Extreme Teams: Why Pixar, Netflix, AirBnB, and Other Cutting-Edge Companies Succeed Where Most Fail is a book by Robert Bruce Shaw that looks at the culture of seven successful companies, analyzing what makes them successful and how their strategies can be implemented in other businesses. The book looks at the role of leadership, structure, and communication in building strong teams and organizations. It looks at how these companies were able to develop unique cultures and corporate strategies that allowed them to succeed and thrive, and how other companies can learn from them.
The book also examines how teams can use technology and data to become more efficient and productive, and how to create an effective team culture. It also provides actionable advice and strategies that readers can use to develop their own teams.
Results and relationships
The fundamental dynamic in teams is delivering results while building relationships. Every team faces the challenge of doing both.
In many cases, results and relationships are synergistic—each supporting the other and producing virtuous cycles (where results enhance relationships and relationships enhance results).
In some situations, however, results and relationships are antagonistic, with extremes in one undermining the other. An excessive focus on results can erode relationships; an excessive focus on relationships can erode results.
Push harder, push softer
Cutting-edge firms establish a distinctive “hard/soft” culture by first clarifying the attributes and emotions that they want in their companies. The don’t mimic other firms.
They then develop formal and informal mechanisms to reinforce those attributes. In particular, they identify the experience they want their employees to have as a result of working in the company.
The result is that members know what is expected of them—what to do, what not to do—what is valued and what is taboo.
Teams at the Extremes
Netflix is disrupting the media industry through its streaming service. Airbnb is disrupting the hospitality industry through its peer-to-peer model. Alibaba is disrupting the way business is done in China through its e-commerce sites. The leaders of these firms, however, realize that their long-term success requires more than groundbreaking products and services.
They need their companies, as companies, to be equally innovative—workplaces that are challenging commonly accepted ways of operating. They understand that their legacies will be based not on the products they create but on their ability to build creative and agile organizations that endure over time.
Steve Jobs will always be recognized for his innovative products but the true test of his leadership will be if Apple can continue to innovate and grow for the next 50 years. Does the company he created have the people, cultures, and processes needed to do so? At this point, the jury is still out.
The Balance
The paradox of building a cutting-edge firm is that an unrelenting focus on results and relationships is necessary to achieve something extraordinary but also destructive if not managed skillfully. The challenge, then, is to drive results and relationships to the breaking point while managing the very real downsides of doing so.
For leaders like Reed Hastings of Netflix or Brian Chesky of Airbnb, pushing their organizations to the breaking point, pushing beyond what others believe is possible or even desirable, is not the problem. The risk they face, as does anyone who disrupts the common order of things, is that their reach exceeds their grasp.
Value Fit over capabilities
Most firms hire based on a job candidate’s resume—assessing how well his or her skills fit the demands of a specific job.
Cutting-edge firms, in contrast, place equal if not greater emphasis on a person’s fit to their culture.
Cultural fit is important in three areas: each person must embrace the group’s higher purpose, the value it places on results, and the value it places on relationships.
The best firms and teams develop robust processes to screen for these traits in the hiring and promotion of their people.
The Bottomline
Comfortable teams are those that value relationships over results. Stressed teams value results over relationships. Indifferent teams settle for mediocrity or worse in both areas. It is logical, then, to suggest that the best teams strive to maximize both results and relationships—to operate in the upper right quadrant of the following table.
When managed well, this combination creates virtuous cycles within a team, where results and relationships work in a mutually reinforcing manner to produce increasingly higher levels of performance. However, simply recognizing that both are important, that they can be mutually beneficial, helps manage the tradeoffs and tensions that often exist between the two. Extreme teams take this one step further in pushing each to the breaking point—a goal that is easy to understand but difficult to manage.
Focus More, then Less
Cutting-edge firms actively communicate the broader context to their members (market opportunities and threats, financial realities . . . ).
They then clarify their vital few strategic priorities—the three or four goals that must be achieved to move the firm or team forward.
These priorities are defined in a manner that ensures that everyone knows what success looks like, including performance metrics and accountabilities.
Cutting-edge firms, however, also understand that too much focus can be self-defeating—thus, they foster ongoing experimentation in an attempt to identify innovative customer and revenue opportunities.
Take comfort in discomfort
Traditional firms and teams can suffer from “terminal niceness”—creating what Jack Ma of Alibaba calls “a little white rabbit” culture.
Cutting-edge firms and extreme teams, in contrast, realize that tension and conflict are essential to achieving their goals.
Their skill is creating environments where people are comfortable with being uncomfortable. In so doing, they increase the likelihood that conflict is surfaced and resolved in a productive manner.
Striving for equilibrium
Many teams strive to manage the interplay between results and relationships by maintaining an acceptable equilibrium—enough results and enough relationships to move the group forward without taking undue risk.
Striving for equilibrium, however, is a seductive trap. It can result in stagnation as a team seeks to maintain a comfortable balance between results and relationships in an environment that requires more of each.
Genius, in teams, is found at the edges. Cutting-edge teams push results and relationships to the breaking point with an understanding of the need to manage the risks that come with doing so.
Foster a shared obsession
Cutting-edge firms have a critical mass of obsessive people and teams.
They view their work as a calling—much more than a job to be done. The team members align around a higher purpose that shapes their collective thinking and behavior.
Their obsessive nature is both a blessing and a curse—necessary to achieve something extraordinary but potentially destructive if not managed well.
Pushing the boundaries
Entrepreneurs, by definition, are adept at managing newness—pushing the boundaries of what exists today. The premise of this book is that cutting-edge leaders and their teams push both results and relationships further than traditional firms. But there are risks, and sometimes a price to pay, for doing so.
Results, pushed too far, can produce a variety of unintended consequences, such as a harsh company culture or unethical business practices. Relationships, pushed too far, can create a soft environment that lacks the drive and toughness needed to achieve success.
