As any professional sports manager knows, new teams can be wildly successful or surprisingly disappointing. When it goes well, collaboration can create something much greater than the sum of its parts. The question is, how do you decide whether to stick with a winning lineup or take a risk on an entirely new configuration of players?
In the context of professional service firms like law, accounting, and consultancy, collaboration is continuous and crucial. These knowledge-intensive businesses serve a roster of clients and involve forming temporary project teams in response to client needs. These teams then disband when the work is complete.
Professional service firms typically have a partner and associate structure rather than classic top-down management. Partners act autonomously and share ownership of the firm, which means they choose with whom to collaborate when building a team. They may also personally hold the firm’s relationship with a client. This means their teams’ success or failure in earning business from clients will affect not only the financial bottom line but also their personal standing within the firm.
It’s not always better to stick with what you know
'If it ain't broke,' as the saying goes, 'don't fix it.' Putting people together who have previously formed successful teams is a low-risk strategy since their compatibility is proven. But in sticking with these tried and trusted teams, firms pass up the chance to try a new combination which could offer even greater value.
It also restricts the social capital within the firm – the richness of connections and collaborations within it. It's great to work with the same people repeatedly, but you see diminishing returns as time passes.
Heidi Gardner’s work on collaboration within law firms shows that by collaborating with more people, individuals do better because they get more relationships and more referrals. Building a reputation through connections in this way means they can appropriate more value for themselves and progress in their careers.
So, there is a trade-off between the proven, short-term benefits of a team that has worked together before and the potentially greater success (long-term and short-term) that comes with new combinations of people.
How do partners choose their teams?
There is plenty of literature on how the makeup of temporary project teams affects business outcomes but less research on how teams are put together in the first place. What makes partners choose whether to assemble a new team or stick with an established grouping?
Our research focuses on how relationships, clients, and resource availability drive team-forming decisions. We identify three groups of factors:
• Relationship: Questions around who holds the relationship with the client – the firm or the individual.
• Client status: Factors like how important the client is to the firm and how long-standing the relationship has the potential to be.
• Resource constraints: Including individual and firm-level considerations, such as which people are available to join a given project team.
When do firms embrace risk and try out new team member combinations?
New collaborations are more likely to happen if the client relationship is held primarily by the firm rather than by an individual. In these situations, the client relationship is based on the firm's reputation or the client's experience with the firm rather than with a specific partner.
There are a few possible reasons for this trend. The firm may be willing to try new things if no individual reputations are especially at risk. If something goes wrong, the client might prefer not to work with these people again, but their loyalty to the firm is not necessarily affected. Another reason may be that many people within the firm have a similar level of client knowledge, so more combinations of suitable teammates are possible.
Another scenario in which new teams might be tried out is when clients have a low probability of retention. If the client is known to use multiple firms already, for example, there is less to lose if the new team doesn't work out, as the firm may lose its business anyway. If the team is successful, value has been created in the form of new, productive connections that can be used again in the future.
What drives firms to use lower-risk, established teams?
When one person primarily holds a firm’s client relationship, that person will be cautious about risk and is more likely to opt for a team they know to have been successful in the past.
High-status clients are also more likely to be serviced by tried and trusted team combinations. Again, the driver is avoiding risk. Although it might seem intuitive to put together a new 'all-star' team from across the business to handle a big and prestigious project, this can fail if the people don't get along or haven't got previously established ways of working together. It’s safer to give the responsibility to well-established, well-functioning teams.
Resource constraints drive new combinations – but only on an individual level
Of course, people need to be available to work on the team. New teams can form when the usual members are unavailable to work together again. If someone is busy with other responsibilities, there is no option but to work with someone new.
Yet, when firms are resource-constrained rather than just specific team members, the opposite happens. They tend to default to known, low-risk team compositions as the most efficient means of servicing clients.
