Enhancing Business Success through Innovation and Entrepreneurship
Overview
Innovation is often touted as the key to business success, but what does it entail beyond creating uniquely valuable products? The concept of innovation is frequently used broadly, and its precise definition is rarely explored in depth. Innovation alone does not guarantee success, nor does a lack of it ensure failure. However, increasing innovation within organizations can significantly enhance their products and overall success.
Innovation and Entrepreneurship
Peter Drucker, in his seminal 1985 work Innovation and Entrepreneurship, outlined several points that remain relevant today:
● Employment: Small businesses are major contributors to employment in the U.S.
● Innovation as a Primary Driver: Innovation is a key driver of economic growth.
● Source of Innovation: Small businesses and firms are the primary sources of innovation.
Drucker emphasized that for large companies to foster innovation successfully, they must segregate new endeavors from their established operations. He noted that the organizational design of small, innovative companies often contributes to their success, whereas large companies frequently grapple with bureaucracy and outdated practices that stifle innovation.
Similarly, Mel Conway's 1968 paper "How Do Committees Invent?" observed:
“Probably the greatest single common factor behind many poorly designed systems now in existence has been the availability of a design organization in need of work.”
Conway argued that poor system design often arises from poor organizational design, suggesting that architecture and organization must be designed together to be effective.
Significant Changes Since Conway’s Time
Several significant shifts have occurred since Conway’s observations:
● Barrier to Entry: Software development has become easier due to simpler programming languages and AI tools. In 1968, software professionals often had advanced degrees; today, one can enter the field with a brief coding boot camp.
● Software Consumption: The trend has moved from purchasing on-premise software to subscribing to cloud-based Software as a Service (SaaS), where customers rent outcomes rather than buy products.
● Complexity: Systems have grown vastly more complex. While Unix V1.0 had fewer than a million lines of code in 1971, Windows 11 now exceeds 50 million lines.
● Customer Expectations: Expectations have evolved from tolerating errors to demanding flawless performance.
Despite these changes, Conway's insights and those of other thought leaders remain pertinent. Many companies have yet to embrace these principles fully.
Amazon’s Innovation Journey
Amazon is a prime example of a company that has leveraged "Big I" and "Little I" innovations to achieve unprecedented success. Amazon reached $100 billion in revenue faster than any other company, accomplishing this milestone in about 20 years—eight years ahead of Walmart. Unlike Walmart, which focuses on low prices, Amazon's success has been driven by continuous innovation. Amazon has pioneered e-commerce, disrupted publishing with e-readers, revolutionized digital media distribution, and created the infrastructure-as-service industry.
● Big “I” Innovation: Involves creating new industries or significantly disrupting existing ones. Many large companies experience such innovation at least once, often relying on acquisitions for ongoing innovation.
● Little “I” Innovation: Involves applying technology in new ways or making incremental improvements to existing products based on data insights. It includes minor optimizations and significant updates but does not disrupt existing industries.
Contrary to Drucker’s Law, which suggests large companies often rely on acquiring smaller firms for innovation, some companies achieve significant innovation internally:
● Netflix: Transitioned from a DVD rental service to a leading streaming platform, adapting to changes in the media landscape.
● Facebook: Evolved to maintain ad revenue growth as user engagement shifted from desktops to mobile devices.
● Apple: Revolutionized the music industry with iTunes after initially losing the personal computer market.
Why Do These Companies Succeed?
While many of these teams may include highly skilled individuals, such expertise is optional for achieving superior performance. Is it desirable? Certainly. But necessary? Not at all. These companies share several key traits. These factors are more critical to success than having individuals with exceptional skills:
● Team Size: Smaller teams tend to be more agile and effective in decision-making, similar to special operations units. They can quickly respond to changes and are less burdened by bureaucracy.
● Team Construction: The composition of the team matters more than individual talent. The right mix of skills, diversity in thought, and complementary roles allows teams to perform better, akin to how elite military units or sports teams are structured.
● Team Duration: How long a team stays together can impact its success. Teams that work together over time develop trust, shared language, and a deeper understanding of the mission, enabling them to work efficiently.
● Team Alignment: Alignment around clear goals and purposes ensures everyone works toward the same objective. This is critical for guaranteeing focus and cohesion.
● Empowerment: Empowering teams to make decisions independently fosters innovation. Just as special operations units operate autonomously, innovative companies allow teams to act decisively without waiting for top-down direction.
● Unifying and Compelling Vision: A shared, compelling vision is necessary to inspire and motivate teams to strive for excellence, even in challenging circumstances. This is crucial to driving military units and companies to achieve extraordinary outcomes.
● Culture of Success: Successful organizations cultivate a mindset that embraces challenges, learns from failure, and celebrates achievement, all of which contribute to continuous improvement and innovation.
Recognizing that many successful companies don’t exhibit all the attributes mentioned earlier is essential. Some product teams may embody these traits, while others within the company may not. Apple, for example, is known for its functionally oriented teams across various product lines. While Apple has seen tremendous success, particularly with its early products like the Apple II and iTunes, much of its later success, including the iPhone, came from being a “fast follower”—taking market share from existing players like Blackberry and expanding the phone’s functionality into a computing device.
Innovation is not always the key to success, just as lacking it doesn’t necessarily spell failure. Many companies succeed by acquiring existing solutions or refining them—building a better mousetrap. However, consider how successful these companies could be if they increased their focus on fostering innovation internally.
Next, we’ll explore each of these traits and examine how they can be applied to product teams, helping to define a more practical approach to developing innovative products, starting with…
Team Size, Construction, & Duration
Team Size
The concept of optimal team size ties into evolutionary psychology and organizational theory, drawing on insights from Dunbar’s research on social groupings and Conway's team coordination and communication principles.
Dunbar Numbers and Layers
Robin Dunbar's research suggests that human cognitive limits, based on brain size, restrict the number of meaningful social relationships one can maintain. The most famous number, Dunbar’s Number (150), is the upper boundary for meaningful relationships—the kind of people you could approach for a casual conversation or join uninvited in social situations.
Additionally, Dunbar proposed Dunbar Layers, which describe deeper and smaller circles of relationships:
● 5 close friends: Your innermost circle, usually those with whom you share deep emotional connections.
● 15 good friends: A slightly larger group, including friends you can confide in or rely on for support.
● 50 friends: A group you know well and might engage with more frequently than acquaintances.
● 150 meaningful contacts: People you maintain enough familiarity with for social engagement.
Team Size and Dunbar Layers
Interestingly, these numbers align with the size of effective elite teams. For example:
● Special Forces teams (e.g., SEALs and Green Berets) tend to operate with 12–16 members.
● Sports teams range from 5 players on a basketball court to 11 players in soccer or football.
This alignment suggests that team effectiveness diminishes as the group size exceeds the cognitive and social capacities described by Dunbar.
Conway’s Law and Communication Overhead
Melvin Conway highlights a structural constraint on teams based on the complexity of communication. He suggests that the team size should be at most seven subordinates per leader. The communication overhead in a team is described mathematically by the formula:
Communication Overhead = N (N−1) / 2
This equation indicates that as team size grows, the complexity of coordinating tasks increases exponentially, eventually reducing productivity as members spend more time communicating than working.
Amazon’s “Two-Pizza Team” Rule
Amazon popularized the Two-Pizza Team concept, which is rooted in the same principles. Teams should be small enough to be fed two pizzas, which generally limits them to about 6-10 members. This approach minimizes communication overhead and keeps teams agile, avoiding the inefficiencies of larger groups.
Key Takeaways:
● Dunbar’s Number shows the cognitive limits of social relationships, with layers of intimacy that match optimal team sizes.
● Conway’s Law emphasizes limiting team size to reduce communication complexity, ideally maintaining 7 or fewer subordinates per leader.
● Amazon's Two-Pizza Team rule recommends teams of around 6-10 members to maintain efficiency and productivity.
● Elite teams and sports teams often align with these limits, rarely exceeding 15 members, optimizing for trust, communication, and collaboration.
Keeping the size between 5 and 15 members for high-performing teams maximizes effectiveness while minimizing communication overload.
Team Construction
Constructing high-performing teams requires more than limiting their size; teams must also be equipped with all the skills and resources necessary to achieve their desired outcomes. Successful organizational practices emphasize the importance of cross-functional teams and aligned identity for innovation and effectiveness. Below are the core concepts of team construction and innovation:
Cross-Functional Teams
The idea behind cross-functional teams is to include every skill set required to achieve their goal, reducing external resource dependencies and enabling innovation:
● Diverse skill sets reduce reliance on other departments, speeding up time to market.
● The team owns the entire process, from ideation to execution, promoting ownership and responsibility.
For instance, in a Special Forces A-Team, every role necessary for successful execution behind enemy lines is represented: leadership, medics, engineers, weapons specialists, intelligence, and communications experts. Similarly, in corporate or product teams, cross-functional teams should include skills like product management, engineering, QA, DevOps, and operations. This model contrasts with traditional functional silos, which lead to delays and conflict over responsibility.
The Tyranny of the “How” vs. the “What”
One common organizational misstep is structuring teams around how tasks are done (i.e., functional organization) rather than what they are trying to achieve (outcome-focused teams). While most leaders agree that "what" is more important than "how," many organizations are still structured along functional lines:
● Product management is separate from engineering
● Engineering distinct from QA
● Operations as a separate unit from product teams
However, organizational structures, especially those defined by functional boundaries, can hinder empowerment. When work must travel across organizational boundaries or collaboration is unclear, it increases affective conflict. This conflict focuses on disagreements about ownership of tasks and decisions, slowing progress and stifling innovation. Functional organizations and waterfall development methodologies exacerbate this problem by reinforcing siloed thinking and conflicting priorities.
For example, in a functionally aligned company:
● A product management team might define a problematic solution to implement efficiently. Under pressure to deliver quickly, the engineering team may need help to meet the requirements.
● The operations team could face issues due to design decisions that affect service availability, leading to conflict with engineering.
This type of conflict arises because teams feel a sense of ownership over different aspects of the project (e.g., revenue, time to market, availability), and each group prioritizes its objectives. There is no shared responsibility for the overall outcome.
In contrast, cross-functional teams that organize around “what” they aim to produce enjoy better collaboration, faster delivery, and higher levels of innovation. Fred Brooks’ Mythical Man-Month uses a surgical team analogy to describe this approach: the entire team is constructed to support the "surgeon" (or critical deliverable), maximizing the surgeon’s success.
Cross-functional teams are designed to reduce affective conflict and promote cognitive conflict, the beneficial kind that drives innovation. Experientially diverse teams, which include members from different skill sets and perspectives, are more likely to generate cognitive conflict. This conflict revolves around what should be done and why, leading to better decisions and solutions.
However, diversity in experience can also lead to affective conflict if not managed well. If team members don’t see themselves as part of a shared outcome-focused team, they may begin to argue over who owns decisions. This is why fostering a shared identity within the team is crucial.
Conflict and Innovation
The two types of conflict are:
Cognitive Conflict: Productive and beneficial, this conflict focuses on what to do and why to do it. It fosters brainstorming and creative problem-solving, resulting in more significant innovation. Because of their diverse expertise, cross-functional teams tend to generate higher levels of cognitive conflict, leading to better decision-making and outcomes.
Affective Conflict: Detrimental to performance, affective conflict arises from disputes over who is responsible for what or how tasks should be done. This type of conflict delays progress, lowers morale, and stifles innovation. Affective conflict is more common in functionally aligned teams where boundaries between responsibilities aren’t clear.
Cross-functional teams that identify primarily with their shared outcome—rather than their job function—tend to have lower affective conflict and higher cognitive conflict. This alignment around outcomes fosters collaboration, reduces bureaucratic delays, and boosts morale.
Team Identity and Empowerment
Social identity plays a critical role in the success of cross-functional teams, and as feelings of empowerment increase within a team, so does the level of innovation. Empowered teams take ownership of their outcomes, which fosters engagement and creative problem-solving. This sense of "ownership" encourages team members to innovate, make decisions more efficiently, and maintain a high-quality standard. Empowered teams are more likely to take initiative in resolving issues and bringing ideas to fruition, leading to faster time to market and higher overall quality.
● When individuals identify primarily with their team’s outcome, they are more likely to collaborate effectively and reduce affective conflict.
● When individuals identify with their functional role (e.g., “I’m an engineer” or “I’m in QA”), they are more likely to create silos, leading to territorial disputes and conflict.
For example, in Special Forces A-Teams, members identify primarily with their team (ODA), and only secondarily with their job function (medic, engineer, etc.). This reduces intra-team conflict and creates a strong bond of shared purpose.
Similarly, in businesses, when individuals view themselves as part of an outcome-oriented team (rather than a siloed function), innovation flourishes. Teams that share ownership of successes and challenges are likelier to make real-time trade-offs and collaborate toward the best overall outcome.
Serial Entrepreneurs and Loose Ties
One notable trait of successful serial entrepreneurs is their broad and diverse network of loose ties. These individuals—often in the Dunbar range of 15 to 150—provide external validation, diverse perspectives, and new ideas that entrepreneurs can test and integrate into their businesses. Diverse teams with external networks are often more innovative because they source best practices and ideas from multiple fields.
Key Takeaways
Cross-functional teams should include all necessary skills to achieve their outcomes, reducing the need for external dependencies.
To avoid affective conflict, teams should organize around what they produce (the outcome), not how they make it (functional roles).
Cognitive conflict drives innovation, while affective conflict slows progress and decreases team morale. Cross-functional teams encourage cognitive conflict and minimize affective conflict.
To foster a collaborative, innovative environment, team members should identify with their team's outcome rather than their job function.
Empowered teams with shared ownership of outcomes experience higher morale, faster time to market, and increased innovation.
Team Duration
Bruce Tuckman’s model of group dynamics outlines the four stages of team development—Forming, Storming, Norming, and Performing—which have significant implications for Agile development and team management in modern organizations. Here's a breakdown of each stage and its impact on Agile practices:
1. Forming
In the Forming stage, a team is just beginning to come together. Team members are polite and focused on getting to know one another but lack trust and understanding of the group’s goals.
● Productivity: Low, as individuals aren’t fully aligned on team objectives.
● Conflict: Minimal, but any disputes stem from unclear expectations or differing personal goals.
● Agile Impact: Leadership is crucial to setting clear goals and ensuring everyone understands the team’s purpose and objectives early on. Establishing ground rules and expectations helps the team transition smoothly to the next stage.
2. Storming
The Storming phase is characterized by increasing conflict as team members express their ideas and vie for control. Misalignment of roles and approaches leads to friction, especially when trust is still low.
● Productivity: Often lower than in the Forming stage due to unresolved conflicts and power struggles.
● Conflict: High affective conflict as team members argue over decisions and responsibilities.
● Agile Impact: Agile practices aim to resolve affective conflict quickly through open communication and frequent retrospectives. Good leadership is critical to ensure the team doesn't get stuck in this phase. Setting clear roles and responsibilities and embracing Agile’s iterative feedback loops can help the team progress.
3. Norming
In the Norming stage, team members begin to accept their roles and responsibilities, trust starts to grow, and the team develops a set of norms for working together. Cognitive conflict rises, and the team begins to work more effectively.
● Productivity: Rising as the team becomes more cohesive and focused on achieving shared goals.
● Conflict: Low affective conflict, higher cognitive conflict, which benefits innovation and performance.
● Agile Impact: In this stage, the team begins to gel and work more smoothly, making it a productive phase for Agile teams. Agile frameworks encourage constant improvement through practices like retrospectives, which help teams refine their norms and collaboration methods.
4. Performing
The Performing stage is ideal, where the team operates at high productivity with strong trust, collaboration, and shared goals. Teams are self-sufficient and can handle healthy conflict without leadership intervention. The group identity is strong, and members are loyal to each other, as well as the outcomes they collectively work toward.
● Productivity: High—teams are focused, efficient, and consistently deliver high-quality work.
● Conflict: Primarily cognitive conflict, which is productive and helps drive innovation and improvement.
● Agile Impact: Agile teams in the Performing stage deliver the highest levels of value to their organizations. These teams are adaptable, embrace feedback, and continuously improve without external guidance.
Challenges with Short-Term Teams
In Agile development, teams often face disruptions when they are temporarily formed around specific initiatives or projects (e.g., virtual or matrixed teams). These teams frequently cycle through the underperforming stages of Tuckman’s model (Forming and Storming) without reaching the higher performance phases of Norming and Performing. This is particularly problematic when teams are formed for initiatives shorter than six months, as they don’t have enough time to progress past the early stages of group development.
Ideal Team Duration and Structure
Tuckman’s model suggests that teams should ideally remain together for at least one year, with the optimal duration being around three years. The first six months are often spent forming trust, resolving conflicts, and setting norms, so the team’s peak performance happens in the second half of the first year and beyond.
● Three-Year Limit: Beyond three years, there’s a risk of groupthink or stagnation, where the team may become too comfortable, which can reduce innovation.
● Semi-Permanent Teams: Rather than constantly reshuffling teams for different projects, it's more productive to move work to the team rather than the other way around. This helps maintain high levels of trust and familiarity while allowing teams to refine their collaboration continually.
Agile Implications
Long-Term Teams: Agile organizations should prioritize forming long-term, cross-functional teams that remain intact for extended periods to achieve high performance. Keeping teams together for at least six months to a year maximizes their productivity and potential.
Move Work to Teams: Teams should be multidisciplinary and capable of handling various work types. Instead of assembling a new team for each new project, moving projects or tasks to existing, well-established teams is more effective. This prevents the team from repeatedly restarting the Forming and Storming phases.
Team Ownership: To reach their highest potential, Agile teams must stay together and “own” their work and outcomes. This fosters a sense of responsibility and shared vision, essential for progressing to the Performing stage.
Key Takeaways
● Team duration matters: Teams should be kept intact for at least 6 months, ideally up to 3 years.
● Move work to teams: Agile organizations should aim to move work to stable teams rather than forming new teams around work.
● Build multi-disciplinary teams: Teams should have the diverse skill sets necessary to handle their workloads without relying on constant external input.
Finally, let’s explore the remaining four traits of effective teams…
Team Alignment, Empowerment, Vision, and Culture
Team Alignment and Conway’s Law
Conway’s Law, coined by Melvin Conway in his 1968 paper "How Do Committees Invent?", fundamentally connects organizational structure with system design. The essence of the law is that systems designed by organizations will reflect the communication structures of those organizations. Although Conway’s thesis initially faced rejection from Harvard Business Review, it gained prominence in Fred Brooks’ 1975 classic The Mythical Man Month, which labeled the concept as Conway’s Law.
Conway’s Thesis: Systems Mirror Organizational Structures
At its core, Conway’s Law asserts:
Organizations that design systems are constrained to produce designs that are copies of the communication structures of these organizations.
This idea of homomorphism means that the structure of the system being designed will reflect the team’s communication patterns. The design will exhibit similar fragmentation if a team’s communication is fragmented or siloed.
Key Points from Conway’s Thesis
Organizational Structure Constrains Design: A system's architecture or design will inherently reflect the team's structure that creates it. This has profound implications for how organizations align their teams and design processes.
Depth Reduces Flexibility: Hierarchical organizations tend to produce rigid, inflexible architectures. The deeper the hierarchy, the less adaptable the design. In contrast, flatter organizations promote flexible designs that can more easily adapt to changes or new requirements.
Flexibility is Crucial: Design is iterative, and mistakes will be made. Organizations must be able to adapt and fix issues quickly. Rather than rigid success, planning for failure and adjustment aligns with Agile principles of iterative development and continuous improvement.
Common Failures Related to Conway’s Law
Many organizations fail to consider the implications of Conway’s Law, which leads to significant design and architectural issues. Common pitfalls include:
Separate Design and Organizational Structures: Teams often structure their organizations and architectures separately, not considering that designs will mirror communication structures. This leads to fragmented architectures or solutions that don't function cohesively.
Deep Hierarchies: Hierarchical, bureaucratic organizations are more likely to produce rigid, inflexible designs, limiting the organization’s ability to innovate and adapt. The deeper the hierarchy, the more constrained the design options become.
Lack of Flexibility: Many companies plan as if failure isn’t an option, but Conway’s Law emphasizes that designs are rarely perfect. Organizations must be agile, anticipating failures and iterations as part of the design process.
Conway’s Law and Agile Development
Agile practices are built around principles that inherently align with Conway’s Law:
● Flat, cross-functional teams in Agile minimize communication silos, promoting more integrated system designs.
● Iterative development allows teams to adapt and evolve their designs, reflecting Conway’s view that no initial design is perfect.
● Frequent communication and collaboration between product, design, and engineering teams ensure the architecture is constantly refined and adapted.
Agile organizations structure teams around outcomes rather than functions, reducing the hierarchical constraints that hinder design flexibility. These teams tend to own their entire delivery pipeline, resulting in architectures that reflect collaborative and flexible approaches.
Key Takeaways for Team Alignment
Align Team Structures with Architectural Design: To avoid the pitfalls of Conway’s Law, organizations should ensure that teams are structured to support the desired system architecture and focused on the outcome. This means designing organizational structures and system architectures in parallel, ensuring alignment.
Favor Flat Organizations: A flat organizational structure promotes better communication and more flexible system designs. The deeper the hierarchy, the more constrained the design, reducing the ability to respond to changes or innovate.
Embrace Flexibility and Adaptation: Designs will evolve, and mistakes will happen. Organizations should focus on creating flexible teams and architectures that can quickly adapt to changing requirements and fix issues efficiently.
Foster communication: Teams must communicate frequently and transparently, ensuring the system architecture evolves organically in line with the collaborative team structures.
Anticipate change: No system is perfect at its inception. Organizations must plan for continuous iteration and quick problem resolution.
Empowerment: The Foundation of Innovation and Speed
Empowerment plays a crucial role in fostering innovation and shortening time-to-market within teams. However, many leaders mistakenly use the term empowerment interchangeably with delegation, which can hinder the outcomes they wish to achieve. Let’s explore the true meaning of empowerment, how it differs from delegation, and why it is essential for driving innovation.
Empowerment vs. Delegation: Understanding the Difference
Delegation simply involves assigning a task to someone and making them responsible for completing it. While the individual or team is responsible for completing the task, they may need more resources or authority to carry it out effectively. In delegation, the focus is on passing responsibility, but often without providing the tools or autonomy required for success.
For example:
● A carpenter can be delegated the task of hammering a nail into a 2x4, but she cannot complete the job if she doesn’t have the necessary tools (e.g., a hammer, nails, and wood).
● A surgeon may be assigned to perform a surgery, but without a support team (e.g., anesthesiologists, nurses, and proper equipment), she is not truly empowered to operate effectively.
In these cases, delegation without the proper tools, resources, or support limits the individual’s ability to deliver on the responsibility assigned. Conversely, empowerment means equipping the person with all the necessary tools, resources, skills, and support to achieve the desired outcome.
True Empowerment: A Holistic Approach
Empowering someone or a team means ensuring they have responsibility, full authority, tools, and support structure to make decisions and execute tasks effectively. Empowerment involves:
Providing the right tools: Just as a carpenter needs a hammer and nails, teams need the right technology, software, or resources to complete their work efficiently.
Embedding the right skills: Teams must have the relevant expertise or access to individuals with the necessary skills. For example, in software development, a team working on a project should include not just developers but also designers, testers, and product managers.
Granting authority and autonomy: Empowered teams must have the authority to make decisions and act without waiting for external approvals. Autonomy to adjust plans, make trade-offs, and pivot as necessary is critical to fostering innovation.
Providing appropriate support: Just like the surgeon relies on a support team, empowered teams need access to resources and colleagues to assist. Whether it’s administrative support, budgetary control, or technical help, empowerment means having a comprehensive support system.
Empowerment Drives Innovation
Research shows that empowered teams are more likely to innovate because they have:
● Confidence in their skills (self-competency)
● A strong locus of control (they believe they can control the outcomes of their actions)
● Access to proper support to carry out their tasks
When a team feels genuinely empowered, it is likelier to take creative risks, engage in problem-solving, and push boundaries. This sense of ownership over outcomes is a powerful motivator encouraging innovation and improving overall performance.
Conversely, when teams are merely delegated tasks without true empowerment, they tend to:
● Experience frustration due to lack of control or access to necessary resources.
● Face delays because of dependencies on external teams or approvals.
● They lose motivation as they struggle to meet expectations without adequate support.
The Impact of Misunderstanding Empowerment
Leaders who confuse delegation with empowerment risk stifling innovation. For instance, if a software development team is tasked with delivering a feature but needs access to the required design team or is forced to navigate bureaucratic resource approvals, it will need help meeting deadlines and producing innovative solutions. The lack of empowerment leads to missed opportunities, delays, and often lower-quality outcomes.
Key Takeaways
● Empowerment and delegation are not the same: Delegation assigns responsibility, while empowerment ensures the individual or team has all the necessary tools, skills, and authority to succeed.
● True empowerment involves moving all required resources, tools, and expertise into the team, ensuring they can act autonomously.
● Innovation thrives in environments where teams are empowered. They feel ownership over the process and are motivated to drive creative solutions.
● Confusing delegation with empowerment can hinder performance, slow down time to market, and stifle innovation.
Empowered teams are more agile, resilient, and innovative. By ensuring teams have the right resources, autonomy, and support, leaders can unlock their full potential and significantly enhance team performance and innovation pace.
Unifying and Compelling Vision
As Richard Boyatzis discusses in Resonant Leadership, a vision is much more than a simple destination—it’s a driving force that inspires and motivates teams to strive for higher accomplishments continually. A compelling vision tugs at team members' emotions and becomes the primary motivator for their daily work. It guides actions even in the absence of direct supervision or external motivation.
In elite environments, such as US Special Operations Units, vision becomes more than just a set of goals. It’s a powerful attractor for individuals with the right behaviors and alignment to the team's goals. People are aware of the intense standards of these units long before they apply, and only the best aspire to join. Once selected, members push each other to reach new levels of excellence fueled by their shared mission. This creates a virtuous cycle where the vision attracts elite individuals, and those individuals further reinforce the vision by setting high expectations and driving performance.
The same dynamic can be found in high-profile companies with a strong, publicly communicated vision. In eBay’s early years, for example, the vision of empowering small, independent sellers inspired employees and created a sense of purpose beyond just business success. Employees were driven by the knowledge that they were helping people achieve financial independence or providing opportunities for those otherwise unable to work due to personal challenges. This was especially evident in initiatives like the "Auction for America" after 9/11, where employees contributed additional time to build a platform to benefit victims of the tragedy. While eBay may not have been the most innovative in other areas, its vision inspired deep commitment from employees.
Key Takeaways:
● Vision should go beyond being a mere destination. It should connect emotionally with the team and inspire them to achieve extraordinary results.
● A compelling vision creates a self-reinforcing cycle. The mission attracts the best talent and drives the team to higher performance.
● A vision that resonates with employees can turbo-charge innovation, making the team more driven and committed to achieving shared goals.
Culture of Success
A prime example of a culture focused on relentless success is Amazon. Jeff Bezos' 2016 letter to shareholders stressed the importance of Amazon's "Day 1" mentality, where every day is treated as the first day of the company, filled with energy, risk-taking, and the drive to achieve ambitious goals. As Bezos explained, “Day 2 is stasis. Followed by irrelevance. Followed by an excruciating, painful decline. Followed by death. And that is why it is always Day 1.” This "Day 1" culture reflects hope, drive, and the thrill of potential, encouraging a small, focused team to aim for significant results.
The interaction between vision and culture drives innovation and growth in high-performing organizations. A compelling vision attracts and motivates people, while a strong culture encourages individuals to perform at their best, contributing to team success continuously. Culture statements, however, are not just aspirational—they must be embodied daily by leadership and employees alike. At Amazon, this is evident in how the company operates like the "world’s biggest startup," a fast-paced, execution-focused environment that isn't suited for everyone.
Key Takeaways:
● Culture sets the expectation for high performance among team members.
● Culture is not just a statement; it must be actively embodied by leadership and employees to drive results.
● When aligned with a compelling vision, a culture of success fosters innovation and propels teams to higher levels of achievement.
Putting It All Together
Principles for Building Innovative Product Teams and Development Lifecycles
After reviewing research and best practices, here’s a set of guiding principles to structure product teams and optimize the product development lifecycle:
1) Team Size
Small Teams: Keep teams lean, ideally at most 15 members. Smaller teams enhance communication, agility, and decision-making, allowing for more effective collaboration and focus.
2) Team Construction
Cross-Functional Teams: Assemble teams with all necessary roles to deliver a complete solution. This includes:
Product Managers (Owners): Lead the team’s direction, ensuring alignment with vision and business objectives.
Engineers: Responsible for building and delivering the product.
Infrastructure/DevOps: Ensure smooth deployment and infrastructure scalability.
QA (Quality Assurance): Test the product to ensure high standards.
Designers: When relevant, contribute to user experience and product design.
Additional Roles: As needed, such as analysts or customer support specialists.
3) Team Duration
Sustained Team Tenure: Teams should stay together for at least 6 months, ideally up to 3 years. This allows them to progress through stages of team development (Tuckman’s model) to achieve high performance and cohesion.
4) Team Alignment
Aligned to Outcomes: Teams should be focused on clear, measurable outcomes that align with a larger vision.
Vision-Driven Outcomes: Teams work towards outcomes defined by the company’s vision.
Architecture-Outcome Alignment: The architecture is designed to meet specific outcomes. Teams are organized to own specific architectural components.
Outcome Ownership: Teams own the outcomes they are responsible for, fostering accountability and motivation.
5) Team Empowerment
Ownership and Autonomy: Teams should be empowered to own their outcomes fully and have all the skills, tools, and resources needed to succeed. Empowerment goes beyond delegation, providing everything required for the team to act independently.
6) Vision
Clear and Inspiring Vision: Vision provides a compelling reason for teams to strive for success. It informs the product outcomes and gives teams direction and purpose, driving their efforts and dedication.
7) Culture
Culture of Success: Cultivate a team culture focused on continuous improvement, collaboration, and pushing each other to achieve more excellent results. A shared sense of ownership and alignment with success drives performance and innovation.
By Chip Correra, Partner