What determines the long-term sustainability and success of organizations? Is it the genius of high-level individuals, or is it the collective knowledge of a communicative team? Researchers from Carnegie Mellon and MIT joined arms to study what allowed the most powerful companies in the world to thrive. Their discovery led to a groundbreaking shift in our understanding of the traits of high-functioning organizations, businesses to re-think their age-old strategies. Spoiler alert, the answer is not what you might expect.

Here’s a repost of a great Forbes article we like about the importance of teams by Greg Satell called: "We Don't Need The Best People, We Need The Best Teams" -- Forbes Magazine. Read the full article in its original form here.

In 1997, in a landmark article, McKinsey declared the war for talent.  The firm argued that due to demographic shifts, recruiting the “best and the brightest” was even more important than “capital, strategy, or R&D.” The report was enormously influential and continues to affect how enterprises operate even today.

Companies were urged to identify specific traits they were looking for, aggressively recruit and retain the very best performers and move quickly to weed out those who didn’t measure up.  Some companies, such as General Electric, instituted a policy of stacked ranking, routinely firing the bottom 10% of their workers.

Yet in a new book, Humans Are Underrated, longtime Fortune editor Geoff Colvin challenges this notion.  As it turns out, what it takes to compete in today’s world is not the best individual performers, but the best teams.  Having the “smartest guys in the room” won’t do you much good if they can’t work with others effectively.  We need to rethink how we approach talent.

The Increasing Dominance of Teams

In the aftermath of 9/11, the CIA commissioned a study to determine what attributes made for the most effective analyst teams.  What they found was surprising.  As it turned out, what made for the most effective teams was not the individual attributes of their members or even the coaching they got from their leaders, but the interactions within the team itself.

Managers have long sought to stock their organizations with great performers.  Hard-working people who went to top schools scored high on aptitude tests and had a proven track record of getting results were highly sought after.  Compensation schemes and retention practices were similarly geared to individual performance.  

However recent studies show that high-value work is increasingly done not by individuals, but teams, and those teams are increasing in size. Moreover, other research demonstrates that diverse teams outperform others that are more homogenous even if the more uniform units are made up of people with higher ability.

In fact, almost everywhere you look there is evidence that belies the central premise of the “war for talent” approach that McKinsey promoted and that so many organizations have adopted.  What’s increasingly becoming clear is the focus on individual performance was misguided. We need to shift our focus from individuals to teams.

What’s Driving The Shift

At first, the new emphasis on teams, rather than individual performance, can be a little hard to swallow.  We’ve all seen great performers at work and marveled at their effectiveness, just as we’ve all seen real buffoons in action who can’t seem to tie their own shoelaces.  It seems far-fetched, to say the least, that the former does not outperform the latter.

Yet in truth, very few people are stars or dolts, most sit somewhere in between and cognitive ability isn’t as consequential as it used to be. Consider the fact that an ordinary teenager with a smartphone has more access to information than even a genius working in a high-powered organization a generation ago and it becomes clear that talent is overrated.

So just as the industrial revolution devalued physical power, the digital age is reducing the importance of cognitive power.  Increasingly, we’re collaborating with machines to get work done.  Further, as the world grows more complex, expertise is becoming more domain-specific, so we need to work with others to get things done.

The effect of teams is even becoming clear in fields that have long been considered in the realm of individual performance.  The National Transportation Safety Board, for example, found that 73% of fight incidents happen on the crew’s first day together, before they had a chance to build a team dynamic.  Another study showed that surgeons perform markedly worse at unfamiliar hospitals.

Building A Team Of Teams

Just as the individual capabilities of team members aren’t nearly as important as how they work together, overemphasizing individual team performance can hinder the performance of the organization as a whole. As he describes in Team of Teams, that’s what General Stanley McChrystal found fighting Al Qaeda in Iraq in 2004.

Although as the Commander of Special Forces, he led some of the world’s most capable teams, the interactions between them left much to be desired.  Commandos would capture valuable intelligence, which would often sit for weeks before a team of analysts would get to it.  Insights from analysts, on the other hand, often weren’t getting to the soldiers on the ground.

McChrystal saw that his forces had fallen into an efficiency paradox.  In their zeal to field the most capable teams hell-bent on accomplishing their specific missions, interoperability suffered and the shared mission of the organization was being lost.  They were winning every battle, but somehow still losing the war.

So McChrystal took steps to network his organization, even if that meant slowing the individual teams down slightly.  For example, he took top soldiers out of the field and made them liaison officers—usually a role for those past their prime.  He also embedded analysts in commando units and vise versa.  The result was that overall efficiency increased by a factor of seventeen.

What Makes A Great Team?

Managers have long relied on assessments such as the IQ test to identify high performers and those scores do correlate highly with individual achievement.  However, the work we do today demands greater collaboration and the same individual skills don’t necessarily transfer to a group setting.  In fact, some high-performance traits, like assertiveness, negatively affect teams.

To understand how to create more effective teams, scientists at MIT and Carnegie Mellon have identified a collective intelligence factor that predicts group performance.  Rather than hard-driving “A personalities,” it turns out that high-performing teams are made up of people who have high social sensitivity, takes turns when speaking, and, surprisingly the number of women in the group.

Another study found that successful groups exhibited behaviors that engender trust, such as facing each other while talking and making eye contact.  Colvin also pointed to further research, still unpublished, which suggested that team performance was hindered when people believed that their work was being individually assessed.

All of this points to a major change in how we need to recruit, train and manage people.  Many long-held practices, such as individual performance assessments and compensation will have to be reassessed. The best performers are no longer the hard-driving executives that can impose their force of will, but those who can engender trust and encourage others to contribute.