How do you know if your organization’s teams are highly engaged? And if they aren’t, how do you get them there and keep them there?

A surprising number of teams can’t actually explain their purpose or how it connects to wider business objectives. A well-defined purpose is one of the five essential components of an engaged team our research uncovered. In this report, we also describe effective strategies organizations including CarMax, Quicken Loans, and NASA use to keep their teams fired up and focused.

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Executive Summary

Teams are a highly effective and economical way for organizations to become more fluid, agile, and efficient in response to constantly changing business needs. As a continuation of the research The Engagement Institute™ has conducted over the past five years, we now focus on engagement at the functional team level: the inherent characteristics of those that are highly engaged and best practices that help organizations foster high levels of team engagement. Of the many themes we heard through our surveys, interviews, focus groups, and discussions with engagement leaders, these four stand out as important to driving a team culture of engagement:

1. Developing, communicating, and understanding team purpose is critical. Leaders must establish a strong team purpose and reinforce it daily. Why does the team exist? How do team goals drive the organization forward? All team members should be able to answer these questions and feel a personal connection to the team’s purpose.
2. Teams can’t function without trust and integrity. Team leaders cannot be effective, engaging leaders if they don’t establish trust, act with integrity, and empower their teams. And team members show their engagement by, among other things, exhibiting trust and integrity.
3. Leaders can’t sustain an engaged culture alone; team members strongly influence it. Clear communication and an ownership spirit are among the qualities engaged team members bring to the table. Each team member has a role to play in the culture of the team and is critical to team engagement and performance.
4. Highly engaged teams can help organizations innovate. Team leaders arelooking for their teams to challenge the status quo. Organizations can put processes in place to encourage innovation, and team leaders should encourage new ideas and instill a growth mindset in their teams.

How do organizations promote highly engaged and high-performance teams?

When asked about current and future valuable practices for fostering team engagement. leaders and managers selected provide peer coaching or mentoring opportunities to help develop desired team behaviors, develop an organizational structure that fosters team collaboration, and recognize highly engaged teams through reward/recognition among their top five most valuable practices for both now and in the future. Notably, a number of human capital leaders acknowledge that these three practices are not effectively carried out in their own organizations today, despite their value in engaging workers. 

Organizations should focus on improving the effectiveness of peer coaching, organizational design, and rewards and recognition to create or sustain team engagement, as these practices are important now and will remain so in the future. 

But not all valuable team engagement strategies are static over time. One of the most interesting differences between what is valuable now and will be in the future is the need to communicate the role of the team in fostering a culture of engagement. This practice is the most valuable now but was ranked lower in importance for the future. The opposite is true for include ability to lead teams as a criterion for hiring leaders: respondents believe it will be more valuable in the future than it is now. Such differences are likely driven by anticipated improved effectiveness in communication and leadership, as well as shifting landscapes of work in the coming years.

Organizations may also need to place greater emphasis on accountability. Conversations with HR leaders uncovered this as an area for development and attention. With competing priorities and an ever-increasing pace of change, engagement will not take precedence unless leaders and team members are held accountable for fostering a team culture of engagement.

Top Areas for Improving Team Engagement

Using the performance management process to ensure teams are accountable is both the least effective and least frequently employed practice. Though performance management remains an important aspect of the talent management system, few organizations use it to support team engagement. 

Connecting team engagement to business results is another area that organizations should focus on. Our previous research demonstrates how organizations are measuring employee engagement to positively affect business performance. While just over 75 percent of surveyed organizations measure engagement at the team level, many of the leaders we spoke with struggled to connect team engagement results to business outcomes. Team engagement is most connected to employee engagement survey results and turnover, but less so with customer satisfaction, business results, and employee performance. Aligning team engagement with business objectives is a priority for many organizations, but there is still work to be done to make these connections a reality.