Team Charters Plus Task Plans Boosted Performance

Team members that created high-quality plans for accomplishing their tasks and for working together outperformed those that did neither or only one in a 2009 study. This provided the first direct evidence for the power of team charters, the authors said.

As part of an MBA class, teams had to create a team charter and a task plan for a computerized game that simulates running a global footwear manufacturer. The study article said the charters included:

• Information provided by each team member on his or her background, preferred communication methods, available hours, strengths and weaknesses, and work styles.
• Team goals, roles, and task schedule.
• Rules for "meeting attendance, task performance and quality, idea contribution, cooperation and attitudes, and anything else they wanted."
• How the teams would reward successes and manage poor performance.

The task plan was essentially a business plan, covering overall strategy; "market share objectives"; strategies for such issues as pricing, services, and retailing; key driving forces and indicators; and operational and contingency plans.

The charters and plans were created after two practice rounds of the game, played once a week. Then the class instructor and a second person who knew no one's identities independently rated the completeness and internal consistency of each document. Their scores were averaged as the quality measure.

The game continued through eight weekly rounds. "During each round," the article explained, "members used decision support software to make and integrate dozens of decisions concerning plant operations (e.g., plant upgrades, closings, capacity); human resources (e.g., wages and bonuses, hiring and layoffs); warehouse and shipping (e.g., exchange rates, speed vs. cost of delivery options); sales and marketing (e.g., variety of shoe models, pricing, celebrity spokespersons); financial resources (e.g., cash flow, bonds, and loans); and other strategic decisions."

The game software measured performance based on the researchers' choice of "a weighted index of five factors: after-tax profits (40%), bond rating (20%), return on investment (15%), market capitalization (15%), and sales revenue (10%)." This resulted in a score on a 0–100 scale.

In their data analysis, the researchers filtered out the effects of the members' Graduate Management Admission Test (GMAT) scores and grades from other parts of the class. The team assignments were random except for controls to ensure similar gender and ethnic mixes. The average age was 28.5.

Teams that received high quality ratings on both their charters and their task plans were by far the strongest performers, averaging scores in the mid-70s. Those which had a high quality charter but low-quality plan, or the reverse, averaged around a 50. And those who had low quality ratings on both ended up with average scores in the mid-20s.

The paths the teams took differed, however. Because performance was calculated after each round, patterns could be seen. The high-charter/low-plan teams performed best in the early rounds, and then dropped off sharply. Their opposite, the low-charter/high-plan teams, fell furthest behind at first, then leveled off such that those two sets of teams ended up in the same place. The high/high teams rose in performance slower than the high/low teams but kept improving. The low/low teams did not drop off as quickly at first as the low/high, but dropped rapidly thereafter.

"Our findings suggest that the time devoted to developing charters is time well spent," the authors wrote. But teams also need to plan their task work to gain top performance.

Source: Mathieu, J., and T. Rapp (2009), "Laying the Foundation for Successful Team Performance Trajectories: The Roles of Team Charters and Performance Strategies," Journal of Applied Psychology, Vol. 94(1):90.