The popularity of team-building exercises has gone up dramatically in recent years, developing from being seen by some as an unnecessary excess only afforded by the largest corporations, to now being accepted as a corporate necessity employed by most businesses that have the intention of growing and scaling.
But what is the purpose of team building, and is it something you should be investing in or just another financial black hole?
What is the Purpose of Team-Building?
You might be surprised because countless academic research studies have determined that an effective employee team-building day is one of the best investments a company could ever make and considering that 96% of executives say that “poor collaboration and ineffective communication are the leading causes of workplace failures”, this probably shouldn’t be surprising.
The end goal of a team-building day should be:
- Increased motivation
- Improved morale
- Encouraged leadership skills
- Objectives and goals that are clearly defined
- Improved functioning as a team
All of this leads to more sales and more profits, and if you have the right team, a team-building course or event will always lead to a positive return on your investment.
But if all of this is true, how do you measure whether it’s actually worked?
This is the next question, and for many businesses, the most important:
How to Measure Team Building Success
When looking into how to measure effective team building, the most important thing is to have a plan to develop from and some baseline metrics, otherwise it will be impossible or very difficult to measure any improvements that occur afterwards.
A good team-building plan should focus in particular on any issues or weaknesses you would like to tackle, so it’s always a good idea to discuss any of these you may have with the team-building agency or event organisers beforehand.
While coming up with some baseline metrics might sound like a bit too much work, you more than likely already have them – for example, if your sales staff are taking 10 calls per hour and you’d like to increase the volume, you can use that 10 calls as your baseline metric.
These will be completely different for other departments, but the most important thing is that you know what they are currently capable of, and in which areas you’d like to improve.
But even if these numbers increase, how do you know if they’ve increased enough to be a positive ROI?
How do you know the improvement isn’t something you could have achieved via another method?
How to Measure the Return on your Team-Building Investment
Since the effectiveness of a team is an ongoing metric that may change day by day, your best option is to measure your chosen metrics along with fundamental business metrics at set times after your team-building event.
We will talk about that more in a moment, but first, how do you actually measure that success?
Here are some tips:
Track & Measure Your Company’s Financials
It goes without saying that you should be doing this anyway, but the increases you see after a team-building day will directly show you the impact your investment has had on company performance.
For example, in our sales team example above, an increased amount of calls per day for all or most of your sales staff should directly translate into more orders and therefore more revenue.
Measuring this increase will tell you how much return on the investment you made and also help you decide when to schedule your next team-building day in order to keep the increases going in a sustainable manner.
Track Your Results Visually
Keeping track of the metrics yourself is one thing, but creating a visual demonstration such as a wall chart or graph makes the improvements easy to understand for everyone, and helps encourage them to work towards even more significant gains.
It also makes it easy to spot when gains are slowing down which is a good sign that it’s time for another team-building session, but after a few more sessions, you should find that it starts to maintain its gains and not fall off – this is the point where you know your team building investments has had a measurable and permanent benefit for your company.
Consider Expanding Your Efforts to the Entire Company
Once you’ve made a measurable improvement to the problem area you first targeted, the next obvious step is to wonder about which other areas or departments could benefit from a team-building event.
For example, if you have already increased the profits taken by your sales department, why would you want your customer service team to stay stagnant?
Seeing the increase in revenue and performance will give you the confidence to branch out and work on other areas too, and applying this same process to all departments can only be a huge benefit in the long run.
Now let’s look at how you can measure the return on your investment over time:
Measure the Boost to Productivity in Stages
Some people struggle to believe in the effectiveness of team-building and employee engagement exercises, and one of the major causes of this is a fundamental misunderstanding of how the benefits are supposed to show themselves.
For a start, team-building isn’t a one-time investment that just instantly works the first time and provides permanent results.
Whereas you may see immediate results the first day after your initial team-building event, they aren’t necessarily going to be immediately sustainable. The ideal way to measure improvements and figure out how to keep them coming is to measure the results in stages:
Stage 1: Is There a Boost in Productivity the Day After a Team-Building Event?
This is almost always the case, as the team-building day has given your staff a lot of encouragement, a day away from their regular responsibilities, potentially some new skills, and therefore a significant boost in performance.
What is not always the case is that these improvements stick around – staff drift back into their old habits, the excitement wears off, and they potentially wonder whether the team-building thing was a one-off that they don’t need to think about any more.
Stage 2: Does the Team Dynamic Go Back to Normal After a Week or Two?
It’s quite possible that the momentum from Stage 1 will continue for a while before wearing off, leaving your staff productivity and team effectiveness closer to where they started. This is a good time to look at the increased performance and increased profits that occurred while productivity was up, and compare that to the cost of the team-building event to see what type of return on investment you have received.
Stage 3: Is There a Direct Impact on Your Financial Returns?
Of course, the simplest way to measure the success of your team-building event is by measuring your financial returns from pre- and post-event. This gives you an immediate and easy to understand the measurement of how your team has improved.
If the growth is considerably more than the cost of the team-building day, which it should always be with any reputable team-building company, then holding another event is clearly a no-brainer.
Stage 4: Ensure The Momentum Isn’t Lost!
The last thing you want is to get some good momentum after your team-building events, then let that improvement slide until company performance is back to normal.
Once you have the financial returns and team metrics to support your team-building strategy, it’s time to organise regular events at strategically planned time periods to ensure the improvements continue. It is impossible to make these sorts of decisions without the metrics collected in previous stages, which is why the first “experimental” team-building event is always a good idea.
You may also find that different departments or teams react better to different events, for example, one department may experience a larger improvement after a singing workshop, whereas others prefer traditional team-building games and events. Once again, this is only something you can learn from trying.
We hope this guide has helped you to learn some effective ways to measure effective team-building. The most important thing to remember is that team-building days and events are an investment, so you need to be measuring your team’s performance both before and after – otherwise you’ll never know if they’re something that holds a small benefit for your business, or if they’re a major boost that you should be doing every few weeks.
One thing is for sure though – approach them right, using a strategy based on evidence and data as opposed to guesswork, and you’ll soon find your team motivating and achieving in ways you previously never imagined!