The Orange White Paper
Teamwork and Your Bottom Line
by Adrian Gostick and Chester Elton
Based on a 350,000 person study of Managers and Employees
featured in The Orange Revolution
Contents:
Introduction
Why is Orange the New Green?
1.0
The Concerns about Teamwork
1.1 The Data on Teamwork
1.1.1 Teamwork has Become Cliché
1.1.2 Teamwork is Not Practiced
1.1.3 The Key Components and Benefits are Unfounded
2.0
The Path of Breakthrough Teams
2.1 Does research correlate with reality?
2.2 The Components of the Orange Path
3.0
Where’s the Money in Teamwork?
Case Study: Following the Money of Teamwork
3.1 Evidence of Economic Performance
4.0
Where to start your Orange Revolution?
4.1 Message Consistency
4.2 Training
4.3 Ideas and Repetition
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The Orange White Paper
Teamwork and Your Bottom Line
Introduction: Does Orange Create Green?
Orange is a color of transition. And in business, an Orange Revolution is a transformation of a team
from good to great.
An Orange Revolution in the corporate world is not intended to conquer a regime. Instead, it begins
in the hearts of team members—men and women focused on overcoming barriers, exceeding
expectations, and producing exceptional results.
The question is: does the data prove this idea that a new standard of teamwork can bolster your
bottom line?
That’s exactly what the authors set out to do—prove that by improving your teams, you’ll improve
your profits.
1.0—The Concerns about Teamwork
Teamwork is one of the most written about subjects in business, and yet one where remarkably little
hard data has been gleaned to prove if long-held assumptions about how people work together are
accurate. It’s one reason “teamwork” is viewed by many organizations as a fluffy cliché.
In the field of psychology, there is a large body of theory that analyzes how individual behavior differs
from group behavior—and, even more specifically, how people make different decisions if they’re
teamed with others. Of course, it’s easy to assume there are great differences between individual
decisions and group decisions. But, the question remains: which is better? Or, more specifically: which
produces better results—individual decisions or group decisions?
Our goal was to find the data for business leaders. Do great teams produce better results than
individuals alone can achieve?
1.1 The Data on Teamwork
For 20 years now we’ve entrenched ourselves into the inner-workings of organizations across the globe.
We didn’t start our research focusing on teamwork—we were focused on employee recognition and
the role appreciation could play in building stronger cultures. We focused on understanding how to
accelerate human performance on an individual level. And, although our theories were proven accurate
through a 10-year, 200,000 person study throughout North America, and then a global study we
commissioned in 2008, a finding arose that we couldn’t ignore: one of the primary drivers of human
and organizational performance is in the strength of the team. It was that data we could not ignore.
Perhaps some of the most definitive results to support this teamwork theory came from our study
measuring employee engagement in 13 countries conducted exclusively for us by independent
researchers Towers Watson in late 2008. We learned that doing work that matters in a team
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environment makes a statistically significant impact on employee willingness to work harder, longer,
and with substantially higher levels of engagement. The global study showed us:
• Employees who understand how their work as a team affects the overall goals of the organization
reported a 75% engagement rate.
• Employees who didn’t understand how or if their work as a team affected the overall goals of the
organization reported a 64% engagement rate.
An 11 percent variance in engagement indicates that something remarkable happens when we
understand that our team makes an impact on the larger organizational success. And yet we wanted
more details: how can individual teams impact an organization, how do intelligent group decisions
produce results, and how we could tap into the true brilliance of teamwork.
As we dug into details—interviewing some of the most productive, creative teams in the world, and
collecting data from an additional commissioned study—we began to uncover the similarities between
attitudes, processes, and perspectives of great teams. And, sadly, we learned why so many
organizations who attempt to inspire teamwork fail.
Really, if teamwork is so powerful, then why isn’t everyone a master team member?
1.1.1 Teamwork has Become Cliché
Sadly, we’ve found that the word “teamwork” has been diluted through the last ten years. It’s been
tossed around so liberally inside organizations that people think it’s just a buzzword—because it’s not
politically correct to call an employee a worker, a subordinate, or even a crewmember anymore. And,
maybe there’s a small fantasy that if you label people “a team” they’ll perform like one. In the process
of this lip-service, the true definition of a coveted entity has been bleached.
1.1.2 Teamwork is Not Practiced
Many leaders today are “selling” a notion of teamwork that simply boils down to: “I’ll call you a team
as long as you play by my rules.” These managers might argue that it is leadership, not collaboration,
that is the great separator between marginal and magnificent. However, our data proves that typically
the main thing that defines a great leader is, in fact, the performance of their team.
1.1.3 The Key Components and Benefits are Unfounded
Interestingly enough, when we ask managers if teamwork accelerates performance, almost all of them
will answer with an overwhelming “yes.” However, when we take the question one step further, and ask,
“Why … why are teams more productive than individuals?” or “How … how do you structure people
to work together effectively?” the answers are vague. The simple truth is that most managers do not
know the key components of great teams, and do not understand the concrete benefits of teamwork.
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2.0 The Path of Breakthrough Teams
This is where teamwork gets interesting: our 350,000-person research study has shown there is a
common methodology to breakthrough teams. That means that great teams aren’t necessarily
composed of great team members, but instead, they’re composed of great team practices.
These practices when performed create a very specific “Orange Path” to the creation of esprit de corps
and, most importantly, breakthrough results. But, what’s even more intriguing is this: no matter how
we spliced the data, or which great team we analyzed, the Orange Path revealed itself. If teams follow
the path, they all end up in the same location—success.
2.1 Does research correlate with reality?
In the process of writing the book The Orange Revolution, we asked the Best Companies Group to
conduct a research study of 2009 and 2008 data to determine the path of breakthrough success of
teams. The hard numbers from this survey of more than 350,000 people were illuminating, but still we
weren’t satisfied. The looming question that remained was: could we dig inside some of the world’s
most renowned and successful teams to find these same traits? And, what does it mean for an
organization’s bottom-line?
In The Orange Revolution we spotlight numerous teams: Pepsi Beverages Company, Zappos.com,
Apple, Texas Roadhouse, U.S. Foodservice, and the list continues. Some of the companies we
specifically approached because we had been informed that they practiced the traits along the Orange
Path, but others we approached and researched simply because they had accomplished something
amazing—and we wanted to find out how teamwork played a role.
Sure enough, if they had accomplished breakthrough results, it wasn’t just a matter of great leadership.
Instead, it was methodology of teamwork—the same methodology we had witnessed in our research.
2.2 The Components of the Orange Path
As we studied the data and interviewed managers and team members from organizations around the
globe, we uncovered similar components that existed within breakthrough teams:
1. Every breakthrough team—those teams that change the world—start with and share a common
cause. The ultimate vision of great teams is the same, and the motivation to achieve this simple,
cohesive cause is shared by all members. It didn’t matter which industry or the nature of the
cause. All teams that win understand the shared cause—from winning a Super Bowl ring, to
leaving all customers with smiles on their faces, and even in some organizations like a commercial
cleaning franchise we met, to operate so flawlessly that your clients take you for granted.
2. The teams adhere to/and commonly practice the Basic Four of Leadership + Recognition, which
includes: Goal-Setting, Communication, Trust, and Accountability. These Basic Four are the
gold-standards of leadership. Add purposed recognition—meaning employees feel appreciated
for their above-and-beyond efforts—and performance is accelerated beyond imagination. These
concepts are detailed in our earlier books like The Carrot Principle.
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3. Here is the life-blood of our research on breakthrough teams. All great teams adhere to the
Rule of 3:
• Wow—The standard performance of great teams is always world-class.
•No Surprises—All team members are accountable for openness, honest debate, and each
knows what to expect from the others.
•Cheer—Team members support, recognize, appreciate, and cheer others and the group
on to victory.
The Rule of 3 is critical to team success. In The Orange Revolution, each rule is detailed into
steps taken to achieve mastery.
4. These teams achieve a heightened level of Esprit De Corps, with corresponding increases in
focus, loyalty, engagement, and satisfaction. Esprit De Corps isn’t as much of a practice as it is
an understanding. Those employees who have experienced esprit de corps on a highperformance team know what it means, what it feels like, and how it drives performance.
Together these components create the Orange Path. Again, they are practiced by all breakthrough teams.
Wow
Basic Four
The Cause
Goal-Setting
Communication
Trust
Accountability
+
Recognition
No
Surprises
Team
Esprit de corps
Breakthrough Results
or Sustained Success
Focus
Loyalty
Engagement
Satisfaction
Cheer
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3.0 Where’s the Money in Teamwork?
Finally, we wanted to know about the green of Orange Teams. No one can deny that the team that
created the iPod generated a great deal of profit. And it’s hard to argue that the stellar teams at
Zappos.com—a seemingly instantaneous megaforce in online retail—didn’t have everything to do with
the company’s success. Still, we wanted to dig deeper. Obviously, great companies, made up of great
teams, create great returns. But boil it down to something simpler. Does a great team create better
results than a great group of individual performers? Are group decisions better?
We called upon Mark Potter, Associate Professor of Finance, Babson College, and co-author of
Performance Characteristics of Individual vs. Team Managed Mutual Funds for answers.
Case Study: Following the Money of Teamwork
“There’s a great deal of evidence that favors a team’s decision making ability instead of an individual’s
ability,” says Mark Potter, Associate Professor of Finance, Babson College, and co-author of
Performance Characteristics of Individual vs. Team Managed Mutual Funds. “The evidence is
particularly compelling for performance and risk-taking activities, like mutual fund management.”
Potter, along with his colleagues and co-authors, Richard T. Bliss, Babson College, and Christopher
Schwarz, University of California at Irvine set out to discover the best management approach when it
comes to mutual fund management.
To date, relatively little attention has been devoted to deciphering the differences between individualmanaged portfolios and team-managed portfolios. Potter and his associates compiled research over a
12-year period.
“It’s fascinating,” says Potter. “If you’re wondering the safest place for your money—a team-managed
approach is much less risky.”
In their research, Potter and his team concluded that:
• Team funds have significantly lower risk than their individually managed counterparts and exhibit
lower cross-sectional differences in their performance and systematic portfolio factor loadings.
• Performance of mutual funds managed by teams is similar to individually managed funds on a
risk-adjusted basis, in spite of team-managed funds growing at a significantly greater rate over
twelve years.
• Team managed funds have significantly lower expenses and loads than individually managed funds.
“That’s just the tip,” adds Potter. “Findings unrelated to investment management indicate that groups,
on average, make superior decisions compared with individuals. Research that we found reveals that
groups make better decisions due to pooling and aggregating disparate pieces of information to form a
better decision. And another study finds that groups recall information more accurately, leading to
better-informed decisions.”
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What about the time required to reach a decision? Are teams slower than individuals?
Says Potter, “This may be one of the most surprising findings: There is no difference in the time it takes
teams and individuals to reach a decision, even though group decisions were superior. The bottom line is
this: team-managed funds exhibit marginally lower risk, more persistent returns, and experience
greater inflows over time.”
3.1 Evidence of Economic Performance
Results of our research continued to astound us as we dug deeper. Through data and interviews we found:
• Employees who felt they were part of a strong team reported that they were more likely to work
longer business hours to help their team members.
• Managers reported witnessing much more frequent “above-and-beyond” activities from
employees who were part of a strong team.
• Employees who reported feeling that they were part of a strong team revealed stronger pride in
their corporation.
• Employees who reported having friends in their work groups were much less likely to report
plans to leave the organization.
• Employees who felt they were part of a strong team scored much higher in employee engagement
categories.
The list of benefits from building strong teams could continue—and all the data is detailed in
The Orange Revolution. However, in viewing the whole, with greater engagement, commitment to
success, and satisfaction in the workplace, the most compelling piece of evidence (variable from
organization to organization) may be this: In the companies where employees reported strong levels
of esprit de corps, breakthrough accomplishments could be pinpointed, and bottom-line results
could be attributed to those accomplishments. And, in company’s where teamwork levels were poor,
marginal returns were obvious.
4.0 Where to start your Orange Revolution?
“Where do we start?” is the first question we are typically asked by managers or team leaders who
have either read our books or attended one of our speeches. It’s one thing to call your group a team,
but it’s another to truly act like one.
The studies we have conducted in the last two decades—now totaling more than half a million
employees globally—have shown us that teamwork training, education and practice are vital to achieving
optimal acceleration of performance. Committing to The Rule of 3 isn’t necessarily easy. Start by defining
the world-class results you and your team want to achieve through Wow. Learn to communicate openly
and frankly and actively achieve a No Surprises culture. And, learn to Cheer each other on with strategic
purpose. Esprit de Corps doesn’t happen overnight. It cannot be mandated. And it is only through
actively performing and practicing the Orange Path that breakthrough teamwork can be achieved.
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4.1 Message Consistency
One important factor when it comes to
initiating an Orange Revolution in your
organization is the creation of message
consistency. A professional speaker can
introduce the concept, use effective
terminology, and explain the do’s and
don’ts. Having a strong consistent message is
key to getting all team members in your
organization on the same page and the same
timeline. For information on our keynote
speeches visit carrots.com/authors.
“Breakthrough Teams possess a revolutionary
mindset, where efforts are focused on creating
positive transformation, and results. Each
member demonstrates personal competency
while sharing in a unified cause.”
4.2 Training
Although it sounds easy to practice teamwork, we’ve found the organizations that are reaping the
biggest results are those that train their teams. Practice, practice, practice makes perfect. And, even
when you reach a heightened level of esprit de corps, it’s still important to brush up on your skills.
Think about it. Just because a team wins the championship game doesn’t mean they can stop
practicing. For information on Orange training programs, visit carrots.com/training. Training for
organizations is available via classroom, train-the-trainer, or online formats.
4.3 Ideas and Repetition
Just as important as it is to live in your Orange Revolution, it is just as vital to challenge your skills and
ideas. The Orange Revolution offers numerous tips on how to build esprit de corps. However, it’s also
important to choose an Orange champion within your organization. Create monthly meetings where
managers, team leaders and employees can share stories about what is working with their teams and
what might not be. Ask others in your profession what they do to instill esprit de corps. One piece of
advice may not work inside every team or company, but it may inspire ideas. For information on our
books, or to gather tips, reports, case studies or white papers focused on recognition visit carrots.com.
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About the Authors
New York Times and Wall Street Journal bestselling authors and
acclaimed speakers Adrian Gostick and Chester Elton have spent the
past 20 years researching and speaking to the world’s best companies
such as Pepsi, DHL, KPMG, Wal-Mart and Avis Budget Group.
Considered “The thought leaders on employee engagement,” Gostick
and Elton have appeared on CBS’s 60 Minutes, NBC’s Today Show,
CNN, ABC and National Public Radio. Their work has been quoted in
the New York Times, Fortune, The Economist, Newsweek and many
other publications.
Gostick and Elton are the leaders of O. C. Tanner Company’s Training
and Publishing Practice.
For more information visit carrots.com.