Seven Key Characteristics of Superteams

These "superteams" represent a new paradigm in organisational structure and performance. And they share key characteristics:

First off, they lean in heavily to AI augmentation, automation and synergy. Augmentation is where an AI enables you to achieve more in a given time, automation where you offload entire tasks (perhaps even goals - see last weeks newsletter), and synergy is where by working with AI you are able to create levels of output neither you, or an AI, can achieve on their own. Every task is assigned to one or other of these buckets.

Secondly roles tend to be fluid and team members adapt quickly, taking on various roles as needed. No-one is defined by their title - indeed titles are often done away with altogether.

Thirdly this is a world of rapid Iteration. Superteams are predicated on being able to prototype, test, and refine ideas at unprecedented speeds. This emphasis on rapid iteration isn't about 'move fast and break things.' Rather, the very act of working at speed necessitates a heightened level of focus and precision. Speed concentrates the mind not through recklessness, but through the need for careful, deliberate action.

Fourthly there is an emphasis on cross-functional expertise. Teams combine diverse skills and perspectives for holistic problem-solving. This approach not only breaks down traditional departmental silos but also enables teams to identify interconnected issues and opportunities that might be missed when viewed through a single disciplinary lens.

Fifth is a belief in data-driven decision making, often leveraging AI for real-time insights and predictive analytics. This does not eschew “gut” feeling (which is the brains synthesis of knowledge and experience) but does ground the team in reality. Realities can be changed, but not without acknowledging them first.

Sixth, and very much in the spirit of our times, continuous learning is core to these teams’ success. Team members constantly upskill and adapt to new technologies. The more you know the more you realise you don’t know.

And finally, these teams are very likely to be experts at remote collaboration. Our Cities have historically been the best venues for talent matching, but in an AI mediated world, nowhere agglomerates like the Internet. Often the best teams are dispersed because that is how you get the best people together. Increasingly we’ll be seeing seamless integration of in-person and virtual teamwork. Now the market for distributed working tools is so large, the supply of them is growing rapidly. Yes we need to be together, but we also need to be apart. Super productive teams work accordingly.

Some large companies will be able to create and curate superteams internally, but the natural habitat of such teams is going to be startups and smaller entities, often forming collaborative ecosystems to tackle complex projects. This dynamic is increasingly resembling the film industry, where individuals and small companies coalesce and disperse as projects begin and end.

The Economics Behind the Shift

Everything boils down to co-ordination costs, as the economist Ronald Coase pointed out in "The Nature of the Firm”, in 1937. This provides a fundamental explanation for why companies exist and how they determine their optimal size. He wrote about transaction costs and co-ordination (organisation) costs. His theory suggests that a company should expand until the cost of organising one more transaction within the firm equals the cost of carrying out that transaction in the market. In other words:

• If it's cheaper to do something internally (lower coordination costs than transaction costs), the firm should grow.
• If it's cheaper to outsource something to the market (lower transaction costs than coordination costs), the firm should remain smaller or contract out that activity.

How AI Lowers Coordination Costs

Now AI is poised to have a significant impact on both transaction costs and coordination costs, and will reshape how companies are structured and how they compete.

With transaction costs, AI enhances search and information acquisition, enables automating contracting and negotiation, and improves monitoring and enforcement.

With coordination costs, AI improves communication and collaboration, can automate task management and workflow optimisation, and power more informed decisions.

From Ecosystems to Micro-Multinationals

This, in turn, will make smaller companies more competitive, give rise to the ‘Micro-Multinational’, and opens up the potential for more decentralised organisations. Meanwhile enabling larger companies to focus on their core competencies, and outsource the rest.

This ‘feels’ inevitable.

Sure, these small, fast, agile, ultra-productive superteams are not appropriate everywhere in business, definitely have the potential to ‘combust’, and need smart, sophisticated management, but the upside from the wise pairing of ‘Human + Machine’ is so great that one can’t help but believe that at least some of them are going to perform outstandingly well.

There are memes about ‘One Person Unicorns’ which seems outlandish, but it no longer feels impossible.

Y Combinator, the startup accelerator and venture capital firm, has recently been briefing about the potential for companies operating AI ‘Agents’ to be bigger than the SaaS industry. As they say:

‘Al replaces both software AND labor costs Companies spend far more on employees than on software, making these smaller companies far more efficient and requiring far fewer employees’.

The Real Estate Perspective

Commercial real estate is an intensely personal but also deeply technical industry. As such it is almost perfectly shaped to adopt AI. Last week we wrote ‘We need to look for workflows where AI and humans can each play to their strengths while compensating for each other's weaknesses.’ - CRE is full of these.

This further fuels the rise of superteams, given their complementary nature. What we need is to find the people with the characteristics mentioned above AND the sensibilities of a Real Estate person. People who can add intuition and judgement to analysis. Causal understanding to correlation.

This shift will likely present a significant challenge, especially for the largest incumbent firms. While smaller, more agile players may readily embrace this new approach, the largest firms face significant inertia. Their current market dominance may offer short-term protection, but a major digital transformation will be essential for long-term competitiveness.

Looking Ahead

My bet is that we’ll see the rise of a new breed of real estate company, with entirely different operating procedures, that embraces AI and all new technologies, and that will unbundle and re bundle the industries workflows (as discussed in last week’s newsletter), and lead us to somewhere very different.

These companies are going to be enormously productive. By optimising around the seven key characteristics of superteams, they will be very much working with AI, whereas many are going to be stuck competing against AI. And that is somewhere you really do not want to be.

Food for Thought

"What's the first step your organisation could take tomorrow to move towards enabling these kinds of high-performing, AI-augmented teams? And what's stopping you from taking that step today?"