Organizational Culture

  • 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.

    Categories: , , , , ,

  • 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.

    Categories: , , , , , , ,

  • Why Ford Should Keep Volvo

    As Ford Motor Company refocuses on its core brand and operations, media reports indicate that the company wants to offload Jaguar and Land Rover and may be willing to sell Volvo Cars. These brands comprise Ford’s premier automotive group. For the record, Ford has denied that Volvo is on the block.

    Clearly, Ford faces challenges. So far in 2007, Ford’s sales are down more than 12 percent over the same period last year. And Ford has reportedly received initial bids for Jaguar and Land Rover. While Jaguar and Land Rover have been losing money, Volvo is another story. Volvo has been producing profits of $800 million to $1 billion per year, according to a July 17 story in The New York Times headlined “Ford Seeking a Future By Going Backward.” You can read the story here (registration required).

    But Volvo’s value to Ford goes beyond sales and even beyond the substantial expertise in safety that the Swedish company has provided to its American parent. The greatest value Ford stands to gain from keeping Volvo is the culture of collaboration. Volvo has a highly-collaborative organizational culture in which hierarchy takes a back seat to results. When they feel strongly about key decisions, junior people are quick to challenge senior leaders.

    As I mention in The Culture of Collaboration book, if Volvo’s CEO were to propose a new strategy during a meeting, a junior person would feel comfortable telling him that his ideas require further discussion. Volvo people spend considerable time reviewing, negotiating and discussing until they agree. Then the team proceeds with paced discipline. Some of Volvo’s culture is rubbing off on Ford’s other operations, particularly in Europe, as Ford “commonizes” certain parts and collaborates more across brands.

    Ford, which has been stymied in part by hierarchy and lack of collaboration, should keep Volvo and make a concerted effort to apply Volvo’s collaborative principles and culture across Ford’s operations. Volvo derives its culture in part from Swedish culture which is more collaborative than the dominant culture in the United States.

    While there are already efforts to integrate more collaborative tools into work styles, Ford needs to focus at least as much on culture as on tools. Meantime, Sweden is proud of Volvo and wants it back. The Swedish newspaper, Dagens Industri, reports that Volvo insiders are trying to arrange for Swedish institutional investors to buy Volvo, should Ford want to sell the unit. You can read the translated version of the story here.

    One advantage Ford has is that Alan Mulally has taken the helm as President and CEO. Mulally understands the value of collaboration from running Boeing Commercial Airplanes. In The Culture of Collaboration book, I write about how Boeing has reinvented itself as a large-scale systems integrator and has shifted away from designing and building airplanes by itself. Boeing now collaborates with design and manufacturing partners to produce the 787 Dreamliner and other planes. The term I use to describe Boeing’s new approach is global collaborative enterprise. Mulally should draw from his background at Boeing and from Volvo’s example to transform Ford’s culture into a collaborative one.

    Categories: , , ,

  • Collaboration Produces First Boeing 787 Dreamliner

    On Sunday, Boeing unveiled its first 787 Dreamliner at the company’s final assembly plant in Everett, Washington. With former NBC News anchor Tom Brokaw hosting the festivities, Boeing broadcasted and webcasted the event in nine languages to more than 45 countries. 787_launch Boeing Commercial Airplanes VP and GM Mike Bair made an important remark for those of us interested in collaboration: "I am so proud of the men and women of Boeing and of our partner employees in the 70 companies that have brought this airplane to the passengers of the world."

    Bair’s reference to “partner employees” is significant in that Boeing is moving away from designing and manufacturing planes by itself. Instead the company is becoming a large-scale systems integrator and collaborating with global partners to produce the 787 Dreamliner and other planes. In The Culture of Collaboration book, I describe the 3 levels of collaboration at Boeing and how CIO Scott Griffin and Sergey Kravchenko, president of Boeing Russia, worked together to create a real-time collaborative design environment and the culture to support it. The environment, culture and tools that Griffin and Kravchenko have implemented have helped create a more efficient and profitable business model for Boeing. 

    The book uses Boeing as a model for the global collaborative enterprise (GCE), which I define as “a collection of interdependent companies that engage in shared creation of value, often in real time.” The partner employees to which Mike Bair refers are the collaborators who comprise Boeing’s GCE. While more and more companies are collaborating internally, very few are in the same league with Boeing when it comes to collaborating with business partners.

    Categories: , , , , ,

  • Star Culture Declining?

    NBC announced last week that it’s dropping Dateline anchor Stone Phillips as a cost-cutting measure. Pundits quickly sized up the move as representing the decline of network television news. This may be true, but there is a broader trend at play: it’s the beginning of the end of star culture.

    NBC has been willing to pay Phillips a fancy salary, because the network was convinced that Phillips’ star power attracted viewers at least as much as the investigative journalism Dateline provides. I know a former Dateline producer who frequently referred to Phillips as the star and had to make appointments with Phillips’ secretary to work with him on stories.

    And for years, local TV stations have promoted anchors as faces you can trust. However, that’s changing. One mid-sized NBC affiliate now rarely promotes its main anchor. I know this, because the anchor is a friend of mine. But other stations are promoting anchors less and instead making news promos about viewers and their interests.

    In The Culture of Collaboration book, I write about the Myth of the Single Cowboy and how many organizations embrace a star culture. You can read more about this in the book’s introduction. The point I make is that collaborative culture creates greater value than star culture. While star culture still pervades business, the media and our collective consciousness; we’re starting to see a chink in the armor.

    Categories: , ,

  • 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.

    Categories: , ,

  • Collaboration, Mergers and Acquisitions

    The acid test for collaboration is mergers and acquisitions. Getting two organizations with different cultures to work well together while tying the knot presents significant challenges. The key is to instill collaborative culture. As I noted in my April 12 post, which you can view here, the lack of collaboration has likely derailed such mergers as Daimler-Benz and Chrysler.

    The lead story in today’s Wall Street Journal by Ellen Byron tackles Procter & Gamble’s $57 billion acquisition of Gillette, which I cover in The Culture of Collaboration book. The gist of the story, which requires registration to view here, is that combining the oral care units of P&G and Gillette involved particular complexity. Gillette’s Oral-B unit preferred meetings, while P&G’s Crest team liked memos. While P&G/Crest deliberated more, Gillette/Oral-B made relatively quick decisions.

    Both meetings and memos have limitations in merging two geographically-dispersed organizations. Meetings require scheduling and travel. Memos are one-way, asynchronous and anti-collaborative. The most effective tools for integrating two companies are often real-time tools including instant messaging, web conferencing and videoconferencing. Presence brings these tools to life by showing which colleagues are available and by enabling instant connections through text, voice and video.

    Ironically, I describe in the book how P&G and Gillette used presence-enabled tools extensively while managing the merger. The desire for spontaneous decision-making and problem-resolution drove the use of the tools. However, the tools took hold because P&G extended its highly-collaborative culture to the Gillette team, which was generally receptive. Judging from the Wall Street Journal story, there may have been pockets of anti-collaborative behavior during and after the merger. However, the broader story, which The Wall Street Journal article did not address, is that the P&G and Gillette merger is succeeding because of collaboration.

    Categories: , ,

  • Instant Messaging Changing Workplace Dynamics

    Behavior once considered a faux pas at best and professional suicide at worst is now considered collaborative. As business adopts instant messaging and other forms of real-time, spontaneous collaboration, workplace dynamics are changing. In forward-thinking organizations, instant messaging or even a spontaneous video chat with your boss’s boss or somebody several levels down the organization chart is becoming acceptable.

    By 2010, 90% of people with business email accounts will have IT-controlled IM accounts, according to Gartner. Also, Gartner reports that the enterprise IM market is growing at 20% per year through 2009. IM is more effective than email in making remote workers feel more connected. Remote workers include telecommuters, road warriors, and people working from small branch offices and outsourced workspace. By 2010, more than 40 million people in the United States will work remotely or from home, according to JALA International, which analyzes data on telecommuting. Currently, almost a third of managers work at home at least part of the time, according to the U.S. Bureau of Labor Statistics.

    To feel more connected, geographically-dispersed team members are choosing real-time, spontaneous tools like IM. Secure, corporate-sanctioned IM is beginning to eclipse email in many workplaces. With IM at their fingertips, people are checking whether colleagues at all levels of the organization are available. New capabilities allow real time on the fly connections with a single click from a spreadsheet, document or database (see my March 7 post). Rather than wait for a scheduled call or meeting, people are instead collaborating spontaneously.

    Real-time collaboration is wreaking havoc on hierarchy and is challenging the status quo. Therefore, as I point out in The Culture of Collaboration book, organizational culture must catch up with new ways of working. However, tools extend and enhance—rather than create—culture.

    Let me know how IM is impacting workplace dynamics within your organization. Feel free to post a comment or send me email at evan@thecultureofcollaboration.com

    Categories: , ,

  • Collaboration Issues at DaimlerChrysler?

    When mergers sour, many factors play a role. In The Culture of Collaboration book, I describe how anticipating, acknowledging and addressing cultural differences are key success factors in mergers. I also discuss how collaboration can bridge cultures, break down barriers and reduce the impact of silos. Against this backdrop, the book covers what went right with Procter & Gamble and Gillette and what went wrong with AOL and Time Warner.

    Now DaimlerChrysler seeks a buyer for Chrysler, and the bids are a fraction of the $36 billion Daimler-Benz paid for Chrysler nine years ago. This merger was clearly a disaster. What went wrong? Tuesday National Public Radio broadcast an excellent story by Frank Langfitt on its flagship newscast, All Things Considered. You can listen to the story here.

    In a nutshell, Langfitt reports that the companies had almost nothing in common. Barriers included language and culture. Daimler was a German company known for luxury brands and Chrysler was a scrappy, price-conscious Detroit carmaker that nearly went bankrupt in the 1980’s. Mercedes engineers had limited interest in the cost-per-unit of components and resisted sharing parts for use in Chrysler-branded vehicles for fear of diluting brand value. In contrast, Ford Motor Company—as I describe in the book—shares parts across Volvo, Ford Europe and Mazda.

    DaimlerChrysler uses collaborative tools, both real-time and asynchronous. The company has standardized on the IBM Lotus suite including Sametime instant messaging. Nevertheless, collaboration has been inadequate to break down barriers and ensure a successful merger. Why? It takes more than collaborative tools to collaborate! As I point out in the book, tools extend and enhance—rather than create—collaborative culture.

    Categories: , , ,

  • Collaborative Leadership

    Matt Villano’s excellent column headlined “Want Recognition? Share the Limelight” in Sunday’s New York Times business section tackles the “I” vs. “we” dilemma in the workplace. Use “I” to describe success, and you’re a selfish narcissist, to paraphrase the column. Use “we” and you get less credit than you may deserve.

    Nevertheless, “I” has no place in a collaborative culture. Few successes are the work of one person. Unfortunately, too many organizations embrace star cultures in which people are rewarded for competing with colleagues. We can create much greater value through collaboration than through internal competition. Fortunately for the bottom line, star cultures are becoming passé.

    And there’s a clear link between tools and culture. Presence is the ability of a person or device to connect with others and to display levels of availability. IM buddy lists introduced us to the concept. Now we can connect with colleagues and business partners directly from spreadsheets, documents and line-of-business systems. We can begin with text chat and, when appropriate, escalate into voice or video interaction.

    As we extend collaborative culture through presence-enabled tools, we are becoming more “we” oriented. In The Culture of Collaboration book, I describe the collaborative culture at the Mayo Clinic. Mayo extensively uses collaborative tools including videoconferencing and web conferencing to extend—rather than create—its collaborative culture. And Dr. Glenn Forbes, CEO of the Mayo Clinic’s Rochester, Minnesota campus tells me that at Mayo people are very uncomfortable using the word “I.”

    Categories: , , ,

ABOUT

Email Me

CATEGORIES