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High Performing Teams Vs High Functioning Teams: What's the difference?

By Anthony Taylor - February 13, 2023

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In this Blog, we examine the differences between High-Functioning Teams and High-Performing Teams. Despite the common misconception that both terms are the same, they are in fact two distinct teams with different approaches to achieving success in the workplace.

Since the start of the year, 297 tech companies laid off nearly 95,000 workers, and that’s just in the tech industry. This has left many organizations facing difficult decisions around their team makeup, such as reshuffling and consolidating teams and making hard decisions with limited resources and talent. The challenge for managers is to make the right decision: when forced to decide whom to let go and whom to bring onto their team, do you focus on performance or culture?

Although organizations can and have both. Many don't


When making hiring decisions, managers must ultimately choose what is best for the entire team. Only by understanding the distinctions between High-Functioning and High-Performing Teams will they be able to make the best decisions for your organization.
Discover the differences between a High-Performing Team and a High Functioning Team. What makes a high-performance team different from a high-functioning team? What advantages do they each bring to the table and how can you ensure that your current team finds success regardless of which type of team it is?


Hi, it's Anthony here. I'm the CEO of SME Strategy. In this section of Leader's Digest, I typically give you my perspective on the topic at hand. strategic planning facilitator 

The last few years had been a wild ride for businesses of all shapes and sizes. The pandemic has forced many companies to restructure, lay off staff and make difficult decisions as they navigated the economic uncertainty. As a strategy facilitator, my role involves leading the strategic planning process and collaborating with multiple CEOs to explore ways of achieving optimal outcomes for their teams.

During our strategy meetings, I observed an interesting trend: many of them were using the terms 'high performing' and 'high functioning' interchangeably.

At first, I thought nothing of this, but after a few discussions, it became clear that there was a slight difference between them. 

High-performance teams focus on measurable goals, such as output and performance. This type of team is often driven by quantitative results.

High-functioning teams, on the other hand, tend to focus on the dynamics between team members. They emphasize cooperation, communication, and collaboration.


 Click here to watch Anthony's Perspective


I recently ran a poll on LinkedIn asking what type of team senior executives prefer. The results were clear: The majority of executives responded that they prefer high-functioning teams over high-performance teams

As a CEO, it’s important to understand the power of a high-functioning team. While it might be tempting to focus solely on the performance of individual contributors, a cohesive group of individuals working together towards a common goal will be more likely to achieve success than a team of individuals who are not as well connected.

To illustrate this point, let’s consider an example. If an organization generates $5 million in revenue and one highly productive individual is not committed to teamwork, it could lead to a loss of $1 million in revenue if they were to leave. However, the benefits of having a team-oriented approach – such as increased motivation and collaboration – can easily outweigh the loss of an individual’s performance. By fostering a team-oriented environment, you can ensure that your organization is set up for success.

Remember that the value of a team cannot be replaced by one single person, and the health of the team should never be sacrificed for the productivity of one individual. High turnover can be an indication that something is amiss, and it is essential to ensure the well-being and success of the team in order to maintain a healthy and productive organization.

When it comes to the differences between a high-performing teams and a high-functioning team, I believe it's important to focus on fostering high-functioning teams first.

Trading off high performance for an individual versus high performance or high function of a team will cost you in the long run. 



 To gain a well-rounded perspective on the best practices for strategy and leadership success in 2023, we recommend reviewing these pertinent articles.


  • High-Performing Teams vs. Team of High Performers. What's the difference, and why 
    Insights from AJ Thomas

    Where do you start when you embark on the journey of building a high-performing team? Is your team a high-performance team or a team of high performers if 80% of your revenue comes from 20% of team members?  This blog highlights six subtle differences between both types of teams and why they matter.

  • Developing and Sustaining High-Performance Work Teams
    Insights from the Society for Human Resource Management

    High-performance work teams are critical for organizations to achieve their goals. This article discusses the stages of team growth, causes of team dysfunction, and the main types of high-performance work teams your organization can use to reach its goals.


  • 5 Things High-Performing Teams Do Differently

    Insights from HBR

    New research suggests that the highest-performing teams have found subtle ways of leveraging social connections during the pandemic to fuel their success. This article presents five key characteristics of high-performing teams, — even within a remote or hybrid work setting all of which highlight the vital role of close connection among colleagues as a driver of team performance.



In this segment of Leader's Digest, we highlight a new approach to dealing with the topic of discussion. This will identify alternative modern solutions for your consideration

  • Equipping Leaders for merger integration success
    Insights from McKinsey

    Developing leaders during mergers is critical for successful integration planning, value capture, and cultural integration. This article highlights key strategies for equipping your leaders with the skills and knowledge necessary to ensure a smooth merger process and capitalize on the new opportunities for growth and performance that come with it. 


Here are some actionable tips that you can use now to begin the process of building a high-functioning team in 2023.


  • 5 Ways To Build A High-Performance Teams
    Insights from Forbes

    High-performance teams require CEOs to possess certain behavioral traits. This article outlines five of these key attributes that can help to drive successful teams.

  • How to Make Your Teams Stronger in a Crisis
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    The pandemic brought about a drastic change to the dynamic of work teams. Today the best teams are rebalancing their time to emphasize the development of strategy, culture, and talent. This article highlights four things high-performing teams do consistently. When C-suite leaders score their teams highly across these four attributes, their organizations are up to six times more likely to lead rivals in revenue, profit, and total shareholder return.

  • How to build a high-performing team. Every step you need to take.
    Insights from Timeular

    Building a high-performance team is a challenging task, but contrary to what you might think, it doesn't have to be daunting. Investing time, energy, and budget to develop the skills, traits, and behaviors of team members is essential to creating a successful and cohesive team. This article provides step-by-step instructions on how to build a high-performance team, as well as the importance of doing so.


 You're invited to become a part of the conversation.


Participate in this poll question:


What's more valuable to you?

  • A Highly Functioning Team
  • A High-Performance Team

Click here to provide your answer and view the collective results.


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