In this blog post we discuss what the value of team building is in terms of growth, productivity, and retention on teams.
As a team building company, we often talk about how team building activities impact teams’ productivity and growth. Implicit in this is a value proposition about team building activities and how they benefit teams: the cost of these programs is outweighed by the value that they bring.
But what is the real value of team building in its relation to growth and productivity within teams and companies? Can it be measured or quantified? And does it even matter?
It can be very hard to quantify the impact of team building. In large part this is because there is just not that much data out there. Isolating team building as a variable on its own is hard to do. And determining whether team building is the cause of this increase in growth or productivity, or merely correlated with it, has its own difficulties.
But there is some data and statistics that we can bring to bear that might help clarify some of the possible ways that team building is in fact valuable. So in the following blog post we’ll look at some of these and discuss a few of the ways that team building actually brings value to teams.
Why the value of team building matters
Team building can be expensive. Individual programs and activities can cost a lot of money, as can finding venues and external facilitators. There is a time cost as well–searching for the right program that fits the team’s needs and budget, working on the schedule and logistics, and getting the rest of the team’s buy-in.
Plus, as we always recommend to our clients and on our blog, team building has the most value when it is made a regular and recurring part of the team’s schedule. Team building, like physical training, requires consistent commitment and time to really see results. This only raises the costs of team building even more.
However, we want to make the case here that team building, despite all of its potential costs, is worth it. Team building can not only give you your money’s worth in terms of providing a fun event, but it will also impact your team’s development and your company’s bottom line even after the event is over.
Team building is therefore an investment in your team’s future. And like all investments, there needs to be a clear idea of what the likely returns on the investment are. We’ll now look at three areas where team building has the potential to add to a companies’ value: growth, productivity, and retention.
How team building adds value to teams
But before we begin talking about the value of team building, we want to bring up a few caveats. Obviously, the statistics mentioned below are not conclusive and shouldn’t be interpreted as what will definitely happen to every team. Citing only one statistic in defense of a claim is also clearly not definitive.
Our goal is not to prove conclusively, but rather to show where the possible connections lie. So really it’s to sketch out the likely relations between team building and areas that generally affect companies and teams’ value and long-term outlook.
So with that being said, let’s look at the value of team building in terms of the three areas mentioned above.
In a 2019 survey conducted prior to the pandemic, sales of 69 client companies (publicly listed companies whose sales are publicly available) that used Invite Japan’s team-building services were compiled. It found that their average sales growth rate in the previous two fiscal years was 10.4%. It turns out that this number is significantly higher than the average increase of 2.6% for companies listed on the Tokyo Stock Exchange.
While it’s hard to make a direct causal link between team building and growth, the above statistic does mean that there is some correlation (the pandemic and its lingering effects on global growth and supply chains clearly complicate the situation after 2020).
Defining growth and what goes into it is beyond the scope of this article. But what we can say is that growth requires long term thinking and strategy, as well as the ability of companies and teams to adapt to change.
This is obviously easier to accomplish when teams have more trust and unity, both of which are things that team building helps teams to strengthen. But the value of team building in terms of growth also comes into play when we think about the nature of some team building activities.
Valuable team building activities, like the ones at Invite Japan, give teams challenges that test their ability to think together in different situations. While these challenges are mentally hard, they are also generally low-stakes. This means that teams have the opportunity to experiment and figure out ways to make the team work together better without having it actually affect the work that the team does.
Another big aspect of growth is being able to think creatively and come up with new ideas. Again, through challenging teams mentally and putting them in situations outside of their normal routine and environments, team building gives teams the space to learn to think differently. Team members also learn to use each other for inspiration, and to draw on each others’ strengths and skills when facing novel problems.
According to a Gallup article from 2020, feeling isolated on a team can lead to productivity losses of 21%. And a 2006 study from Harvard notes that heart surgeons perform better when they are working on a team that they are familiar with, regardless of their abilities or experience.
You can see where we are going with this. While we tend to think of productivity as being completely about our individual abilities and work ethics, in fact that idea may be incorrect.
Productivity is related to communication and how well team members know each other, which means that team building can play a huge role in increasing team productivity.
First though, let’s try to think through why productivity might be related to communication and having stronger relationships with team members. And it’s actually not that hard. Because assuming that you work on a team (which is a good assumption considering that you are reading about team building), then your work is inevitably linked to other people’s work.
Within every team there are people that fulfill different functions: managers or leaders, schedule-makers, organizers, accountants and budgeters, tech people, etc. Plus there are people outside your core team, but who you might consider as being valuable work relationships like people from other departments, clients, suppliers, etc.
This is all part of the larger workflow structure of your team, which relates to who you receive your tasks from, who you work with when you receive them, and who you pass these tasks on to when you are done.
Because workflows are about relationships and the connection between team members, this means that they can be improved through bettering relationships and communication. It means that when there are issues with workflows, you can deal with them easily. And it means that when some problem comes up that you haven’t dealt with before, you can work with the rest of your team to figure out the best way to solve it.
Which means that productivity can be enhanced simply by making communication on your team better, and by getting to know each other better. And the best way to do that is through team building activities that build teamwork and communication skills.
A note on remote teams
Many of you might be thinking about remote work at this point, and wondering if remote work is worse because people feel more isolated. Productivity on remote teams is complicated. But it appears that productivity has not declined, at least within teams that consistently work with each other.
The main issue with remote work is not remote work per se, but rather the support systems surrounding it. Because it’s relatively new, teams are still figuring out the best way to communicate and maintain strong relationships in an online environment/remotely. This takes time.
For remote teams, we strongly recommend being more proactive about communicating as a team and ensuring that no one feels isolated. We also recommend more team building events. There are a lot more options out there now, even for remote teams (such as online team building), so take advantage of them, and continue to explore and experiment.
The last area related to the value of team building that we’ll be talking about here is retention. Teams have an incentive to retain talent and keep people at their company. This isn’t simply because of the individual skills of the team members (although that’s a big part of it). There are also lots of effects on the team as a whole.
The biggest of these is teamwork. As we explained in the last section, productivity increases when team members know each other better and have stronger relationships. Turnover makes it harder to maintain that cohesiveness, and it means that you have to constantly train “new” teams.
Turnover can also affect morale as well. If there’s lots of turnover, other team members may not be as motivated to stay on the team. And potential hires may not be more suspicious about why turnover is high.
All of this impacts productivity as well as long-term growth. Teams need to be able to plan together in order to grow, which means you need more stability among coworkers and their relationships towards each other and towards the team as whole.
Another Gallup article reports that companies could benefit from as much as a 27% decrease in turnover if employees felt like their opinions mattered more (currently, only 30% of employees in the US do).
One of the major causes of turnover is employees not feeling valued and listened to. When team members don’t feel like they can truly express themselves, team members feel less motivated to be there and contribute fully.
Team building helps teams create more inclusive and more psychologically safe team environments, in which team members feel like they can share their thoughts and be listened to. But team building also brings team members closer together and lets them see each other as individuals, rather than simply coworkers. This in turn builds more cohesive and unifying structures that are able to make everyone feel like they are part of the team.
While this article has shown how team building in general can impact teams’ growth and productivity, a great deal depends on what team building activities you choose. Team building activities are meant to be beneficial for your team, so you need to think about what your team actually needs and what will do the most to challenge and encourage them.
As we enter a post-pandemic era, growth will again be on the forefront of many teams looking for ways to grow beyond the pre-pandemic paradigms of the past. Which makes the value of team building all the more apparent. Teams more than ever need to learn how to be adaptive, resilient and unified in the face of an unknown future.