Single Arrows_RGB

How Executives Can Optimize Team Structure

July 28, 2021

Jim Thomas

in BLOG

Why senior leaders need to create an effective team structure to move their organizations forward.


If my recent executive coaching conversations are a bellwether, one of the biggest challenges facing executives right now is team structure.

As companies are crystallizing their strategy to reposition themselves in a dramatically changed business landscape, executives are expressing more confidence about what to do next. But they’re struggling to fit together the puzzle pieces of team structure to make it work.

For many executives, they’ve never done this before. They know how to be an excellent team member, and they know how to lead a team. But they don’t know how to structure a larger network of teams.

Stanley McChrystal, in his book Team of Teams, illustrates how modern organizations are made up of interconnected teams that must mesh together. Without mentioning the term explicitly, the book makes a compelling argument for executives to also operate as “team architects.”

Just as an architect designs a structure, supports its construction, and fine-tunes its design once opened, today's leaders must create team structure, select and launch teams, and support teams to effectively accomplish their purpose. My work with senior leaders over the past several years suggests that these architectural skills are needed now more than ever.


How to Create an Effective Team Structure

Creating structure starts with a fundamental understanding of the work unit’s purpose. Additionally, the business drivers, or imperatives, that the unit must address now and into the future must be understood.

Leaders must base team structure and design decisions on a visionary understanding of where the business is heading. Designing for only today’s challenges pretty much assures that the structure will already be out of date by the time it is implemented. Essential team architect competencies include strategic direction setting and business savvy.

But these structural design skills are just the foundation. McChrystal’s book highlights that agile organizations are comprised of multiple teams that need to collaborate seamlessly. This implies that team architects need to have deep insights into how individual elements of their design interact together.

Defining the lines and boxes of an organizational chart must be combined with establishing mechanisms to ensure that teams can work together. How will individual work teams connect to different teams? What information must be shared across team boundaries? How will decisions be made that impact multiple teams and who approves these decisions?

These questions of governance must be included in any discussion of team design and structure. My work on organizational design efforts over the years suggests these questions are given much less attention than they deserve. And the result of this is often significant organizational confusion and dysfunction.


Best Practices for Establishing Teams

Just as an architect supports the construction of a building, executives must establish new teams and team structure. Then the executive’s goal is to speed the team’s evolution into a cohesive and productive unit. And more importantly, they must ensure that individual teams can collaborate with each other effectively to accomplish company goals.

Executive team architects should start by grounding themselves in the basics of team development. That includes things like the phases of team development (e.g., forming, storming, norming, and performing) and team success factors (e.g., purpose, process, communication, trust, and commitment). A key consideration when starting up teams is, “Who belongs on the team?” The design of a team may specify the roles and skill sets required as well as the team size. But executives must still make the personnel decisions to place specific individuals onto a leadership team. This requires leaders to have a keen eye for talent and an accurate assessment of individuals’ skill strengths and weaknesses. It also helps to understand personality characteristics that might enable, or derail, individual success.

Direct experience with potential team members certainly allows an executive to assess these characteristics. However, an objective assessment of skills and personality traits will provide the most useful insights. Objective assessments of prospective team members are also helpful when decision makers have little, or no direct, experience with potential team members.

Additionally, an objective assessment of potential team members provides opportunities for leaders to consider a dedicated team mosaic. I liken this to how sports teams require players with different skills to play different positions. Work teams also benefit from having members with diverse backgrounds, experience, and temperament. Objective assessments of these characteristics allow a decision maker to build teams with members who have complimentary attributes, background, skills, and experience.


Why Team Chartering Is a Must

Once team members are selected, the team architect needs to launch the teams to accelerate their evolution from “forming” to “performing.” When starting up new teams, I’ve found that a formal team “chartering” process is a must.

Team chartering ensures that team members have a clear understanding of their purpose. It also helps to establish individual roles and responsibilities and creates team processes that enable the team to function. A well-designed chartering process also ensures that individual teams know how they are supposed to work with other teams. This includes how information is shared across teams and how decisions impacting the larger organization are made and implemented.

A well-designed team structure often fails to perform as expected because leaders fail to provide the support and attention to guiding teams from the formation to productivity stages. Just as an architect often remains on-site during building construction, a successful team architect must remain involved in the creation and activation of the teams they’ve designed.


Supporting Teams and Spotting Issues

The architect’s job is not finished once a structure is up and open for business. The successful architect visits the functional structure to ensure that it’s working as designed. And often, an architect makes design changes, either during construction, or after the initial opening, to ensure that the design fulfills its purpose.

Similarly, a team architect needs to check in regularly after teams are chartered to ensure they are functioning effectively. This includes examining how multiple teams are interacting across their boundaries. My experience suggests that inter-team issues are the most likely areas for dysfunction.

A strong process for team chartering, while necessary, can lead to the development of strong intra-team bonds at the expense of inter-term challenges. If you’ve ever run into teams that operate in “silos” you’ve experienced this problem.

Silos result when teams lack the appropriate team structures and processes to connect with other teams. When this happens, teams don’t share information across boundaries. Teams also make decisions based on the parochial interests of individual teams instead of what’s best for the organization. Shadow organizations or unintended “teams” may spring up to work around these dysfunctions creating further confusion, conflict, and inefficiencies.


The Most Common Team Challenges and How to Address Them

The successful team architect must be vigilant to detect these developments and diagnose areas of intra-team and inter-team dysfunction. Common forms of intra-team dysfunction include stress-related conflict, inability to deal with ambiguity, loss of focus, and team member burnout. Inter-team challenges include withholding of information, failure to reach consensus decisions, teams undermining the work of other teams, and overall organizational structure inefficiency.

The team architect must continuously monitor the health of their teams and take decisive action to address these issues. In some cases, individual team members need to be replaced or repositioned. Other cases require actions to clarify roles, responsibilities, and decision-making authority. (I’ve found the RACI framework particularly useful for this.) It may also be necessary to revisit the organization design and further fine-tune team structure.

Perfecting Team Structure Is Key

It’s a given that executives must be effective team members and team leaders. But these senior leaders must have a much more sophisticated understanding of how teams operate to be successful. They must function as team architects to design, launch, and support the effective functioning of a matrix of individual teams working together.

Over the past 18 months many senior leaders have been compelled to focus on tactical considerations to respond to the COVID crisis. And executive teams have been challenged, upended, and reconfigured. So it’s appropriate that senior leaders are concerned with their effectiveness as members of the executive team. But just as leaders are encouraged to “work on the business, not in the business,” executives need to perfect their skills as team architects to move their organizations forward.


Learn how DDI Executive Services can help you optimize your executive team structure.

Jim Thomas, Ph.D., is an executive consultant at DDI. He has more than 35 years of consulting experience in leadership development and talent assessment in the U.S. and internationally. This includes extensive experience developing and coaching executives and senior teams from many different industries and diverse backgrounds.

Subscribe to our blog!