Failing to build a culture of trust
If people think their teammates are lying, withholding information or just incompetent, nothing valuable will get done.
By Geoffrey Colvin, FORTUNE senior editor-at-large

(FORTUNE Magazine) - Read the extensive literature on team effectiveness, or talk to people on teams in sports, business, or elsewhere, and it always comes down to this: Trust is the most fundamental element of a winning team.

If people think their teammates are lying, withholding information, plotting to knife them, or just incompetent, nothing valuable will get done. The team doesn't create synergy. It creates "dysergy" - two plus two equals three, with luck.

Berkshire Hathaway's success is the product of a tag-team effort by Warren Buffett, above, and his lower profile partner, Charlie Munger.
Berkshire Hathaway's success is the product of a tag-team effort by Warren Buffett, above, and his lower profile partner, Charlie Munger.
Bad teams
Lessons from the business playbook
John Rigas, Timothy Rigas, Michael Rigas
The paterfamilias, John, and his sons borrowed huge sums for personal use. Adelphia went into bankruptcy in 2002 after disclosing billions in debt. Much of the Rigas clan ended up in court.
CEO Phil Condit (1996-2003) and his Boeing brain trust
Dogged by scandal, falling earnings, and the challenge of Airbus, America's premier airplane manufacturer just couldn't fly right.
Al Dunlap and anyone
"Chainsaw Al" liked to portray himself as a tough-minded savior of dying companies (Lily-Tulip, Scott Paper, Sunbeam). But the big-talking bully got tossed from Sunbeam and ended up as a symbol of capitalism at its worst.

So dream teams are in trouble right from the start because team members may have particular reasons to be distrustful. In sports settings they are often brought together only briefly from teams that spend the rest of the year trying to beat each other. Even if team members can set aside that antagonistic mindset, they rarely have time to develop confidence in one another's behavior. It's similar in business: Even if team members aren't battling for the next promotion, someone is always getting moved or stolen away.

"A major problem is that people are transient," says consultant Ram Charan. Especially on an all-star team, "there's all the headhunting, and there's a constant tug to have people pulled out of the team. Instability is a major issue." That's a big problem because trust, by its nature, builds slowly.

Many companies try to speed the trust-building process. In the '80s there was a virtual epidemic, often in woodsy corporate off-sites, of people falling backward off tables into the arms of co-workers as a way of learning trust. Maybe it even helped.

Today consultants have developed many additional exercises that involve people sharing personal stories or revealing their personality type, based on the valid insight that reciprocal vulnerability is the beginning of trust. But the process can be rushed only so much.

In fact, trust is so fragile and so laboriously created that it may never extend very far in a top-level team. "Building a really high-performing executive team at the highest level is a mirage," says a management consultant who doesn't want to be quoted because this particular message is a downer. "When such teams do exist, they'll consist mostly of two people, maybe three."

It's just too hard to build trust more extensively at the top level, where everyone is supposedly a star.

And sure enough, the legendary top executive teams are almost always pairs. Think of Roberto Goizueta and Donald Keough at Coca-Cola (Research) in the '80s and '90s, or Tom Murphy and Dan Burke at Capital Cities/ABC from the '60s to the '90s, or Reuben Mark and Bill Shanahan at Colgate-Palmolive (Research) for two decades until last year, or Warren Buffett and Charlie Munger at Berkshire Hathaway (Research) from the '60s to today. No one would have called those pairs dream teams back when they got together; at the time, most people had never heard of them.

Maybe you noticed something else about those teams: Each consisted of a boss who became famous and a much less famous No. 2 who devoted his career to the success of the enterprise. In every case, though, they developed deep trust over many years and produced outstanding results.

Next pitfall: Tolerating competing agendas


Why dream teams fail:

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