competition

  • 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.”

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  • 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.

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  • BMW, Toyota and Collaborating with Competitors

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

    BMW Toyota CollaborationBMW 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.

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