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The Team Dysfunction Tax
CARTER REPORTS
Greetings - It’s David here.
Carter Reports is formatted as a One Must-Read newsletter. Each week I send you one story and explain why it's worth your time. My choices include key issues for growing companies; different points of view, and hidden gems. These are the stories I know will give you a competitive edge.
Gallup research shows $1.9 trillion was lost to productivity issues in 2024, with small businesses hit hardest by team dysfunction. Unlike large corporations, SMBs can't absorb the cost of under performing teams—every dysfunctional member directly impacts the bottom line. Today's article breaks down why team dysfunction kills small businesses and provides a practical 5-point framework to fix it.
Reminder: I'd love to hear what you're dealing with. Hit reply and let me know if you have suggested topics for future newsletters.
I appreciate your trust and readership. Best. David
One Must-Read Article
The Team Dysfunction Tax
The brutal truth: Your dysfunctional team is bleeding money faster than you can count it.
Here's a number that should wake you up: Gallup estimated that $1.9 trillion was lost in productivity in 2024 just to unhappy employees. For small and medium businesses, where every dollar counts and margins are razor-thin, team dysfunction isn't just an HR problem—it's a pragmatic threat.
I have observed a common pattern in my coaching experience. Companies that fail have dysfunctional teams. Companies that thrive have figured out the teamwork equation. It's that simple, and that critical.
The 2025 Reality: Why Team Dysfunction Hits SMBs Harder
The business landscape has fundamentally shifted. By 2025, 32.6 million Americans will work remotely, making it more difficult for teams to communicate effectively with each other. Alarmingly, only 7% of workers agree that communication at their business is open, timely, and reliable.
For entrepreneurs and SMB owners, this creates a perfect storm:
The "I" Problem Has Gone Digital: Remote and hybrid work has amplified the individual-focused mindset. Team members are behind screens, sometimes avoiding accountability and tough conversations. Remote work has transformed team dynamics, introducing challenges like communication barriers, feelings of isolation, and difficulties in building trust.
Resource Constraints Magnify Dysfunction: 70% of SMBs struggle with productivity due to lack of accountability. When your five-person leadership team has two "I-focused" members, that's 40% dysfunction—a ratio that can kill small businesses.
The Competitive Disadvantage: While you're dealing with internal friction, your competitors with functional teams are winning. This struggle is amplified in SMBs, where limited resources demand maximum efficiency to grow the top and bottom lines.
From "I" to "We": The Commitment Revolution
The antidote to dysfunction isn't team-building retreats or personality tests. It's commitment—pure and simple.
Great teams practice intense debate on key decisions. They ensure all voices are heard. But here's the crucial difference: once a decision is made, team members commit completely. They take off their "functional hats" (representing their departments) and put on their "company hats" (representing the collective "We").
This transformation from "I" to "We" thinking is where the magic happens. It's where money stops bleeding and starts multiplying.
The 5-Point Team DNA Framework
Here's what actually works in 2025:
1. Shared Vision Obsession. Your team must believe in—and be able to articulate—your common vision - the real, visceral understanding of where you're headed and why it matters.
2. Goal Commitment Intensity. Motivation fades. Commitment endures. Your team needs more than buy-in; they need skin in the game. When success becomes personal, individual agendas disappear.
3. Common Enemy Clarity. Every great team needs an external threat to unite against. Whether it's a competitor, market condition, or industry disruption, a shared enemy creates shared purpose.
4. Leadership That Inspires Belief. Your team needs to believe they can do extraordinary things. Not because you tell them so, but because your leadership creates evidence of what's possible.
5. Relentless Mission Focus. Distractions are everywhere, especially in today's digital workplace. Great leaders constantly redirect attention back to the mission. Every meeting, every decision, every conversation should connect to the bigger picture.
The SMB Advantage: Speed and Agility
Here's the good news: Smaller teams benefit from lean operations, while larger organizations can get bogged down in bureaucracy. When you fix team dysfunction in an SMB, results come fast.
You don't need months of change management. You don't need expensive consultants. You need clarity, commitment, and the courage to address dysfunction head-on.

Here’s My Take
As goes your leadership team, so goes your entire company. Period.
You can have the best product, the smartest strategy, and the most innovative technology. But if your team is dysfunctional—if you have too many "I's" and not enough "We's"—you're leaving massive amounts of money on the table.
The entrepreneurs and SMB leaders who recognize this truth and act on it will dominate their markets in 2025. Those who don't will become cautionary tales.
The question isn't whether you have team dysfunction. The question is whether you have the courage to fix it.
Stop making excuses. Stop hoping it will fix itself. Your business, your employees, and your family deserve better.
The time to act is now. The framework works, but only if you implement it. Don't let another quarter slip by while your competition gets stronger - contact me to help apply this framework in your company.
That’s A Wrap
Successful companies aren't necessarily the smartest or the most well-funded—they're the ones who've learned to work with uncertainty instead of against it. It's not about having all the answers—it's about staying nimble enough to find them as you go.
Reminder: I'd love to hear what you're dealing with. Hit reply and let me know if you have suggested topics for future newsletters
Did this edition spark an idea? Forward it to someone who needs to see the invisible. And if you haven’t yet—subscribe here to never miss an issue.
All the best-
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© 2025 David Paul Carter. Photo Credit: Hachiware | iStock
Thanks to Claude Sonnet4 for helping me streamline and sharpen my ideas in this article.
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