When Amy Berkowitz became CIO of CBS in August 2001, she inherited an IT group organized by business units. That structure had worked well when there hadn\u2019t been a lot of change in the company\u2019s network television, TV station, radio and outdoor advertising businesses, or in the core technologies supporting them. But the world was going digital, and CBS needed to ready itself for consequent changes in workflow, distribution, advertising and sales.CBS IT was already laudably efficient, running at about 50 percent of the cost of the average IT shop, according to Meta Group, yet Berkowitz realized that being efficient and effective was no longer enough. "There was a new set of metrics we needed to be prepared for: adaptability, speed and innovation. And the way we were organized, we were not going to be successful at any of those," she says. Berkowitz wanted her IT group to be more agile and closer to users, yet even more efficient. After a lot of homework, Berkowitz decided that a new organizational structure that was centered on small teams offered the most potential for achieving those seemingly conflicting goals. She rolled out the teams in January 2002.Small teams are revered in software development and other technical fields for their absence of bureaucracy. Bill Gates, business author Tom Peters and Google CEO Eric Schmidt, among others, have lauded small teams as the ideal structure for getting good work done. But how do small teams work in the IS department, where technical work is only part of the job and regular contact with business managers and users is paramount? Elements of Small TeamsIn moving from a line-of-business focus to what she calls a product-center focus, Berkowitz eliminated the need to have redundant groups working on the same kinds of applications. For example, instead of having four separate teams supporting finance and administration systems for the TV network, TV station, radio and outdoor advertising businesses, CBS now has a single group that handles such systems for the entire company. Four product area managers (reporting directly to Berkowitz) oversee each of the four kinds of software products that CBS uses: finance and administration, sales and traffic, programming and production, and interactive systems. Within each of these product areas, project managers coordinate three to five dedicated workgroups that handle all development and support.So far, so good?but not much different from the typical centralization effort. The main feature of the new structure, however, is the 20 newly created workgroups. These are independent small teams each made up of four to seven people with complementary skills: one workgroup lead (who is a process specialist), one or more developers, one or more people responsible for testing and documentation, and one business analyst\/architect whose job is to understand the business needs and relay that to the rest of the workgroup. The idea is that the members of these small workgroups commit to a common purpose, approach and processes, and hold themselves mutually accountable for delivery against clearly defined performance goals. "The key is to make sure [the workgroups] have a very focused purpose. And that they\u2019re very outcome-based," says Berkowitz.Jon R. Katzenbach, coauthor of The Wisdom of Teams and a consultant specializing in workforce performance, says strong performance goals are essential for maximizing the value of small teams. "If groups want to achieve team performance, the most important factor is not the leader of the team; it is the clarity around the performance purpose for that group," he says. "The more clear and compelling that is, the more naturally those people will function as a team."Because CBS\u2019s IT teams are independent and self-contained, there are fewer handoffs in the development process than before; a workgroup is responsible for all development and support functions for a given product (or piece of a product), resulting in increased productivity and efficiency. At the same time, each workgroup has a great deal of autonomy to get the job done. That improves quality and sparks innovation, Berkowitz says.To make sure the independence afforded the workgroups doesn\u2019t result in anarchy, Berkowitz also established an overarching strategic services group, which has its own set of small, virtual teams, made up of people representing various levels of IT (and who still spend 80 percent of their time on their "day jobs"). These teams help Berkowitz handle governance, program management, enterprise architecture, and technology and strategic planning. Strategic services is also responsible for understanding business goals and developing a master schedule and capacity plan for all of CBS IT. The strategic services layer serves to tie together the functional workgroups, says Howard Rubin, executive vice president of Meta Group, whom Berkowitz brought in to help with the reorganization. "You want the efficiency of a small team and autonomy to generate intimacy. But you don\u2019t want chaos," he says.The CIO\u2019s Role in Small GroupsBerkowitz\u2019s first priority in managing small teams is setting clear and compelling performance expectations by laying out for everyone in her group her short- and long-term vision for using IT at CBS and the strategy for getting there. Then, she engages in what she calls "relentless monitoring" of the workgroups\u2019 progress. "I help them evaluate where they\u2019re hitting and where they\u2019re missing, and put plans in place to adjust for the gaps," she says. (The dashboard of the IT project management office, which rolls up scheduling information from the workgroup leads, gives her a real-time view of all projects.) Since the reorganization wasn\u2019t motivated by a crisis, Berkowitz has to regularly expound on its benefits to convince workgroup members to embrace the concept of mutual accountability. (Rubin describes Berkowitz\u2019s communication strategy as one of "polite hammering.") For example, IT workers now have the bandwidth to do strategic projects rather than being tied up in day-to-day work. Berkowitz also tries to make sure her employees take advantage of cross-training opportunities to build their skills. For instance, in a recent Web development project, developers with only two of the four requisite skills were paired with more experienced developers, who served as on-the-job trainers.In addition to publishing a monthly newsletter, Berkowitz holds quarterly town hall-style meetings in the MTV-ish cafeteria known as The Lodge at CBS\u2019s New York City headquarters. She brought her boss, CFO Bruce Taub, to the last meeting, where she talked up small-team successes and showed clips from the TV airing of flashy new graphics developed by a workgroup.Tapping into the workgroups\u2019 sense of pride is a better management strategy than depending on money, according to Katzenbach. Money runs out, after all. "Teams take great pride in what they\u2019re doing, how they\u2019re doing it and who they do it with," he says. "That\u2019s what motivates them."Demonstrating Big BenefitsSoftware quality is up since the new structure went into place, which Berkowitz attributes to the fact that workgroups now feel an established ownership of each piece they develop. The clear definition of ownership also improves efficiency. Project Manager Linda Audibert says that knowing which workgroup is responsible for each piece of an application makes her job of distributing software enhancements and changes easier?and faster?than it was under the line-of-business structure.The workgroup structure also gives IT the ability to turn on a dime. For example, a new management team for Infinity Radio (which, like CBS, is a division of Viacom) recently wanted to improve communication through an extranet for advertisers and an intranet for employees. Berkowitz was able to quickly shift gears by redeploying workgroups to accommodate the shift in priorities.The efficiencies gained through workgroups have allowed Berkowitz to undertake rationalizing IT applications?a big task that the IS group hadn\u2019t had time to tackle internally before, or the money or inclination to do with consultants. The rationalization team has already identified opportunities to consolidate or retire systems that are redundant or no longer needed and to replatform systems that are outdated and therefore hard to support. Besides giving IT staffers systems that are easier to maintain, the rationalization effort is improving and upgrading the skills of IT employees, thus increasing their job satisfaction. A longtime employee originally hired to work on mainframes and to help with Y2K remediation, for example, is now developing client\/server and Web-based applications.Shelley Hanna, a senior programmer who is also a member of the strategic services technology and strategic planning workgroup, says the small-team model pays off on two levels. "At the bottom end, because there\u2019s more standardization and more governance, it really sets people up to succeed; there\u2019s less room to fail, less variation," she says. "And at the top end, it opens it up. Now there\u2019s not a sense of \u2019This is where your job starts, don\u2019t go beyond that.\u2019"And up at the top, Berkowitz is convinced she\u2019s chosen a good path. Not only do the small teams improve CBS IT\u2019s agility, they will result in a 30 percent to 40 percent reduction in operating costs once all the current projects are complete, says Meta Group\u2019s Rubin. Faster, better and cheaper?all at the same time.