Posted on January 21, 2010 by Kurt Shuster

As coaches, we often find ourselves working with clients in middle or upper management positions who are responsible for improving the performance of business teams.

Browsing through the Management section of the bookstore reveals literally hundreds of titles dedicated to this very subject. Throughout the decades, these books have recommended everything from incentive-based performance bonuses to teambuilding river rafting trips.

But which ones really work? Which factors should a manager work on – compensation, work-life balance, communication skills? Should a manager take his team on a week-long trek through the Himalayas, or simply increase salaries by ten percent?

Brazilian psychologist Marcial Losada has been studying this issue for the past 20 years, and unlike most business gurus who claim to know the answer, he has applied the scientific approach to finding the answer. And the answer, it turns out, comes down to just three factors. That is, there are three things that high-performing teams do differently from low-performing teams.

Losada’s approach is to watch and record statements made by a given business team as they interact with each other over a period of time – usually one or two hours – to solve a specific business problem. Losada and his team of assistants then record each and every statement made by the team members. These statements are then coded according to where they fit along three dimensions: inquiry-advocacy, self-other, and positive-negative.

1. Inquiry-advocacy refers to whether the person is making a recommendation or asking a question. For example, the statement “I think we should spend more on marketing” would be coded as an advocacy statement, whereas “Should we spend more on marketing or on development?” would be coded as an inquiry statement.

2. Self-other refers to whether the statement is about the speaker or about someone else. So “I think my office is too small” would be a self statement, while “Our customers want lower prices” would be an other statement.

3. Positive-negative refers to, not surprisingly, whether a statement is sarcastic, mean-spirited, etc, or complimentary, supportive, etc. So the statement “That’s the worst idea I’ve ever heard” would be coded as negative, while “I love your idea!” would be coded as positive.

After studying hundreds of small business teams over thousands of hours, Losada has discovered that the best-performing teams (in terms of objective criteria like profitability and meeting deadlines) have a greater ratio of inquiry versus advocacy, other versus self, and positive versus negative statements [1]. Specifically, the “optimal” teams had ratios of about 1-to-1 for inquiry-advocacy and self-other, and just over 5-to-1 for positivity-negativity.

Figure 1, below, shows the different ratios for high, medium, and low-performing teams [2].

The bottom line is that if you’re working with a client who’s trying to improve performance on a business team, you need to focus on improving the way they communicate with each other. More specifically, you should focus on improving the above ratios of positivity-negativity, other-self, and inquiry-advocacy.

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Notes:

1. Losada’s research findings can be found in The Role of Positivity and Connectivity in the Performance of Business Teams: A Nonlinear Dynamics Model published in American Behavioral Scientist

2. The table provided can also be found in the research paper referenced in Note #1 above.