Survival of the Flattest: Teams with Low (but Not High) Status Differentiation Turn Failure into Success by Adding High-Status Members

Most prior research on teams’ responses to failure treats teams as closed systems. However, after failures, teams may seek to improve performance by bringing in new members. Adopting a teams-as-open-systems perspective, we test which teams are more willing to add high-status members following failures and whether doing so improves team performance. Drawing on status hierarchy research, we posit that after a team failure, members will feel uncertain about their own status (particularly those with high status). More importantly, we predict that the impact of this status uncertainty on members’ willingness to add high-status new members depends on teams’ pre-existing status differentiation. Specifically, status uncertainty leads members in low-status-differentiation teams to perceive adding a high-status new member as a potential benefit to collective performance, whereas it leads members in high-status-differentiation teams to perceive the addition as a potential threat to their own status. We theorize that these individual perceptions shape teams’ collective decisions through an emergent process. Taken together, we predict that, at the team level, failure will increase the willingness to add high-status members in teams with low, but not high, status differentiation, and such addition improves subsequent team performance. Using longitudinal archival data on product development teams (Study 1, N = 4,811 teams) and two pre-registered experiments at the individual (Study 2, N = 783 participants) and team levels (Study 3, N = 222 teams), we found support for these predictions. This research advances the literature on team failure and illuminates dynamics between membership change and social hierarchy.