Learning, Clarity and Credibility in Teams: Evidence from an Agile Organization

This paper studies team dynamics in the product development section of a large bank that is structured following the Agile model i.e. around self-managed teams, with few interdependencies among them. In collaboration with the bank, the author ran 5 surveys of teams between October 2015 and February 2017 that allow her to describe the evolution of an agile organization and study the main drivers of sustained cooperation and coordination within 382 teams. First, the author shows that performance and engagement improve over time and this is mostly driven by team learning rather than selection of teams. Then, exploiting within team variation over time and controlling for a rich set of potential drivers of team’s outcomes, she shows the importance of trust, common “culture”, quality of communication and several dimensions of clarity for efficiency and employee engagement at the team level. Third, the author is able to compare the importance of those features in agile teams relative to non-agile teams and show that, while the drivers of performance are similar, good communication and trust are more relevant for performance in agile teams. The author interprets the results as allowing her to test the importance of clarity and credibility for the team relational contract in an agile context. Finally, the author shows how different people in the organization evaluate performance in a setting with complex, multidimensional tasks that are inherently difficult to obtain hard measures for. The author finds that different observers have a similar assessment of team performance, but also differ in some interesting ways. The importance of the measured features which are “soft” in nature and dependent on interaction highlight the difficulty in copying key organizational practices across organizations.