How Founders Should Start Thinking About High-Performing Teams
Updated: Apr 9, 2020
There’s a difference between okay teams, good teams, and high-performing teams, but most startup leaders have trouble telling them apart. Sometimes, leaders are too close to their own people to really take stock. Sometimes, the nuance is just too unclear.
What is clear, though, is that high-performing teams are critical to success. High-performing teams are associated with a stronger culture, higher profitability, and lower risk. In the book Leading Organizations: Ten Timeless Truths, two McKinsey partners highlight that 90 percent of investors think the quality of the management team is the single most important non-financial factor when evaluating an IPO.
This message rings true in the startup world, too. 56% of VCs say that the team is the leading predictor of startup success.
What can you do as a leader to help your team reach its full potential? How can we take awesome talent and awesome ideas and build them into awesome teams?
From research and my own experience, there are three building blocks in the foundation of high-performing teams.
Start thinking about your TAM
No, not your total addressable market. In the context of high-performing teams, TAM stands for trust, accountability, and motivation. I built this simple, research-backed model to help founders and leaders remember what really matters.
Trust. Team trust and psychological safety; how comfortable are people with voicing their opinions and bringing their true self to work?
Accountability. Dependability, structure, and clarity; how are the team’s systems and processes supporting its goals?
Motivation. Meaning and impact; how inspired are team members to come to work and accomplish the team’s goals?
I talk to startup founders almost every day, and most of these conversations involve teams in some way. Whether it’s how to lead, build, or grow a team, the common thread is that it takes more than just one person to build a dream.
Thankfully, there has been a lot of research on what makes teams successful. In 2015, Google published it’s Project Aristotle data on what makes up an effective team. This is one of the most recent and relevant studies to highlight the traits of high-performing teams.
Image by Google
Where the Google model falls down, though, is in how to apply this easily to teams, especially small teams in startups. I built the TAM model directly from the research of Google and others, so nothing here is new. It’s just easier to digest and action.
Each intersection of the diagram has its own implications, but I won’t get into that here. What matters is that, to have a truly high-performing team, all three factors need to be present.
One factor is certainly better than none, but one (or even two) won’t survive in today’s market.
Begin with A players
Before diving too deep into the TAM model, I want to mention that people matter. What I mean is that while TAM is a great way to think about teams, teams are built from people, from individuals.
I can’t stress enough the importance of starting with awesome individuals. You can design your team in the best possible way, but it’s potential will always be defined as a function of individual potential.
Said differently, if trust, accountability, and motivation are the foundations of building high-performing teams, then people are the raw materials. The best-laid designs fall to pieces with crap raw materials.
These people you bring in shouldn’t just look like you or think like you, either. Really search for not just the expertise you need, but the experience and diversity of thought you need, too.
Invest the time it takes to actually find amazing people. The second-biggest regret that I hear from startup executives is that they didn’t hire the right people. The number-one biggest regret that I hear is that they didn’t let go of the wrong people fast enough.
People matter, take the time to find them.
Foster an environment of trust
Moving away from team composition, the first step of building the right team dynamics is to foster an environment of trust. This is not individual trust, though, this is team trust. You may know this as psychological safety.
Psychological safety is getting a lot of attention lately, and rightly so, but really it’s just the individual idea of trust expanded into a team and its norms. And this idea of team trust has some big implications on outcomes.
Research by Amy Edmonson found that teams with strong psychological safety had higher metrics for team performance, employee engagement, employee wellbeing, and innovation, while similarly having lower error rates and turnover.
Project Aristotle, the multi-year internal Google study mentioned earlier, came to a similar conclusion: psychological safety was the number-one predictor of their highest-performing teams.
This makes intuitive sense. If people feel like they can put forward an opinion without fear of retaliation, great ideas come out. When people feel comfortable being themselves at work, teams get the best of these people.
So how do we encourage team trust and psychological safety? First and foremost, it begins with leadership. Role modelling vulnerability and being willing to show up in a courageous way is a leader’s job.
At the team level, though, take time to get feedback and understand what’s holding people back from speaking. Have each member of your team ask themselves: what am I doing each day to build trust, and what am I doing each day to diminish trust?
And don’t just listen to what you find, do something about it. Make changes based on your team’s input. Hold a meeting with check-in on how people are doing. Offer your own feelings instead of trying to be strong and smart. Have feedback sessions with your team to uncover what’s really happening.
Make a conscious decision to build trust in your team every day. This is the number-one thing that separates good teams from high-performing teams.
Build a structure for accountability
This can often be the hardest thing to do in a startup. The market changes so rapidly and products pivot so quickly that structure can be the last thing on the founders’ minds.
But the litmus test for a structure is that it should be helpful, not hold you back. Structure for its own sake breeds bureaucracy. Structure with intent breeds results.
As a team, you need to identify what works well for you and what doesn’t. I’ve mentioned the below five components of accountability before. Take these to your team and rate yourselves on where you shine and where you fall short. Find out what works for you.
Owners: This is critical. Who is actually going to be accountable for a task being done? Do not make this more than one person, it just gets confusing and too easy to deflect that accountability.
Support: Who else might be involved? Is there anyone you need to report to, check-in with, consult with, or inform? Who else can help? It might be multiple people.
Resources: What resources do are needed? Are there financial resources, team resources, access to data? Another way to think through this is by asking “what will stand in our way?”
Deliverables: This is the second-most important item on the list after “owner.” Clear deliverables make actions clear. Focus on the actual thing that you need as an outcome of the action. This is not process-y like “completed interview” or “refined approach.” It’s tangible like “interview summary notes” or “one-pager on approach.”
Timeline: When will this be done by, and/or when will it be started? We sometimes call this work planning, and it can be done neatly in a project management software tool or Excel spreadsheet.
Project Aristotle refers to this as “Dependability” and “Structure & Clarity.” Not every situation calls for this level of detail, but it’s a great conversation starter about what does matter.
Check-in on individual motivation
We all have hopes and dreams, we all have our own values. What’s really important here is how they map back to the team’s goals and values.
Project Aristotle has “Meaning” and “Impact” in their definition of high-performing teams because individuals need to be motivated to achieve the objectives that their teams define. Strong alignment here means strong results. Weak alignment here means mediocre results at best, failure at worst.
I offer a simple exercise to help teams clarify this alignment. First, have every team member define their goals and values. It can be as simple as journaling for a few minutes or as complex as a guided values-mining exercise, where people discuss and really clarify what’s meaningful to them. I recommend the Who Am I and 80th Birthday Party exercises as an entry point here.
Whatever you do, the objective should be to end with a clear list of what each individual wants and what really matters to them. From here, the task is to map these back to the team’s goals and values.
You can be open-ended, using this as a lively debate to define those team goals or values from scratch. But chances are your team has some already, explicit or implied.
If that’s the case, then just spend a bit of time talking about how individual goals and values relate back to the teams. How can you connect someone’s life goal to what the team is trying to accomplish? How can you give someone an opportunity to grow in a way that’s meaningful to them? What individual values are also shared by the team and by others? How can you design team norms to make room for what matters to them?
“Alone we can do so little, together we can do so much.” -Helen Keller
Let me be clear: although I have decades of leadership experience, it doesn’t really matter. Every week I talk to a dozen people that lead their teams better than I ever could.
This isn’t a how-to guide based on my own thoughts. A lot of what I’m suggesting isn’t new, it’s just packaged in a different way. And it’s informed by what I’ve seen work for a lot of executives and leaders in the startup world.
Whenever you find yourself wondering about how to build out your team’s maximum potential reflect back on the TAM. What can you do to:
Foster an environment of trust
Build a structure for accountability
Check-in on individual motivation
My hope is that this TAM will matter to you as much as if not more than your total addressable market. Take the time to invest in your team as the real opportunity to build the dream you have for your company. Realize that people matter and invest in people as much as you invest in your product.
It will pay dividends.
Originally published in The Startup