Collaborative Leadership

  • Ford Keeping Volvo: Collaboration a Factor?

    Collaboration was percolating beneath the surface of Ford Motor Company’s announcement last Thursday that it would focus on fixing rather than selling Volvo. I argued in an August 3 post entitled “Why Ford Should Keep Volvo” that the greatest value Ford stands to gain by keeping Volvo is the Culture of Collaboration. You can read my post here.

    In the announcement, Ford said that it has developed a plan for Volvo. The priority is to improve the unit’s financial performance, which has been stymied by several factors including foreign exchange rates. Another objective is to increase “synergies” (essentially collaboration) between Ford-brand operations and Volvo, particularly in product development and purchasing.

    In The Culture of Collaboration book, I write about highly-collaborative enterprises. Ford is included mostly because of Volvo. While Ford’s collaborative culture is a work in progress, Volvo collaborates constantly and is consensus-driven. In short, Ford has much to learn from Volvo on many levels. Clearly, Ford CEO Alan Mulally wants to accelerate collaboration between Ford and Volvo. Until recently, Alan ran Boeing Commercial Airplanes—and Boeing is among the most collaborative companies. My sense is that Alan is the right leader at the right time for Ford. He understands the value collaboration can create. Clearly, the desire to collaborate with Volvo is playing a role in Ford’s decision to keep the unit.

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  • Overcoming Fear of Failure Enhances Collaboration

    Zane Safrit, the highly-collaborative CEO of Conference Calls Unlimited, has added substantially to the conversation about how accepting and learning from failure enhances collaboration. Zane_safrit Incidentally, Zane is a living, breathing example of a CEO who leverages collaborative culture and tools to create value.

    Conference Calls Unlimited has integrated many collaborative tools into its culture. Using the basecamp Wiki product from 37 Signals, Zane notes, helps eliminate backdoor channels of conversation and decisions at Conference Calls Unlimited. But minimizing fear of failure is more about the culture Zane has helped instill than it is about the tool per se. Rather than trying to hide mistakes, team members feel comfortable sharing work and ideas for all to see. Some ideas work and a few fail, but everybody keeps learning and collaborating; and the company benefits from the cultural acceptance that it’s ok to fail. Zane and his team avoid using the word mistake and instead focus on learning and collaborative accomplishments. And the result is that Conference Calls Unlimited, Zane feels, makes fewer mistakes because of the collaborative culture and environment. You can read Zane’s post here.

    Meantime, Citigroup and Merrill Lynch are searching for CEO replacements in the wake of the sub-prime mortgage meltdown. The problem, according to a story (subscription required) by Aaron Lucchetti and Monica Langley in Monday’s Wall Street Journal, is that these firms suffer from a thin talent pool. It seems that the lack of internal CEO candidates stems from a Wall Street culture that is so focused on quarterly returns that leaders quickly lose their jobs if they fail to deliver.

    Something else that’s at play on Wall Street is the star cultures that plague many firms. An individual must perform as a star analyst, star trader, or a star executive. If he or she fails, the company is quick to sack the individual. Trust is out the window, and the organization—as we’re now seeing—suffers. This kind of culture gives rise to scandals including numbers fudging. Enron, which had a star culture, comes to mind. In collaborative cultures, team members brainstorm, make mistakes, chalk up successes, and often create far more value for the organization. Overcoming the fear of failing advances collaborative culture and can deliver significant returns.

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  • Collaboration and the New York City Subway

    Collaboration enhances efficiency and innovation and keeps the equipment maintained and the trains running on time, literally, for the New York City subway system. New_york_subway_1979 In the 1970s, the New York subway system was in a shambles. I know, because I rode the subway to school in those years when I was growing up in New York. System delays and breakdowns were commonplace.

    (Above image: A New York subway car in 1979. Photo by Doug Grotjahn, collection of Joe Testagrose)

    Part of the problem was that the transit system rarely maintained subway cars and instead bought new ones when it had money, which was rare. This, according to a story by William Neuman headlined “After 45 Years, Subway Chief Has Reached His Stop” in the October 13 edition of The New York Times. You can read the story here. Neuman writes that in the 1960’s, a transit system mechanical engineer named Doug Tilton believed there was a better way and developed a plan to perform scheduled maintenance on subway cars, which was then a novel concept. In those days, according to the article, “most managers at the transit agency were not interested in new ideas from their employees.”

    In the 1970’s,Tilton gained traction for his proposal by collaborating with Michael Lombardi, an instructor and manager at the transit system. Lombardi saw an opportunity, because the transit system had hired a consultant to address subway breakdowns. Lombardi and the consultant promoted Tilton’s idea and gained the support of top transit officials.

    In 1981, the state of New York authorized a multibillion dollar plan to overhaul the city’s transit system. This helped institutionalize the program which is now known as the Scheduled Maintenance System. The transit authority has extended the program to the bus fleet, and transit agencies in other cities have adopted similar programs.

    Lombardi told the Times that in 1979, subway cars broke down on average every 4800 miles traveled. Today they break down every 149,000 miles. Collaboration certainly has created value for the New York City subways. Next month, Michael Lombardi will retire as the senior vice president for subways at New York City transit. By collaborating with Tilton and the consultant, he accomplished more than he ever could have alone.

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  • Collaboration Roundup: CEO private lives, Google collaboration, and Adobe CS3

    I’ve been on the road speaking on The Culture of Collaboration a lot recently. Meantime, material for this blog has been piling up, so I’ll share a few items:

    There was a fascinating story in The Wall Street Journal on September 5 headlined “Scholars Link Success of Firms to Lives of CEOs” by Mark Maremont. You can read the story for free here. The story describes new research involving how the personal lives of CEOs may impact stock prices of their companies. The theory is that a family death or a recent large house purchase are distractions that negatively affect shareholder value.

    Among the studies the story mentions is one by two Penn State professors called “It’s All About Me” which is to be published in Administrative Science Quarterly. The study concludes that narcissistic executives take greater risks, leading to bigger swings in profitability of their companies. You can read the paper by Arijit Chatterjee and Donald Hambrick here.

    The Wall Street Journal story hints that a CEO-centric star culture drives many companies. This is shortsighted leadership. It’s no surprise that narcissistic executives expose their companies to uncalculated risks. Too often, star cultures breed shoot-from-the-hip leadership rather than consensus building through broad input. As companies adopt more collaborative cultures, swagger and narcissism become less appropriate and one leader’s distractions are less likely to jeopardize the company.

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    Google Docs let people collaborate on documents screen-to-screen. I’ve been checking out the tool recently. The drawback is that it’s not quite real time, but the potential is huge. Google hosts your documents for free, and you and your colleagues can log in and access them from anywhere.

    Google has just enhanced the service with the ability to create and collaborate on presentations from anywhere. The capability stems in part from Google’s acquisition in April, 2007 of Tonic Systems. For more on this, check out Clint Boulton’s September 18 story in eWeek headlined “Google Offers ‘Collaboration in the Cloud.’”

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    I’ve been meaning to write more about Adobe and its tools. Core customers for such Adobe products as Illustrator, Photoshop, Flash and Dreamweaver are highly creative—and creative people are often collaborative. I’ve been checking out some of Adobe’s products recently. Acrobat Connect is the web conferencing tool that enables screen-to-screen sharing and annotating of Adobe’s other products and other applications. You can read my June 18 post about Acrobat Connect here.

    I’ve also been checking out the new Adobe Creative Suite 3, which coupled with Acrobat Connect, lends itself to collaborative design. Using CS3, geographically-dispersed designers can create vector graphics, develop web sites, edit images and layout pages collaboratively. Marketing people can collaborate with designers in real time, annotating everything from brochures to web designs.

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  • Hierarchy Busters Enable Collaboration

    Hierarchy is a huge impediment to collaboration. In organizational cultures that emphasize hierarchy, people feel compelled to go through channels. This prevents front-line people from contributing to decisions and also discourages leaders from getting real-time, unfiltered information from the field. Smart organizations encourage collaboration across levels, functions, business units and regions.

    I was glad to read in yesterday’s Wall Street Journal that SK Telecom of Korea has taken fundamental steps to reduce the role of hierarchy. Evan Ramstad writes in his "Managing" column headlined “Pulling Rank Gets Harder At One Korean Company” that SK Telecom has replaced the five ranks that employees used to address each other with one rank, manager. You can read the article here (reg. required).

    I live in California, where people in business typically call each other by their first names. For somebody to call his or her boss “Director Jones” would seem absurd. But even in Silicon Valley companies with supposedly reduced hierarchies and relaxed environments, trappings of position exist such as triple-sized cubicles. In other regions, hierarchy is more pronounced. People address senior leaders as “Mr. or “Ms.” and they talk of vice presidents in hushed tones as if they might get in trouble for even uttering the names of big shots.

    As growth has slowed, SK Telecom has begun encouraging more debate and input from all levels. The idea is to spark more creativity and risk-taking, which are certainly important to collaborating. South Korea’s business culture has traditionally concentrated decision-making with senior executives “to protect their power” as Ramstad notes. Clearly, SK Telecom has realized that, in Bob Dylan’s words, the times they are a-changin’ and that a hierarchical culture was costing the company money.

    Other companies should take notice that reducing the role of hierarchy and instilling the culture of collaboration is in vogue—and will create value.

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  • Collaboration and Star Culture

    Collaboration requires collaborative culture. That’s the whole point of this blog. The opposite of collaborative culture is star culture, which our collective culture—particularly in the United States—perpetuates. The media is certainly complicit, because celebrity stories draw audiences. Therefore, the media has a vested interest in manufacturing stars—not just Hollywood people, but business leaders, athletes, entrepreneurs, surgeons, chefs and others. Food writers are particularly culpable, and we’ve certainly seen the celebrity craze spread to winemakers.

    Now, apparently, star culture is trying to envelop tequila makers. Last Friday, the San Francisco Chronicle ran a short article by Camper English headlined “Next big thing: Tequila bottle signings.” You can read the article here. The story begins, “Further evidence that distillers are the new rock stars…” We learn from the article that Carlos Camarena, owner and third-generation master distiller of El Tesoro Tequila, will be in San Francisco to sign autographs on $185 bottles of tequila at a liquor store.

    Clearly, Mr. Camarena is not alone in contributing to the success of El Tesoro. According to El Tesoro’s web site, making tequila begins with the jimador, the person who hand picks perfectly-ripe agaves and separates the pina, the juicy blue core, from the rest of the plant. “Most other tequila producers use an automated system that processes the entire stem,” the web site notes. Next workers cut the pinas into quarters with a special ax. In the next stage, workers use the traditional method of baking the pina quarters for 36 hours and cooling them for another 36 hours. Next workers use a one-ton stone wheel called a tahona to crush the pinas, extracting their juices. There are three more steps.

    The point is that many people with a variety of expertise collaborate to make El Tesoro tequila. While I appreciate the marketing benefits of Mr. Camarena signing tequila bottles during his rock star-style tour, this feeds into star culture and sends the wrong message to the public and to El Tesoro team members. Promoting the CEO as a star may produce a momentary marketing bounce, but a collaborative culture sustains greater business value than a star culture.

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  • CEO’s Becoming Collaborative

    The word collaboration appeared nowhere in the excellent page-one story by Alan Murray headlined "After the Revolt, Creating a New CEO" (subscription required) in this past weekend’s edition of The Wall Street Journal. However, collaboration certainly plays in the background.

    The gist of the story is that the new crop of CEO’s running some of the world’s largest companies are less powerful, less arrogant, and more humble.  One example the story cites is Jim McNerney, CEO of Boeing who is “quick to point out the limits of his own power.” The story quotes McNerney as saying “I’m just one of eleven [board members] with a point of view.”

    Boeing is among the companies featured in The Culture of Collaboration book. The chapter on collaborative leadership discusses how organizations that create value through collaboration often develop and promote less autocratic and more responsive executives. This reinforces collaborative culture. Examples include Toyota, The Dow Chemical Company and the Mayo Clinic.

    Mayo regularly rotates its leaders including the CEO, who must keep practicing medicine while leading the organization. This keeps the CEO in touch with the trenches and collaborating with other doctors. Mayo, which was founded on principles of collaboration, has deftly integrated collaborative tools including videoconferencing, web conferencing and innovative messaging into its operations.

    Effective leadership has always required collaboration, but now collaborative leadership is in vogue.

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