The Culture of Collaboration

Getting High on Collaboration

        Is collaboration or competition in our DNA?

        The answer is both, but we enter this world collaborative. We are naturally inclined to work together to create value. But competitive organizational cultures short circuit our collaborative instincts.

        Lux Narayan, CEO of the data analytics company Unmetric, analyzed two thousand New York Times non-paid obituaries. In a TED talk, he describes how he used natural language processing on the first paragraphs of these obituaries and found that the word help appeared more than almost any other word.

        The lesson is that people want to help. Our instincts are to work towards common goals. Psychologists including Sander van der Linden write about intrinsic and extrinsic motivation. When we are intrinsically motivated, we take action because we want to help or because it’s the right thing to do. In contrast, competition involves extrinsic motivation which is derived externally rather than internally. An incentive system that rewards sharp elbows in an organization is extrinsic motivation.

        The more educated people are, the more competitive they are. Our educational system has traditionally used extrinsic motivation to beat collaboration out of us. In high school, we compete to get into college. In college, we compete for admission to graduate school. In graduate school, we compete for grants and fellowships. We enter professions, careers and corporations conditioned to compete.

        In smaller communities where many people get jobs right out of high school, people are driven more by intrinsic motivation—and they’re used to working together. They organize fundraisers and cook together at the VFW, fire stations and churches. They help neighbors repair tornado or hurricane damage.

        It’s this type of attitude that we need to nourish in companies, higher education, government and in our communities. Aetna CEO Mark Bertolini lit a spark that is taking hold at Aetna. In a "corner office" interview in Sunday’s New York Times, Bertolini describes how drugs and Western medicine failed him after a serious ski accident. His success with alternative therapies propelled him to introduce yoga, meditation and an enlightened approach at Aetna. According to Bertolini, the CFO’s initial reaction was “We’re a profit-making entity. This isn’t about compassion and collaboration.”

        Nevertheless, leaders became more enlightened and began paying attention to the struggles of front-line team members some of whom were on Medicaid and food stamps. Aetna raised the minimum wage to $16 an hour and improved benefits. Next the company stopped giving quarterly guidance to investors and focused more on collaboratively creating long-term value.

        Studies show we feel good physically and psychologically when we help people. Psychologists calls this the “helper’s high.” There’s no research I know of yet, but I suspect there is also a “Collaborator’s high.”

Millennial Malarkey

“The people under 30 get it. It’s second nature to them.”

 “We have a bifurcated workforce.”

 “Let’s just turn the keys over to the Millennials. They get it. We don’t.”

These are some snippets of conversation from well-intentioned change agents who overemphasize generational differences while attempting to transform their organizations into collaborative enterprises. In The Bounty Effect: 7 Steps to The Culture of Collaboration®, I identify this scenario as the Generation Gap Trap. It’s a trap, because overemphasizing generational differences reinforces fear and internal competition which short circuit collaboration.

Undoubtedly, younger team members who are so-called “digital natives” are accustomed to using tools such as texting, instant messaging, and social media. It takes more than using tools, though, to collaborate. In The Culture of Collaboration® book, I define collaboration as working together to create value. And it’s quite possible to text, IM, or use social media without creating any value.

The point is that age is by no means a predictor of collaborative behavior.  Some people right out of college or graduate school internally compete while they use “collaborative” tools and technologies. Meantime, collaboration is baked into the behavior of some team members in their fifties and sixties. Some disciplines like aerospace engineering or animation are inherently collaborative, and therefore experience in these fields is a better predictor of collaborative behavior than age. I have worked with some “boring” industrial companies in which people work together to create value far more easily and often than team members in supposedly collaborative Silicon Valley companies.

After seemingly endless media reports describing how millennials demand a collaborative workplace, a new CEB study indicates that millennnials—those born between 1980 and 2000—are the most competitive generation in today’s workplace. Among CEB’s findings are that millennials are more driven by performance relative to others than by absolute performance and that millennials are less likely to trust peers and their peers’ input. Trust, incidentally, is one of the 10 Cultural Elements of Collaboration that my colleagues and I have identified. Without trust, collaboration is dead on arrival.

In an August 1, 2015 “Schumpeter” column in The Economist, the unidentified columnist explores some of these millennial myths and cites the CEB study. The columnist incorrectly concludes from the research that to motivate young team members, organizations should put less emphasis on collaboration. The real take-away regarding the CEB study is that emphasizing generational differences is folly.

De-emphasizing collaboration because millennials are less motivated by it would pander to a generation without guiding it. Instead, doubling down on adopting collaborative organizational structures and cultures will ultimately motivate team members regardless of generation and create far more value than command-and-control and internal competition.

Big Data, Measurement Mania and Collaboration

The world is drowning in data. The term “Big Data” appears in most technology trend articles in 2013 and reverberates at seemingly every conference regardless of industry. This reminds me of a quote attributed to Mark Twain that I used with my senior picture in the high school yearbook: “Collecting data is much like collecting garbage. You must know in advance what you are going to do with the stuff before you collect it.”

Now companies and government agencies have an idea what they’re going to do with the data they collect. And a leading use of data is measurement. Measurement mania has spread throughout every function of seemingly every organization from government agencies and universities to public school systems and corporations. Organizations can now measure traits among applicants and team members ranging from emotional intelligence to flexibility. Plus companies can calculate transactional cost-per-hire.

The relentless drive to measure people can reduce value creation and compromise collaboration. Measurement mania breeds fear and internal competition among team members and encourages leaders to focus on short-term results which create less sustainable value than achieving longer-term objectives. In a numbers-obsessed organization, leaders are more likely to cut corners by booking phantom sales or sacrificing safety in manufacturing plants. With hidden agendas running rampant, collaboration towards common goals becomes impossible.

Media reports suggest that Zynga, the company that develops online games including FarmVille, has thrived on numbers. “Relentlessly aggregating performance data, from the upper ranks to the cafeteria staff,” is the way Evelyn M. Rusli of the New York Times describes the company in a November 27, 2011 story. According to a November 28, 2011 blog post by Ryan Fleming of Digital Trends, executives nurture “fierce competition both between the groups and within each department.”

Apparent measurement mania is one of many structural and cultural issues that have plagued Zynga. A September 8, 2010 story in SF Weekly by Peter Jamison indicates that the company’s values are sub-optimal and that rather than focusing on innovation, Zynga has instead pushed team members to appropriate ideas from competitors. If these assessments are accurate, it appears that Zynga would benefit from changing the structure and culture of its organization. Principles is one step that I explain in my new book, The Bounty Effect: 7 Steps to The Culture of Collaboration.

In perhaps the most sober indication of problems with Zynga’s focus, the company reported second quarter results last Thursday that contained few bragging rights. While the results exceeded analyst expectations, the number of daily active users declined 45 percent in the quarter from the same period last year. In the three months ending June 30, Zynga’s sales fell 31 percent to $231 million. According to the Wall Street Journal, Zynga CEO Don Mattrick indicated that “getting a business back on track isn’t quick, and isn’t easy.” Mattrick recently replaced founder Mark Pincus as CEO.

While Zynga clearly faces challenges on many fronts, the company’s structure and culture are likely factors in Zynga’s woes. The company is by no means alone in the issues it faces and the possible structure and culture elements. Organizations of all kinds face exigent circumstances ranging from new competitors and disruptive market forces to natural disasters and terrorist attacks. These storms that blow through businesses provide opportunities to change.

In The Bounty Effect, I discuss how to replace command-and-control remnants including measurement mania and how to adopt collaborative principles, practices and processes among other steps. Creating value through collaboration happens only when organizations change their structures and cultures from Industrial Age command-and-control to Information Age collaborative.

BMW, Toyota and Collaborating with Competitors

They compete in the marketplace, but now they’re also collaborating.

BMW and Toyota have announced they will collaborate in two areas: the companies will share costs and knowledge for electric car battery research, and BMW will supply diesel engines to Toyota. Toyota owns the luxury brand, Lexus, and therefore BMW and Toyota directly compete in the luxury car segment. Both companies have a significant collaboration track record.

In The Culture of Collaboration book, I describe how BMW and Toyota create value by collaborating internally and with business partners. The preface, which you can read here, reveals how my visit to the BMW design center in Munich some years ago sparked the book.

So why would two competitors collaborate? Collaborating makes sense within enterprises and with partners, but the marketplace requires pure competition. Right?  Well, that depends.

Collaborating among competitors makes sense when the collaboration:

1. Creates value for both parties
2. Begins with structure and clarity
3. Involves non-differentiating processes

Clearly, the BMW/Toyota collaboration nails number one. “We think that this collaboration will allow for development of next-generation batteries to be done faster and to a higher level,” Toyota Executive Vice President Takeshi Uchiyamada said at a news conference. Both companies will share the costs of battery development. 

Toyota will reportedly use BMW’s 1.6 and 2-liter diesel engines for cars sold in Europe beginning in 2014. This is reportedly the first time Toyota has procured an engine from a competitor. According to a story by Yoshio Takahashi and Kenneth Maxwell in the December 2, 2011 edition of the Wall Street Journal, the collaboration will reduce BMW’s engine production costs per unit by increasing volume. So, value creation is at the heart of this collaboration.

What about #2, structure and clarity? Based on what I know of BMW and Toyota and their approaches to collaboration, chances are this effort involves much of both. In any collaboration among competitors, both parties must establish boundaries for collaboration at the outset. Most importantly, the competing collaborators must determine use and ownership of existing and jointly-created intellectual property. Far fewer problems arise when business unit people, engineers, marketing folks, lawyers and others from both companies hash out these concerns rather than simply handing off the issues to lawyers to hash out in a vacuum.

Regarding #3, I’ve found that collaboration among competitors works best when the effort involves eliminating redundancy in non-differentiating processes. These are typically under-the-hood processes that are not part of a company’s market or product perception.  Two companies that each make hot sauce might use the same bottling equipment. Two newspapers in the same market might use the same printing presses. Entire industries participate in consortiums for purchasing, saving each competing company substantial money. These shared, non-differentiating processes are invisible to the customer. 

Engines are invisible to all but the most die-hard car enthusiasts, so collaborating on this process arguably fits the bill as non-differentiating. Typically, car batteries have nothing to do with the vehicle perception in the marketplace. In the case of electric cars, though, the jury is still out whether the battery is invisible to the consumer. The technology is in its infancy, and therefore the market consists primarily of early adopters. These consumers are more techno-savvy, realize the lithium-ion battery is intrinsic to the product’s technology and performance, and therefore may place a heavier emphasis on the battery in their purchase decisions.

So, it remains to be seen whether battery research and development is non-differentiating for BMW and Toyota. Nevertheless, if both companies can save substantial money on development and bring vehicles to market sooner and customers perceive and actually get better electric vehicles, this collaboration will prove successful.

Non-Profit Collaboration Creating Value

The cost of internal competition plagues almost every company. But the private sector is by no means the only sector that competes. With limited funding, particularly during the Great Recession and the fledgling Great Recovery, non-profit organizations have increasingly competed for shrinking grant dollars. And while the for-profit sector may regard the non-profit sector as populated by less-competitive do-gooders, competition in the non-profit arena can rival that of private industry.

For private-sector companies, competing in the marketplace furthers objectives, namely to increase revenue and market share.  In contrast, non-profit organizations compromise their objectives when they compete with other non-profits that share their mission.  The cynical among us might believe that the first goal of some non-profits is preserving themselves to employ administrators and staff and that their service mission is secondary. Let’s assume, though, that the primary goal of most non-profits is to further their mission. In that case, collaboration among non-profits creates far greater value.

Some foundations have developed programs to encourage non-profit organizations to collaborate. The Myelin Repair Foundation, which is working to cure multiple sclerosis, has recruited five principal investigators from different universities. With input from the researchers, MRF developed a Collaborative Research Process, which addresses everything from tools to incentives. You can read more about MRF in my July 16, 2009 post. The Bill and Melinda Gates Foundation has funded a collaborative research consortia comprising 165 investigators globally to accelerate HIV Vaccine Development. For both MRF and the Gates Foundation, collaboration is reducing time-to-a-cure.

Foundations are by no means the only funders favoring and, in some cases, insisting on collaboration among non-profits that they support. In some cases, funders use a heavy hand in forcing organizations to share resources or join forces. But ordering people to collaborate misses the point. The most successful non-profit collaborations are those in which non-profits and their funders collaborate to achieve common goals.

This is exactly what’s happening with San Francisco’s Tenderloin Technology Lab, which provides computer and Internet access plus instruction to disadvantaged people looking for jobs. Because most jobs require online applications, people struggling with keeping a roof over their heads are often shut out of the job market. The lab is a collaboration among St. Anthony Foundation, San Francisco Network Ministries and the University of San Francisco. Beginning in 2001, USF was providing computers and other support to the two organizations’ separate computer labs. As demand rose with the economic downturn in 2008, USF collaborated with the two organizations to open a combined Tenderloin Technology Lab. The lab now serves a hundred people a day.

Last Thursday, I dropped into the Tenderloin Tech Lab as the collaborating organizations were unveiling an updated space. Rev. Stephen Privett, a Jesuit priest and president of the University of San Francisco, described the collaboration among UCSF, St. Anthony Foundation and San Francisco Network Ministries as three legs of a stool. “Without the three legs, the stool doesn’t stand. We can get a lot more done together than we can separately.” I chatted with Craig Newmark, founder and customer service representative, of craigslist, which supports the lab. (Yes. Craig’s business card includes both titles.) Craig praised the lab for delivering real results to real people. “One thing you learn doing customer service is what’s real,” he insisted.

Shifting from competing to collaborating can create substantial value for non-profits and the people they serve. “It involves putting down our egos and saying we can do this better,” according to Cissie Bonini, director of programs for St. Anthony Foundation, which began feeding San Francisco’s needy in 1950. And the private sector can take a cue from this non-profit collaboration. When we put our egos aside, we can share more, internally compete less—and create far greater value.

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.

 

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.

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.

Lodestar Gets Nearly 700 Nominations for $250K Collaboration Prize

The Lodestar Foundation has received 600 to 700 nominations for its first annual $250,000 collaboration prize. Today is the deadline, and I just got off the phone with Lois Savage, the foundation’s president. Lois tells me that the impetus for the prize is the lack of models for collaboration among non-profits. The prize process creates the opportunity to gather information about effective collaborative practice models that academics and non-profit practitioners can study.  

 

Too often in the non-profit sector, funders try to drive collaboration by forcing organizations with similar objectives and interests to work together. Lois calls them “shotgun weddings.” These usually fail. Similarly, successful collaboration in the for-profit workplace requires more than tools and an edict to collaborate.

 

The Collaboration Prize recognizes collaboration among two or more nonprofit organizations that would otherwise provide the same or similar services and compete for money, clients and staff. The Lodestar Foundation, created by real estate developer Jerry Hirsch of Phoenix, focuses on process and structure of non-profits rather than on specific philanthropic activities. Lodestar’s guiding principle is encouraging non-profits to use efficient business practices. Collaboration fits into that framework by maximizing resources and reducing competition among organizations tackling similar issues. Lodestar has funded cooperative ventures and new organizational structures including coalitions and mergers.

 

Here’s how the prize selection process works: La Piana Associates of Emeryville, California, a management consulting firm for non-profits, will review submissions for eligibility. AIM, the Arizona-Indiana-Michigan Alliance, will review nominations and select eight semi-finalists. AIM is a consortium that includes The Lodestar Center for Philanthropy and Nonprofit Innovation at Arizona State University, the Center on Philanthropy at Indiana University, and the Johnson Center for Philanthropy and Nonprofit Leadership at Grand Valley State University in Michigan. Sterling Speirn, president and CEO of the W.K. Kellogg Foundation, will chair a panel that will choose the recipients from among the finalists.

 

The Lodestar Foundation is one of a growing number of foundations that are embracing collaboration. In July of 2006, the Bill and Melinda Gates Foundation announced 16 grants totaling $287 million to fund an international network of highly- collaborative research consortia focused on developing an HIV vaccine. In The Culture of Collaboration book, I write about the Myelin Repair Foundation’s collaborative research model. The model creates incentives for data sharing and collaboration among scientists at different universities working on treatments for multiple sclerosis.

 

While the non-profit sector has focused recently on adopting efficient business practices, the for-profit sector may also look to non-profits for guidance. There is certainly room for knowledge transfer among both sectors to share successful collaboration models.