A Team of Leaders

A Team of Leaders Plot Summary

Introduction

How can organizations create environments where every team member takes ownership, demonstrates initiative, and delivers exceptional results? The traditional model of hierarchical leadership with a supervisor directing employees increasingly falls short in today's complex workplace. When employees merely follow orders without thinking critically or taking initiative, teams experience disengagement, reduced productivity, and missed opportunities for innovation. The Five-Stage Team Development Model offers a revolutionary framework for transforming ordinary work units into high-performing teams of leaders. This model illustrates how teams can evolve from supervisor-dependent groups where members simply follow instructions to self-managed entities where everyone functions as a leader. Through carefully designed systems, optimized processes, shared knowledge management, and visual performance tools, organizations can create environments where team members naturally step up, take ownership, and drive results. This approach not only enhances organizational performance but also creates more fulfilling work experiences where individuals grow professionally while contributing meaningfully to collective goals.

Chapter 1: The Five-Stage Team Development Model

The Five-Stage Team Development Model provides a comprehensive framework for understanding how teams evolve from traditional supervisor-led units to self-managed teams where everyone functions as a leader. At Stage One, interaction primarily occurs between the supervisor and individual team members in a one-on-one fashion. The supervisor makes all key decisions, assigns tasks, and maintains full accountability for team performance. Team members essentially function as followers who receive and execute instructions without much independence or cross-communication. As teams progress to Stage Two, members begin interacting with each other more frequently, though still under the supervisor's direction. The supervisor starts coaching the team and team members begin learning new processes together. While the leader still provides most direction, team members start coordinating activities and sharing knowledge, gradually establishing a foundation for greater collaboration. Stage Three represents a significant shift as leadership begins to be shared. A few team members step up to lead specific processes or activities while engaging others in participation. The supervisor still plays an important coaching role but progressively transfers leadership responsibilities to willing team members. By Stage Four, leadership is widely distributed, with most team members leading key processes and activities. The supervisor transitions to more of a coaching role while gaining time to pursue higher-level work. The team handles most functions independently but still relies on the supervisor for difficult challenges. Finally, at Stage Five, the team reaches true self-management. Every member steps up to lead processes, set challenging performance targets, establish best practices, and contribute to other teams. The supervisor's time is largely freed to tackle strategic initiatives while remaining available for counsel when needed. This evolutionary model works across diverse settings, from manufacturing plants to service organizations, sports teams, and even family units. The General Electric jet engine plant in Durham, North Carolina exemplifies a Stage Five organization, operating with over 300 employees but just one manager. Self-directed teams build engines, manage workflow, address performance issues, and hold each other accountable. Similarly, the Department of Veterans Affairs transformed several regional offices from assembly-line operations to team-based environments where members took ownership of complete claims processes, dramatically improving service quality and employee satisfaction. For a team to progress through these stages, four factors prove crucial: maturity (the team's collective experience), knowledge (how effectively information is shared), complexity (the intricacy of work processes), and fluidity (the stability of the team's environment). Organizations must provide appropriate training, communication frameworks, and systematic approaches to startup and development. When implemented successfully, the model creates an environment where every member thinks and acts as a leader, taking responsibility for team performance rather than simply following instructions.

Chapter 2: Designing Systems for Leadership Development

To transform ordinary teams into teams of leaders, organizations must intentionally design systems that support and encourage leadership at all levels. The fundamental principle is elegantly simple yet profound: "Teams are perfectly designed to get the results that they get." If your team is producing followers rather than leaders, it's because your design choices inherently promote that outcome. Redesigning team systems requires careful attention to alignment - ensuring that all components work together harmoniously to drive desired behaviors and results. The Organization Systems Design (OSD) Model for Teams provides a comprehensive framework for this redesign process. This model illustrates how external influencing factors (customers, stakeholders, competitors), design choices (mission, processes, structure, rewards), knowledge/culture, and outcomes interact to shape team performance. When redesigning systems, teams must make strategic choices about mission (their reason for being), guiding principles (underlying beliefs), uniqueness (competitive differentiation), and metrics (performance indicators). Additionally, six critical systems must be considered: business processes, structural systems, decision-making and information systems, people systems, reward systems, and renewal systems. The design process typically employs three analytical tool sets: environmental scan (understanding customer and stakeholder requirements), process analysis (examining workflows and bottlenecks), and culture analysis (studying knowledge networks and team dynamics). Through environmental scanning, teams gather critical insights about customer needs that might otherwise remain undiscovered. Process analysis helps identify inefficiencies and variance points, while culture analysis examines interaction networks, individual needs, and knowledge requirements. Using these tools, teams can develop comprehensive designs that support leadership development. A powerful real-world example comes from a company that completely reimagined its organizational structure by relocating to a new office space and implementing team-based management. Initially retaining the same workflows, the company experienced misalignment between its new management approach and outdated processes. Working with OSD consultants, the company created design teams to analyze systems using the tools described. They identified variances in workflows, built control mechanisms, and established customer-focused teams throughout the organization. Managers transitioned to facilitator roles while focusing more on cross-functional issues. The results were remarkable - one team reduced its cost per unit by approximately 75%, achieved through doubled productivity, reduced management positions, and tighter variance control. Successful implementation requires thoughtful transition planning, including management plans (who will lead the change), action plans (sequencing implementation activities), stakeholder commitment plans (ensuring buy-in), evaluation plans (measuring success), and stabilization plans (preventing regression). When all system elements align properly to support leadership development, teams naturally evolve toward self-management, with members increasingly stepping up to lead various aspects of team operations.

Chapter 3: Optimizing Team Processes

For everyone to function as a leader within a team, all team processes must be explicitly designed to support this objective. Teams typically operate five critical process categories: performing core work, managing performance, selecting and onboarding new members, building team capabilities, and managing member disengagement. By optimizing these processes with leadership development in mind, teams create environments where everyone naturally steps into leadership roles. The foundation begins with core work processes - understanding how value flows through the team's activities. Process mapping visualizes these workflows, identifying "state changes" where inputs are converted into more valuable outputs. For example, a customer service team might map how information requests change to accepted requests and ultimately to answers. This analysis helps teams identify waste, bottlenecks, and value-adding activities. When team members deeply understand these processes, they shift from seeing themselves as button-pushers to process owners responsible for creating value through state changes - a fundamental leadership mindset shift. Performance management processes must operate at both team and individual levels. Teams need clear, aligned metrics that reflect organizational priorities, with performance data transparently shared and regularly reviewed. Individual performance management should include standards covering productivity, quality, timeliness, and leadership contributions, with reliable consequences for every performance level. One innovative team addressed accountability problems by including rehabilitation outcomes in everyone's standards, even though individuals only controlled portions of the process. This prompted collective ownership and dramatically improved results. Selection and onboarding processes fundamentally shape team capability. High-performing teams participate in selecting their members, applying clear guiding principles such as "We will not compromise selection criteria" and "The best predictor of future behavior is past behavior." Effective onboarding accelerates integration through comprehensive orientation, skill assessment, and mentoring programs. Building team capability requires identifying knowledge gaps through skills matrices and creating individual development plans aligned with team needs. Finally, processes for managing member disengagement must address both voluntary departures (celebrating contributions, transferring knowledge) and involuntary separations (addressing poor performance). The contract processing team example illustrates the power of process optimization. By reorganizing from fifty specialists handling discrete tasks to ten cross-trained employees managing entire processes, the team reduced processing costs from $4.98 to $1.56 per unit while improving quality and timeliness. This transformation occurred because team members understood their processes, eliminated unnecessary handoffs, and took ownership of entire value streams - exactly the mindset shift required for developing leadership at all levels.

Chapter 4: Creating Value Through Shared Knowledge

Understanding the value one contributes to an organization is fundamental to developing leadership behavior. When team members clearly see how their work creates measurable value, they transform from passive employees into engaged leaders who continuously seek improvement opportunities. The team value creation model provides this crucial visibility by calculating two essential figures: the cost of team operations and the value of team outputs. With this information, everyone can determine whether they're creating positive value and identify opportunities to increase their contribution. A properly constructed team value creation model demonstrates how value flows through the production and delivery of products or services. The cost component incorporates fully allocated expenses including salaries, benefits, overhead, and discretionary spending. The value component can be determined through market pricing, industry benchmarks, or internal metrics based on the cost per transaction. By comparing these figures, teams can assess their overall performance and identify specific areas for improvement. For example, in one value creation model, while the team as a whole generated positive value of $1,131 for the pay period, three members operated at a loss. This visibility prompted focused improvement efforts. One organization applied this approach to securities trading operations, initially valuing each transaction (or "put-on") at $210 based on previous contractor costs of $230. Through continuous improvement, the team progressively reduced their value target to $190, then $170, $150, and eventually $95 - creating substantial competitive advantage. The key insight was that management didn't arbitrarily set these values but used sound judgment in establishing reasonable targets that gradually became more challenging as the team developed. To implement a value creation model, teams need several essential components: a template with pre-populated fields, reporting systems that track hours and transactions, overhead percentages, and transaction values. Teams should regularly review results, asking critical questions like: "Is performance consistent across the team?" "How do we compare to other teams?" "Are resources scheduled effectively?" "Can we streamline our procedures?" This analytical approach transforms mindsets from worker to leader, as team members begin viewing their work through the lens of business value creation. The most successful teams combine this analytical approach with a strong sense of purpose, engaging both logical (left-brain) and emotional (right-brain) thinking. This whole-brained approach connects team members to something meaningful while providing the data they need to improve performance. When team members understand both their mission and their metrics, they naturally elevate from simply doing assigned tasks to actively leading improvement efforts that create greater value for the organization, customers, and themselves.

Chapter 5: Developing and Managing Knowledge for Team Performance

Knowledge development and management form the bedrock of high-performing teams where everyone functions as a leader. While process analysis reveals what work must be done, cultural analysis uncovers the knowledge required to deliver extraordinary value. This knowledge represents the purest source of competitive advantage, but managing it effectively requires understanding its complex nature and the social networks through which it flows. Knowledge development must focus on performance capabilities, recognize that diffusion is harder than discovery, implement systems to prevent knowledge loss, and continually enhance learning capabilities. The cultural analysis toolkit includes several powerful instruments for assessing and developing team knowledge. The voice of the team assessment evaluates the extent to which team members display behaviors, feelings, and attributes needed for high performance. The knowledge assessment maps four distinct types of team knowledge: codifiable know-that (facts and information), codifiable know-how (procedures and routines), tacit know-that (beliefs and attitudes), and tacit know-how (expertise and artistry). Often, more than half of a team's knowledge - particularly the most valuable portions - exists in tacit form that resists codification and explanation. High-performing teams develop proficiency in all knowledge types, similar to how elite athletes develop both technical knowledge and intuitive feel for their sport. A tennis player must learn codifiable elements like proper racquet position and swing mechanics, but also develop tacit knowledge about when to attack, defend, or approach the net. Similarly, teams need both explicit procedures and tacit expertise to make rapid, sound decisions in complex situations. All four knowledge types must be aligned and balanced, with appropriate learning methods for each type: structured approaches for codifiable knowledge and more experiential methods for tacit knowledge. The knowledge capability equation (KC = D × D, or Knowledge Capability equals Discovery multiplied by Diffusion) illustrates that improving knowledge diffusion often yields greater returns than enhancing discovery. Most teams rate their discovery ability much higher than their diffusion capacity. If a team scores 7 for discovery but only 2 for diffusion (giving a total KC of 14), improving diffusion by just one point increases capability by 50% (to 21), while raising discovery by one point only increases it to 16. This explains why the best teams excel at sharing and applying knowledge rather than merely acquiring it. The skills matrix completes the knowledge management toolkit by mapping required competencies across team members, identifying gaps, and planning development. Unlike traditional approaches that focus solely on individual skills, this comprehensive methodology links knowledge management directly to team performance, ensuring that knowledge development supports leadership at all levels. When team members understand the knowledge needed for success, have systems for sharing that knowledge, and recognize how their contributions create value, they naturally evolve from passive workers to engaged leaders driving continuous improvement.

Chapter 6: Visual Management for Team Performance

Visual management transforms ordinary workspaces into dynamic environments that accelerate team development and leadership behavior. This approach combines management principles with fine arts elements to create spaces that inspire, inform, and elevate team performance. Rather than merely housing workers, a visually managed environment actively communicates mission, goals, and performance data while celebrating team accomplishments and reinforcing accountability. By consciously designing what team members see daily, organizations can powerfully reinforce desired behaviors and mindsets. The concept goes far beyond traditional office decor. When properly implemented, visual management creates spaces where performance information remains constantly visible, triggering productive discussions about improvement. Historical displays connect team members to their mission and purpose, while recognition areas celebrate individual and collective achievements. The approach utilizes various media - charts, photographs, artifacts, videos, and even sound - to communicate through multiple sensory channels. This whole-brain approach engages both analytical and emotional thinking styles, helping information resonate with diverse learning preferences and creating stronger memory imprints through emotional experiences, music, and metaphors. The Veterans Affairs Los Angeles Regional Office (LARO) demonstrates visual management's transformative potential. When Stewart Liff became director in 1994, the office suffered from poor performance, low morale, and a cynical culture. As part of a comprehensive redesign, Liff transformed the physical environment to honor veterans' contributions while displaying team and individual performance data. The office created a virtual museum throughout the workspace, installed military artifacts like helicopters and jeep displays, and prominently posted performance metrics. Combined with other organizational changes, this approach dramatically improved results - increasing benefit grant rates by 50%, customer satisfaction by 37%, and rehabilitation outcomes by 600%. Implementation typically follows six phases: planning (aligning with mission and systems), building a framework (educating team members), creating the space (reviewing workflow and adjusting physical elements), focusing on customers and data (installing mission/customer displays and performance metrics), focusing on employees (adding recognition elements and individual performance data), and renewal (refreshing displays and incorporating new ideas). Throughout this process, team members naturally step into leadership roles by contributing to design decisions, creating displays, and using visual information to drive improvement discussions. The most powerful visual management environments employ multiple sensory elements - not just visual displays but also sound, tactile features, and even distinctive scents - creating spaces so inspiring that team members proudly bring visitors to see their workspace. These environments elevate everyone by connecting them to mission and purpose, celebrating contributions, providing performance transparency, and creating accountability through visibility. When team members work in spaces that consistently reinforce these messages, they naturally evolve from passive followers to engaged leaders who take ownership of team success.

Chapter 7: Implementing Self-Managed Work Teams

Transforming traditional work units into self-managed teams requires a systematic approach addressing both structural and cultural elements. The journey begins with a critical insight: disengaged employees cost organizations billions in lost productivity, with studies showing only 30% of workers feel engaged and inspired. Traditional command-and-control structures no longer suffice in environments where workers seek meaning, challenge, and opportunities for growth. The self-managed team model offers a compelling alternative by creating environments where employees naturally evolve into leaders. Implementing this model requires careful attention to team design. Teams function best when organized around complete processes or logical "state changes" where value is created. This structure enables members to see the impact of their work and take ownership of outcomes. Clear, aligned goals provide direction, while information systems deliver frequent, timely performance data directly to those making decisions. Team members need training in business management skills, problem-solving techniques, and meeting facilitation to effectively manage their own performance. Reward systems must connect to results, and the organizational culture must support speaking up about problems, suggesting changes, and implementing data-driven improvements. The team value creation model serves as a cornerstone for self-management by providing transparency about costs, outputs, and value. This information enables team members to think like business owners rather than employees, asking critical questions about resource allocation, process improvement, and performance optimization. When combined with comprehensive knowledge management systems that develop both codifiable and tacit expertise, teams gain the capability to make sound decisions independently. Visual management reinforces these elements by creating environments that constantly communicate mission, goals, and performance while celebrating achievements. Real-world implementations demonstrate the power of this approach. The General Electric Durham plant operates with just one manager overseeing 300 employees organized in self-directed teams. Team members decide how to manage work, schedule time off, improve processes, and address performance issues. At Brigham Young University, football coach Bronco Mendenhall implemented visual management principles to transform team culture, leading to unprecedented success with five seasons of 10-11 wins. The Veterans Affairs Los Angeles Regional Office combined team restructuring with visual management to dramatically improve service outcomes and employee engagement. The journey to self-management isn't simple - it requires redesigning systems, optimizing processes, developing knowledge, and transforming physical environments. However, organizations that commit to this path create workplaces where employees eagerly contribute, innovate, and take ownership. Instead of watching the clock, team members become energized partners in driving performance. Leaders find themselves freed from day-to-day supervision to focus on strategic initiatives. The result is a win-win: higher performance for the organization and more fulfilling work experiences for everyone involved.

Summary

The fundamental insight at the heart of this framework is that everyone can become a leader when organizations intentionally design systems, processes, and environments that support leadership development at all levels. The Five-Stage Team Development Model provides a clear roadmap for this transformation, showing how teams evolve from supervisor-dependent units to self-managed entities where every member takes ownership and demonstrates initiative. By aligning organizational design elements, optimizing processes, implementing knowledge management systems, creating value transparency, and employing visual management techniques, organizations create environments where leadership naturally emerges throughout the team. The implications extend far beyond workplace efficiency. When individuals work in environments where they understand their value contribution, possess the knowledge needed for success, and feel connected to meaningful purpose, they experience profound personal and professional growth. They no longer merely execute tasks; they think critically, take initiative, and drive continuous improvement. Organizations benefit from higher performance, greater innovation, and increased adaptability, while individuals enjoy more fulfilling work experiences and develop valuable leadership capabilities that transfer to all aspects of life. This transformation represents the future of work - moving beyond traditional hierarchies to create dynamic environments where everyone contributes as a leader toward shared success.

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Paul Gustavson

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