At the core of each great product is an unfulfilled need of its consumer, and that need reaches a market big enough. However, this is not enough without a flexible team that can turn a vision into a growing business efficiently. Each company can create its own workforce structure of teams of people that can work cohesively towards a mutual goal.

We can divide teams in 4 main groups: project teams, operational teams, virtual teams, and self-managed teams. Each of them comes with a certain set of strengths and weaknesses, and what type you have depends on your business’ purpose, organizational structure, and location. In this article, we will try and understand where each of these types of teams works the best, and how to fully utilize them.

1. Project teams

This type of team represents a group of employees who work collectively toward shared goals. Project team allows you to structure your work in a specific, time-constrained and measurable way, and assign roles, deadlines, and responsibilities. The 4 types of project teams, with their own set of strengths and weaknesses, are:

Functional teams. They are permanent and include members of the same department, but with different responsibilities. Everyone reports to the manager, who’s responsible for everything. This type of project management is considered to be traditional project management. In some cases, several departments need to work together in order to complete a project (e.g. marketing, research and development, design, and manufacturing department) with a manager overseeing the entire project.

Cross-functional teams. These teams are comprised of members from different departments, and they handle tasks that require different expertise and inputs. Even though they’re becoming popular, they haven’t proven to be very functional.

Contract teams. These teams are outsourced and tied down by a contract. Companies usually bring them in to complete a part of a project, and after the project’s completion and end of the contract you can cut all ties to the team.

Matrix teams. Matrix teams work on a “two-boss system”. Team members have to report to different managers, depending on the aspect of the work. For example, marketing department provided an idea for a new product, R&D deemed it feasible, and now one team member has to make a design for it. He has to report to the project manager and functional line manager – the first cares only about the design being done, and the latter is in charge of his training, routine tasks, and career development.

2. Virtual teams

Virtual teams are teams who rely heavily on project collaboration software solutions to get things done together, because all team members work in different physical locations. These teams allow business owners to acquire help from the best experts in the field, while providing members with better life-work balance, all regardless of the fact that they life on the other side of the planet.

Automatic (best known by their company WordPress) is an organization that had most success with its virtual teams – more than 100 employees in 43 different countries communicate in real-time via WordPress plugin P2. Whenever a new employee gets on board, they receive a sum of $2,000 get the latest Macbook, improve their home office, and to use take free time when they need it (thanks to an open “time off” policy).

Virtual teams are characterized by 3 dimensions:

Space – where people work, as they could be working hundreds of miles apart or next to each other.

Time – when people work, as they could work in different time-zones, on different shifts, or during different hours.

Culture – how people work and whom for. This dimension includes factors like education, profession, language, race, gender, nationality, as well as economic, religious, social, and political factor.

3. Self-managed teams

Members of self-managed teams are typically employed in the same organization. They have a wide array of objectives, but they work together to reach a common goal. There is no authority figure or manager, and it’s up to the team to come up with their rules, expectations, solve problems, and share responsibility. When the work ethic of a team relies on individual responsibility, when setting it up you should define two parameters – the autonomy that’s given to a self-managed team and the levels of responsibility. Self-managed team members often find their jobs more challenging and feel more useful on the job, which makes them more motivated and trustful.

Besides improved motivation of team members, ability for them to handle tasks and manage their time when it suits them, and pride in team accomplishment (instilled by shared responsibility), the lack of authority can lead to conformity and put personal relationships over good judgment. Dur yo broader scope of duties, training costs and time are higher.

4. Operational teams

These teams are formed to support other types of teams, and make sure that all back office processes run smoothly. For instance, the human resource department has to perform candidate screening, interviewing, and recruiting, but doesn’t handy any projects. What if one of your key employees decides to leave? In that case, HR must find a substitute and carry on. Operational teams have well-defined roles and responsibilities, thus can have their own function and projects just like a project team.

So, what type of team is for you? To choose the right team, you need to ask yourself: What is the team’s exact purpose? How many people do we need and what will their roles be? Do selected team members require a leader or are capable of self-management? Is their engagement permanent or temporary? Do they need to be located in a single place? In reality, you’ll rarely find a team that can be defined as solely virtual or functional. Companies often decide to go with a mixture of teams, and most of them in modern business are some kind of hybrid (sometimes of all team types).