Criteria for effective leadership in technology-oriented project teams

Hans J.Thamhain, Ph.D., PMP, Bentley College

Teamwork is the frontier in today's competitive business world. More than 70% of managers in our organizations consider effective cross-functional teamwork a key determinant of business performance and success.Virtually all managers recognize the critical importance of effective teamwork and strive for continuous improvement of team performance in their organizations. Yet, only one in 10 of these managers have a specific metric for actually measuring team performance. Obviously, this creates some tough challenges, especially in project-based environments where teamwork is crucial to business success. In these organizational environments, work teams must successfully integrate multidisciplinary activities, unify different business processes, and deal with cross-functional issues, such as innovation, quality, speed, producability, sourcing and service. Managerial principals and practices have changed dramatically. Not too long ago, project management was to a large degree considered “management science.” Project leaders could ensure successful integration for most of their project by focusing on properly defining the work, timing and resources, and by following established procedures for project tracking and control. Today, these factors are still crucial. However, they have become threshold competencies, critically important, but unlikely to guaranty by themselves project success. Today's complex business world requires project teams who are fast and flexible, and can dynamically and creatively work toward established objectives in a changing environment (Cusumano & Yoffie, 1998; Engel, 1997; Thamhain, 1998, 1999, 2000). This requires effective networking and cooperation among people from different organizations, support groups, subcontractors, vendors, government agencies, and customer communities. It also requires the ability to deal with uncertainties and risks introduced by technological, economic, political, social, and regulatory factors. In addition, project leaders have to organize and manage their teams across organizational lines, dealing often with resource personnel over whom they have little or no formal authority. Resource sharing, multiple reporting relationships and broadly based alliances are as common in today's business environment as email, flex time, and home offices. Managing project teams effectively in such dynamic environments, requires task leaders to understand the interaction of organizational and behavioral variables. These project leaders must develop their multidisciplinary task groups into unified teams, and foster a climate conducive to involvement, commitment and conflict resolution, in spite of these organizational challenges.

What We Know About Teamwork in Project Organizations

Concept and Process. Teamwork is not a new idea. The basic concepts of organizing and managing teams go back in history to biblical times. In fact, work teams have long been considered an effective device to enhance organizational effectiveness. Since the discovery of important social phenomena in the classic Hawthorne studies (Roethlingsberger & Dickinson, 1939), management theorists and practitioners have tried to enhance group identity and cohesion in the workplace (Dyer, 1977). Indeed, much of the human relations movement that followed Hawthorne, is based on the group concept. McGregor's (1960) theory Y, for example, spells out the criteria for an effective work group, and Likert (1961) called his highest form of management the participating group or system 4. However, the process of team building becomes more complex and requires more specialized management skills as bureaucratic hierarchies decline and horizontally oriented teams and work units evolve.

Traits of High-Performing Project Team

Exhibit 1. Traits of High-Performing Project Team

Redefining the Process. In today's more complex multinational and technologically sophisticated environment, the group has reemerged in importance as the project team (Wellins, Byham, & Wilson, 1991; Fisher, 1993; Nurick, 1993; Shonk, 1996; Thamhain & Wilemon, 1999). Team building can be defined as the process of taking a collection of individuals with different needs, backgrounds, and expertise and transforming them into an integrated, effective work unit. In this transformation process, the goals and energies of individual contributors merge and focus on specific objectives.When describing an effective project team, managers stress consistently that high-performance, although ultimately reflected by producing desired results, on time and within budget, is a derivative of many factors that are graphically shown in Exhibit 1. Team building is an ongoing process that requires leadership skills and an understanding of the organization, its interfaces, authority, power structures, and motivational factors. This process is particularly crucial in environments where complex multidisciplinary or transnational activities require the skillful integration of many functional specialties and support groups with diverse organizational cultures, values and intricacies (Oderwald, 1996). Typical examples of such multidisciplinary activities requiring unified teamwork for successful integration include:

• Establishing a new program

• Transferring technology

• Improving a project-client relationships

• Organizing for a bid proposal

• Integrating new project personnel

• Resolving interfunctional problems

• Working toward major milestone

• Reorganizing mergers and acquisitions

• Transitioning the project into a new activity phase

• Revitalizing an organization.

Because of their potential for producing economic advantages, work teams and their development have been researched by many. Starting with the evolution of formal project organizations in the 1960s, managers in various organizational settings have expressed increasing concern with and interest in the concepts and practices of multidisciplinary team building. As a result, many field studies have been conducted, investigating work group dynamics and criteria for building effective, high-performing project teams. These studies have contributed to the theoretical and practical understanding of team building and form the fundamental concepts discussed in this chapter. Prior to 1980, most of these studies focused just on the behavior of the team members, with limited attention given to the organizational environment and team leadership.While the qualities of the individuals and their interaction within the team are crucial elements in the teamwork process, they represent only part of the overall organization and management system that influences team performance, which was recognized by Bennis and Shepard as early as 1956. Since 1980 an increasing number of studies have broadened the understanding of the teamwork process (Tichy & Urlich, 1984; Walton, 1985; Dumaine, 1991). These more recent studies show the enormous breadth and depth of subsystems and variables involved in the organization, development, and management of a high-performing work team (Gupta & Wilemon, 1996). These variables include planning, organizing, training, organizational structure, nature and complexity of task, senior management support, leadership, and socioeconomic variables, just to name the most popular ones (Shaw, Fisher, & Randolph, 1991; Thamhain & Wilemon, 1983, 1987, 1991, 1993). Even further, researchers such as Dumaine (1991), Drucker (1996), Peters and Waterman (1987, 1997), Moss Kanter (1989), and Thamhain (1990, 1993) have emphasized the nonlinear, intricate, often chaotic, and random nature of teamwork, which involves all facets of the organization, its members, and environment. These teams became the conduit for transferring information, technology, and work concepts across functional lines quickly, predictably, and within given resource restraints.

Toward Self-Direction and Virtual Teams. Especially with the evolution of contemporary organizations, such as the matrix, traditional bureaucratic hierarchies have declined and horizontally oriented teams and work units became increasingly important to effective project management (Fisher, 1993; Marshall, 1995; role as supervisor has been diminished in favor of more empowerment and self-direction of the team, as defined in Exhibit 2). In addition, advances of information technology, made it feasible and effective to link team members over the Internet or other media, creating a virtual team environment, as described in Exhibit 3. Virtual teams and virtual project organizations are powerful managerial tools, especially for companies with geographically dispersed project operations, including contractors, customers, and regulators.

Self-Directed Teams

Exhibit 2. Self-Directed Teams

Teams of this contemporary nature exists in virtually all of our organizations, ranging from dedicated venture groups, often called skunk works, to product development teams, process action teams, and focus groups. These team concepts are being applied to different forms of project activities in areas of products, services, acquisition efforts, political election campaigns, and foreign assistance programs. For these kinds of highly multifunctional and nonlinear processes, researchers stress the need for strong integration and orchestration of cross-functional activities, linking the various work groups into a unified project team that focuses energy and integrates all subtasks toward desired results. Further, the life cycle of these teams often spans across the complete project, not just the phase of primary engagement. For example, the primary mission of the product development team may focus on the engineering phase, but the team also supports activities ranging from recognition of an opportunity, to feasibility analysis, bid proposals, licensing, subcontracting, transferring technology to manufacturing, distribution and field service. While these realities hold for most team efforts in today's work environment, they are especially pronounced for efforts that are associated with risk, uncertainty, creativity, and team diversity such as high technology and/or multinational projects. These are also the work environments that first departed from traditional hierarchical team structures and tried more self-directed and network-based virtual concepts (Fisher, 1993; Ouchi, 1993).

Virtual Teams

Exhibit 3.Virtual Teams

Benchmarking Your Team Performance

Exhibit 4. Benchmarking Your Team Performance

Scope, Objective, and Method

This paper reports selected parts of ongoing field research into best-in-class project management practices, investigating the way project leaders work with their teams in complex, mostly technology-intensive project situations. The objective of these studies was to examine team leadership methods and organizational criteria that are effective in complex project settings. This paper draws on research from five field studies conducted over the last 12 years, which include surveys of over 900 project professionals in 24 companies. Specifically, these studies include data from 655 engineers, scientists, and technicians, 31 managers from functional support groups, 138 project team leaders, 69 project managers, 14 directors of R&D, 9 directors of marketing, and 10 general management executives. Together, the data covered over 180 projects in the area of product/service developments with budgets averaging $1,200,000 each. The host companies were large technology-based multinational companies of the “Fortune-1000” category. Specifically, data were collected between 1987 and 1999 by questionnaires and two qualitative methods: participant observation and in-depth retrospective interviewing. The purpose of this combined data collection method was to cast the broadest possible information-gathering net to identify the tools, techniques and practices used for managing technical projects today, and to gain insight into applications, methods and effectiveness.

A Model for Measuring Project Performance

“A castle is only as strong as the people who defend it.” This Japanese proverb also applies to organizations. They are only as effective as their unified team efforts. Although team performance is difficult to measure, research agrees on specific metrics for characterizing winning teams, as graphically shown in Exhibit 1. More specifically, Exhibit 5 breaks these characteristics of high performing project teams is into four categories: (1) work and team structure, (2) communications and control, (3) team leadership and (4) attitude and values. These broad measures can provide a framework for benchmarking and a simple model for organizing and analyzing the variables, which influence the team's characteristics and its ultimate performance. Teams that score high on these characteristics are also seen by upper management most favorable in dealing with cost, quality, creativity, schedules and customer satisfaction. They also receive favorable ratings on the more subtle measures of high team performance, such as flexibility, change orientation, innovative performance, high morale and team spirit.

Exhibit 5. Influences of the Work Environment on Team Leadership Effectiveness (Kendall's Tau Rank-Order Correlation)

Influences of the Work Environment on Team Leadership Effectiveness (Kendall's Tau Rank-Order Correlation)

Influences of Team Environment on Leadership

Many observations from best practices and formal field studies are pointing at an interesting, professionally stimulating work environment, high on recognition and accomplishments, as conducive to effective team leadership and high project performance. These conditions seem to affect motivation and commitment of individual team members, cross-functional communications, and many components that ultimately influence the team characteristics favorably (see Exhibit 4) and produce high project performance. However, more rigorous statistical tests had to be performed before conclusions could be drawn. Exhibit 5 summarizes the results of a Kendall Tau analysis, measuring the association between the work environment and leadership effectiveness. The results show indeed that those conditions, which are conducive to a professionally stimulating work environment, also lead to higher levels of (1) trust, (2) respect, (3) credibility, (4) ability to influence decisions, and ultimately (5) overall team leadership effectiveness.

The strength of the organizational and leadership variables was measured on a five-point scale as a perception of project team members, except for overall team leadership effectiveness, which was measured as a perception of both team members and senior management. As indicated by the strong positive correlation shown in Exhibit 5, factors which fulfill professional esteem needs seem to have a particularly strong influence on overall team leadership effectiveness. The three most significant associations are: (1) professionally stimulating and challenging work environments [τ=.41], (2) recognition of accomplishments [τ=.39], and (3) the ability to resolve conflict and problems [τ=.37]. Many of these factors that correlate favorably to team leadership effectiveness, appear to deal favorably with the integration of the personal goals and needs of team member with the project and organizational goals. In this context, these more subtle factors seem to become catalysts for cross-functional communications, information sharing, and ultimate integration of the project team with focus on desired results. All associations are significant at p=0.1 or better. The implications and lessons learned from the broader context of this field study are summarized in Exhibit 5.

Building High-Performing Teams

What does all this mean to managers in today's work environment with high demands on efficiency, speed and quality? The increasing technical complexities, cross-functional dependencies, and the need for innovative performance, prompt enormous managerial challenges for directing, coordinating and controlling teamwork. Especially with the expansion of self-directed team concepts, additional managerial tools and skills are required to handle the burgeoning dynamics and infrastructure. Effective teamwork is a critical determinant of project success, and the organization's ability to learn from its experiences and position itself for future growth (Senge, 1990). To be effective in organizing and directing a project team, the leader must not only recognize the potential drivers and barriers to high-performance teamwork, but also know when in the life cycle of the project they are most likely to occur. The effective project leader takes preventive actions early in the project life cycle and fosters a work environment that is conducive to team building as an ongoing process. The new business realities force managers to focus also on cross-boundary relations, delegation and commitment, in addition to establishing the more traditional formal command and control systems.

The effective team leader is usually a social architect who understands the interaction of organizational and behavioral variables and can foster a climate of active participation and minimal dysfunctional conflict. This requires carefully developed skills in leadership, administration, organization, and technical expertise. It further requires the project leader's ability to involve top management, to ensure organizational visibility, resource availability and overall support for the new project throughout its life cycle. Moreover, project leaders and their management must understand the interaction of organizational and behavioral variables, so they can facilitate a climate of active participation, minimal dysfunctional conflict, and effective communication. They must also foster an ambiance conducive to change, commitment and self-direction. Four major conditions must be present for building effective project teams: (1) professionally stimulating work environment, (2) good project leadership, (3) qualified personnel, and (4) stable work environment. Building effective project teams involves the whole spectrum of management skills and company resources, and is the shared responsibility between functional managers and the project leader. By understanding the criteria and organizational dynamics that drive people toward effective team performance, managers can examine and fine-tune their leadership style, actions, and resource allocations toward continuous organizational improvement.

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This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI or any listed author.

Proceedings of PMI Research Conference 2000

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