Nut Island Effect definition
The Nut Island effect describes a phenomenon in organisations whereby teams of talented employees become isolated from managers, making it impossible for the team to perform a key function or task.
The Nut Island effect is brought about due to a combination of talent within the team, which allows it to function semi-autonomously or autonomously, and distraction among leaders that keeps them unfocused on the team. Resentment then sets in because management assumes the team can function independently without support, followed by a psychological and practical separation in which the team becomes closed off to outside influence. The team then begins to self-regulate to satisfy external demands, such as compliance, which create hidden problems. These problems, in addition to management lack of interest, cause the team to fall apart.
The Nut Island effect was postulated by former Massachusetts state official Paul F Levy in relation to an incident that caused pollution in the Boston Harbour – sewage treatment and disposal on Nut Island were contracted to an external agency which suffered the effects detailed above, resulting in its inability to perform its duties effectively and subsequent pollution of the surrounding harbour.