The Comparative Advantage of X-Teams

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Traditional teams are not faring well in today's rapidly changing business environment. Even when they establish clear roles and responsibilities, build trust among members and define goals according to the book, their projects often fail or get axed. Three MIT Sloan School researchers think they have found the reason: Traditional teams are too inwardly focused and lack flexibility. Traditional team-building activities are still important, they contend, but only when combined with a greater awareness of external stakeholders and information sources.

Fortunately, a new, externally focused team has arisen: the X-team. The authors detail the high levels of performance that X-teams are seeing. And they explain how managers in a wide variety of industries and functions can establish the organizational structures that support such teams.

The researchers outline the five components of X-teams they have studied: external activity, extensive ties both inside the larger organization and outside the company, expandable tiers or kinds of responsibility, flexible membership (switching roles, moving in and out of the team as needed) and execution mechanisms that facilitate getting the job done.

The results are impressive. One observed X-team greatly improved the dispersal of innovation throughout its organization. X-teams in sales were seen to bring in more revenue. Drug-development teams were more adept at drawing in external technology. Product-development teams were more innovative than traditional teams — and more often on time and on budget.

Managers that recognize their own company in the new, flatter organizational structures, the increasing interdependence of tasks and teams, the constant updating of information and the overall complexity of work should consider creating an environment for successful X-teams.

Deborah Ancona is the Seley Distinguished Professor in Management at MIT Sloan School of Management, where Henrik Bresman is a doctoral candidate and Katrin Kaeufer is a visiting scholar. Contact the authors at ancona@mit.edu, hbresman@mit.edu and kaeufer@mit.edu.

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