Principal Investigator Deborah Ancona
Project Website http://x-teams.com/
Innovation is often described as something that just happens -- the appearance of a lightbulb or a bolt from the blue. But today’s companies can’t wait around for lightning to strike. Competition is fierce, and businesses need to be able to generate, leverage, and sustain innovation.
Current research suggests that it is possible to create a culture of innovation through X-teams, teams designed to pull together external and internal input to give organizations an infusion of new thinking.
Through extensive research into team performance, researchers have found that in large organizations, the critical work of generating new products and services is typically done in teams. And yet, their research shows, a team can work well on the inside and still not deliver results.
As the “X” implies, an X-team combines and integrates high levels of external activity with extreme execution inside the team. While most teams engage in some degree of external activity, X-teams view such activity as central to their mission, their mindset, and their modus operandi. “Going outside” is a top priority from day one. So, for example, members of an X-team are selected because they have the necessary content expertise, process skills, personality, and motivation to work effectively “on the inside.” Equally important, however, they are chosen for their ties to other individuals and groups that can help the team achieve its goals, whether inside or outside the company.
An X-team’s external activity takes the form of scouting for new ideas, opportunities, and resources. This might mean conducting a survey, hiring a consultant, interviewing customers, spending a day “googling” the competition, or just having coffee with an old college professor.
Another critical external activity is ambassadorship, meeting with management to gain buy-in, sponsorship, and protection from potential internal opponents; to acquire funding and other resources; and to keep the team’s work tightly connected to the company’s strategic imperatives. Finally, working externally involves task coordination, engaging with other individuals and groups inside and outside the company to get feedback, identify critical resources, and convince or cajole others to help get the task accomplished.
Internally, “extreme execution” means building a transparent decision-making structure and open communication systems so that outside ideas and resources can flow in freely, and the work can keep moving forward.
X-teams at work -- An X-team’s external and internal activities go on concurrently, with changing emphases, through flexible phases that shift with the work requirements. It initially explores the environment to figure out what customers want, what the competition is doing, what top management will support, and where resources can be found. By going outside from the very beginning, the team establishes the critical importance of an external focus.
Acting on the results of its initial exploration, and placing somewhat greater emphasis on internal activities, the team then moves quickly to prototype, test, and modify an innovative new product or service that will exploit the most promising opportunity. Finally, the team shifts operating mode again, this time to export the innovation to the larger organization for full-scale implementation.
As an X-team moves through these cycles of activity, its members move across the team’s core, operational, and outer-net tiers, changing roles as needed. The team also periodically adds and subtracts members as new connections or expertise is needed. This exchangeable membership along with such activities as scouting, ambassadorship, and task coordination has the added result of reinforcing the team’s connection to the larger organization while simultaneously extending the reach of the team’s innovative thinking. Thus, at Microsoft, an X-team not only created a new social networking product for “netgen” users, but also became the driving force behind a new model for customer-inspired software development.
In other words, X-teams are not only highly successful at achieving their own tasks, they are also highly effective agents of change and innovation across the larger organization.
Creating an X-team -- X-teams can be very successful at driving innovation. They can also be systematically set up, trained, coached, and replicated.
In X-Teams: X-teams have driven innovation at companies as diverse as Microsoft, BP, Merrill Lynch, CVRD, Procter & Gamble, and Southwest Airlines. Extrapolating from these examples, they also provide detailed guidelines for managers who want to set up an X-team, for X-team leaders themselves, and for senior executives who want to use X-teams as a powerful tool to distribute leadership company-wide.
Dozens of company X-teams have been trained through MIT Sloan executive education with input from the MIT Leadership Center, with successful results. X-teams from BP have delivered a variety of breakthroughs, including new ways to manage the company’s huge oil/gas exploration projects across the world. At Merrill Lynch, X-teams trained at the Leadership Center have produced everything from new interest rate volatility indexes to an entirely new and successful distressed equity business. In all, MIT Sloan and the Leadership Center have created almost a hundred X-teams.
Making X-teams work can be complicated for senior management and taxing for team members. But the benefits can outweigh the costs, particularly when the goal is innovation.