Team productivity is a more serious factor in the current business environment. As more people are working remotely and hybridly, and the marketplace has become more complex than ever before, managers must learn how to make teams tick so that they can be successful.

The silver lining in this is that through decades of research, several key drivers were found that have a disproportionately large effect on team productivity and performance. Learn these drivers as a manager or a team member, and you can be in a good place to achieve a lot. 

In this guide, we are going to look at the six most important factors that impact the productivity of any team:

• Clear Goals and Vision
• Trust and Psychological Safety
• Open and Effective Communication
• Balanced Team Composition
• Recognition and Rewards
• Tools and Technology

To every driver, we shall discuss the importance of it, give the corresponding statistics and examples, and give some practical pieces of advice.

Let’s dive in!

Clear Goals and Vision

Clear goals and a shared vision are the first drivers of team productivity. In simple terms, teams must be informed of the reasons for their existence and what they are aspiring to accomplish.

According to the research conducted by Gallup, 45 percent of employees strongly believe that they clearly understand what their company is attempting to accomplish and why. As well, there are only 28 percent of individuals who strongly agree that the mission or purpose of their company makes them feel that their work is important.

This inability to see clearly and project into the future is a big drag on involvement and efficiency. Workers become confused, demotivated, and eventually less team-oriented since they do not see how their job fits into the bigger picture.

As a manager, you can improve goal clarity in several ways:

• Co-create specific, measurable, and time-bound (S.M.A.R.T.) goals with input from team members
• Connect every goal and task to the overarching team vision
• Over-communicate how each person’s work ladders up to team goals
• Continually revisit and discuss goals during team meetings

Team Rwanda Cycling is an example of a team whose goals and vision are extremely clear. This national cycling team was established with the sole objective of encouraging unity and reconciliation in the aftermath of the Rwandan genocide.

Each member of the team knows how their work, their behavior, and their treatment are connected with this general vision. This inspires unbelievable motivation, meaning, and cooperation in the attainment of athletic and cultural objectives.

Takeaway: By instilling a compelling vision and crystal-clear goals, managers enable teams to fully understand their raison d’être. This galvanizes higher levels of strategic alignment, effort, and productivity.

Trust and Psychological Safety

A second critical driver of team productivity is fostering high levels of trust and psychological safety. Employees who feel comfortable taking risks and speaking openly at work unlock higher levels of innovation, creativity, and critical thinking.

Google’s two-year Aristotle study looked at over 180 teams to determine why some were significantly more effective than others. They found that the number one driver of team effectiveness was psychological safety and trust between team members.

Teams with high psychological safety had teammates who:

• Felt they could rely on each other
• Didn’t undermine one another
• Felt respected and valued
• We’re comfortable admitting mistakes or weaknesses

In contrast, teams with low psychological safety were riddled with distrust, disrespect, and disengagement, which crushed productivity.

So, how can managers cultivate trust and safety? There are several proven approaches, including:

• Leading by vulnerable example (such as admitting weaknesses and mistakes)
• Establishing team norms and ground rules upfront
• Acting as an impartial facilitator during team discussions
• Responding non-judgmentally to questions and input
• Providing performance feedback privately and respectfully

One company that exemplifies high-trust team dynamics is employee-owned supermarket chain Publix. Not only are associates offered ownership stock, but managers also receive intensive training around building healthy, human-first relationships.

This focus on trust-building fosters industry-leading retention rates, service levels, and productivity.

Takeaway: When teams feel psychologically safe to engage openly without fear of embarrassment or retribution, they unlock much higher levels of participation, creativity, and bottom-line performance.

Open and Effective Communication

Open communication represents a third critical driver of team productivity. Teams that communicate clearly, honestly, and regularly – both between team members and their managers – avoid the pitfalls of confusion, ambiguity, and misalignment that drag down productivity.

There are two distinct aspects of communication that managers must address:

Team-Team Communication: Do team members communicate clearly and regularly with one another? Are there forums for addressing concerns, updating projects, and relaying critical information?

Manager-Team Communication: Does information flow clearly from managers to the team? Do employees understand priorities and have insight into how their work ladders up to business goals?

To strengthen communication, managers should:

• Provide regular opportunities for open dialogue and collective sense-making
• Give timely, transparent updates on company news, goals, and challenges
• Clarify tasks, priorities, and next steps in detail, while still welcoming questions
• Create centralized places (like Slack channels) to share information and reduce ambiguity

A great example of effective communication is Patagonia, which applies open-book management at all levels. Leadership offers an unparalleled level of openness regarding finances, strategy, and issues. This provides teams with the context in terms of which they can align common goals and priorities.

Takeaway: Open, clear, and frequent communication across teams and with company leadership allows teams to achieve the understanding required to create alignment and avoid the productivity traps.

Balanced Team Composition

The fourth productivity driver of team is balanced team composition. Teams are successful when different complementary skills, experience, work styles and personalities are combined. This balance opens the door to a wide range of viewpoints as well as allows the members to properly play into individual strengths.

Although there are nuances between each area when building balanced teams, for example, a different skill is required for establishing a team in a telehealth app development company versus a more traditional business, most of the key considerations remain the same.

Research by the Harvard Business Review found that balanced teams with a mix of backgrounds, capabilities, and personalities significantly outperformed unbalanced, homogeneous teams in decision-making exercises. 

As a manager, intentionally building balanced teams involves:

• Assessing the various capabilities, working styles, and personality traits needed for success based on goals and priorities
• Thoughtfully composing teams with a mix of skills and work styles (using tools like DISC or Myers-Briggs assessments)
• Paying attention to the diversity of backgrounds and demographics to incorporate varied perspectives
• Adding new team members strategically when there are capability or trait gaps that need to be filled

Whole Foods Market is an example of the best practice of team composition. The teams of stores are constructed to have the balance between the executors who are detail-oriented, the innovative thinkers, the disciplined coordinators, and the motivational influences. Such a variety of strengths allows teams to reach an outstanding efficiency, creativity, organization, and inspiration.

Takeaway: Strategically composed teams with a balance of complementary skills, work styles, and traits unlock higher levels of innovation, rigor, and productivity due to their diverse perspectives and capabilities.

Recognition and Rewards

The fifth driver of high team productivity is recognition and reward of good work. Although compensation and benefits are relevant, employee recognition in the form of well-deserved praise, rewards, and celebrations can prove to be even more effective in terms of inspiration and engagement.

Research by the CTO found that organizations with strategic recognition programs experience 31% lower voluntary turnover.

To leverage recognition and rewards for higher team productivity, managers should:

• Celebrate both individual and team accomplishments frequently and enthusiastically
• Tailor rewards based on what motivates each person
• Encourage peer-to-peer recognition by calling out impactful contributions
• Use tools like bonuses, event tickets, gift cards, and swag to creatively reward great work
• Publicize wins and milestones broadly to increase visibility and multiply impact

Takeaway: Well-designed and frequent recognition programs tangibly boost employee fulfillment, engagement, retention, and performance – unlocking tremendous productivity dividends.

Tools and Technology

The last important productivity driver is equipping teams with productive tools and technologies. The availability of intuitive, easy-to-use tools eliminates the daily friction and allows teams to invest their time in the high-value priorities instead of doing routine work.

In a recent ServiceNow study, office workers reported losing nearly 14 hours per week due to poor workflow design and technology inefficiencies. This adds up to over 30% lower productivity than their optimal capability.

To leverage tools and technology for productivity gains, managers should focus on:

• Identifying repetitive, low-value tasks that can be automated
• Researching tools that simplify workflows, centralize information, and reduce complexity
• Streamlining the number of disparate tools/platforms used while still meeting all needs
• Providing thorough training, resources, and support to drive adoption
• Continuously soliciting feedback on current tools and exploring new solutions

Takeaway: The right technology investments pay exponential dividends by eliminating friction, complexity, and manual work – empowering teams to deliver higher throughput and quality.

Conclusion and Summary

There are clearly many integral drivers of team productivity that managers must get right for top performance, including:

• Clear Goals and Vision
• Trust and Psychological Safety
• Open Communication
• Balanced Team Composition
• Recognition and Rewards
• Tools and Technology

Naturally, do not attempt to change everything at once. Pay attention to 1-2 areas that would have the most significant effect on the situation in your team. Then, leverage small victories to bring larger changes at a later point.

The study leaves no doubt that engagement, alignment of strategy, and productivity have gigantic returns through investment in these drivers.

Therefore, get your team together, audit the gaps, select the areas you want to improve, and get prepared to uncap 10-fold or more performance levels!