The topic’s importance is not about to diminish as digital technology reshapes the notion of the workplace and how work gets done. On the contrary, the leadership role becomes increasingly demanding as more work is conducted remotely, traditional company boundaries become more porous, freelancers more commonplace, and partnerships more necessary. And while technology will solve a number of the resulting operational issues, technological capabilities soon become commoditized.

Team composition is the starting point. The team needs to be kept small—but not too small—and it’s important that the structure of the organization doesn’t dictate the team’s membership

It’s one thing to get the right team composition. But only when people start working together does the character of the team itself begin to be revealed, shaped by team dynamics that enable it to achieve either great things or, more commonly, mediocrity.

he results are remarkably consistent and reveal three key dimensions of great teamwork.

The first is alignment on direction, where there is a shared belief about what the company is striving toward and the role of the team in getting there.

The second is high-quality interaction, characterized by trust, open communication, and a willingness to embrace conflict.

The third is a strong sense of renewal, meaning an environment in which team members are energized because they feel they can take risks, innovate, learn from outside ideas, and achieve something that matters—often against the odds.

Top-team meetings should address only those topics that need the team’s collective, cross-boundary expertise, such as corporate strategy, enterprise-resource allocation, or how to capture synergies across business units. They need to steer clear of anything that can be handled by individual businesses or functions, not only to use the top team’s time well but to foster a sense of purpose too.

Many teams benefit from having an impartial observer in their initial sessions to help identify and improve team dynamics. An observer can, for example, point out when discussion in the working session strays into low-value territory.

<h3 class="sidebar-header"><div class="sidebar-title-wrapper">The ‘bike-shed effect,’ a common pitfall for team effectiveness </div> <a href="javascript://" class="sidebar-skip-link"> <span class="mck-radial-plus-icon"> </span></a> </h3> <div class="sidebar-content-wrapper"> <div class="sidebar-content"> The tendency of teams to give a disproportionate amount of attention to trivial issues and details was made famous by C. Northcote Parkinson in his 1958 book, Parkinson’s Law: Or The Pursuit of Progress. As the story goes, a finance committee has three investment decisions to make. First, it discusses a £10 million investment in a nuclear-power plant. The investment is approved in two-and-a-half minutes. Second, it has to decide what color to paint a bike shed—total cost about £350. A 45-minute discussion cracks the problem. Third, the committee addresses the need for a new staff coffee machine, which will cost about £21. After an hour’s discussion, it decides to postpone the decision. Parkinson called this phenomenon the law of triviality (also known as the bike-shed effect). Everyone is happy to proffer an opinion on something as simple as a bike shed. But when it comes to making a complex decision such as whether or not to invest in a nuclear reactor, the average person is out of his or her depth, has little to contribute, and will presume the experts know what they are doing. </div></div>