the bounty effect

  • Common Sense Trumps Data

    I was in northwest Ohio this summer where Trump yard signs were everywhere and Clinton signs were practically nowhere.

    What changed? The increasing role of data.

    Most Clinton staffers apparently believed that targeted election canvassing and social media produce greater results than yard signs, campaign buttons and bumper stickers. And the data suggests that physical signs have only a slight impact on campaigns.

    Hillary Clinton online ad

    The Hillary Clinton campaign favored online ads like this one over yard signs.

    The lack of Ohio yard signs was a shock in that I covered presidential campaigns in Ohio during my early career as a reporter for WTOL-TV, the CBS affiliate in Toledo. Yard signs always dominated the landscape during election season. For voters looking around for clues of which way the wind is blowing among friends and neighbors, yard signs matter.

    Yard signs illustrate how data and common sense can diverge. Common sense suggests that campaign signs, particularly those on residential lawns, have a significant impact. Many people vote for the candidate their friends and neighbors support. And regardless of ads and chatter on social media, there’s nothing quite like the real-world visual reinforcement of a candidate’s signs dominating one’s street or neighborhood.

    And Ohio is by no means the only state that lacked Clinton yard signs.  Published reports indicate that Trump signs dominated rural Pennsylvania. Last January, Wired profiled Edward Kimmel, a part-time campaign photographer and Clinton supporter, who noticed the visual shift from previous presidential campaigns in Iowa. Kimmel voiced concerns about the impact a lack of signs might have on voter turnout. Kimmel was prescient.

    A tyranny of data short circuited the Hillary Clinton campaign and contributed to Donald Trump’s victory. From the bubble of its Brooklyn Heights headquarters, the Hillary Clinton campaign apparently viewed yard signs as obsolete in the age of targeted digital canvassing and social media.

    The Clinton campaign is just one example of how relying exclusively on data can compromise value. Wells Fargo emphasized measurement over common sense, and its reward system encouraged team members to cut corners and open unauthorized accounts for customers as I detailed in my September 13, 2016 post. The company is now paying the price in fines, lost business and compromised reputation.

    Donald Trump yard sign

    A Donald Trump for President campaign yard sign in West Des Moines, Iowa. Photo by Tony Webster. Licensed under CC BY 2.0

    Measurement mania and the tyranny of data are nothing new. In my most recent book The Bounty Effect: 7 Steps to The Culture of Collaboration , I write about the myopic approach dubbed “management by measurement” which dates back to the so-called Whiz Kids. In the 1940s, the Whiz Kids were junior faculty from Harvard Business School recruited by Charles “Tex” Thornton to run the Statistical Control unit of the Unites States Army. The group included Robert McNamara, who would later become president of Ford Motor Company, secretary of defense and president of the World Bank.

    The Whiz Kids applied statistical rigor in running the army, and later Henry Ford II hired the team to bring a similar data-driven focus to Ford. The Whiz Kids also introduced bureaucracy and hierarchy and developed rules requiring that, among other things, memos from vice presidents must appear on blue paper to highlight their importance.

    The Whiz Kids sacrificed long-term value for short-term targets by limiting investment in new equipment and R&D. Plus Ford’s products suffered when plant leaders failed to prove through numbers the necessity for new equipment. Ultimately, this myopic focus on data led to foreign competition from companies that focused as much on engineering and production as on finance.

    The Clinton campaign is by no means the only organization blinded by data. Organizations in every sector and industry suffer from measurement mania that impedes collaboration and value creation. In The Bounty Effect, I detail Five Measurement Counter-Measures to prevent data from short circuiting collaboration and compromising value. One of them is “perform a common sense reality check.”

    Had the Clinton campaign used common sense to check its data, yard signs might have sprouted in the industrial Midwest and, more broadly, the campaign might have adopted a message that would have resonated with swing-state voters.

    Regardless of level, role, region, organization or sector…never rely on data without a common sense reality check.

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  • Accenture Scraps Reviews, Rankings and Joins The Bounty Effect Bandwagon

    Nothing impedes collaboration more than outmoded recognition and reward systems. And replacing annual performance reviews and rankings advances collaborative culture, behavior and organizational structure.

    Many organizations promote themselves as collaborative while simultaneously reinforcing internal competition through annual performance reviews and rankings. This process squanders time and distracts the organization while pitting team members against one another. Performance reviews and rankings incent team members to hoard information and maintain hidden agendas rather than share ideas and work together towards common goals.

    Accenture is the latest major organization to eliminate rankings and performance reviews. “Massive revolution” is how Accenture CEO Pierre Nanterme characterized the organizational change as quoted in the July 21 edition of The Washington Post.

    In the Spring of 2013, Microsoft Co-Founder Bill Gates read an advanced copy of The Bounty Effect: 7 Steps to The Culture of Collaboration® which demonstrates why ranking team members falls short and how a Collaborative Reward System creates greater value than an internally-competitive system. Replacing performance reviews is the first of seven components of the Collaborative Reward Process (CRP) that I outline in the book.  In November, 2013, Microsoft eliminated rankings of team members. You can read more about Microsoft’s reward system shift in my January 20, 2014 post.

    Many legacy recognition and reward systems are based on the premise that individuals have different goals and must be motivated using “carrot-and-stick” approaches. But in a collaborative organization, people share the same goals so “carrot-and-stick” performance reviews and rankings are obsolete.

    So why do organizations persist in ranking and annually reviewing the performance of team members? The justification is weeding out non-performers and promoting “star” players, but the real reason is clinging to an outmoded command-and-control organizational structure. Remnants of this structure include not only performance reviews and rankings, but also organization charts, meetings and mission statements. These remnants inhibit organizations from maximizing value through collaboration.

    Undoubtedly, more organizations will follow Accenture, Microsoft and other major companies in replacing rankings and annual performance reviews—and in adopting a more collaborative organizational structure.

     

     

     

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  • General Motors and the “C” Word

    General Motors CEO Mary Barra is taking aim at the “C” word.

    “I hate the word culture,” Barra is quoted as saying in an article by Joseph B. White in the Mary BarraSeptember 30 edition of the Wall Street Journal. “Culture is really just how we all behave,” according to Barra. The comments are curious in that Barra testified before a Congressional subcommittee last June that she would

    GM CEO Mary Barra outlines new strategic plan  (Image copyright GM)

    not rest until GM’s “deep underlying cultural problems” are resolved. The subcommittee was investigating GM’s failure to recall thousands of cars with defective ignition switches for eleven years.

    It’s myopic to dismiss the word culture. Merriam-Webster Dictionary’s third definition of culture is “a way of thinking, behaving, or working that exists in a place or organization.” GM would benefit from focusing on these issues plus the broader context of the word culture. In his Tusculan Disputations, the ancient Roman orator Cicero introduced the concept of culture as cultivation of the soul as a farmer cultivates crops. Culture has come to represent beliefs and customs of societies. Cultural anthropologists study social structure and customs in populations ranging from villages to corporations.

    Culture is inextricably intertwined with collaboration in that how “we all behave” in Barra’s words determines whether we’re working together towards common goals or working at cross purposes. Ironically, in a July 28, 2014 post, The Culture of Collaboration® blog took General Motors to task for overemphasizing culture change without structural change. Culture change typically delivered as an edict often highlights the desired result without providing a way to get there. This common prescription from leaders, pundits and management gurus often fails, because the shift originates with executives without detail, discussion or broad buy-in. Meantime, the outmoded organizational structure stays the same. To achieve collaborative culture and the payoff that collaboration provides, it’s necessary to change the organizational structure. Then culture change can happen.

    On October 1, GM outlined its new strategic plan that focuses on technology and product advances, growth in China, establishing Cadillac as a separate business unit “headquartered” in New York City and delivering “core operating efficiencies.” Incidentally, the notion of headquarters is a relic of Industrial Age command and control. Nowhere does the plan mention structural change, which the automaker sorely needs. Changing GM’s structure requires overhauling everything from how team members share information across levels, roles and regions to how the company recognizes and rewards people as I detail in my book, The Bounty Effect: 7 Steps to The Culture of Collaboration®.

     

     

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  • Health Insurance Company Experiences The Bounty Effect

    When Presbyterian Health Plan denied Dave Bexfield of Albuquerque, New Mexico reimbursement for a multiple sclerosis treatment trial, Bexfield launched a campaign to recover the $200,000 he spent on the treatment. He contacted media, bombarded Presbyterian with calls and emails, and ultimately lined his garage walls with the insurer’s denial letters, according to an August 1, 2014 column by David Segal in the New York Times.

    The treatment was a stem cell transplant trial sponsored by the National Institutes of Health. The trial worked in that Bexfield no longer takes M.S. medication and the disease is in remission. But the stem cell transplant was apparently not a covered benefit when Bexfield received the treatment. Ironically, Presbyterian Health Plan added this treatment to the benefits for Bexfield’s plan a few months after he finished the trial. A Presbyterian spokesperson reportedly called the timing “unfortunate.”

    Unfortunate indeed for Presbyterian Health Plan in that Bexfield refused to back down. Presbyterian reportedly insisted that the only reason the company had added stem cell transplants for M.S. as a benefit was that the federal government had mandated it. So Bexfield submitted a Freedom of Information Act request and received documents indicating there was no federal mandate. This suggested that Presbyterian had decided on its own based on the treatment’s merits to begin covering stem cell transplants after Bexfield had completed the trial. After receiving many additional letters and media calls, Presbyterian changed course. Presbyterian Health Plan President Lisa Farrell Lujan agreed to reimburse Bexfield not only the $200,000, but also an additional $198,000 in interest at 18 percent, according to the Times.

    Boom. The Bounty Effect had arrived at Presbyterian Health Plan, and the company seized the opportunity to change. The Bounty Effect happens when exigent circumstances compel businesses, governments and organizations to change their structures from command-and-control to collaborative. The exigent circumstances were groundbreaking advances in stem cell research. Bexfield’s campaign and the resulting media attention drove The Bounty Effect home. In this situation, Presbyterian adopted a more collaborative approach. Often structural change starts small and grows. This episode may pave the way for more fundamental structural changes at the company.

    In my latest book, The Bounty Effect: 7 Steps to The Culture of Collaboration, one of the 7 steps is Processes. And a key process is employing Measurement Counter-Measures which curb the measurement mania that can complicate collaboration and compromise value. The point is that a maniacal focus on measurement can produce the opposite of the intended result. Clearly, Presbyterian’s measurement mania produced myopia in that claims representative had difficulty seeing beyond the numbers.

    The $200,000 for the stem cell transplant would cost the insurer in the short run, but the money produces a living, breathing example of an insurance customer who may potentially avoid further treatment for M.S. and save the insurer plenty. One measurement counter-measure is to perform a common sense reality check. If the numbers defy common sense, that’s our cue to pause and reconsider. Employing Measurement Counter-Measures is often the hardest collaborative process for financial professionals to adopt.

    Lujan, Presbyterian’s president, is the company’s former CFO and was previously an audit manager with Arthur Andersen. She told the Times that the individual decisions Presbyterian made in Bexfield’s case were correct but that consistent policies had to be balanced against fairness. “When I looked at the forest, I came to a different conclusion than those who had looked at each individual tree,” according to Lujan.

    The old reimbursement decision was obsolete, because of scientific breakthroughs. Clinging to an antiquated coverage decision would expose the company to possible litigation, bad publicity, and a hit to its reputation. More fundamentally, the old decision—and the structure that produced that decision—failed the fairness test and the common sense reality check.

    The Bounty Effect prompted Lujan to take a key step—but changing the structure requires much more. If only the CEO can see the forest and use a fairness test, the organization flies blind and the business suffers. In adopting a collaborative structure, the challenge for Presbyterian and for many organizations is empowering people at all levels to consider the big picture, participate in decisions and take action. This requires, among other shifts, changing the recognition and reward system and enabling spontaneous interaction so that all Presbyterian Health System team members share a view of the forest and not just individual trees.

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  • Fixing General Motors and Curing Veterans Affairs

    General Motors chief executive Mary Barra has vowed to change the company’s culture and has testified
    GM Logo1before Congress that GM has taken steps to increase internal transparency and information sharing. This commitment follows a report exposing that GM discouraged raising or sharing safety concerns. The company commissioned the report, because GM failed to recall thousands of cars with defective ignition switches for eleven years.

    Similar calls for culture change have followed the Veterans Health Administration’s wait-for-care and numbers fudging scandal. President Obama has remarked that VA Image the VA needs a culture change so that “bad news gets surfaced quickly.” Not content to wait for culture change, House and Senate negotiators today announced a $17 billion plan that, among other provisions, provides money to lease clinics so that veterans can get treatment outside the VA’s system.

    Culture change emphasizes the result without a way to get there. It’s like telling a poor person to become rich. Culture change has become a common prescription from leaders, pundits and management gurus. The prescription often fails, because the shift originates with executives without detail, discussion or broad buy-in. Meantime, the organizational structure stays the same.

    The Bounty Effect has hit GM and the VA. As I describe in my new book, The Bounty Effect happens when exigent circumstances compel businesses, government and organizations to change their structures from command-and-control to collaborative. The solution for these organizations is to seize the opportunity The Bounty Effect provides and fundamentally change their structures so that people can spontaneously engage one another, share information and participate in decisions regardless of level, role or region. This will cost far less than $17 billion.

    Many organizations, including GM and the VA, still operate with a structure that has barely changed since the Industrial Age.  This obsolete structure based on command-and-control promotes hierarchy and internal competition plus rewards information hoarding, secrecy, and cutting corners. GM and the VA also share a need to go through channels. This inhibits the participation and information flow critical to Information Age organizations.

    Safety concerns apparently never reached GM’s chief executive, nor did problems with scheduling reporting systems apparently flow to former VA Secretary Eric Shinseki.  And both organizations apparently discouraged people from sharing concerns. VA supervisors often retaliated against workers who raised valid complaints, according to a White House report.

    GM chief executive Mary Barra has said that culture change must be leader-led. Barra has also promoted a program called “speak up for safety” plus three GM “core values.” These are “the customer is our compass, relationships matter, and individual excellence is crucial.” But a leader’s words have modest impact without structural change. Yes, GM has added safety investigators, increased safety data mining, and created a vice president of safety position. Nevertheless, none of these actions will reduce information hoarding and internal competition. None of these actions will change GM’s structure from command-and-control to collaborative. 

    When an organization rewards obsolete behavior, change dies on the vine despite a leader’s mandate. If hoarding and hiding information or failing to act on knowledge results in a raise or a promotion, people are unlikely to share information or take action. Pushing safety issues at GM was seemingly no path to promotion. VA managers reportedly kept patient names off the official waiting list, because bonuses depended on concealing information. Recognition and reward systems in obsolete organizational structures often reinforce bad behavior and the status quo regardless of culture change efforts. The same flawed practices and processes that encourage internal competition and information hoarding lead companies to compromise safety and fudge numbers.

    Changing the VA’s structure will enhance transparency and efficiency while saving money rather than costing the $17 billion Congress is authorizing. Changing GM’s structure will ensure that people across the organization share and act on critical information.  And changing the structure of GM and the VA will accomplish what many leaders and pundits are recommending: culture change.

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  • Bankruptcy of Purse–and of Culture

    Can an organization’s culture portend disaster?

    For the answer, we need look no further than some of the most high-profile corporate scandals. Lehman Brothers, Worldcom and Enron— companies that experienced some of the largest bankruptcies in history— used accounting gimmicks which stemmed from bankrupt cultures. Command-and-control, internally-competitive, autocratic, star-oriented organizational cultures breed unethical and—in extreme cases—illegal behavior.

    Now Big Law gives us a new don’t-let-this-happen-to-you poster child for embracing the right culture. Leaders of the once top-tier law firm of Dewey & LeBoeuf overstated revenue and used accounting tricks to hide losses and cash flow shortfalls, according to a 106-count indictment that a New York state grand jury handed up last Thursday. If convicted of the most serious charges, Chairman Steven Davis, Executive Director Stephen DiCarmine and Chief Financial Officer Joel Sanders, each face up to 25 years in prison. Dewey filed for Chapter 11 bankruptcy in May of 2012. The alleged financial shenanigans began as billings dipped and clients evaporated during the depths of the 2008 financial crisis.

    But Dewey’s problems began long before the firm’s leaders allegedly began their deceit, as I describe in my new book, The Bounty Effect: 7 Steps to The Culture of Collaboration®. Formed in 2007 from a merger of two venerable firms, Dewey Ballantine and LeBoeuf, Lamb, Greene & MacRae, the firm reportedly employed three thousand people globally at its height. Dewey’s roots date back a century, but it took roughly five years for the firm to come unglued.

    Among other cultural defects, the newly-merged firm created a two-tier partnership system in which it treated “stars” differently than other “partners.” After the merger, Dewey began recruiting so-called “lateral partners” rather than promoting from within. These partners received multiyear, multimillion-dollar guarantees. Dewey’s secretive culture prevented the firm from sharing this information with all of the partners. While one lateral partner reportedly had a six-million-dollar-a-year guarantee, other partners received four hundred and fifty thousand dollars a year.

    The stars were those who the firm expected would bring in the most business. Dewey considered other partners “service partners,” the ones who wrote briefs and performed or managed the legal heavy lifting. When word of the wide compensation gap spread, the service partners—many of whom had worked for the firm much longer than the newly-recruited “stars”—became resentful. Clearly, star culture had compromised trust and poisoned the organization. And, guess what? Some highly-touted “stars” were unable to live up to their hype, and therefore revenue fell short of what Dewey needed for paying annual compensation commitments to these “stars.”

    The merger occurred right before the financial crisis. By the end of 2008, Dewey had more than $100 million in term debt outstanding and available lines of credits totaling more than $130 million with four banks. The firm’s credit agreements required Dewey to maintain a minimum cash flow. To abide by this covenant, the firm’s leaders and others conspired to misrepresent Dewey’s financial performance, according to the indictment.

    So brazen were the defendants, according to the indictment, that they created a document called the “Master Plan” which outlined fraudulent accounting tricks. Plus they reportedly discussed the alleged fraud in a series of emails. One of these apparently read, “Can you find another clueless auditor for next year?”

    Suppose Dewey had fostered a collaborative rather than command-and-control culture and organizational structure? What if Dewey had shared rather than hoarded information, harnessed broad input into decisions, and encouraged partners to work together both in developing business and producing legal work? The firm may have weathered the financial crisis rather than devolving into apparent unethical and possibly illegal activity.

    Dewey is by no means the only law firm with a two-tier partnership system. Nor is it the only firm that embraces a star-oriented, command-and-control culture. Many law firms and organizations in multiple industries and sectors run the risk of financial implosion, because their cultures are bankrupt. The solution, as I describe in The Bounty Effect, is to change the structure of organizations from Industrial Age command-and-control to Information Age collaborative

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  • Rank and Yank or Differentiation?

    Sometimes corporate speak or shop talk migrates from cubicles to the front page. This is exactly what happened to the terms “performance review” and “performance appraisal” last November. That’s when Microsoft eliminated its so-called “stack ranking” of team members.

    Last spring, Microsoft Chairman and co-founder Bill Gates read an advanced copy of The Bounty Effect: 7 Steps to The Culture of Collaboration®. The book shows how to change organizational structures from Industrial Age command-and-control to Information Age collaborative. Regarding performance reviews, The Bounty Effect demonstrates why ranking team members falls short and how a Collaborative Reward System creates greater value than an internally-competitive system. Ranking is essentially grading on a curve, because the organization often pre-determines which percentage of its workforce must fall into categories such as below target, target, above target and significantly above target. And grading on a curve fosters internal competition rather than collaboration. How encouraged are team members to share information and ideas if they must compete with colleagues for rankings? Not very. More likely, people will try to fake collaboration.

    Headlines regarding Microsoft’s shift include “Stack Ranking Falls Outs of Favor” in Computerworld and “Microsoft Kills Its Hated Stack Rankings” in Bloomberg BusinessWeek. Within several days of Microsoft’s elimination of stack ranking, I was on a flight from Taipei to San Francisco reading The Wall Street Journal Asia edition. And I was fascinated to see a condemnation of Microsoft’s shift and a defense of ranking team members from Jack Welch, who once was CEO of a company known for using what Welch calls “differentiation.” That company is General Electric.

    Here’s how Welch describes differentiation: “It’s about building great teams and great companies through consistency, transparency and candor. It’s about aligning performance with the organization’s mission and values. It’s about making sure that all employees know where they stand. Differentiation is nuanced, humane and occasionally complex, and it has been used successfully by companies for decades.”

    In The Culture of Collaboration® book, I describe “differentiation and affirmation.” The process is more commonly called “rank and yank,” a term that Welch considers “media-invented” and “politicized.”  One company that adopted the approach and created a star culture was Enron, which went bankrupt for many reasons.  Star culture is a hallmark of the Industrial Age command-and-control organization. Such organizations pit people against one another and hidden agendas multiply. In contrast, a collaborative organization encourages team members to work in concert towards common goals.

    Welch seems to endorse star culture in describing “feedback and coaching” as one component that makes “differentiation” work. “Your stars know they are loved and rarely leave. Those in the middle 70% know that they are appreciated, and they receive clear guidance about how to improve their performance. And the bottom 10% is never surprised when the conversation sometimes turns, after a year of candid appraisals, to moving on,” according to Welch.

    Further, Welch endorses the “bell-curve” grading aspect of “differentiation.” “We grade children in school, often as young as 9 or 10, and no one calls that cruel. But somehow adults can’t take it? Explain that one to me.” Well, here it goes, Jack. Curve grading is no more helpful to children in school than it is to organizations. Our educational systems, particularly in the United States, too often foster unnecessary competition rather than collaboration. It’s no wonder why corporations have difficulty migrating from command-and-control to collaboration. Part of the reason is that team members competed for grades in school, competed for graduate school admissions while in college, and then competed for limited grant money and fellowships while in graduate school. In particular, law schools often grade first-year students on a curve in part to limit merit scholarship awards. Eliminating curve grading in which a fixed percentage must fail is a major step towards reducing internal competition and curbing the “star culture” that complicates collaboration.

    Ranking team members is part of the broader recognition and reward process. This process typically features performance reviews, which distract organizations and waste an incredible amount of time. The Bounty Effect describes how to replace performance reviews with a far more collaborative approach. Whether we call ranking team members “differentiation” or “rank and yank,” this Industrial Age command-and-control approach has no place in an Information Age collaborative organization.

     

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  • Media Embraces The Bounty Effect’s Structural Change

    There are encouraging signs that the media is recognizing that the structure of organizations must change to enhance collaboration and maximize value. And when the media gets on board, organizations often follow.

    Several media outlets that have featured The Bounty Effect: 7 Steps to The Culture of Collaboration have focused on changing organizational structures from Industrial Age command-and-control to Information Age collaborative. This is crucial, because The Bounty Effect is about seizing opportunities to design and build new organizational structures that exigent circumstances provide. So, reviewers and journalists have clearly understood the central theme of the book.

    Reviewing The Bounty Effect in The Washington Times, James Srodes describes the big picture of why changing organizational structures is necessary. He relates the need for collaborative structures to the changing “hinges of history” in which a decades-long trend suddenly shifts. Srodes mentions a global economic state where little or no growth is the norm and dwindling raw materials and political instabilities among other trends impacting the planet. This insightful review endorses the book’s approach:

    “If you recoil at the notion of folks sitting around a boardroom campfire singing “Kumbaya,” Mr. Rosen offers an ingenious example of the essence of the collaboration strategy. The “Bounty” in his title is in fact the HMS Bounty, famed in Hollywood’s bogus history for its portrayal of a despotic (command-and-control) Captain Bligh.”

    In a question-and-answer article with me entitled “Can Collaboration Be Forced?” in Talent Management magazine, Kellye Whitney also focuses on changing the organizational structure. My answer to a question about what talent leaders can do to change command-and-control structures echoes the “hinges of history” shift in the Washington Times review:

    “In the workplace we should constantly be working to create value. It used to be that companies could make a decent buck by just telling people what to do. A few people were paid to do the thinking and everybody else was paid to carry out orders. But with globalization, increased competition and the boom and bust cycles, companies are realizing that it’s all hands on deck.”

    In another question-and-answer article entitled “The New Way We…Collaborate” in Avaya Innovations magazine, Eric Lai focuses the interview on changing organizational structure and culture. Here’s my response to his question about the role of technology in changing the structure and culture:

    “The Greek philosopher Socrates believed that the way to truth is through dialogue. Socrates rejected writing because it meant—quite literally in Ancient Athens—that ideas were set in stone or wax and that the process of developing those ideas was dead. Email is the modern equivalent of setting ideas in stone. If given the choice, Socrates would have found a lot more truth in using real-time tools rather than email. Email is essentially an updated version of the old memorandum. In command-and-control organizations, people send an email and wait for a response. An email is often a report or a request for a decision. There is no real-time dialogue in email, so Socrates would have found little truth in email.”

    So the media is beginning to join the growing numbers of organizations that have jumped on the structural change bandwagon.

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  • World Bank, Microsoft Changing Structure for Collaboration

    More and more organizations are recognizing that obsolete organizational structures are impeding collaboration. I identify this issue and detail solutions in my new book, The Bounty Effect: 7 Steps to The Culture of Collaboration®.

    One of the latest organizations to begin adopting a collaborative structure because of The Bounty Effect is the World Bank. The World Bank has announced that it’s moving away from a command-and-control organizational structure that is compromising value. The World Bank will instead adopt a collaborative structure for greater speed and efficiency. The new structure will enable internal collaboration across functions, groups and regions. Plus the new structure will enhance external collaboration particularly with the private sector.

    World Bank President Jim Yong Kim announced the shift after a survey of ten thousand team members revealed a “culture of fear” and a “terrible environment for collaboration,” according to an October 6, 2013 story by Annie Lowrey in the New York Times. Further, Kim told the New York Times he feared the World Bank’s culture and structure might short-circuit its new goals of eradicating extreme poverty by 2030 and ensuring “inclusive growth.”

    The Bounty Effect for the World Bank is that the organization, which is financed by 188 member countries, faces increasing competition in supporting developing economies from many groups. One of these is the Bill and Melinda Gates Foundation. Incidentally, Bill Gates also chairs the Microsoft board of directors. In July, Microsoft announced it would change its organizational structure to reduce internal competition, curb silos and enhance collaboration. Bill read an advance copy of The Bounty Effect: 7 Steps to The Culture of Collaboration®. The book shows how to change the structure and culture of organizations from Industrial Age command-and-control to Information Age collaborative.

    Microsoft, the World Bank and many organizations suffer from similar shortcomings. While many have embraced collaboration as a concept and have even developed pockets of collaborative activity, the broader organization remains mired in command-and-control.

    Remnants of Industrial Age command-and-control compromise value creation. These remnants include 19th Century vertical organization charts, the need to go through channels, traditional meetings, and recognition and reward systems that reinforce internal competition among many others. The Bounty Effect: 7 Steps to The Culture of Collaboration® identifies these remnants and details how to replace them with infinitely more valuable collaborative building blocks.

    As the World Bank, Microsoft and growing numbers of organizations recognize The Bounty Effect’s impact on them, they can use the opportunity to implement the 7 Steps to The Culture of Collaboration® and ultimately create far greater value.

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  • 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.

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