How to Create Effective Teams In an Organization

Do your employees work well together? How do you build a team that enhances each other’s strengths?

In It Doesn’t Have to Be Crazy at Work, Jason Fried and David Heinemeier Hansson share their perspectives on treating employees as a long-term investment. Doing so makes your organization a more effective and satisfying place to work.

Let’s discuss their tips for learning how to create effective teams in an organization.

Tip #1: Don’t Hunt for Talented Employees—Create Them

The first tip for how to create effective teams in an organization is to build up a team from scratch. Most companies get skilled employees by identifying the most talented workers in their industry and trying to steal them away from whatever company they’re currently working for. However, transplanting successful employees from other companies can end in disaster if the new recruits struggle to adjust to your organization. Fried and Hansson argue that the more reliable strategy for learning how to create teams in an organization is to hire employees who show promise and help them reach their full potential.

Three Effective Hiring Criteria

This mindset of creating rather than hunting for employees means that your hiring process will look different from the industry standard. Fried and Hansson recommend ignoring traditional résumé items such as a prestigious education or impressive past job titles. Instead, ask yourself three questions to determine whether someone has the potential to grow into an exceptional employee.

First, are they likable? For the good of the team, make sure to only hire people that everyone would be excited to work with.

Second, do they add a unique perspective to the team? Hiring people from a wide range of diverse backgrounds helps the team produce good ideas and better serve a wider range of customers.

Third, what tangible work have they personally done? Fried and Hansson note that the work someone typically lists on their résumé is too vague or exaggerated to illustrate what they’re actually capable of. Use the interview to uncover what specific tasks they executed in past jobs rather than inferring their skill sets based on their previous work experience. This allows you to avoid onboarding workers who appear valuable on paper but end up being a costly mismatch.

For example, imagine you hire a former software engineer from a prestigious company to be a manager at your new tech startup. Unfortunately, the leadership responsibilities and disorganized startup environment are too overwhelming for them, and they end up resigning after six weeks. If you had instead hired someone who’d managed a scrappy team before, they likely would’ve succeeded as a manager for your startup.

Tip #2: Supply Generous Benefits

Finally, Fried and Hansson recommend supplying your team with enough generous benefits to make them want to stay at your company for the long haul. Retaining your current employees by offering them benefits is more effective than replacing them for a couple of reasons. First, high employee turnover is expensive for your company. Second, every time you hire someone new, your team has to divert time and attention away from serving your customers to conduct interviews and get the new employees up to speed (a long, arduous process).

Many companies entice employees with benefits that seem generous but that incentivize them to spend too much time at work instead of cultivating work-life balance. For example, they deck out the office with ping-pong tables or on-campus workout facilities that are free for employees to use but encourage them to stay at the workplace instead of going home.

In contrast, Fried and Hansson recommend offering employees generous benefits that genuinely support employees—especially their lives outside of work. For instance, the authors pay for their employees to take three weeks of vacation every year and even cover the costs of travel and accommodation for their workers.

How to Create Effective Teams In an Organization