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The century-old Chicago-based candy corporation had

5Leading Teams and ChangeChapter 5 Outline5.1 Leading and Managing TeamsTeams versus GroupsAdvantages and Disadvantages of Teams5.2 Developing TeamsStage 1: FormingStage 2: StormingStage 3: NormingStage 4: PerformingStage 5: Adjourning5.3 Leading Different Types of TeamsFunctional TeamCross-Functional and Virtual TeamsSelf-Managed TeamShared-Leadership Teamwei6626X_05_c05_p177-224.indd 1775.4 Transforming Groups Into Effective TeamsHabits of Highly Effective Team Leaders5.5 Developing Highly Effective TeamsFirst Tier: Establishing Foundation-LayerTeam Caring SkillsSecond Tier: Applying Caring Skills toTeam ProcessesThird Tier: Building Team Trust5.6 Preventing and Managing Conflict in TeamsAbsence of TrustFear of ConflictLack of CommitmentAvoidance of AccountabilityInattention to Results8/5/11 10:26 AMCHAPTER 5Leading Teams and Change5.7 Leading and ManagingOrganizational ChangeOrganizational Change DefinedImportance of and Need forOrganizational ChangeThe Big Picture: Planning and LeadingOrganizational ChangeOrganizational Alignment MattersKotter’s Model of Organizational ChangeWhy Organizational Change Fails5.8 Leaders as Change Champions:Capacities and CompetenciesCommunication and TrainingParticipation and InvolvementCoercionSummaryLeadership has generally been portrayed in early theories from a one-dimensional, vertical perspective, with the leader at the top and followers below. This chapter willexamine the more horizontal structure of teams, which are designed as collaborative andegalitarian. It will cover when and how teamwork can be used effectively in organizations, how teams form, and what the differences are between types of teams that scholarshave identified. A large component of this chapter explains how the role of leadershipchanges with a team, given the different structures, and how leaders can develop effective teams. Team leaders’ responsibilities differ with their roles on teams, but still play acritical role. Finally, because teams—and leaders—are often instruments of change, thechapter discusses the management of broad-based organizational change. Many of theskills needed for leading teams transfer to managing the large-scale change process. Asyou read, consider how you can apply the concepts here to your own team situations.5.1 Leading and Managing TeamsAfter several years as the fourth CEO of the William Wrigley Jr. Company, Bill WrigleyJr. II realized he needed help. The century-old Chicago-based candy corporation hadgrown more complex since a 2005 acquisition, global expansion, and increasing international operational demands. Wrigley decided that the company’s traditional centralizedmanagement system under family-member CEOs needed to change if the company wasgoing to innovate and think outside the box. Wrigley reached out to veteran executiveBill Perez for help, hiring Perez to succeed him as president and CEO—the first personoutside the Wrigley family to hold this position since the company was founded in 1911.Perez brought over 30 years’ experience with the privately held global consumer-productscompany S. C. Johnson and Son—including 8 years as its president and CEO—as well asa 14-month stint as executive chairman of Nike.At Nike, Perez had attempted to colead the shoe company with founder and ex-CEO PhilKnight, who second-guessed all of Perez’s actions and disliked Perez’s cost-cutting measures. At Wrigley, Perez would be part of a similar management team—Wrigley stayed onwith the company—but things would be different this time. According to Duke Petrovich,wei6626X_05_c05_p177-224.indd 1788/5/11 10:26 AMSection 5.1 Leading and Managing TeamsCHAPTER 5the chief administrative officer and a Wrigley veteran since 1975, Wrigley spent considerable time with Perez discussing management philosophy, the company’s organizationalculture, and expectations for how the partnership would work: “What would happenif they disagreed on an acquisition? Who would have the ultimate approval? To whomshould the senior executives report?” (Carter, 2007)The company brought in a consulting firm to run the pair through scenarios. Perez calledStarbucks CEO James Donald to discover the secret to his success in working with Howard Schultz, founder and chairman of Starbucks Corporation. Donald’s answer was tomake sure that information flowed easily and constantly between Perez and Wrigley. BillW. and Bill P., as they were known to Wrigley employees, worked as a team. Perez managed the day-to-day operations and finances, while Wrigley focused on long-term strategy and culture. Together, their output was far greater than their individual contributions.In 2008, Mars bought Wrigley Co. for $23 billion (Mars, Incorporated, 2008).Bill W. and Bill P. were the top two team leaders of the Wrigley Company before it wassold to Mars. A team is an organized group of several members who share a common goal,work interdependently, and coordinate efforts to accomplish desired objectives (Larson &LaFasto, 1989). In the example of the Wrigley candy company, that goal was the successand growth of the company. As we saw in the Wrigley example, teams are formed whenleaders recognize—as the saying goes—that two heads are better than one and a more collaborative effort will yield better results.Teams can vary in size and scope and can occur at all levels of the organization. A teamcan describe anything from a small group of executives who lead a corporation to smallergroups that are formed around a specific task and dissolved upon completion. A managermay assign two employees to a team to complete a small project together or a CEO maycreate an interdepartmental team to evaluate the efficiency of communication processes.Teams generally consist of several members, up to 12 or even more, although the numberchanges depending on the type of assignment, composition and skills of members, location of members, and duration of the work.Regardless, a team is created around a common purpose—usually with the intent of meeting some organizational goal—so individuals work together toward a positive outcome.Like a vision, this goal keeps the team focused and provides clear parameters in whichwork should be completed. In an organization, teams are formed for a variety of reasons: to form strategy, solve problems, manage projects, take on specific tasks, improvea process, or create a product (Sunstrom, DeMeuse, & Futrell, 1990). As mentioned inChapter 4, the potential for crises often requires the creation of interdepartmental teamsthat assess the company and its environment, plan for crises, and implement those crisismitigation plans.Teams can be led by a formal leader or through a particular division of labor across teammembers. This distribution of leadership responsibilities is called team leadership capacity (Day, Gronn, & Salas, 2004), with capacity referring to the potential for such leadershipto fulfill those responsibilities. Unlike in traditional organizations, where managers makeall of the decisions, these teams ensure their effectiveness through shared responsibility (Hawkins & Tolzin, 2002). One of the most visible examples of this is a company’swei6626X_05_c05_p177-224.indd 1798/5/11 10:26 AMCHAPTER 5Section 5.1 Leading and Managing TeamsCEOCOOVPR&DCFOCIOVPManufacturingHRVPSales & MarketingFigure 5.1 Traditional Executive Teamtraditional executive team, shown in Figure 5.1: the so-called C-suite (referring to thethree-letter initials starting with C and ending with O). The chief executive officer, or CEO,leads a group of top-level officers, often including a chief financial officer, a chief operations officer, a chief information officer, and a head of human resources. Each individualhas his or her own specialization and brings something different to the table, and togetherthey work to establish and implement company vision, mission, values, and strategy.While the CEO directs this team, all partake in the decision-making process. Even in casesof distributed leadership, it is important to designate a leader who is ultimately responsible for delegation and the team eventually achieving its goals. Ideally, team members willagree on both the goals and the intermediate steps, but at times, consensus isn’t possible,and decisions still need to be made.Teams also form in the lower levels of an organization and translate the high-levelgoals and objectives developed by the C-suite into more specific projects. The natureand types of teams depend on the organization. For example, one of Texas Instruments’ chip factories has its own levels and teams. First, there is a top-level executiveteam tasked with managing the overall operations and strategic direction of the plant.This team includes the plant manager and department heads of finance, engineering,human resources, and manufacturing. Second, there are three lower-level teams createdto address specific issues. One “corrective-action” team works on solving short-termproblems, another focuses on improving product quality over the long term, and thelast examines the effect of day-to-day production (Dumaine, 1990). The work of theseteams combines to ensure that TI is working to the best of its ability by developinglong-term strategies while evaluating and improving operations across immediate andmidrange time frames.As may be evident, the composition of a team can vary, but this variation can be important. Team members often depend on one another for information or resources, and oftencertain roles must be filled so the team can meet its goals. Consider how a company mightwei6626X_05_c05_p177-224.indd 1808/5/11 8:03 PMSection 5.1 Leading and Managing TeamsCHAPTER 5be hindered if the executive team did not havesomeone to oversee or bring insight to finances(CFO) or hiring talent (HR), or if the CEO decidedhe or she needed a panel of 50 people to makeeveryday decisions.The importance of team composition can also beseen at a book-publishing company. The production of any book will likely involve an interdepartmental team: editor, copy editor, cover artist,book designer, and marketer. The team’s goal isto produce the best possible version of the bookwithin a given time frame. Consider what wouldhappen if there were no cover artist or copy editor. Each team member contributes specializedskills and knowledge, such as the types of covers that may appeal to readers of historical fictionor ways to sell a book for teenage girls to largeretailers such as Barnes & Noble or Wal-Mart.However, they are all working toward a sharedgoal and must interact regularly to complete theirtasks. These team members join the project withdiverse, and ideally complementary, expertiseand improve the quality of the final product, andtheir work is interdependent.The production of a book involvesinterdepartmental teams: editor, coverartist, book designer, photo researcher,and marketer.What teams have you been a part of? What roledid you play? Take the assessment at http://www.interlinktc.com/public_html/ami.htmlto see if you are a team player. What does your score indicate about your interests, ability,and developmental needs with regard to being a team member?Teams versus GroupsTeams have been described as groups, which are simply collections of people workingtogether. However, not all groups are teams. There are those who argue that, in the realworld, teams and groups overlap and are more similar than different. It is possible thatsome groups can become teams, but as shown in Table 5.1, the two technically differ instructure, intent, and function. Teams rely less on a hierarchical structure and more onan open and equal exchange of ideas and expertise. Leadership is often shared or mightrotate among team members—who might come from all parts of an organization—andleaders rely more on social skills (skills facilitating interaction and communication) andtrust to ensure that shared responsibilities are met. Also, teams often set their own performance goals and collaborate closely to produce a collective work product.Groups, on the other hand, function in much the opposite way. Groups often have strong,designated leaders who have a formal relationship with followers and can use influencetactics based on their positions. The structure is much less flexible and egalitarian, andwei6626X_05_c05_p177-224.indd 1818/5/11 10:27 AMCHAPTER 5Section 5.1 Leading and Managing Teamsthe emphasis is on individual contributions, delegation, and connection to an organizational vision.At Texas Instruments, the finance, human-resources, and manufacturing departments areall separate groups with their own hierarchies, roles, and distribution of responsibilities.The leaders of these groups are part of an executive team that manages a plant.Table 5.1 Differences Between Groups and TeamsGroupsTeamsDesignated, strong leaderShared or rotated leadership rolesIndividual accountabilityMutual and individual accountability toward each otherIdentical purpose for group and organizationSpecific team vision or purposePerformance goals set by othersPerformance goals set internallyWork within organizational boundariesNot inhibited by organizational boundariesIndividual work productsCollective work productsOrganized meetings and delegationMutual feedback, open-ended discussions, and activeproblem solvingSource: “The Discipline of Teams,” by J. R. Katzenbach, and D. K. Smith, 1995, Harvard Business Review,71(2), pp. 111–112. Used by permission.Depending on the complexity of the work, either a group or a team may provide a better option than the other for meeting a goal. For straightforward tasks, groups are usuallyenough. Why complicate a simple situation by trying to build a cohesive team, which takestime and effort? For highly complex, interdepartmental projects, however, teams may be abetter fit. In these cases, working within a hierarchy can be onerous and time consuming.One employee may want input from another in a separate department, and following properchannels of communication means contacting a manager, who contacts an equivalent manager in another department, who then asks an employee—and then the response followsthe same route in reverse. It would be far simpler to flatten the hierarchy (remove layers ofstructure) and simply work across groups in a team, especially if regular feedback is helpful.3M encountered this situation in their research-and-development department. In a hierarchical group arrangement of the department, a manager told employees what to make.Researchers would create a mock-up and forward the design to sales for feedback and thenthe design would be given to manufacturing for implementation (Dumaine, 1990). Without input from manufacturing, however, designs could have severe flaws, and the resulting communication delays between departments held up production. In this case, creatinginterdepartmental product development teams makes more sense. A researcher can honedesigns based on the realities of manufacturing at a mass scale, and sales and marketing canboth impact the design based on client concerns and competition reports. In contrast, 3M’shuman-resources department may work perfectly well as a structured group, with certainemployees who manage benefits and others who run professional-development workshops.wei6626X_05_c05_p177-224.indd 1828/5/11 10:27 AMSection 5.1 Leading and Managing TeamsCHAPTER 5Advantages and Disadvantages of TeamsThere are a number of advantages when working within a team, as compared to working alone or in a group. Teams are often characterized as achieving high performancelevels through close collaboration (Daft, 2011). In the example of Wrigley, the CEO andthe executive chairman were able to complement one another’s skills and produce a better result than if they had been working separately. This idea is called synergy—whenthe sum is greater than the component parts. Teamwork creates a situation where thisis possible. When members collaborate, their discussions deepen the pool of knowledgeavailable to each individual member. This can lead to more creative solutions to problems and also act as a vetting mechanism: FedEx has been successful in using teams in itsback-office operations in Memphis, Tennessee. The company organized its 1,000 clericalworkers into teams of five to 10 people, and trained them how to manage themselves.“With the help of its teams, the company cut service glitches, such as incorrect bills andlost packages, by 13% in 1989. At a weekly meeting, a team of Federal Express clerksspotted—and eventually solved—a billing problem that was costing the company $2.1million a year” (Dumaine, 1990).Team members can evaluate new proposals and find ways to implement them, andthey can also strike down unrealistic solutions before attempting them, saving time andresources. Team members build on one another’s talents and ultimately develop a better, more comprehensive strategy. As members help each other through ideas, the teamis likely to make better decisions as a unit and avoid unwanted disruptions, delays, andsurprise problems. When 3M’s research-and-development department moved away fromits traditional hierarchical model to interdepartmental product-development teams, efficiency improved and new product offerings tripled from one division (Dumaine, 1990).Also, because of the egalitarian nature of teams, team members are often compelled topush one another—as well as themselves—to work towards continuous improvementand innovation. In teams, member bear an equal share in success, and members who feelresponsible for each other are more likely to become motivated to perform to the best oftheir abilities. In addition to practical advantages, teamwork often leads to greater jobsatisfaction (Lussier & Christopher, 2006), which in turn correlates with positive organizational outcomes. As team members build trust and work collaboratively, they see theteam as a greater social unit that is able to meet larger goals (Batt, 2004) and feel more thanmonetary fulfillment from their work.However, despite these advantages, we have already observed that teams are not appropriate for all situations. Building a team that works well together takes time, which can becounterproductive if the task or problem in question is simple. Other disadvantages canstem from the leader’s failure to set the appropriate tone when building the team. Onecommonly cited problem with teams is that members can sometimes feel pressured toconform to group standards of conduct and performance (Lussier & Christopher, 2006).A related concept is called groupthink. Groupthink occurs when team members, in theirsearch for unanimity, fail to think critically and instead rush into faulty decisions. The teamoften stops brainstorming and evaluating new ideas and instead hurries to build consensus, adopt a decision, and move on. This usually happens when a majority accepts oneviewpoint and the minority goes along to avoid conflict. Groupthink becomes a seriouswei6626X_05_c05_p177-224.indd 1838/5/11 10:27 AMSection 5.1 Leading and Managing TeamsCHAPTER 5Take the LeadLeading and Managing TeamsYou are the chief operations officer for a large investment-management organization. The organization hasoperations in five major U.S. cities, employing nearly 100,000 associates. You have a team of 10 leadersreporting to you based in these geographic locations. With the annual compilation of next year’s budget,you notice a disturbing trend: The operations have been steadily declining in productivity and profitability.While certain economic situations can explain some of the trending episodes, a recent employeeengagement survey showed that leadership is, at best, fragmented in similarities and approaches torunning the business. It is apparent that each leader is running his or her operation independently ofthe others, creating a “silo” effect within the organization.Based on what you’ve learned about leading and managing teams, determine how you would answerthe following:1. What can you do to identify root causes regarding the leadership silo situation?2. Where will you find a best practice for moving forward?3. What resources should you call on to ensure that your best practices are implemented properly?See page 229 for possible answers.issue when it becomes the team norm.To mitigate problems with peer pressureand groupthink, leaders need to encourage team members to raise alternate viewpoints, even if it results in dissent, andcontinuously create opportunities forindividual team members to participate inthe decision-making process.Another issue with teams is a phenomenon known as social loafing, thetendency of individuals to invest lesseffort when working as part of a teamGroupthink occurs when team members fail to or group. This situation often arises inthink critically and rush into faulty decisions.school group projects: One student doesThe team often stops brainstorming and evalu- less work than the others but receives theating new ideas and instead hurries to build asame grade as the rest of the group. Whatconsensus, adopt a decision, and move on.happens in an organization if two peoplecomplete almost all of the work and athird rarely attends meetings and contributes little to a product’s development? Onemethod of mitigating the risk of social loafing is to set up performance reviews so thateach team member evaluates contributions by others, in effect separating individualcontributions from the group’s complete effort. While the team must work together ona task, promotions and evaluation are conducted separately and are based in part onindividual effort and performance as part of the team, so the team’s success is separated from individual rewards. The role of leadership in teams will be discussed infurther detail in the next section.wei6626X_05_c05_p177-224.indd 1848/5/11 10:28 AMSection 5.2 Developing TeamsCHAPTER 55.2 Developing TeamsEffective teams are built on trusting relationships and take time to develop, which iswhy many organizations that prioritize teamwork—such as Nordstrom and Starbucks—use experienced team members to open new stores and then hire new employees who can adapt and fit into an established culture. Starting a team from scratch cantake a long time, and involves several stages. Different models of team development haveevolved. We will illustrate one of the classic models here (Tuckman & Jensen, 1977), butrecognize that others exist, such as the three-stage model devised by Ilgen, Hollenbeck,Johnson, and Judnt (2005): forming, functioning, and finishing. During each stage, followers deal with and solve certain problems and issues before proceeding to performing.Different models offer different insights about team development. Learning to recognizethese stages can be helpful for anticipating needs a team faces in its development.Tuckman and Jensen’s (1977) classic model is one of the most cited frameworks. The fivestages give leaders and followers insight into the team-building process that can assistthem in understanding how to help the team move through challenging moments in productive ways.Stage 1: FormingThe first stage of team development is the forming stage. In this stage, team membersbecome acquainted with each other and determine what is standard, acceptable behavior.This stage involves a great deal of uncertainty for team members as ground rules andtasks are just beginning to be discussed. If employees are used to the structure and definition of a hierarchical system, where tasks are simply assigned and completed, shifting to adifferent, more complex model of teamwork can be disruptive and disorienting. In changing, competitive environments where decisions must be made fast and competently, teammembers have to share responsibility and may need to assign work to themselves ratherthan reporting to another person.Some of the characteristics of this stage include exploring similarities and differenceswith different members and experiencing and questioning first impressions, which ofteninclude confusion, anxiety, fear, excitement, disorientation, and issues of inclusion, leadership, and trust. It is also not uncommon for members to question whether or not they fitwith each other and whether this group may have lower productivity (“Forming,” 2006).For this reason, open communication is essential (Tuckman & Jensen, 1977). The

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