The Culture of Collaboration

BusinessWeek.com Launches Collaboration Column

Internal competition wreaks havoc in organizations, compromising collaboration and reducing value. The cost is often hidden, but it can be significant. That’s why my first column on collaboration for BusinessWeek.com focuses on internal competition. The column is part of the site’s Management section, which offers actionable business information. So my column offers 5 ways that leaders can reduce internal competition.

Check out “The Hidden Cost of Internal Competition” on the BusinessWeek.com site.

Collaboration Curing Multiple Sclerosis

It was definitely unorthodox. Many said it was impossible. But it looks like The Myelin Repair Foundation has done it. MRF, which is working on curing multiple sclerosis, is about to meet its ambitious goal of licensing a discovery for commercial drug development within five years. Through a collaborative research model, the Silicon Valley-based foundation has reduced drug development time from 15 years to 5 years. MRF is negotiating with a biotech company and believes a license agreement is in the works.

 

Intuit Founder Scott Cook, a foundation supporter, suggested I research MRF when I was writing The Culture of Collaboration book.  In the book, I tell the story of how Scott Johnson, who has MS, learned that a cure was taking three or four times as long because of competition among researchers. This prompted Johnson to rethink the culture of medical research and begin changing that culture. Scientists often refuse to share data and information, because they compete for limited grant money and for publishing articles in top medical journals. The answer was to get experts in different disciplines to collaborate. So Johnson raised money, ultimately plowed $20 million into drug discovery work, and built a collaborative medical research foundation.

 

Johnson brought in fellow tech start-up veteran Russell Bromley as chief operating officer. And Johnson and Bromley recruited five principal investigators who head labs.  They proposed a level of collaboration for curing disease that none of the scientists had ever experienced. Their focus was to repair myelin, the sheath that surrounds the nerves, which MS damages. Johnson and Bromley with input from the researchers developed a Collaborative Research Process, which addresses everything from tools to incentives.

 

Since its founding in 2004, MRF has advanced work towards a cure for MS beyond anything anybody else had imagined within this timeframe. “Because of our work, we have a much clearer understanding of how to drive neural stem cells to the site of myelin damage in the central nervous system and instruct the myelin-producing cells to remyelinate,” Johnson writes in his recent president’s message.

 

The Myelin Repair Foundation’s game-changing collaborative approach sets a new standard for medical research. The broader medical research community should sit up and take notice that collaboration among researchers creates greater value than competition.

 

Constructive Confrontation at the Clinton Library and Museum

When I’m on the road, I keep my eyes open for collaboration insights.

 

This week I was in Memphis and made a detour to Little Rock. In Memphis, I stayed at the Peabody Hotel, the grand old hotel of the south famous for the daily parade of ducks from the hotel roof to the fountain.  The site of several ducks marching in formation through the hotel lobby certainly requires coordination and arguably collaboration.

 

Here in Little Rock…I’m staying at the Capital Hotel, which has an elevator big enough to supposedly have accommodated Ulysses Grant and his horse. Also, the Capital serves one of the best hotel breakfasts I’ve ever eaten. Everything is made from scratch! All of this in a gorgeous, old-world dining room.

 

Back to collaboration. Regardless of politics and how you may feel about Bill Clinton, any leader would do well to take note of Little Rock’s favorite son and his thoughts about hiring, culture, and decision-making:

 

“I don’t care how smart you are…” Bill Clinton’s voice boomed into my audio tour headset at the William J. Clinton Presidential Library and Museum. “Success and failure depends on how well the staff and cabinet debate honestly and openly and then unite once you’ve made a decision. “

 

I was standing in the replica of the White House cabinet room, and President Clinton was setting the scene for the debates that occurred in that room on his watch as the 42^nd President of the United States. “You never can tell when somebody who’s in an unrelated agency will have a really keen insight…thinking people, caring people who came from all different backgrounds from all over America.” Amen! Cross-functional collaboration!

 

President Clinton was essentially talking about constructive confrontation, one of the Ten Cultural Elements of Collaboration that I identify in my book, The Culture of Collaboration. To effectively collaborate, the culture of any organization—whether it’s the federal government, a large enterprise, a non-profit, or a small business—must encourage debate and constructive confrontation regardless of level, role or region. 

 

Constructive means that the confrontation is about making a better decision rather than personality conflicts or posturing. At some point, debate ends and an organization coalesces behind a united position.  Smart organizations encourage debate as President Clinton did among his staff and cabinet rather than blind agreement with the boss.

The Clinton Library and Museum includes a replica of the Oval Office as it was when President Clinton occupied it. According to the staff, the former President often moves objects around or borrows them during his monthly or bi-monthly visits to the Library (he has an apartment upstairs with room for his secret service agents). 

 

The docents tell me that President Clinton knows them all by name and is closely involved in almost everything that happens at the Library. I spoke at length with one docent, Jane Cazort, whose father-in-law was lieutenant governor of Arkansas and whose granddaughter went to school with Chelsea Clinton.

 

Coincidentally, next week I’ll be attending the Fortune Brainstorm: Green 2009 conference in Laguna Niguel, California at which President Clinton is speaking.  More on that later.

Collaborating out of the Downturn Focus of Blog Talk Radio Interview

I discussed collaboration with Zane Safrit yesterday morning on his hour-long Blog Talk Radio show. You can listen to the show here.

 

When he was CEO of Conference Calls Unlimited, Zane masterfully used blogging as a marketing and business tool. His small company, based in a rural Iowa community, adopted collaborative culture and tools as an advantage in a marketplace saturated with large players. Zane is a super-capable, collaborative leader.

 

Our conversation ranged from common denominators and motivators for companies wanting to adopt collaborative culture and the biggest mistakes companies make. We also discussed the need to replace star-oriented culture and the role of collaboration in an economic recovery.

 

Zane asked me how companies can balance the need for collaboration with the need for consistency, routines and procedures. It’s a thoughtful question that organizations should consider. I explained that it’s necessary to include collaboration in policies and procedures, so that people are consistently collaborative J.

 

Towards the end of the show, we focused more on the economy. Zane asked me about the biggest trends regarding collaborative culture over the next two years. Here’s what I said:

 

People are going to realize what collaboration is and what it isn’t, and I absolutely believe that collaboration will help deliver us from the downturn. We need to abandon the herd mentality. I blogged about this on March 15, 2009 with a call to action. You can read the post here.

 

There’s a misconception that collaboration is about running with the herd. Real collaboration involves constructive confrontation….coming together to hash out issues, make decisions, improve processes and develop products and services. And it’s much broader than companies. It’s about governments collaborating across agencies and departments, with citizens and with other governments. It’s about people working together to create value in our communities.

 

It’s about changing education so that we’re developing collaborators. The more educated people are, the more competitive they are. Our educational system beats collaboration out of us. That’s changing.

 

I’ve lived and worked in smaller communities where many people get jobs right out of high school. They’re used to working together to cook dinner at the VFW or help neighbors repair tornado damage. It’s this type of attitude that we need to nourish in our country, in higher education, in companies, in and among governments. Coming out of this downturn, star culture and internal competition are unaffordable. Collaboration will drive the recovery.

 

“How will that change our economy, culture, country?” Zane asked me.

I responded:

 

It’ll be back to basics…working together to create real value. The mortgage mess, the financial collapse were rooted in artificial value. We gave the keys to the country and the economy to star competitors… the best and the brightest who went to top schools and competed for themselves without considering the bigger picture. Now we need to entrust our companies, governments and communities to collaborators. And we’re going to build long-term, sustainable value.

Toyota's Collaborative Leadership Involves "See it for Yourself"

In selecting Akio Toyoda as its next president, Toyota is reaffirming its commitment to collaborative culture and methods. A key tenet of Toyota is genchi genbutsu which means "see it for yourself.” This is related to the leadership method practiced by HP’s David Packard and Bill Hewlett beginning in the 1940’s and later dubbed “management by walking around.” The idea is that to figure out what’s really going on in an organization, a leader needs to get out of the office, go to factories and loading docks and retail outlets, and get his or her hands dirty.

 

That’s exactly what Akio Toyoda did when he visited a Toyota dealership in Ann Arbor, Michigan last summer. He wanted to personally investigate a pickup truck recall. A story by Micheline Maynard on February 15, 2009 in the New York Times says Toyoda made a trip “so secret that Toyota’s public relations staff didn’t know he was here.” While at the dealership, he reportedly got down on his hands and knees to examine the undercarriage of a truck. At the news conference in January announcing his appointment, according to the Times, Toyoda announced he would pop up everywhere as he did in Ann Arbor.

 

Genchi genbutsu or “see it for yourself” fits squarely into collaborative culture and methods. However, it’s not always possible to fly across the world to see what’s happening. That’s where collaborative tools come into play. Through unified communications, we can find one other and connect regardless of level, role or region. We can escalate IM to voice, web conferencing or videoconferencing and spontaneously hash out problems and make decisions. Visual communications is a critical enabler. An ideal solution is telepresence, which makes people feel practically as if they’re sharing the same physical space regardless of distance.  

 

Our research at The Culture of CollaborationÒ Institute has shown that almost all highly-collaborative companies have integrated some form of real-time, interactive video into their operations. As I describe in The Culture of Collaboration book, Toyota uses a custom-designed visual communications system coupled with product lifecycle management and advanced computer-aided design tools that has become essential to its operations. The system links people at design facilities, plants, and at business partner sites and provides a rich virtual environment for developing and producing vehicles.

 

Two other areas involving collaboration that Akio Toyoda will likely re-emphasize:

1)     Making decisions based on long-term goals rather than on short-term developments

2)     Nemawashi or making decisions slowly by consensus

 

While collaborative culture is never about one person, Akio Toyoda is certainly one role model for collaborative leadership.

Innovation Value Institute Enhances Collaboration and Unlocks IT Value

As I stepped into the new “innovation zone” outfitted with leather couches, lounge chairs and café-style tables and stools at Chevron’s headquarters in San Ramon, California yesterday, ideas were flying. The Innovation Value Institute, a consortium focused on enhancing information technology’s role and demonstrating its value, has set up shop for two days at Chevron and yesterday announced its efforts. You can hear the announcement and see slides here. Collaboration is fundamental to IVI in that:

 

1) Competitors are collaborating in the consortium

2) IVI’s framework will enhance collaboration between IT and business units

 

The core consortium includes oil and gas competitors Chevron and BP, competing consulting firms Boston Consulting Group and Ernst & Young, and software companies Microsoft and SAP. Northrop Grumman is also part of the core group as is Intel. In fact, Martin Curley, Intel’s global director of IT innovation, co-directs the Institute, which is housed at the National University of Ireland, Maynooth. Each company is sharing intellectual property, and the partners are all getting more out of the collaboration than the IP that they’re investing. Through the consortium, according to Curley, the members are shifting their thinking and approach from “competitive advantage to collaborative advantage.”

 

IT is evolving from a service to a “business-embedded” role within enterprises. “IT organizations grew up with the service business model… acting as waiters and waitresses. What technology can I serve you today?” notes Natalie Stone, director of business strategy for Northrop Grumman. “We’ve come pretty far, and we’re poised to take the next leap.”

 

That next leap for the consortium members involves developing an IT Capability Maturity Framework (IT-CMF) of 36 interconnected processes—things like service analytics and intelligence, enterprise architecture, and innovation management. The idea is to establish a common language and standards for measuring how IT creates business value.

 

So, how does IVI quantify the value? Ralf Dreischmeier, partner and managing director of the Boston Consulting Group, says the consortium is focused on “50/50/50.” That means increasing IT return-on-investment by fifty percent, reducing time-to-market by fifty percent, and reducing business costs by fifty percent.

 

Consortiums often deliver little more than announcements and joint news releases, because of the lack of collaboration. “Five to ten years ago, this would have been dead,” insists Dreischmeier. “People were much more protectionist, thinking only about their little environment.”  IVI is succeeding because of the premium its members are putting on trust, sharing and innovation. These are three of the Ten Cultural

Elements of Collaboration that I identify In The Culture of Collaboration book.

 

In parallel, businesses can create greater value if there is more trust between IT and business units. “If you don’t have the trust, there’s no way you’re going to make IT better,” acknowledges Chevron CIO Louie Ehrlich. Environment is another element, and Chevron’s “innovation zone” is designed to enhance collaboration and experimentation. “Chevron likes to do things with quality or not at all, but sometimes we need to lighten up and make mistakes,” insists Jack Anderson, Chevron’s innovation specialist, a consortium participant who is also championing collaboration within his company.

 

I’ve blogged and written in my book, spoken and advised organizations about how cultural diversity enhances collaboration, enables broader input and contributes to better decisions and products. Culture may be regional, organizational, functional, or departmental. The IVI includes cultural diversity on all of these levels. “Diverse groups work much better together,” is how Edwina Fitzmaurice, partner with Ernst & Young, sums it up. Fitzmaurice, based in Ireland, has a diverse professional background including stints as CEO of Prudential Europe Management Services and CIO of J. Rothschild International.

 

Many of the consortium members—and many other enterprises and IT vendors—have developed their own frameworks for IT value. Microsoft is no exception. There’s broad agreement, though, that an industry standard framework makes more sense for vendors and enterprises. “We can then talk about our product portfolio in a way that resonates rather than being product-centered,” says Samm DiStasio, senior director for business architecture and optimization in Microsoft’s enterprise and partner group.

 

Ultimately, ITI’s work will be publicly available—but it will never be finished. The nature of a collaborative framework is that it’s dynamic. As business shifts and IT evolves, ITI’s model will also change.

Early Input Enhances Collaboration

The most collaborative organizations get broad input into decisions early and often.

 

President-Elect Barack Obama got into some hot water recently when word leaked out that he planned to nominate Leon Panetta as director of the CIA. U.S. Senator Dianne Feinstein, incoming chair of the Senate Intelligence Committee, publicly attacked the decision partly because of Panetta’s lack of intelligence credentials and partly because nobody apparently consulted her about the appointment.

 

Aides to the President-Elect insisted that they were planning on getting Feinstein’s input regarding the Panetta appointment before going public.  However, getting a key stakeholder’s input late in the decision-making process is less collaborative and less valuable than getting early input. Requesting late input is often political rather than collaborative and provides an opportunity for the decision-maker to sell key stakeholders on a decision rather than really consider their perspectives.  

 

Collaboration means people participate in decisions regardless of level, region, business unit or function. In The Culture of Collaboration book, I write about how Toyota makes decisions and the role of nemawashi, which essentially means consensus building. Before the automaker changes the wheel base on a car model, the company gets broad input from those who design and assemble the vehicle. The decision takes longer, but implementation is swift because stakeholders have already anticipated and addressed potential problems.

 

In contrast, faster decisions without broad input may appear more efficient, but such decisions often run into hurdles during implementation and ultimately absorb more of an organization’s resources. Without broad input, people who are impacted often criticize a decision because they had no voice and no stake in the outcome.

 

Had the Obama transition team involved Senator Feinstein earlier in the process, the decision on the CIA director nomination would have reflected her input—and the transition team would have avoided the resulting perception that the President-elect and his staff are making decisions in a vacuum. Ironically, the Office of the Director of National Intelligence (ODNI) has been focused on making the intelligence community more collaborative. For more on this, see my December 18, 2008 post.

 

Getting early, broad input into decisions enhances collaboration and creates greater value whether the organization is a government, a company, a non-profit, a school, or a club.

Creating Collaboration Incentives

Too often organizational culture and processes recognize and reward internally competitive—rather than collaborative—behavior. This creates a significant barrier to creating value through collaboration. Companies may say they embrace collaboration, but the culture and processes often say something different. A key process is the recognition and reward system. Organizations committed to collaboration must reevaluate these systems to make sure they reinforce rather than undermine priorities including collaboration.

 

Since the terrorist attacks of September 11, 2001, the United States Intelligence Community has been making wholesale changes in how it operates. Among the many recommendations of the 9/11 Commission was that the sixteen federal agencies that comprise the intelligence community share information. The challenge was to create ways to share and collaborate across agencies in a culture that embraces secrecy. The impetus for cultural change is the desire to prevent future attacks.

 

On the sixth anniversary of the terrorist attacks, the Office of the Director of National Intelligence invited me to speak to the intelligence community. Some senior intelligence officials had read The Culture of Collaboration book and asked me to talk about its key themes plus other collaboration ideas relevant to intelligence.

 

In the speech, I provided a series of steps the intelligence community could take to institutionalize collaboration. One step is realigning the recognition and reward system around collaboration. I noted that in both corporations and government agencies there is a tendency to hoard—rather than share—information, because people view information as power. If they give up the goods, they feel they become weaker. Information hoarders embrace their role as the “go-to” people on a given subject. This is exactly the issue that the intelligence community and many private sector companies must address.

 

The Office of the Director of National Intelligence is making progress in multiple ways on the collaboration front.  Regarding incentives, ODNI has publicized a new policy for fiscal year 2009 that makes information sharing a factor in performance reviews. The policy applies to agencies that handle terrorism-related information.  The policy requires agency executives to hold managers and team members accountable for sharing what they know. As part of the directive, information technology departments at these agencies must build or modify systems to enhance information sharing and collaboration across agencies.

 

The key for the intelligence community—and any organization—is that information sharing becomes proactive rather than just reactive. It’s one thing to share information when it’s requested. It’s another thing entirely to take the initiative to share. In a collaborative organization, people reach across departments, functions, business units and regions to proactively share information so that the organization can pounce on opportunities. For the intelligence community, the opportunity may be thwarting an attack. For a company, the opportunity may be making a process improvement, creating a new market opportunity, making a sale or retaining a customer.

 

Organizations must ensure that collaboration is more than a buzz word, more than a check mark or mention in a performance evaluation, and is instead part-and-parcel of how people work.

Mentoring Key to Collaboration

Business is rediscovering mentoring, and the economic downturn is accelerating this trend.

 

In this challenging economic climate, organizations are realizing that the expertise of veteran team members coupled with the fresh ideas and enthusiasm of younger team members can drive innovation and profitability. Besides developing deep industry and functional expertise over time, veteran team members have weathered previous economic storms—so that experience is an added driver.

 

Mentoring is essential to collaboration and is therefore a critical component of a collaborative culture. In The Culture of Collaboration book, I identify eleven approaches a leader can use to instill collaborative culture, and establishing a mentoring system is at the top of the list. Mentoring systems can be formal or informal. Intel has established a formal mentoring process that includes an intranet-based system that matches protégés with mentors. Intel has also institutionalized mentoring through job sharing. Two leaders with complimentary skills may co-lead a business unit.

 

According to an August 18, 2008 story in The Wall Street Journal by George Anders headlined “Companies Try to Extend Researchers’ Productivity,” Texas Instruments is formally matching new hires with mentors called “craftsmen” who coach their protégés. New design engineers, writes Anders, can become “fully effective” in three or four years instead of five to seven.

 

Some companies that were founded on collaborative principles or have developed a collaborative culture over decades have successfully used informal mentoring. In these organizations, people naturally seek out mentors throughout the organization. Many Japanese companies, notably Toyota, successfully practice informal mentoring. For less-collaborative companies seeking to instill a collaborative culture, however, it’s essential to establish a formal mentoring system.

 

There are many types of mentoring relationships relevant to organizations. The traditional relationship is between an older, wiser mentor and a younger, motivated protégé. For this approach to work, the organizational culture and HR practices must value the contributions of team members regardless of age and must acknowledge that team members develop at different paces. Some team members contribute the most late in their careers, and typical performance evaluation systems fail to account for this. Malcolm Gladwell’s new book, Outliers: Why Some People Succeed and Some Don’t, addresses the disconnect between evaluation methodology and individual talents. For more on Gladwell’s Outliers, see my June 6, 2008 post.

Mentoring can transcend the traditional age-oriented mentor/protégé relationship. People with complimentary skills can mentor each other. For this arrangement to work, people must easily morph from the role of mentor to that of protégé in much the same way as a graduate student may teach undergraduates in the morning and become an apprentice to a professor in the afternoon.

Mayo Clinic’s collaborative leadership model pairs a doctor with a professional administrator for each leadership role. Aside from bringing his or her medical knowledge to decision-making, the doctor’s responsibility is to advocate the patient’s perspective in developing policy. The administrator brings a complementary perspective involving things like business processes. Dr. Glenn Forbes, CEO of the Mayo Clinic’s Rochester, Minnesota campus, told me when I was researching the book that he has had about a dozen leadership partnerships at Mayo. In some partnerships, he has played more of a mentor and in other cases he has played more of a protégé. The mentor and protégé roles are dynamic in a collaborative culture.

Collaboration Means Knowing When to Step Aside

“Do you want to be rich or do you want to be king?” That’s the question Mark Perry, general partner with New Enterprise Associates, asks founders of portfolio companies who resist being replaced. Often, venture capitalists like Mark seek to replace founding CEO’s with leaders who are more suited to take a company to the next level.

 

Collaborative leaders willingly step aside when it’s the right decision for the company. After all, many people have a stake in a company’s success including investors, employees and customers. For a founder to remain CEO because of ego and bravado can damage the company he or she has worked hard to create.  And, as Perry points out, the rewards for everybody are often greater when the founding CEO moves on at the right juncture.

 

At the 19^th Annual IBF Venture Capital Investing Conference last month in San Francisco, venture capitalists and executive search consultants debated issues including CEO succession on a panel called “Building a Management Team in 2008.” The panel included venture capitalists Mark Perry of New Enterprise Associates, Cameron Lester of Azure Capital Partners and Mark Sugarman of MHS Capital plus recruiter Aaron Lapat of J. Robert Scott. Recruiter Jeff Kuhn of FLG Partners moderated the panel.

 

The VC’s agreed that it becomes obvious over time if the CEO puts his or her own success above that of the company. This is exactly the kind of behavior smart VC’s seek to identify before they invest. Cameron Lester of Azure Capital Partners recommends asking founders the question, “If this company grew beyond you, would you be willing to step aside?”

 

Stepping aside, deferring to others, and soliciting input are among behaviors key to collaborative organizations of all sizes.  When we use collaborative tools including web conferencing, it’s important to relinquish control and let colleagues take the cursor while sharing applications. In a broader sense, collaborative people understand how their expertise contributes to collaborative work and know instinctively when to defer to those with complimentary skills.

 

Challenges for collaborative leaders include resisting the control paradigm and inviting input from all levels and functions.  Then it’s easier to recognize when changing roles, relinquishing authority, or even leaving the organization benefits the company. The acid test is whether stepping aside creates organizational value.