I’ve been reflecting on Scott Keller and Mary Meaney’s classic McKinsey article, “High-Performing Teams: A Timeless Leadership Topic,” and its implications for organisations seeking to build genuine innovation capability.
While their research offers valuable insights—confirming that executives in high-performing teams are five times more productive and that aligned top teams have a 1.9 times greater likelihood of above-median financial performance—I believe a critical dimension is missing from the conversation.
The article rightly notes that “top-team performance” consistently ranks among the most enduring business challenges, ranking eighth among Harvard Business Review’s most-covered topics between 1976 and 2016. But as I work with Fortune 500 companies and governments worldwide on innovation strategy, leadership, and culture, I find myself asking a more fundamental question: productive and aligned toward what specific outcomes?
After two decades in this space, my answer is clear: actual high performance isn’t simply about teams working well together—it’s about demonstrable innovation capability. Specifically, it’s the repeatable ability to identify and solve complex problems worth several hundred thousand pounds, operating in the strategic middle ground between incremental improvements and radical disruption.
Beyond Team Effectiveness: The Innovation Capability Imperative
Keller and Meaney emphasise that “building a team remains as tough as ever” because “energetic, ambitious, and capable people…often represent different functions, products, lines of business, or geographies and can vie for influence, resources, and promotion.” This is undoubtedly true, but the real challenge runs deeper.
The organisations I work with don’t struggle primarily with team dynamics or cross-functional collaboration in the abstract. They struggle with something more specific: building teams capable of repeatedly solving the complex, high-value problems that determine competitive advantage. These aren’t problems that can be addressed through standard processes or incremental improvement. They require genuine innovation capability.
Consider the mathematics: if your organisation faces ten problems, each representing £300,000 in annual inefficiency, that’s £3 million in value available for capture. But not as a one-off, that’s every year! So, the question isn’t whether you have smart, capable people who could, in theory, collaborate to solve these problems. The question is whether you’ve built the team capability and cultural conditions to address them systematically, repeatedly, and at scale.
This is where traditional approaches to team performance—focused on generic markers like clear goals, strong communication, and psychological safety—fall short. These elements matter, but they’re table stakes. The organisations that genuinely outperform their competitors have built something more fundamental: repeatable innovation capability at scale.
Differentiated Innovation: Defining the High-Performance Sweet Spot
The McKinsey article notes that ‘top-team meetings should address only those topics that need the team’s collective, cross-boundary expertise, such as corporate strategy, enterprise-resource allocation, or how to capture synergies across business units.’ I completely agree with this principle, and I’d add a crucial specification: for innovation teams, this means focusing on what I call ‘Differentiated Innovation’—the strategic middle ground that separates genuinely high-performing organisations from those merely managing operations efficiently.
Differentiated Innovation is the process of identifying and solving problems that are strategically valuable, manageable in complexity, achievable within reasonable timescales, scalable across multiple teams, and integrated into the organisational culture.
Differentiated innovation sits between two extremes that organisations typically gravitate toward:
At one end lies continuous improvement: incremental changes that optimise existing processes, such as streamlining production lines or improving customer service. These deliver value but rarely create competitive advantage. Individuals or small working groups handle them and don’t require the cross-functional team capability that Keller and Meaney describe.
At the other extreme sits radical innovation: the “moonshots” that promise to transform industries. As Reid Hoffman’s quote in the article suggests—”No matter how brilliant your mind or strategy, if you’re playing a solo game, you’ll always lose out to a team”—these initiatives require collaboration. But they also consume disproportionate resources, involve significant risk, and remain confined to elite groups at the organisational apex. They’re too infrequent and unpredictable to serve as a foundation for repeatable high performance.
The real competitive battleground—where sustainable high performance is built—lies in the middle. Differentiated innovation is characterised by:
- Strategic value: Problems and opportunities representing several hundred thousand pounds
- Manageable complexity: Challenges requiring cross-functional collaboration but not enterprise-wide transformation
- Reasonable timescales: Solutions achievable within 3-6 months with focused effort
- Scalable approach: Methods that can be deployed across multiple teams simultaneously
- Cultural integration: Capabilities that become “how we do things around here” rather than special initiatives
This middle ground is precisely where high-performing innovation teams operate. They possess the collective capability to tackle problems too complex for individual contributors, without requiring the massive resources and lengthy timescales associated with radical transformation.
Team Composition for Innovation: Building on Proven Principles
Keller and Meaney’s guidance on team composition provides an excellent foundation. They note that “a small top team—fewer than six, say—is likely to result in poorer decisions because of a lack of diversity, and slower decision making because of a lack of bandwidth,” while “research also suggests that the team’s effectiveness starts to diminish if there are more than ten people on it.”
My experience suggests that no more than six people work best for Differentiated Innovation challenges because, in the context of problem-solving, it’s less about who is making decisions and more about what evidence is being used to inform those decisions. But team composition for innovation capability requires additional considerations beyond traditional performance metrics.
Cross-functional representation becomes non-negotiable. The article rightly emphasises that “the structure of the organisation doesn’t dictate the team’s membership.” For innovation teams, this principle is even more critical. Unlike operational teams that can function within departmental boundaries, innovation teams must integrate perspectives from across the organisation—not for political reasons, but because understanding and solving complex problems requires diverse knowledge that works across organisational systems.
The right level of seniority matters profoundly. Keller and Meaney discuss how one CEO ‘recognised the importance of having the right expertise in the room, introducing new people with new ideas, and coaching the next generation of leaders.’ For Differentiated Innovation, I typically see the most effective teams drawn from what I call the ‘DRIVE’ layer—middle managers and senior practitioners who understand both strategic priorities and operational realities. They have sufficient authority to mobilise resources but aren’t so far removed from day-to-day work that they’ve lost touch with genuine constraints. The ‘DRIVE’ layer refers to individuals who are Dynamic, Resourceful, Influential, Visionary, and Energetic, and they play a crucial role in driving innovation within the organisation.
Beyond functional expertise to innovation aptitudes. The article asks essential questions: “Do they recognise the improvement opportunities? Do they feel accountable for the entire company’s success, not just their own business area? Do they have the energy to persevere if the going gets tough?” Do team members possess the innovation aptitudes I call customer empathy, systems thinking, comfort with ambiguity, and collaborative problem-solving? A team of functional experts lacking these capabilities will revert to incremental thinking regardless of the problem’s complexity.
Psychological characteristics determine breakthrough potential. The article notes the risk of leaders who “have been held hostage by individual stars who aren’t team players.” In terms of innovation capability, the psychological factors run deeper: Do team members view failure as a learning opportunity? Can they challenge assumptions constructively? Are they willing to question established processes? These characteristics separate teams that achieve breakthrough solutions from those that produce competent but predictable outputs.
Team Dynamics: Where Innovation Culture Takes Root
The McKinsey article wisely observes that “it’s one thing to get the right team composition. But only when people start working together does the character of the team itself begin to be revealed.” For innovation capability, the dynamics required differ significantly from those needed for operational excellence.
Productive conflict becomes essential. Innovation requires challenging conventional wisdom and exploring unconventional solutions. Teams that prioritise harmony over truth-seeking will never achieve breakthrough results. The goal isn’t to eliminate conflict but to ensure it’s focused on ideas and approaches rather than personalities and politics.
Psychological safety must extend to intelligent risk-taking. While the article doesn’t explicitly address psychological safety, its emphasis on reflective sessions that examine whether “team members feel aligned on what they were trying to achieve” and “excited about the conclusions reached” touches on this.
For innovation capability, psychological safety must go further—creating conditions where team members feel safe to propose uncertain solutions, share early-stage thinking, and acknowledge when they don’t have answers.
Time horizons must balance urgency with depth. Innovation teams operating on the typical quarterly business rhythm will revert to incremental thinking. Solving complex problems worth hundreds of thousands of pounds requires sufficient time to understand root causes, validate assumptions, explore solution spaces, and test approaches. This typically means 3–6-month timeframes, not 30-day sprints.
Reflective practice accelerates capability building. Keller and Meaney emphasise that “reflective sessions concentrate not on the business problem per se, but on how the team worked together to address it.” For innovation capability, these reflections must probe deeper: What assumptions did we challenge? Where did we resist unconventional thinking? How did we respond when early experiments failed? These questions build the meta-capability that enables teams to improve their innovation effectiveness over time.
Problem Selection: The Most Overlooked Element
The article makes a crucial observation about problem selection: “One of the most common complaints voiced by members of low-performing teams is that too much time is spent in meetings. In our experience, however, the real issue is not the time but the content of meetings.”
This insight is even more critical for innovation teams. Not every problem merits a high-performing team. Challenges that can be resolved through standard processes, individual expertise, or incremental improvement don’t require cross-functional innovation capability. Applying innovation teams to these problems wastes valuable resources and undermines the team’s sense of purpose.
The right problems sit in the Differentiated Innovation space. They’re complex enough to require multiple perspectives and creative thinking, but bounded sufficiently to be solvable within reasonable timeframes. They represent significant value—typically several hundred thousand pounds annually—making the investment in team time and resources clearly justifiable.
Problems should be strategic but not existential. Innovation teams need psychological safety to experiment and potentially fail. Problems that are “bet-the-company” challenges create pressure that eliminates the creative risk-taking required for breakthrough solutions. The sweet spot is problems that are strategically important but not mission-critical to immediate survival.
Clear value metrics provide essential focus. Vague goals like “improve customer experience” or “increase efficiency” don’t give the focus innovation teams need. The most effective innovation challenges have clear, quantifiable value: “Reduce maintenance costs by £250,000 annually” or “Capture £400,000 in revenue currently lost to process friction.”
From High-Performing Teams to Innovation-Led Culture
Here’s where I believe the McKinsey article, while excellent on team-level dynamics, misses the broader transformational opportunity. The article focuses primarily on top-team performance, noting that “there is no avoiding the time and energy required to build a high-performing team” and that the research “suggests that executives are five times more productive when working in a high-performing team than they are in an average one.”
But organisations seeking competitive advantage through innovation cannot limit high-performing teams to the executive level. They must systematically develop the capability to deploy multiple teams simultaneously to address numerous high-value problems across the organisation. This scaled approach transforms innovation from an occasional achievement into a repeatable organisational capability.
This scaling requires an innovation-led culture. In this environment, the conditions for high-performing innovation teams are embedded in organisational systems rather than dependent on heroic individual efforts. Key elements include:
Leadership that actively enables innovation teams rather than merely sponsoring them. As the article notes, building teams requires executives who can answer questions like “Are they good role models?” But for innovation, the leadership imperative goes further: executives must understand their role isn’t to solve problems but to create conditions where teams can solve problems effectively. They provide resources, remove barriers, model vulnerability, and celebrate learning from both successes and failures.
Middle managers equipped as innovation enablers. The article briefly mentions how one CEO included people “from the next level of management down” because he “recognised the importance of having the right expertise in the room.” In my ODC Framework, these middle managers occupy the critical “DRIVE” layer—translating executive vision into practical reality while empowering teams to tackle complex challenges. Without capable middle managers who understand innovation leadership, high-performing teams remain isolated experiments rather than a scaled capability.
Systems aligned to support innovation. Resource allocation processes that allow for experimentation, governance frameworks that balance oversight with autonomy, recognition systems that reward learning alongside results, and metrics that measure both innovation activity and outcomes.
Clear innovation philosophy guiding decisions. Teams need to understand what kind of innovation the organisation values, how it creates value for customers, and what trade-offs are acceptable. This philosophy provides guardrails that enable teams to make autonomous decisions aligned with organisational intent.
The Capacity Challenge: A Critical Reality Check
While the McKinsey article acknowledges that “there is no avoiding the time and energy required to build a high-performing team,” I’d argue that most organisations underestimate—or refuse to acknowledge—the capacity implications of building genuine innovation capability.
I recently worked with a large organisation that couldn’t spare three people for four hours per week to address a problem costing £200,000 annually. This capacity crisis isn’t unusual. Organisations operating at maximum utilisation across their workforce cannot build innovation capability, regardless of how much they claim to value it.
High-performing innovation teams require dedicated time and protected resources. When organisations treat innovation as work to be squeezed into spare moments between “real” responsibilities, they ensure it will never happen. Building repeatable innovation capability requires deliberate capacity allocation—typically 10-15% of key talent’s time explicitly dedicated to innovation challenges.
Organisations unwilling or unable to create this capacity aren’t making a neutral choice. They’re actively choosing short-term efficiency over long-term adaptability. In today’s rapidly evolving business environment, that’s not just inefficient—it’s strategically suicidal.
Measuring What Actually Matters
The McKinsey article rightly emphasises the importance of having teams “working together toward a common vision” and the financial performance benefits that flow from this alignment. But for innovation capability, we need more specific metrics. Traditional team performance metrics—such as project completion rates, stakeholder satisfaction scores, or budget adherence—miss what matters. The metrics that distinguish genuinely high-performing innovation teams include:
- Problem-solving velocity: How quickly can teams move from problem identification to a validated solution? This measures both team effectiveness and organisational enablement.
- Value captured: What’s the quantified impact of solutions implemented? For Differentiated Innovation, this should typically be 2-5X per problem solved.
- Learning conversion: How effectively do teams apply insights from one challenge to subsequent problems? This meta-capability accelerates over time as teams develop innovation muscle.
- Replicability: Can the approaches and methods developed by one team be deployed by other teams facing similar challenges? This distinguishes isolated success from scalable capability.
- Cultural integration: Do innovation teams use the behaviours and approaches that are becoming normalised across the broader organisation? This indicates whether innovation capability is becoming embedded in cultural DNA, i.e. “Innovation Maturity.”
The Strategic Imperative: Redefining High Performance
Keller and Meaney conclude that “the topic’s importance is not about to diminish as digital technology reshapes the notion of the workplace and how work gets done.” I couldn’t agree more, especially now with AI on the scene. But I’d add that, as Michael Jordan’s quote in the article suggests—“Talent wins games, but teamwork and intelligence win championships”—the defining characteristic of championship-calibre teams in business will be their innovation capability.
The organisations that genuinely outperform don’t just have efficient teams—they have teams with repeatable innovation capability focused on solving high-value problems. This distinction matters profoundly. In an era of unprecedented disruption and competitive pressure, the ability to systematically tackle complex challenges worth hundreds of thousands of pounds determines which organisations thrive and which become irrelevant.
Building this capability isn’t quick or easy. It requires deliberate team composition, careful problem selection, cultural conditions that support innovation, and leadership willing to allocate capacity to this strategic work. But the organisations that make these investments position themselves to shape the future rather than merely respond to it.
The question isn’t whether your organisation needs high-performing teams. The question is whether those teams possess the repeatable innovation capability that drives sustainable competitive advantage. That’s the measure of genuine high performance in the twenty-first century.
Cris Beswick is a strategic advisor and recognised global thought leader on innovation strategy, leadership, and culture. He works with executive teams worldwide to build innovation-led organisations through practical, evidence-based approaches that develop repeatable innovation capability at scale.
Article Source: Scott Keller and Mary Meaney, “High-Performing Teams: A Timeless Leadership Topic,” McKinsey Quarterly, June 2017.