers we can see that a team of nine has a network of thirty-six points of contact and becomes difficult for one individual to control.

7±2 teams have great functionality with numbers at the upper end of the scale being the smallest teams in which a dedicated leader can be in place.

Robin Dunbar, a British anthropologist and evolutionary psychologist at Oxford University has coined a series of ‘Dunbar Numbers’. He has shown that a 7±2 team is the upper boundary of those with whom you can be truly close, like a family.

7±2 team combinations can be seen everywhere from sport (the Blue Ribband rowing event – the 8, basketball, Ultimate Frisbee) to business with corporate boards of directors, Music (the Rolling Stones and Beach Boys), popular sitcoms (Friends, Cheers) and the typical Silicon Valley startup.

15±3

This is the first size in which a team has real heft and division of labour can take place. A 15±3 team can handle a proper hierarchy of management, with a second layer, which is separate from the rest of the team. However, here in lies the issue for small businesses, there needs be a distinct chain of command for teams of this size, in which the leader must work through his or her subordinates, rather than dealing with the entire team’s membership.

At this size a team requires a professional leader, who will devolve responsibility for matters to management and the team. In the Army, 7±2 leadership is given to a noncommissioned officer, who will be expected to join in the work, including battle. However, at the Platoon level (15±3), Leadership is given to an officer who has been specifically trained for the task and will usually not get involved in the work.

Research shows that if a project team demands the work of 9, 10 or 11 people, it is often more productive to bump the team up to 15±3. By doing this an internal management superstructure can be formed. Usually the additional cost is worth it.

Famous 15±3 teams? Well, you’ve likely heard at least one of them on a regular, if not daily basis. If you’ll indulge my inner music geek, the house bands of several of the most prodigious recording studios, namely The Wrecking Crew, Booker T & the MGs and The Swampers, were all 15±3 teams. Haven’t heard of the bands? You will have heard their music as they recorded with the Beach Boys (notably recording all of the instruments for Pet Sounds), Aretha Franklin, The Staple Singers, Etta James, Simon and Garfunkel, the Rolling Stones, Otis Redding, Neil Diamond, Wilson Pickett the list goes on…

50 and 150

Beyond 15±3 teams, the next structure of stability is 50±10. Here we can go back to Dunbar’s Numbers, with 50 being the largest group of people on which an individual can have mutual trust, which becomes the defining element of teams this size. At this level the team is fully self-sufficient and is most likely not to require outside contractors or suppliers for any functions, which can hold smaller teams to ransom. After 50, business teams have a smaller overhead per employee and are more resistant to market shock, generally having the cash and inventory required to survive.

Dunbar has noted that, anthropologically speaking, 50 seems to be a historic stable team number, being the typical overnight camp size of traditional hunter-gatherers, such as the Australian Aboriginals or tribes of southern Africa.

150 is the original Number in Dunbar’s series and can be seen occurring throughout history, being the average number of residents of a settlement from the Doomsday Book to the average number of friends people have on Facebook. Why this size? Dunbar’s argument is that this is the maximum number with which one can have a genuinely social relationship with, the kind of relationship that goes with knowing who they are and how they relate to us.

From here, stable team sizes go to 450 and 1,500, making for very large groups of people indeed.

So, we can see that as team sizes grow, it becomes more important for them to be structured appropriately with combinations of the stable numbers 2, 3, 7±2, 15±3, 50±10 etc. In the business context, teams of 10 to 50 are the least stable because of the span of control. Usually, businesses which have grown to this size have an entrepreneurial leader, who is usually not a professional manager of people. In fact, often the very reason why he or she came to start their company is to get away from the hierarchy of business. They become torn between doing the entrepreneurial work they love and managing people, which is probably not a strength. Hence, they need to set up a proper structure for the team to thrive, whilst they work on their business, not in it. Also, often for reasons of cashflow, it is difficult to grow the team by jumps in these stable combinations and therefore the team find themselves in the dangerous middle ground in-between.

In my own experience, in my Family’s business and with Rowing Squads, teams over 10 become difficult to manage. In my Family’s business we did not have a proper hierarchy and we did not devolve responsibility to the team. Hence, we worked too much in our business, rather than on it. Over 10 members, the team became disparate and it was difficult to communicate, especially as they were based in multiple locations.

In Rowing, I have led squads of up to 50 athletes. These became too difficult to manage effectively and I ended up giving some of my power to senior members. Once they took responsibility for certain aspects the teams settled down. However, it is interesting to note that whenever I have coached squads of over 12 athletes, it has always boiled down to a much smaller core who rise to the top and compete at the highest level, with others either being left behind or leaving in a huff having not achieved what they want.

You Are The Reason Your Business Is Not Growing

Businesses in the adolescent stage, between 10 and 50 employees with a turnover of £2 million to £10 million, struggle to grow to maturity. Government data from the Department of Business, Energy and Industrial Strategy shows that a measly 0.002% of growth came from this portion of the business landscape. This is an area that was highlighted by the last Government as one which needed improvement and which could drive our economy onward.

Why, then, do businesses of this size struggle to get out of adolescence. Usually the reasons stated are things like access to funding and availability of top talent. However, these aren’t the route cause of the problem. I’m afraid the problem, Dear Reader, is you.

You are the problem

The problem holding businesses, and other teams looking for high performance, back is their Leader. So, take a long hard look in the mirror and let’s analyse at a major home truth.

When a business starts it is either with a single Entrepreneur or 2, maybe 3, Co-Founders who have complimentary skills. Whilst this period lasts, things go swimmingly. Either the Solopreneur multitasks and does everything from front line sales to packing up the product and sending it out to customers; or the Co-Founders create silos in which they operate and everything gets done. The problem comes when a business employs its first person, for this is when the Founder or Co-Founders start to lose their grip on what is happening.

Generally the first employee comes on board because they add another skill set or will complete a task that the Founder doesn’t enjoy doing. Generally Employee 1 is an expert in their field, someone who can be left to get on with their job. Because Employee 1 is seen as an expert, they have not been set any ground rules for what they do. They have no parameters within which to operate. They have not been told ‘this is how its done here’. As a result, they start to Ad Lib. They make it up as they go along. When they come across a problem that the business has not encountered before, they use their creativity to come up with a solution. Great! However, often it is not. The Boss starts to see that things are being done in a way which she would not have done them. When a creative solution has been devised, the Boss has not sanctioned its process and is uncomfortable with some small part of it.

In short, the Boss goes from Jack-of-all-trades, able to perform all tasks with heroic effort in a way which she has found that worked, to being a Control Freak for which no one can do things the ‘right’ way. So, she stops what she is doing and starts to manage Employee 1 and Employee 2 and 3 and 4…

Now the effort going in to the tasks the Boss should be focusing on, having employed people to handle the other tasks on which the business must run, transfers to managing the processes of the employees. The Boss’s tasks become neglected, or she starts to take them home with her and she works longer and longer hours in order to cope.

This process gets worse and worse the more employees a business takes on. The Founder or Co-Founders spend more of their time managing the processes of employees. It’s not the employees’ fault. They are generally very competent individuals, having been employed for their skills or specialism. They will be carrying out the work as they have previously been taught to do and have done efficiently their whole career. However, they aren’t doing it ‘the way it is done here’ and therein lies the problem.

So, as a business grows from a team of 1 or 2 Founders to a team of 5-10, the ability of the Leader to control the situation diminishes rapidly. The Boss spends his or her day firefighting, struggling to keep the business afloat and making sure that tasks get done they way they want them to. They become the gateway through which all work must be signed off before it goes out of the door. Clearly this is a serious bottleneck and hampers the efficiency with which the business produces its work for customers. It also means that if the Leader isn’t present, work doesn’t get shipped out to customers. They have to be ‘online’ the whole time. They can’t take a day off. Even when they are away, they get bombarded with messages from the team ‘running things past them’. This constant working in the business is not what you started out to do. If this resonates with you and you look at it objectively, you don’t own a business, you own a job…

From this situation there are three scenarios which can take place – 1. The business gets small again, 2. the business goes broke or 3. the business survives. You’ll be surprised to hear that the third scenario is the worst possible outcome. In this scenario the business survives, but YOU won’t. You are keeping the business afloat like a prize fighter. Ducking, weaving, punching and taking body blows trying to stay off the ropes. Then it comes, your breaking point. Like Mike Tyson has said, ‘Everybody has a plan, ’til they get punched in the face’.

Let’s look at those scenarios in more detail –

1. The business gets small again, in other words you start to trim your team to something more manageable. You shrink your business, your revenue and likely your income too. All your hard work to build your business has led you back to where you were.

2. The business goes broke. Hopefully this is self-explanatory. The business simply implodes because running the business and producing its work for customers has become unmanageable.

3. The business survives. You’ll be surprised to hear that this is the worst possible outcome. In this scenario the business survives, but YOU won’t. You are keeping the business afloat like a prize fighter. Ducking, weaving, punching and taking body blows trying to stay off the ropes. Then it comes, your breaking point. Like Mike Tyson has said, ‘Everybody has a plan, ’til they get punched in the face’.

So then, in all three scenarios your business either ceases to exist or stagnates its growth. Here is where the last Government saw there is a problem. Not only do adolescent businesses fail to grow, but NPI data shows that their revenue per employee has decreased almost year on year since 2002. In fact revenue per worker is now 12% lower than in 2002. Think about that. Entrepreneurs, the supposed life blood of the UK economy, are generating less revenue per employee and therefore a smaller share if GDP than 15 years ago.

Get out of your own way

How, then do you get out of your own way in order to grow your business? You need to have a solution which will allow you to work on your business, rather than in it. You need to disassociate yourself from your business and stop being a bottleneck in order for it to grow and survive.

The solution lies in a business model which has endured since its inception in the 1860s. In the five years to 2016, this model was responsible for 20% more growth than businesses with all other types of operating model. As many of you will have guessed, I’m talking about the franchise business model.

Now, bear with me. I know you that those of you wanting to franchise your business will be in the minority. However, there is one very important aspect of the franchise concept that you must adopt if you want your business to achieve sustainable growth – the Franchise Prototype.

The Franchise Prototype is the system which makes the model of UPS, McDonald’s, DisneyWorld, Swarovski, Clarks Shoes and Universal Studios entirely repeatable wherever in the world they are located. It is the repeatable process which makes a franchise model such a success, generate large profits and allowing continued grow.

In order to get out of your own way, you must think of your business as one which you wish to franchise and create a Prototype on which build. It is the process of building an entirely repeatable, almost fool-proof process for doing the work of your business, which will allow you to disassociate yourself so that you can work on it, rather than in it.

Take McDonald’s for example, the greatest franchise ever created. The Prototype formed in 1952, of which an iteration is still alive today, means that each stage of the process for making your burger and fries has been honed and set in stone. The prototype states that the pickles must be placed on the burger in a certain way so that they do not fall on your lap when you take a bite, because a burger that disintegrates is ‘not the way it is done here’. The fries are left for a maximum of 7 minutes in the warming bin, otherwise they are discarded for fear that they go soggy, which would be ’not the way it is done here’. There is a prototype method for everything McDonald’s does from preparing food to mopping the floor. This allows the concept to be repeatable wherever the restaurant is located and keeps customers happy in the process. A concept which can grow.

This goes far beyond just producing an employee handbook for your team to consult when they need to. Your Prototype for business processes must outline to the letter how each member of the team carries out their tasks. Your employees must follow this to the letter as well, in order for your Control Freak tendencies not to surface and you feel the need to manage.

Not only will the Prototype allow you to stop spending time in your business. It will also help with the two oft quoted reasons that businesses struggle to grow – lack of funding and lack of talent. The Prototype will make your business run like clockwork and therefore be less risky for lenders to invest in. It also means that you will not need to employ the most talented or skilful employees as there is a foolproof process to follow, which has the added bonus of reducing costs.

Forming a Franchise Prototype means that you can disassociate yourself from your business so you can do the important work on it, rather than firefight in it.