By: Patrick Seitz

June 6, 2005, Investor's Business Daily

The business world could learn a lot from successful Broadway musicals.

Not song and dance, mind you, but the composition of successful teams.

Researchers from Northwestern University say they've divined the DNA of successful teams by studying critical and financial hits on the Great White Way. They've determined that the teams with the best odds for success are ones that combine old blood and new.

Creative teams with veterans and newcomers perform better than those with mostly one or the other.

Why is this a recipe for success? The reasons go beyond just combining experience with youthful enthusiasm and new ideas. Newcomers to a team are often seasoned professionals who bring their own networks of colleagues that they use for advice and feedback. This gives an organization more resources than just the team members themselves.

Researchers at Northwestern studied data on Broadway musicals since 1877 to determine characteristics of a great team. They also studied publications in four fields of science to look for common traits among co-authored papers that had the most impact on academia.

The results were the same: Teams with a mix of incumbents and newcomers were more likely to find great success than those with too many of one or the other.

The findings were published April 29 in the journal Science.

A successful team requires the right balance of diversity and cohesion, says Brian Uzzi, associate professor of management and organizations at Northwestern's Kellogg School of Management.

Diversity is reflected in new collaborations while cohesion comes from repeat collaborations, he says.

Consider "West Side Story." Its creative team had a balance of both variables.

Producer and director Harold Prince and lyricist Stephen Sondheim had worked together on "The Pajama Game." Choreographer Jerome Robbins was experienced in the industry, but hadn't worked with Prince or Sondheim.

Classical composer Leonard Bernstein was a newcomer on Broadway. "West Side Story," which debuted in 1957, became a smash hit.

Uzzi co-authored the research paper on dream teams. He shares credit with Luis Amaral, associate professor of chemical and biological engineering at Northwestern; Roger Guimera, a postdoctoral fellow in Amaral's lab; and Jarrett Spiro, who was Uzzi's undergraduate research assistant.

In addition to Broadway teams, the researchers studied scientific teams in the fields of social psychology, economics, ecology and astronomy.

Their report should serve as a wake-up call to businesses and organizations that don't encourage the formation of new teams.

That's because the unsuccessful teams repeated the same collaborations over and over.

The key element for success is the addition of newcomers who bring different viewpoints and access to a fresh network of industry colleagues, Uzzi says.

"Imagine that you're at Procter & Gamble and you've put together a team with five people in it," Uzzi said. "Those five people have worked some time previously in other teams. And the people that they worked with in those other teams worked in other teams as well. You can take each of those teams and you could build a large network of the relationships."

It takes more than talent to create a successful team, Uzzi says.

The show failure rate on Broadway from 1919 to 1930 was 90% compared with 75% today.

Yet that 1919-30 period had tremendous musical-writing talent, including Cole Porter, Richard Rodgers and Lorenz Hart, and Jerome Kern and Oscar Hammerstein.

The problem was: Production teams stayed intact too long and no new blood came in.

Teams made up of the same people from one project to the next hurt creativity, Uzzi says. They share the same experiences and ways of viewing the world and become more insular. They also become less likely to be sensitive to negative feedback.

It's a natural tendency for people to want to surround themselves with people they're familiar with and have worked with before.

And organizations don't want to break up a team that's worked well for them in the past.

But companies and other organizations need to have the courage to mix up their teams to keep them fresh, Uzzi says.

Some organizations try to break down teams every five years to get a clean start. Halliburton, the engineering, construction and oil field services company, takes such an approach with its teams, Uzzi says.

"A lot of companies use task rotation and job rotation to make this happen," he said.

Bringing in new blood is just as important, says David Sanderson, head of recruiting for global business consulting firm Bain & Co.

IBM used to have a practice of hiring only entry-level workers.

The firm found itself having an inside-out perspective and realized it was potentially missing big opportunities, Sanderson says.

After Lou Gerstner joined as chief executive in 1993, he changed that. He saw the need to hire experienced outsiders for key positions to keep the organization fresh.

His vision helped transform IBM from a computer products company to a tech services company.

Many successful techs brought in experienced executives to take their businesses to the next level. Often these executives are from industries other than technology. Dell, eBay and Yahoo are examples of firms run by outsider CEOs with nontech backgrounds.