Rich Karlgaard - Team Genius: The New Science of High-Performing Organizations

To all of our teammates through the years
and all that they taught us about creating
something bigger than ourselves

S uccessful teams are at the core of powerful organizations. But what explains game-changing teamsstart-up teams, creative teams, R&D teams, project teams, and sales teams? What makes them stand out? Can we decode their winning algorithms? Can we apply this knowledge at different companies and industrieseven across different cultures and generations?

The authors of this book have spent their lives in the petri dish of successful team formationin both our home base of Silicon Valley and around the world. We have started companies, sat on boards, and observed winning and losing teams up close. But in Team Genius, weve gone further than anecdotal observation. Weve tested our observations and theories against cutting-edge research in anthropology, sociology, neuroscience, and cognition science. We will explain our research and methodology later and in copious footnotes. Readers of this book will be the beneficiaries of this work.

We believe that the pace of technological innovation plus rapid changes in the global economy, combined with huge demographic shifts now under way, will raise the stakes for team performance. Average will die. High mediocrity wont be enough to win and sustain success.

Let us be clear. When we talk about teams, we are not talking about formal teams as depicted in company org charts and those About the Company Web pages. Team Genius is about how work really gets done. The sum of our experience says that the worlds most creative and impactful workat start-ups, inside large organizations, in sports, and within creative operations in arts and entertainmentgets done by informal teams.

Business literature is remarkably clear about this. After Nazi Germany put the worlds first fighter jetthe Messerschmitt 262into action in 1943, before World War IIs outcome was known, the Allies faced a problem. Lockheeds chief aircraft designer, Kelly Johnson, promised an American fighter jet in six months. Today, as then, it would normally take six months just to write a proposal for funding the jet. But Johnson picked a team of Lockheed rebels like himself, installed them in a tent next to a smelly plastics factory, and delivered the P80 Shooting Star right on schedule. Steve Jobs famously put his informal Macintosh development team away from Apple headquarters in a low-rise building next to a Good Earth organic restaurant. IBM built its first personal computer not in Armonk, New York, but in a few ratty buildings in Boca Raton, Florida. Twitter was designed largely on a bus heading from San Francisco to Austin, Texas, for the 2007 South by Southwest conference.

In the years ahead, will virtual teams and crowdsourcing change the way we think about teams? Well, it so happens that Mike co-wrote a best-selling book called The Virtual Corporation... in 1992. His answer is yesbut it doesnt change everything, as some futurists like to assert. The deeper answer is what neuroscience and anthropology have to say about teams... and you will be surprised by their findings.

As we began putting the final touches on Team Genius, both of us were struck by conversations wed recently had on a pair of themes. One was speed of change in the global economy and how even the most dynamic companies are challenged to build teams that can cope. Rich had dinner with a top executive of Lenovo, the US $40 billion-annual-revenue Beijing-headquartered maker of personal computers, laptops, tablets, and phones. (Lenovo, if you recall, bought IBMs PC division in 2005.)

Lenovo is known for its nimble managementmuch of it based in the United States, in the Research Triangle Park area of North Carolinaas well as for its rapid response to opportunities and threats. Lenovo is a rare elephant that can dance. And yet the Lenovo executive explained at dinner how a Chinese phone upstart, Xiaomi, had outmaneuvered Lenovo in Asian markets. How so? Was this a case of the innovators dilemma, as defined by Harvard Business Schools Clayton Christensen? In the innovators dilemma, a profitable incumbent company (Lenovo, in this case) can see a disruptive threat. It just cant figure out what to do about it. Matching the prices of the Xiaomis products would surely hurt the profit margins of Lenovos. Was it that?

No, Lenovo had seen Xiaomi coming. It had seen Xiaomis products gaining fast acceptance in Asian markets. And Lenovo was perfectly willing to get in a price war with Xiaomi. The problem was more practical. Lenovo just couldnt build local market teams fast enough to stop Xiaomis momentum.

The second conversation we heard again and again was that of senior managers worried about the demographic shift to the millennial generation. And their concern wasnt about market shifts, product tastes, social media, and the other usual sources of concern. Rather, it was about whether millennials could actually lead companies and manage other people. For all that generations known skills in science, technology, social media, and risk taking, senior managers in large organizations everywhere complain about a general lack of managerial talent coming up in their ranks.

Lets stop here. Is this the perennial phenomenon of a grouchy older generation complaining about the shortcomings of up-and-comers? A bit, perhaps. But in the main we dont think so. Absent in these complaints was any of the usual carping about work ethic, education, creativity, and abilities. Rather, the complaints were specific to management experience and team-building skills.

What we do know is that millennials will soon be populating the management ranks of corporations around the globe. They will preside over a world that is so fast-changing and competitive that they will have to do markedly better job at building, managing, and motivating teams than has been demanded of any previous generation. The stakes will be that high.

Thats why one of our chief purposes in writing this book was to bring together both the best practices of today and the past, with the latest in scientific research, to show the next generation of leaders in every field how to build the dynamic, robust, and great teams they will need in order to compete in this new world. Their learning curve will be shockingly steepand we want to help them survive the climb. If they can succeed, it will benefit us all.

TWENTY QUESTIONS

Teams compose a large part of our private and public lives. We depend on them for both our success and our happiness. Isnt it odd how little scrutiny we give them? The teams that make up our lives are created mostly by luck, happenstance, or circumstancebut rarely by design.

Success by serendipity is risky enough in the small matters of our lifea bowling team, the leadership of a neighborhood group, a holiday party committee. But it can be downright dangerous when it comes to actions by major corporations, nonprofit institutions, and governments. No one would launch a billion-dollar product into the global marketplace without months of product testing, customer polling, and analysis; or without establishing distribution and retail channels, marketing campaigns, sales kits, and so forth. Yet we are likely to place this entire project in the hands of a leadership team that, right from the start and by its very nature, is doomed to failure.

As well show in the chapters that follow, the planning for and designing of great teams no longer have to be a black art. To help you get started thinking differently, perhaps even more scientifically, here are twenty questions you ought to be asking about the teams you manage and those to which you belong: