Teamwork and innovation

WHU – Otto Beisheim School of Management, Germany

Introduction

In this paper, some of the main findings from a large-scale study of 145 software development projects are highlighted. The study's key objective was to conceptualize and measure the quality of teamwork in innovative projects, to identify its effects on team (or project) performance, and to specify major antecedents of teamwork quality. Hence, the following discussions start with asking what is good teamwork, leading to a brief discussion of assessing teamwork quality by means of its six facets. This is followed by a discussion when teamwork quality matters most. How does the project's task innovativeness come into play? How team member (geographic) dispersion? How do creativity and teamwork interact?

The paper concludes with one key driver of teamwork quality, that is., team size. This study and others have repeatedly demonstrated that smaller teams perform better teamwork. Yet many teams end up fairly large, for a number of reasons. Some of the main reasons will be discussed, along with ways to keep teams small. This study's findings have been reported in several publications, and this manuscript draws from such prior works (Hoegl, 2005; Hoegl, Ernst, & Proserpio, 2007; Hoegl & Gemuenden, 2001; Hoegl & Parboteeah, 2007; Hoegl, Parboteeah, & Gemuenden, 2003; Hoegl & Proserpio, 2004).

What is Good Teamwork?

Teams differ with regard to the quality of their collaborative team process. Following Hoegl & Gemuenden (2001), the quality of teamwork, however, can be perceived and assessed only indirectly. Six facets of the collaborative work process in teams comprehensively describe the quality of teamwork. These six facets—communication, coordination, balance of member contributions, mutual support, effort, and cohesion—comprise performance relevant measures of team internal processes. Each teamwork quality facet is described in more detail below.

Communication

Communication provides a means for the exchange of information among team members. The quality of communication within a team can be described in terms of the formalization, structure, and openness of the information exchange. The degree of formalization describes how spontaneously team members are able to converse with each other. Communication that requires a large amount of preparation and planning before it can occur (e.g., scheduled meetings, written status reports) is considered more formal, whereas spontaneously initiated contacts (e.g., talks in the hallway, quick phone calls, short e-mails) constitute informal communication. It is this informal, spontaneous communication that has been shown to be crucial to teamwork. In addition, it is important for the quality of collaboration in teams that team members are able to communicate directly with all other team members (communication structure), as the exchange of information through mediators (e.g., team leader) is time consuming and a possible cause of faulty transmission. Apart from formalization and structure, it is critical to teamwork quality that members share their information openly with each other. A lack of openness within a team (i.e., holding back important information) hinders the most fundamental function of teamwork, namely the integration of team members' knowledge and experience on their common task.

Coordination

While teams must work together on fundamental aspects of a common task, many activities in the task process should be delegated to individual members working on parallel subtasks. One important component of the quality of collaboration in teams is the harmonization and synchronization of these individual contributions. To do this effectively and efficiently, teams need to agree on common schedules, budgets, and deliverables. Thus, coordination means that the teams have to develop and agree upon a common task-related goal structure that has sufficiently clear sub-goals for each team member, free of gaps and overlaps.

Balance of Member Contributions

It is important to the quality of teamwork that every team member is able to contribute all task-relevant knowledge and experience to the team. It would defeat the purpose of teams if some team members could not bring in their views and ideas because others were dominating discussions and decision-making processes. Therefore, it is considered essential to teamwork quality that contributions to the team task are balanced with respect to each member's specific knowledge and experience. While not everyone must bring in, the exact same number of ideas, no one should be limited in presenting and contributing relevant knowledge to the team.

Mutual Support

Intensive collaboration of individuals depends upon a cooperative rather than a competitive frame of mind. Without questioning the motivational potential of competition in the case of independent individual tasks, for interdependent tasks, mutual support is more productive than are the forces of competition. Thus, team members working on a common goal should display mutual respect, grant assistance when needed, and develop other team members' ideas and contributions, rather than trying to outdo each other. Competitive behaviors in a team lead to distrust and frustration, whereas mutual support fosters the integration of team members' expertise and is therefore a critical aspect of the quality of collaboration in teams.

Effort

Team norms regarding the effort of team members are of particular importance to the collaborative team process. Workload sharing and prioritizing of the team's task over other obligations are indicators for the effort team members exert on the common task. In order to achieve high teamwork quality and avoid conflict among team members, it is important for everyone in the team to know and accept the work norms concerning sufficient effort. A uniformly high level of effort by all team members is primary to the quality of collaboration.

Cohesion

Team cohesion refers to the degree to which team members desire to remain in the team. Good teamwork can hardly be achieved without an adequate level of cohesion. If team members lack a sense of togetherness and belonging, if there is little desire to keep the team going, then intensive collaboration seems unlikely. An adequate level of cohesion is necessary to maintain a team, to engage in collaboration, and thus to build the basis for high teamwork quality.

When Does Good Teamwork Really Matter?

High levels of team collaboration (i.e., teamwork quality), however, are not necessarily associated with increased team performance in innovative projects, as this relationship may be moderated by task characteristics such as task novelty, complexity, and uncertainty (Gladstein, 1984; Stewart & Barrick, 2000). These task properties combine to what has been termed task innovativeness (Adler, 1995; Olson, Walker, & Ruekert, 1995). As past studies indicate, there are projects of varying innovativeness even in such generally innovative areas as R&D, and the “fit” between innovativeness and the integration mechanism chosen shows a significant relationship with project success (Keller, 1994; Olson et al., 1995). This provides support to the notion that the choice of integration mechanism (e.g., schedules and plans versus teams) should fit the need for integration as described by the novelty, complexity, and uncertainty of the task at hand (Nadler & Tushman, 1988). Hence, higher quality of collaboration within the project teams is not necessarily always better, but the assumed positive relationship between teamwork quality and team performance depends on the innovativeness of the project at hand. For projects that pose moderate levels of technical novelty, uncertainty, and complexity to the team, which is likely the case when the team project entails the upgrade or customization of existing software, teamwork quality should have a lesser effect on team performance than for projects that involve the design and development of an entirely new software solution.

Project Innovativeness, Teamwork Quality, and Team Efficiency

While teams need to work together in a direct and interactive fashion on fundamental aspects of a common task, many activities in the task process can be delegated to individual members working parallel on subtasks. One important component of the quality of collaboration in teams is the harmonization and synchronization of these individual contributions. To this end, teams need to agree on common work structures, schedules, budgets, and deliverables, including a common task-related goal structure with clear sub-goals for each team member, avoiding gaps and overlaps. A lack of collaboration within the team leads to duplicated efforts (overlaps) and/or missing responsibility for certain sub-tasks and activities (gaps) in the task process and thus impedes the team's ability to complete its project within certain schedule and budget constraints.

As this relationship seems common to all team projects, teamwork quality is more important in cases of highly innovative tasks, where the novelty, complexity, and uncertainty of the task makes the collaboration process more critical due to unforeseen and rapidly changing task environments (Hoegl, Parboteeah, & Gemuenden, 2003). More innovative tasks create greater uncertainty because there are more sources of unpredictability and “more potential disruptions associated with the coordination of interdependent pieces of the project” (Sicotte & Langley, 2000, 3). In addition, more innovative tasks usually involve unfamiliar technology and, thus, it is more difficult to rely on past experiences to solve new problems. The lack of “reference points” makes it harder to develop a set of steps to deal with new issues. Thus, in more innovative projects there are frequent changes, a lack of knowledge about future events and consequences of specific actions, ambiguity surrounding the nature of tasks to be executed and problems to be resolved. We argue that these factors combine to make teamwork quality critical.

Due to the constant changes inherent in highly innovative tasks (e.g., team members facing new issues and problems, need to reassign tasks, etc.), it is necessary for team members to collaborate to a high degree to deal with these frequent changes. Team members need to meet regularly to share information about how to execute the next task, to find out about what other team members are facing, to deal with disruptions, and ultimately, to ensure that the project is on track (Keller, 1994). In addition, high levels of collaboration provide opportunities for team members to deal with uncertainties by allowing team members not only to establish objectives and plan courses of actions to reach such objectives but also to regularly revise these plans in the face of uncertainty (Daft & Lengel, 1986).

In contrast, in moderately innovative projects where the task process is clearer from the outset, the team (or team leader) can determine a project plan with milestones, task interfaces between individuals, as well as individual deliverables, at the beginning of the project. Tasks can be assigned to individuals and expectations for performance can be ascertained. Given such a more programmable task environment, high teamwork quality is less necessary. The project poses fewer technical uncertainties and sudden changes and adaptations are not as frequent as in highly innovative projects making intensive teamwork less important for project success. In contrast to highly innovative projects, where high teamwork quality is necessary to deal with the ambiguities and uncertainties of the project, a moderately innovative project involves a relatively familiar and programmable environment. Thus, if teams do engage in high degrees of collaboration in moderately innovative projects (e.g., software upgrade/customization projects), it may be resulting in little or no additional benefit to the team's schedule and budget performance (Sicotte & Langley, 2000). In such projects, team members are more likely to be able to plan the project at the outset and then concentrate on executing that plan, rather than having to revisit and revise their work approach and project planning continuously, as is more likely the case in highly innovative projects.

Project Innovativeness, Teamwork Quality, and Team Effectiveness

As team members share task relevant information openly within the team and grant each other assistance, team members develop a stronger sense of personal responsibility for achieving the collective team goals (i.e., creating software with qualitative aspects such as functionality, robustness, scalability, etc.). Scott (1997) shows that cross-functional teams, where team members perceive their teams as social entities with highly valued common goals (rather than collections of representatives from functional units) experience higher cohesion and display better performance in terms of budget, time, and product quality.

Teamwork quality, however, becomes more important to a team's ability to deliver the desired product quality in cases where projects pose high levels of task innovativeness (Hoegl, Parboteeah, & Gemuenden 2003). In highly innovative projects, the pace of change is rapid, extreme, and unpredictable. To ensure that the project's qualitative performance expectations (i.e., effectiveness) are met, team members need to convene frequently to assess the nature of such changes by examining where the project is going, what new problems have arisen, and what issues need to be dealt with. As argued by Daft and Lengel (1986), more innovative projects provide team members with information laden with equivocality and uncertainty. To deal with such “richness”, team members need to collaborate frequently in order to interpret and give meaning to complex information. In addition to the enhancement of information sharing, team collaboration also allows the team to share the skills necessary to successfully complete the project (Madhavan & Grover, 1998) This collaboration is necessary in order to enhance the synergistic potential among the various interdependent parts of a project (Hitt, Hoskisson, & Nixon, 1993). As such, it is very critical for team members to collaborate (i.e., communicate task-relevant information, provide support and expertise, etc.) to face such a dynamic environment and to ensure that the teams' project goals are achieved. By sharing skills and information, a highly collaborative environment makes it more likely that team members can deal with the uncertainties, ambiguities, and disruptions to achieve a higher quality outcome.

However, in cases of moderately innovative projects, the nature of the tasks that need to be undertaken to achieve qualitative project performance expectations is much easier to determine. In the same vein, tasks and responsibilities for task achievement can be more clearly defined and assigned to individual team members with a lesser degree of difficulty than in highly innovative projects. Because of a smaller probability of dramatic and extreme changes, as compared to highly innovative projects, team members do not need to have a high level of collaboration to achieve team performance objectives. Higher levels of teamwork quality will result in little or no additional effectiveness because courses of action to complete such projects successfully can be more clearly and easily specified at the beginning of the projects. In such cases, a particularly collaborative task process may not be associated with a greater likelihood for attainment of the qualitative expectations by the team.

How Does Teamwork Matter in Dispersed Projects?

It has been shown that teamwork quality decreases with decreasing team member proximity (Hoegl & Proserpio, 2004). This is because core aspects of teamwork quality, such as communication, coordination, mutual support, team effort, and cohesion, are more difficult to achieve with an increasing distance between team members. While this fundamental impact of team member proximity on teamwork quality holds true theoretically and empirically, as team member proximity decreases (i.e., team members are increasingly dispersed), the influence of teamwork quality on team performance increases. Hoegl, Ernst, and Proserpio (2007) discuss two main reasons for this:

First, as Gassman and von Zedtwitz (2003) highlight, there is a general trend toward decentralized research and development (R&D) operations in order to locate this function closer to important markets and to create centers of excellence by utilizing the resources of regional technology clusters (Tallman, Jenkins, Henry, & Pinch, 2004). As a consequence, new product development teams become increasingly dispersed, as the project task requires the input of specialized and superior knowledge that is only available at multiple dispersed locations. On a smaller scale, even “locally” conducted projects (i.e., initiated and carried out at one location) regularly involve some degree of collaboration with partner firms, suppliers, and customers that provide important knowledge for the project. In such projects, team members from the focal organization may spend time at the site of a collaborating firm, or the project team may include members from these organizations who mainly collaborate with the other team members over a distance. Either scenario leads to decreases in team member proximity (Hoegl & Proserpio, 2004; Kiesler & Cummings, 2002), while at the same time increasing the knowledge potential on which the project team can draw. Teamwork quality has a more pronounced effect on team performance in dispersed team settings as it helps to fully leverage the knowledge potential of all team members. A main motivation behind creating dispersed teams is to capture the knowledge potential from various locations (Gassmann & von Zedtwitz, 2003), whether it be, for example, at one organization's different R&D centers or at collaborating organizations' sites. This, in turn, leads to the increasing relevance of teamwork quality for team performance. As such, teamwork quality captures the openness, currency, and accuracy of information sharing, the coordination of sub-tasks, the mutual support between team members, the utilization of all team members' potential, and the effort and cohesion in the team (Hoegl & Gemuenden, 2001). Therefore, teamwork quality describes the collaborative team process necessary to leverage the increased potential of utilizing dispersed and specialized knowledge resources. This, in turn, supports the team's ability to more effectively and efficiently complete its task.

Second, as team member proximity decreases, leadership effectiveness is also likely to decrease. Team leaders lose their ability to impact the team with decreasing team member proximity, as they have less direct and immediate access to all team members (Hoegl & Muethel, 2007). Leadership functions that are regarded as critical in the context of innovation teams (Jassawalla & Sashittal, 2000; Zaccaro, Rittman, & Marks, 2001), such as information search and structuring, information use in problem solving, ensuring every team member's commitment to the project, as well as coaching and facilitating, all become more difficult to perform when team members are increasingly dispersed. Whereas team leaders in co-located teams can counteract or compensate low quality teamwork through hands-on leadership, a team leader in a dispersed setting largely lacks this option. In the latter case, team leaders have to increasingly rely on the individual team members' behavior, as is underlined by recent research on so-called virtual teams (Montoya-Weiss, Massey, & Song, 2001). Coordination of tasks within the team, the balance of team member contributions and communication among team members (as assessed by the teamwork quality construct) must be largely self-managed by the team members, with less immediate assistance from the team leader. In other words, in low proximity settings, team performance depends more strongly on the quality of teamwork and can less be substituted by hands-on leadership that ‘ensures', for example, team members' commitment and information sharing. Therefore, as team member proximity decreases, teamwork quality has a stronger impact on the team's ability to effectively and efficiently complete its project. This has been documented empirically by Hoegl, Ernst, & Proerpio (2007), and Figures 1 and 2 demonstrate this moderated relationship. In their study, team effectiveness relates to the quality of the software products designed and developed (e.g., functionality, robustness), while efficiency refers to the adherence to project schedules and budgets.

Illustration of the Moderation Effect of Team Member Proximity on the Relationship between Teamwork Quality and Team Effectiveness (Source: Hoegl, Ernst, & Proserpio, 2007))

Figure 1 Illustration of the Moderation Effect of Team Member Proximity on the Relationship between Teamwork Quality and Team Effectiveness (Source: Hoegl, Ernst, & Proserpio, 2007))

Illustration of the Moderation Effect of Team Member Proximity on the Relationship between Teamwork Quality and Team Efficiency (Source: Hoegl, Ernst, & Proserpio, 2007))

Figure 2 Illustration of the Moderation Effect of Team Member Proximity on the Relationship between Teamwork Quality and Team Efficiency (Source: Hoegl, Ernst, & Proserpio, 2007))

The findings from Hoegl, m Ernst, and Proserpio (2007) research have clear implications for managerial practice. One fundamental implication derives from viewing team member proximity not as a “given,” but as a managerial team design choice, that is, a manager may decide not to draw on potentially superior but dispersed expertise, relocate individuals for part of or the entire project, or allow for substantial traveling, etc. In any case, managers must be aware of the increasing difficulty of achieving high teamwork quality as proximity decreases (as was shown by Hoegl and Proserpio, 2004). Moreover, managers must also be aware that superior team performance can be achieved in dispersed (that is, low proximity projects), but that this will require additional attention to teamwork quality.

As such, even low geographical dispersion (e.g., same building, but different floors) can play a notably detrimental role with regard to collaborative processes (Allen, 1971). Thus, it is well worth being focused on this potential issue, even if the teams cannot be readily labeled as “virtual.” To cope with this effect, particular attention should be placed on the reinforcement of the different aspects of teamwork quality, such as mutual support, cohesion, as well as open information sharing and task coordination.

Low proximity increases the importance of teamwork. Hence, teamwork-related skills (Stevens & Campion, 1994; Stevens & Campion, 1999) such as social skills and project management skills seem particularly relevant in dispersed settings. It is essential that managers emphasize social and project management skills along with team members' domain-relevant skills (e.g., programming skills, hardware expertise, skills regarding the software's application field), when (1) selecting applicants to join the organization, (2) assigning individuals to work in low proximity teams, and (3) crafting training and development schemes.

Moreover, where there is low proximity, team collaborative processes can be reinforced through advanced computer-mediated communication technologies, such as Lotus Notes, Macromedia Breeze, Matrix One, Microsoft Exchange, and many other collaboration software packages. These technologies alone are often regarded as insufficient because of the well-known issues of low media richness (Daft & Lengel, 1986). It is important to note, however, that low proximity should not (necessarily) be exclusively equated with virtual. Spontaneous and/or formal face-to-face meetings are likely to complement the role of computer-mediated communication, which has been offered as a key solution to improving collaboration in so-called virtual teams (Maznevski & Chudoba, 2000).

Does Teamwork Foster Creativity?

Following Amabile's (1996) conceptualization of creativity-related skills, we can distinguish between domainrelevant skills—abilities regarding a specific content domain, and creative thinking skills—divergent thinking and association abilities. Work by Hoegl & Parboteeah (2007) indicates that team collaboration, that is, teamwork (2001), has different effects in that high levels of team collaboration facilitate the application of domain-relevant skills while impeding the application of creative-thinking skills.

Hoegl & Parboteeah (2007) show that collaborative processes reduce the performance effect of teams' creative thinking skills. This argument is based chiefly on the grounds that creativity as a process (Drazin, Glynn, & Kazanjian, 1999) involves divergent thinking (Amabile, 1996; Paulus, 2000; Thompson, 2003), or the generation of a wide variety of ideas or responses to a particular problem. The collaboration within teams, however, is likely to result in strong convergent forces, limiting the application of creative thinking skills and their influence on team performance in innovative projects.

The creative thinking process is characterized by the conception of divergent ideas or the association of new combinations of means and ends. In contrast, collaborative processes are inherently associated with convergence of ideas, the integration of knowledge, and the seeking of consensus across different, or divergent, viewpoints. Thus, while innovative projects require creative thinking skills, we should recognize that the collaborative team process is likely to hamper their successful application.

Elements of teamwork quality such as communication, coordination, and balance of member contributions pertain to the degree to which technical and coordinative information is being contributed and shared within the team. However, while these task-related interaction processes facilitate the convergence of viewpoints on the project and its objectives, they also constrain the divergent thinking, the association of new combinations of means and ends. In other words, within-team collaboration is good for the selection of one preferred option among alternatives, but likely inhibits the creation of new alternatives (that is, other possible solutions not yet considered) (Thompson, 2003).

As such, these elements of collaboration are likely to lessen the performance impact of creative thinking skills. For instance, if a team has high levels of coordination, it implies that all team members agree on their own individual contributions and respect certain individual sub-goals (Hoegl & Gemuenden, 2001). However, imposing a somewhat structured environment through coordination on an otherwise unstructured process is likely to inhibit the proper application of creative thinking skills. Because high coordination implies that team members are pressured to satisfy certain project requirements and deadlines, it may block any spontaneous or unstructured activity that is so crucial to creativity (Diehl & Stroebe, 1991). Similarly, open sharing of information and ideas as well as ensuring a balance of member contributions also means that team members are forced to acknowledge and process contributions from other team members. This requires time and effort that is spent in interactions within the team, thus taking away from the time and energy for creative work.

Where a tight social knitting provided through team cohesion, a work atmosphere of mutual support, and the presence of work norms of high effort, supports the convergence of ideas, it likely inhibits the emergence of divergent thinking and the creation of new ideas different from what is ‘on the table' already (Thompson, 2003). As such, the performance effect of a teams' creative thinking skills is likely reduced by a collective mind regarding the situation and the definition of the problem.

High mutual support suggests that team members respect each other's ideas and provide a cooperative rather than a competitive environment. However, such an environment may inhibit the proper application of creative thinking skills. Teams may be more likely to accept sub-optimal ideas and avoid conflict. Moreover, high team cohesion implies that team members value team membership, are committed to their project, and aim at maintain the team as a social entity (Gully, Devine, & Whitney, 1995; Mullen & Copper, 1994). In highly cohesive teams, though, team members are likely to strive for consensus and approval rather than diverge from ideas that are perceived as commonly accepted in the team. Such processes may encourage the tendency of teams to focus on common information or knowledge (Stasser & Titus, 2003) and hence may ignore other more fruitful and divergent avenues that may be more likely to generate novel ideas and solutions to problems. Through high levels of collaboration, team members are more likely to use information shared and preferred by the group and ignore conflicting information. As such, critical and conflicting information from members that may produce superior alternatives tends to be ignored, thus limiting the use of creative thinking skills. Such tendencies are similar to what has been described as groupthink, that is, strong consensus seeking in teams (Janis, 1982, 1995).

This has been documented empirically by Hoegl & Parboteeah (2007), and the Figure 3 demonstrates the effect of teamwork on the relationship between creative-thinking skills and team efficiency. The same moderated relationship was found for team effectiveness.

Moderation Effect of Teamwork Quality on the Relationship between Creative Thinking Skills and Team Efficiency (Source: Hoegl & Parboteeah (2007))

Figure 3 Moderation Effect of Teamwork Quality on the Relationship between Creative Thinking Skills and Team Efficiency (Source: Hoegl & Parboteeah (2007))

Given the negative moderating influence of teamwork quality on the relationship between creative thinking skills and both team effectiveness and efficiency, Hoegl & Parboteeah's (2007) research emphasizes the importance of less collaborative sequences in the course of innovative team projects. Hence, on a practical level, their study suggests that teams must allow and provide for collaborative work periods that facilitate the application of domainrelevant skills and less collaborative (i.e., individual) work periods that facilitate the application of creative thinking skills. This pertains to an issue that many organizational teams, particularly those with innovative tasks, often struggle with: How much work should be done jointly in direct interaction among team members, and how much work should be done individually? Both team members as well as team leaders and external managers should be aware of the different effects that interactive work modes have, rather than push for a maximally collaborative work process in the assumption that ‘collaboration is always good'. Moreover, as Thompson (2003, p. 99) points out, “most people strongly believe that teams are more creative than individuals, when in fact they aren't.” Therefore, teams must learn to recognize that not all creative performance lies within collaborative processes, but that different parts of their creative potential are supported by different work modes. For instance, teams can specify and reserve segments of their work process for individual work in order for members to separately generate new ideas and alternatives to problems facing the team. Those alternatives can subsequently be discussed, evaluated, and elaborated by the team collectively. Similarly, the use of facilitators to manage group interactions may be more fruitful than plainly encouraging high teamwork.

What is the Relationship Between Team Size and Teamwork?

From early research by Ziller (1957) and Steiner (1966) to more recent models of team effectiveness, team size has been considered an important structural variable determining team processes (e.g., team collaboration, social loafing, etc.) and subsequently team performance (i.e., the effectiveness and efficiency of task completion). Laboratory research suggests that smaller teams provide for more direct and efficient intra-team communication (Bray, Kerr, & Atkin, 1978), greater effort by all team members (i.e., reduced social loafing) (Latané, Williams, & Harkins, 1979), and hence a better utilization of all team members' potential.

Despite such evidence, teams in business organizations today are often too large. Project leaders and managers often aim for securing a maximally big head count for their project to ‘ensure' that objectives can be met. Also, in cross-functional projects such ‘inflated' teams are often the result of departmental interests. All organizational units that are (potentially) affected by the team's work want to be “represented” in the project.

Teams, like any other organizational unit, need adequate staffing in terms of both quality and quantity of personnel. Unlike less collaborative forms of work organization, however, a team's work performance depends on its ability to efficiently and effectively work in a directly interactive work mode to achieve a common team output. In less collaborative organizational units, the collective output largely represents the aggregate of individuals' work products. For instance, customer service agents conduct their work of answering customer calls largely independently from other members of their department. While the agents might cross-train and support one another or collectively set work schedules, their primary work is done individually, often supported by a supervisor who may provide assistance on more difficult customer requests. By contrast, team members are mutually dependent on one another in their effort to produce a common team output. For instance, in a software development team, programming engineers, computer hardware engineers, systems network experts, and subject matter experts regarding the application field of the software (e.g., accountants, if the software developed was accounting software) need to collaborate to design and develop a coherent software product. Here, the emphasis is not on individual outputs, but on the common output that the team members work toward interactively. Hence, teamwork is the essence of a team's work process, while less collaborative work organizations rely chiefly on individuals' work processes.

How Team Size Affects Teamwork

The size of a team has profound effects on several aspects of teamwork quality. First, the sharing of technical and coordinative information within the team becomes significantly more difficult as the number of team members expands (Zenger & Lawrence, 1989). As team size grows, the complexity of the communication structure between all members increases disproportionately stronger. Figure 4 (from Hoegl, 2005) illustrates this effect showing the jump in complexity of full communication structures in a team of four (6 links) versus a team of ten (45 links). While the communication between all members becomes increasingly difficult, larger team size also creates a stronger need to coordinate the contributions from the various team members. The combination of these two effects highlights how teamwork becomes increasingly resource and time-consuming as the team adds members. While adding one more member to a team of 9 may seem minor, it does add substantially to the complexity of the team's communication structure.

Large teams make it harder to communicate: Full communication structure with four and ten members (Source: Hoegl (2005))

Figure 4 Large teams make it harder to communicate: Full communication structure with four and ten members (Source: Hoegl (2005))

Team size is an important determinant of the social loafing phenomenon, whereby individuals decrease their effort as the number of people in the group increases. Classic experiments by German psychologist Ringelmann at the beginning of the 20th century first documented a steep decrease of effort of men in a tug of war (Kravitz & Martin, 1986). Where one man on average pulled about 63 kg, groups of three pulled 160 kg, and groups of eight pulled 248 kg. Hence, in groups of eight the men put in about 49% of the effort they are capable of when pulling alone. Later experiments demonstrate that this loss in performance is in fact due to decreased effort rather than coordination losses or other possible causes (e.g. Harkins & Petty, 1982).

Similarly, Bray and colleagues (1978) find that as the size of problem-solving teams increases, so does the number of “non-participating” members. This term refers to individuals that do not actively participate in the team's collaborative work. Bray et al. coined the term “functional size,” referring to those individuals that are contributing to the team's work. This illustrates that as team size increases it becomes more difficult for team members to contribute their knowledge, skills, and experiences to their full potential, thus hindering an essential element of teamwork quality, that is, the balance of member contributions. This, of course, is particularly critical in cross-functional or multi-disciplinary teams, where the full contribution of all team members' diverse skills and knowledge is a key to team performance.

There is no ‘Optimal' Team Size

Research evidence does not provide us with an absolute optimal team size in terms of a specific number (e.g., 6 members), nor is there any conclusive indication of an absolute optimal range (e.g., 4 to 7 members). As scholars have pointed out, the right team size will certainly depend on the work to be performed (Hackman, 1987), with some tasks requiring more team members than others. By the same token, though, the previous discussion highlights limitations to team size stemming from its effect on the collaborative work processes.

Therefore, team size must be determined with respect to both staffing requirements (deriving from the size of the project task) as well as teamwork requirements (deriving from task complexity and uncertainty) (Hoegl, Parboteeah, & Gemuenden 2003). As projects get larger in size, so may also the need to add personnel. Similarly, as the task is complex and uncertain, team members with diverse skill sets and knowledge bases must be included in the team (responding to task complexity) and the team must collaborate closely in order to integrate this knowledge.

Given that smaller teams provide better teamwork, I have outlined four ways to keep teams small while providing the breadth and depths of knowledge as well as the necessary personnel capacity to successfully complete a given project (Hoegl, 2005).

Four Ways to Keep Project Teams Small

Create a multi-team project. Larger projects should be assigned to several small teams, rather than one big one. Often, the structure of the project task is such that it can be split up into multiple subprojects assigned to smaller teams. For example, a software development endeavor taking 20 software engineers to complete in a given time should be split up into four teams of about five each, rather than two teams of ten or even one team of 20. The four teams would then be assigned modules of the overall software product, with their own quality, schedule, and budget objectives. As such, these teams are the primary work units of such a temporary team-based organization (Mohrman, Cohen, & Mohrman, 1995). There may be an overall project leader facilitating coordination between teams, or the teams themselves coordinate with each other (Hoegl, Weinkauf, & Gemuenden, 2004).

Core team versus extended team. Cross-functional teams often inflate in size unnecessarily because of departmental interests to be involved or the project leader's interest to keep everyone involved. Both of these considerations are valid as cross-functional teams are designed to integrate different functional expertise on a certain project (e.g., product development projects with the involvement of R&D, manufacturing, marketing, etc.). Hence, keeping all organizational units that are affected by an innovative process informed and involved is certainly positive to ensure their commitment particularly in later implementation phases (Ancona, Bresman, & Kaeufer, 2002; Olson, Orville, Rueckert, & Bonner, 2001). However, rather than having representatives from various organizational groups be included as formal team members, it is better to establish a core team of those individuals that are absolutely necessary for task completion and work directly and interactively on the project together. The remaining individuals outside of the core team may take the roles of consulting or advisory members that are informed on a regular basis and can provide input as needed. It is important, however, to clearly communicate these roles to ensure that everyone understands that it is the core team members who are responsible for the project's completion and interactively work towards this common goal. In other words, the core team is the primary work unit with its resources, objectives, and commitments. The members of the extended team provide somewhat formalized informational links to other groups.

Define team-external contributions. To keep teams small and functional, specific tasks and contributions to project completion can be identified for team-external individuals or groups to provide, rather than including those individuals or groups in the team (Ancona, Bresman, & Kaeufer, 2002). For example, most every software product utilizes databases. Such databases are often standardized modules, for which technical interfaces to the other parts of the software can be defined. Moreover, the database specialist's expertise is not likely to support other task decisions or processes (important for product functionality, robustness, performance, and so on) beyond the database itself. Hence, this module lends itself to be ‘outsourced' to team-external individuals and groups. Rather than increase the software development team by a database specialist, it is better to define this as a team external contribution that the team coordinates (Ancona & Caldwell, 1992).

Project phase-specific team members. Often, projects have identifiable phases with different task requirements. Such is often the case in product development projects, where the early concept phase requires creativity and conceptual thinking, while the design phase focuses the actual development of initial prototypes and later phases focus on product testing and production preparation (Ancona, Bresman, & Kaeufer, 2002; Hoegl, Weinkauf, & Gemuenden, 2004). It is beneficial to keep team members on board for the project phases they are needed, rather than carrying them on the team through the whole project. As such, phase-specific members would join the team and leave it again as needed, helping it to achieve the project's objectives for a specific project phase (e.g., creating a detailed and feasible product concept laying good grounds for product development).

Conclusion

Teamwork in innovative projects remains a timely and relevant topic for both practitioners and scholars alike. Trends toward open innovation, for example, involving suppliers and customers in the innovation process (Brusoni & Prencipe, 2006; Hoegl & Wagner, 2005; Shah, 2006), as well as increasing tendencies to dispersed collaboration (Brockhoff & Medcof, 2007; Cramton, Orvis, & Wilson, 2007; Hoegl, Ernst, & Proserpio, 2007) emphasize the critical role of collaborative processes to profit from such strategies. But for companies to reap such potential benefits (e.g., superior knowledge, lower cost), they will need to put great focus on developing the necessary organizational capabilities to perform high quality teamwork across geography, nationalities, and organizational boundaries. A task that proves very difficult for many companies.

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