How to create an effective team environment

An effective team environment is comprised of a number of related components. If any of these are absent or not functioning correctly, your team is likely to experience problems. If you have this right, then your team should run like a well oiled machine.

The best teams are able to perform without being distracted by too many internal team issues. Great teams are those that work well together, where all parts of the team just seem to click. This doesn’t happen by accident. It requires creating a team environment that has the right conditions for improvement and high performance.

The components of an effective team environment

The best team environment encourages team members to learn and grow, and incorporates positive short-term stress to encourage team members to strive for achievable, meaningful goals. A positive team environment also involves consequences for poor performance, as well as rewards for a job well done. A good team environment also ensures that the right resources exist to accomplish the job at hand.

Last, but certainly not least, a good team environment needs external pressure to function effectively and to keep improving. The sun in our solar system can be a destructive force, but is also fundamental to sustaining life on the planet. External pressure fulfils the same role within your team environment.

The importance of external pressure in a team environment

The importance of external pressure on your team environment cannot be overstated. External pressure on a team and its leader is fundamental to the team being successful and improving. A team environment where there is significant external pressure helps to improve performance for the following reasons:

  1. Time pressure forces your team to try to hit deadlines set by entities outside of your team environment
  2. Budget pressure forces your team to operate efficiently to avoid scrutiny from the financial functions of your organisation
  3. Quality pressure forces your team to deliver services or products to a high level of quality, to avoid the repercussions of bad work.

Without external pressure operating on the team, there is no need to work efficiently, effectively or to a high standard. The next time your top leadership puts the pressure on you and your team, be sure to thank them for it!

A normal team environment will usually involve some sort of external pressure affecting the team. However, there are a few instances where external pressure may not be apparent, such as in an organisation which is:

  • Performing well financially, reducing the need to monitor costs too closely
  • Fractured, distributed and disjointed, where feedback on team performance and quality is not easily able to be collated across the organisation
  • Dominating their particular market, meaning that customers have few options of competitors to switch to; or
  • Free from powerful external stakeholders, such as shareholders, regulators or a board of directors.

External pressure on a team is the starting point. Once this is in place, the rest of the components of a good team environment become critical for success.


Rewards are important for showing team members that what they do matters. If a team member performs well, they should be rewarded in some way. The most important factor here is that the team should be rewarded with something of value. This does not always have to mean providing financial rewards.

Some examples of rewards for team member performance are:

  • Additional learning or skill development opportunities, such as working on interesting or prestigious projects
  • Structured learning opportunities such as attendance at courses or conferences
  • Additional responsibility, such as leading a team or initiative
  • Financial rewards, tied to performance
  • Public recognition for good work.

Without any sort of reward for good work, you are relying on your team members to be intrinsically motivated. Ideally, all of our team members would be motivated in this fashion, but this isn’t always the case.

As such, an absence of rewards can mean that team members do “just enough” to get the job done, and no more. This is likely to result in an average, rather than high, level of performance.


On the other side of the coin are consequences for poor performance. I’ve written before about the importance of consequences in the workplace. Without consequences, poor performance and quality are allowed to become the norm.

Before you know it, the status quo is that your team puts in a minimal amount of effort. Once you’ve hit that stage, there needs to be a major cultural change to get the message that poor performance is unacceptable.

Even worse, your good team members will have to pick up the slack for those that aren’t performing. This increases frustration and will eventually reduce morale.

Introducing consequences to a team doesn’t need to be a draconic measure. It may simply mean having a way to measure performance and being able to provide specific feedback to team members. As with rewards, team members need to understand that there is a link from their performance to the outcome they receive.

I have seen too many team environments where poor performance is tolerated, sending frustration levels sky high. Leadership in these organisations is perceived as weak and is not well respected because leaders fail to address performance issues.


Maintaining the right balance of resources is important in any team environment. The right mix of resources enables a team to run efficiently and effectively. Effectiveness is about getting the job done right, which is all about having the right people in the right roles. Efficiency is about doing the work with a minimum amount of waste by having the right amount of people.

External budget pressure will force the team to “right-size” for its purpose, which is why hiring the right people for specialised roles is extremely important.

If there aren’t enough people to fulfil your team’s workload or you have people in the wrong role, your team will become a breeding ground for stress and frustration, leading to low morale. When the external pressure mounts, your team needs to have the resources to handle it.

Learning & Development

Learning and development is critical in a team environment. It helps to ensure that team members have the appropriate skills and knowledge to perform their role. External pressure on the team will require it to improve to maintain high levels of quality and performance, and to stabilise costs.

Without improving the tools and methods of a team, a common solution to improving performance is simply to hire more resources. Unfortunately, this usually doesn’t solve performance problems in a sustainable way because of the increased costs involved.

Learning and development opportunities are a way that your team can improve its efficiency and effectiveness. It is a way for the team to satisfy increasing demand for services and handle the external budget and performance pressure that effects it.


Motivation in the team environment is important for maintaining team performance. Team members who lack motivation will generally show poor performance. Unmotivated team members will put in less effort and generally do “just enough” to get the job done, without going over and above. Its not realistic to expect everyone to be highly motivated every day, but continued lack of motivation will cause quality and performance issues within your team.

Lack of motivation in a team can be an outcome of imbalance in other team components. A team with inadequate resources will experience more stress and lower motivation. A team with limited learning opportunities will feel that they aren’t developing in their roles. A lack of consequences will see poorly performing team members survive, whilst a lack of rewards will signal to a team that there is no benefit to working hard.

Motivation is key because even if all the right team components are in place, it is the factor that will prevent your team from performing at a high level. If team members don’t really care about their work and don’t strive to achieve milestones, what you have is an average team.

As well as ensuring the other team components are in place, you can take steps to improve motivation, such as:

  • Communicating a team vision that makes team members feel a part of something bigger than themselves
  • Ensuring that the physical working environment is conducive to performing good work
  • Understanding what your team members value and providing it where possible
  • Acting decisively to solve team issues as they arise
  • Supporting team members when they require help.

To create an effective team environment, you need to ensure that the six components are in place. Don’t forget that external pressure is *good* for your team, not bad.

Creating an effective team environment isn’t an easy task and will require compromise and balancing of priorities. After all, you’re dealing with people, and everybody is different.

How you satisfy these components will differ by industry and organisation, but if you have the components in place, you have the best chance of achieving good performance.

Originally published at on March 1, 2017.

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