Team working has increased in recent years, a phenomenon turbocharged by the pandemic. Research by Microsoft found that the number of meetings per person has increased by 150 per cent since 2020. There are now more teams, more meetings and more people in those meetings. Teams are also instrumental in driving transformation, innovation and growth in organisations. Building and sustaining effective teams that maximise the talent and innovation potential of team members is essential to business success in an increasingly complex organisational environment. Yet good teamwork is elusive – teams are often dysfunctional, and even successful teams suffer from ‘process losses’ as they increase in size and complexity. This makes setting up teams for success more important than ever, and optimising team size and diversity plays a critical part in this.
How many is too many?
Teams should have enough people to generate ideas, but not too many to create unnecessary relational complexity. One of the most common mistakes is putting too many people on a team. As team size increases, the marginal benefit of each additional team member goes down. While group productivity does increase with additional team members, the rate of increase declines as the team gets larger. In fact, for very large groups, total team output can decrease once a team reaches a certain size.
If possible, keep team membership to eight people or fewer; research shows that productivity drops if team size increases above this. When meeting virtually – where body language is harder to read and relationships are harder to build – four to six people is likely to be the optimal number. Don’t underestimate the impact of adding one more person to a team or meeting – adding just one more person to a team adds multiple communication lines and therefore vastly changes relationship dynamics.
Another pitfall is creating a team that is too hom*ogenous. hom*ogeneity may mean that team members get along together but lack the full complement of resources needed to perform well. However, while a more diverse team may be more creative or generate more ideas, it is likely to experience greater conflict and process losses. This is where psychological safety and trust become particularly important; they can unlock the benefits of diverse teams by creating an environment where team members can learn from their differences and leverage them in carrying out the team’s work.
What drives team performance?
Research has found that psychological safety – an environment that’s safe for people to speak up without fear of rejection or embarrassment – is the strongest factor that drives team performance. Psychological safety can be established by leaders being fully present in conversations, actively encouraging speaking up and reporting mistakes, being inclusive in decision making, acknowledging that they don’t know all the answers and inviting participation from all team members. Creating an initial team agreement or charter can be a useful way to support psychological safety, considering together topics such as how you will know when the agreed behavioural norms are not being followed, and how you can call each other out on this.
Trust, another essential component of optimising team effectiveness, relies on individual team members having both the confidence that the intentions of other team members are good, and that they will deliver high-quality work. It is built through shared experiences over time as individuals understand and open up to each other. Doing one small thing every day to build trust is more impactful than one big event or away day once a year. Simple tools, such as beginning meetings by asking team members how they are feeling, or asking icebreaker questions, can be very effective.
Virtual and hybrid teams have increasingly become the norm, yet create challenges for creating trust and psychological safety. In hybrid contexts, teams meet less regularly in person, missing out on key information and a shared understanding, which contributes to a lack of socialisation and weaker group identity. Organisations should pay additional attention to building psychological safety in a virtual environment to reap the benefit of diverse teams. This includes encouraging team members to go out of their way to clarify where they are coming from to avoid confusion and misinterpretation, actively sharing knowledge and seeking out feedback, and sharing positivity about the good things they see in others.
Despite an increase in team working and the dispersed and hybrid nature of teams, our research at CRF finds that the key principles for team effectiveness largely remain the same. Getting the team structure right, including team size and diversity, is critical to optimising team effectiveness. Make intentional choices about team size, balancing the need to generate ideas with the need to manage relationships, and unlock the benefits of diverse teams through investing in generating trust and psychological safety.
Jo Nayler is senior research executive at Corporate Research Forum
