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This is an enhanced edition of the HBR article R0507P, originally published in July-August 2005. HBR OnPoint articles save you time by enhancing an original Harvard Business Review article with an overview that draws out the main points and an annotated bibliography that points you to related resources. This enables you to scan, absorb, and share the management insights with others. The essence of a team is shared commitment. Without it, groups perform as individuals; with it, they become a unit of collective performance. The best teams invest a tremendous amount of time shaping a purpose and they translate their purpose into specific performance goals. Team members also pitch in and become accountable with and to their teammates. The fundamental distinction between teams and other forms of working groups turns on performance. A working group relies on the individual contributions of its members for group performance. But a team strives for something greater than its members could achieve individually. The authors identify three basic types of teams: (1) teams that recommend things; (2) teams that make or do things; and (3) teams that run things. The key is knowing where in the organization real teams should be encouraged. Team potential exists anywhere hierarchy or organizational boundaries inhibit good performance.