The Value of Work Teams

In today’s business environment we continually hear about companies restructuring more of their organization’s employees into work teams. This includes the use of teams in white-collar jobs as well as traditional blue-collar manufacturing jobs. You may be asking yourself what is a work team? Why is there a current emphasis on this approach to business and what are the benefits? Can I use it in my business? We will answer these questions in this article.

First of all we should develop a common understanding of a work team. I would define a work team as follows:

“A group of people that are self-directed in efforts, jointly accountable for their outputs, and united in working towards a common purpose.”

Let’s break this definition down more and expand on the definition. I believe that using a football team as an analogy will be helpful in better understanding the makeup of a work team. First lets define the characteristics of the group. Similar to the makeup of a football team, the group will be comprised of people with different skillsets and defined duties relevant to those skills. Each team member has special skills but can be called upon to perform the skills of others in certain situations. The entire team benefits if each person is skilled in the tasks of others as well as their own and will improve the overall effectiveness of the team.

With respect to being “self-directed in efforts” each football team player, when prompted, must individually exhibit their skills to properly execute a specific play. They also have a leader on the field – a quarterback or defensive captain – that is skilled in perceiving a change in the opponent’s actions and empowered to signal the team members to execute another play. In both cases above, they are being self-directed in that the team members are making the decisions on the field.

As for the team being “jointly accountable for their outputs” each player knows their assignment and is accountable to execute it upon demand. If mistakes are made by even one individual, the probability of success for the team is minimal. However, if they all execute their tasks correctly, the chances are very good that the team will make yardage on that play.

The last part of the statement, being “united in working towards a common purpose”, is the most important. The football team is united in the mission of scoring more points than the opposing team and thereby winning the contest. In order to meet this objective, they must execute each of their individual tasks effectively, such as blocking, running, or catching a pass, and make the proper adjustments as the game unfolds. The proper execution of each individual task during each play will allow the team to gain yardage and make touchdowns. If they can execute their plays better than their opponent it can yield the completion of their overall group task which is to win the football game. After reviewing the above analogy to a football team one can see how it could be extrapolated to many different business processes.

In business situations, why would you use work teams? There are many reasons to use teams and they are listed below:

  1. Improve communication. For example if a customer order currently must go through three departments to complete, why not create a team with all three functions in order to complete the order in one group? All communications pertinent to that order will now be focused within that one group thereby eliminating confusion and improving response time and accuracy.
  2. Reduce response time. In performing any operation with several steps, the largest component of the task’s lead-time is often queue time or time that the product or service is waiting in line between processing steps. Using the same example above one can see that performing all the operations in one group or department would save response time because the queue time between the departments would be eliminated.
  3. Reduce floorspace and WIP inventory needs. In a production situation, there is also a direct correlation between lead-time and inventory. Where lead-time is reduced work-in-process (WIP) inventory is reduced proportionately. Because team environments require less WIP inventory and the team members tend to work in closer proximity to each other we have seen a significant reduction in the shopfloor space required after the teams are operational.
  4. Improve quality. Another great advantage of work teams is increased accountability. Often a product or process has multiple departments involved in its processing. If not captured at its source, a quality problem can be passed on to subsequent departments and eventually to the customer. When the problem is finally discovered there are many departments that have been involved. Therefore it is hard to get closure on where the problem originated and, if corrected, to have confidence that it will not reoccur. If one team performs all the work there can be no confusion on where the accountability lies. For all these reasons quality problems are much easier to identify and correct in a work team environment.
  5. Improve productivity. Accountability also plays a major role in this area. If a product or process has value added to it in many departments it is often hard to assign cause/effect relationships to productivity problems. In a team environment, all the value-added processing has been added in that one area. Therefore, it is easier to measure the performance of that group and assist them in improving the output of their efforts. In addition, because they are self-directed by nature, the work teams will often initiate their own efforts to improve productivity, including self-policing the performance of their own members, without an outside prompt from management.
  6. Improve training. Another benefit to work teams is initial training and subsequent crosstraining. Because the members of the team work in close proximity to each other on-the-job training can occur all day long, either directly or indirectly. In many business environments, this is the most cost-effective means to train personnel. Work teams are also the best environments to implement and support Pay-for-Skill programs that can provide financial incentives for the employee to learn and apply more skills.
  7. Reduce turnover. A major problem for domestic companies has been the turnover of their skilled employees and their inability to rehire qualified people to refill the open slots. Assuming pay scales are adequate a team environment fulfills the higher level or psychological needs of employees and helps retain them in the company. In addition, as new employees come into the company they immediately have a personal association with the small group and feel connected to the company.
  8. Develop new leaders. To effectively manage a work team there must be someone within the team with authority and accountability over the tasks performed. In most cases, they are a working peer of the group and are chosen by management because they display leadership qualities. Over time additional individuals are identified as potential leaders and are given opportunities to develop their leadership skills. In turn, they will become the leaders of new work teams.

Applying Teams in Your Business

You may now be asking if teams would be useful in your business. Also, where has our consulting group had experience in using teams effectively? In office and administrative support situations, we have organized product development groups made up of marketing, engineering, financial, and manufacturing representatives that have substantially reduced the time it took to develop and manufacture profitable new products. Also, we have created work teams dealing with the order filling process starting at order entry and going through shipping the product. In the materials management area, we have created work teams that included production planning, purchasing, and inventory management and they managed all materials actions and production scheduling for departments or product lines. In these listed indirect functions, improved communication was the main objective in creating the work teams. In all cases, the team environment substantially enhanced the task performance of each group.

In the manufacturing setting, we have created a variety of work teams that have integrated robotic welding cells, CNC machining centers, and other highly automated production environments.  We have successfully launched countless work teams dealing with basic assembly processes in a variety of industries and technologies. In addition, in complex final assembly operations, such as in heavy equipment manufacturing and truck equipment installation, teams were used very effectively to generate significant improvements in all areas of performance measurement. In almost all cases, the benefits included all eight categories listed above which ultimately led to reduced costs and cash needs, and higher profitability for the company.

In closing, we have great confidence that work teams work well in all office, distribution, and manufacturing environments. The only constraint to using them effectively is one’s own creativity and self-imposed limitations. The bottom line is that the benefits to the organization are too great to ignore implementing these concepts and we therefore encourage you to take the plunge and integrate team concepts into your own business environment.

Posted in Blog Post, Growing Businesses, Mergers and Acquisitions, Restructuring Businesses, Selling Businesses and Struggling Businesses


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