Book summary “Collaboration”: summary

Introduction

You often face situations where your organization works in isolated silos, preventing teams from sharing valuable knowledge and resources. You might try to fix this by launching company-wide teamwork initiatives, yet these efforts frequently backfire and waste valuable time.

To achieve high performance, you must execute disciplined collaboration by evaluating opportunities, spotting specific barriers, and applying precise leadership levers.

Morten T. Hansen demonstrates in Collaboration that working together is not always better. You need a structured approach to decide when cooperation creates real value and when it drains resources.

The book is organized into three distinct parts to guide your actions. You will first learn how to assess collaboration opportunities and recognize common traps. You will then identify the specific organizational barriers that block teamwork. Finally, you will master practical leadership levers to unite people, cultivate T-shaped managers, and build nimble networks.

You can answer critical questions as you read:

• When does collaboration actually hurt your business results?
• What hidden barriers prevent your employees from sharing knowledge across units?
• How do you design systems that reward both individual and collective performance?

1. The Collaboration Imperative and Its Traps

Effective cross-unit collaboration is a necessary requirement for success in complex organizational activities. You often need to integrate knowledge, hardware, and software across different internal units to build winning products.

Effective cross-unit collaboration is a necessary requirement for success, but leaders frequently fall into costly traps by forcing cooperation without discipline.

In 2003, Howard Stringer launched the Connect venture at Sony to rival Apple's iPod. Decentralized divisions competed rather than cooperated, resulting in a delayed, confusing product that was eventually killed in August 2007. Sony's annual sales were 62 billion dollars in 2003, while Apple's were 6.2 billion dollars. Apple sold 125,000 units of the iPod in the first quarter of 2002. Apple reached the 100 millionth iPod sold on April 9, 2007. Apple annual sales from iTunes and iPod reached 10.8 billion dollars in 2007. Sony's stock price declined by 20 percent from 2002 to 2006. Apple's share price moved from 11 dollars to 84 dollars from the beginning of 2002 to the end of 2006.

Sony versus Apple

Sony failed because its hyper-competitive culture created deep silos, incompatible formats, and a lack of communication among its divisions. Philip Wiser estimated a timeframe of nine months to launch Sony's counter-product. The Walkman was introduced in 1979, and 200 million Walkman units were sold by the time the iPod was introduced on October 23, 2001. When Sony bought Columbia Pictures in 1989, executives expected major synergies between electronic devices and filmmaking. The film Last Action Hero bombed and lost 124 million dollars, rendering the synergies nonexistent.

The Five Collaboration Traps

You must avoid common traps that waste time and destroy expected gains. Leaders often misdiagnose why people fail to collaborate by confusing an inability to find knowledge with an unwillingness to share it. A large U.S. financial services company invested in an elaborate knowledge-management system assuming employees could not find information. They discovered that the real problem was people's unwillingness to look or share. At British Petroleum, promoting cross-unit collaboration led to hundreds of informal networks and subnetworks, such as the helicopter utilization network. This wasted managers' time on travel and discussion without clear business results.

Collaboration is strictly a means to an end rather than an end in itself. To avoid traps and achieve high performance, you must execute a three-step framework of disciplined collaboration:

• Evaluate opportunities for collaboration to determine if there is a compelling upside.
• Spot barriers to collaboration that are blocking people from working together.
• Tailor solutions to tear down the identified barriers.

2. Assessing Opportunities and the Collaboration Premium

You must evaluate the true upside of collaboration across innovation, sales, and operations while subtracting opportunity and collaboration costs.

The Upside for Your Company

Evaluating the true potential upside of collaboration requires assessing the gap between current activities and maximum potential across innovation, sales, and operations. You can conduct overall calibrations or use pair-wise matrix evaluations to pinpoint exactly where cross-unit opportunities exist and where boxes remain empty. A large European media company surveyed its top two hundred managers and discovered a large gap representing roughly 50 percent of the potential between current levels and maximum possible collaboration.

• Assess the potential for cross-unit product innovation by combining people, technologies, resources, and ideas from different units in your company.
• Assess the current degree of cross-unit product innovation by combining people, technologies, resources, and ideas from different units in your company.
• Assess the potential for realizing revenue gains by working together across units to cross-sell, customize products, and package solutions for customers.
• Assess the current realization of revenue gains by working together across units to cross-sell, customize products, and package solutions for customers.
• Assess the potential for realizing cost savings by transferring best practices across units in your company.
• Assess the current level of cost savings by transferring best practices across units in your company.

Product innovation is frequently driven by recombining existing internal technologies and expertise from different organizational units. P&G developed Crest Whitestrips by combining teeth-whitening expertise from the oral-care division, bleach expertise from the fabric and home-care division, and novel film technology from corporate R&D.

Cross-selling significantly increases sales-per-customer and profit-per-customer because selling additional products to existing clients is substantially cheaper than acquiring new ones. Under CEO Richard Kovacevich, Wells Fargo merged with Norwest in 1998 and systematically increased cross-selling, raising products per household from 3.2 to 5.6 within a decade.

Operational efficiency can be dramatically improved by transferring proven best practices, ordering methods, and store layouts from one regional unit to another. Deborah Copeland of BP gas stations in the southeastern United States utilized pilot programs from the UK and Netherlands to reduce stockkeeping units by 26 percent and working capital by 20 percent in Atlanta area stores.

When to Say No

Excessive collaboration can backfire and harm performance when highly experienced teams waste valuable time and effort seeking unnecessary outside help. In a statistical analysis of 182 teams at IT consulting firm Sterling, researchers Martine Haas and Morten Hansen found that the more highly experienced sales teams collaborated with colleagues, the lower their chance of winning sales contracts.

Collaborative projects should only be undertaken if the net value exceeds both opportunity costs and collaboration costs. DNV attempted to combine its certification and risk management consulting businesses for food safety with projected net cash flows of $40 million, but the project failed and was stopped because opportunity costs and collaboration costs outweighed the returns.

3. The Four Barriers to Collaboration

Modern management practices based on extreme decentralization inadvertently create silos and fiefdoms that block collaboration. Decentralized systems set clear individual responsibilities and reward managers based strictly on unit performance. This drives strong independent results up to a point, but it causes managers to focus exclusively on their own targets.

Modern management practices inadvertently create silos and fiefdoms maintained by motivational and ability barriers that block teamwork.

The U.S. intelligence community before September 11, 2001, functioned as a sprawling, highly fragmented collection of agencies and units without an attending physician to coordinate them.

Motivational Barriers

The Not-Invented-Here barrier occurs when people are unwilling to reach beyond their own units to get external input, advice, or technology. This is a motivational problem caused by insular cultures, status gaps, self-reliance norms, and the fear of revealing shortcomings.

In the late 1990s, French managers at underperforming Hewlett-Packard factories refused to learn from Belgian managers because they believed their own problems were unique.

The hoarding barrier happens when people are positioned to help but deliberately withhold their time, information, help, and effort. Hoarding is driven by internal competition, narrow unit-focused incentives, time famines caused by high performance pressure, and the fear of losing personal power by giving away knowledge.

In a Hewlett-Packard study, managers categorized 30 percent of all interdivisional interactions as competitive because divisions fought over product development rights and hoarded technologies.

Ability Barriers

The search barrier arises when people who need answers are unable to locate the right information or experts within a company. Search is hindered by large company size, physical distance between units, information noise, and a poverty of networks.

In a study of Hewlett-Packard's measurement sector, innovation teams spent up to 22 percent of their total engineering months simply searching for technical know-how and marketing information.

The transfer barrier occurs when individuals are motivated to work together but lack the ability to successfully transfer complex expertise, know-how, or technologies. Transfer problems stem from the difficulty of sharing tacit knowledge, the lack of a common frame of reference, and weak ties that make it hard to communicate subtle nuances.

Certain project teams at Hewlett-Packard spent up to 57 percent of their staff budget trying to transfer complicated technologies from other divisions.

Leaders must first accurately assess which specific collaboration barriers are present and then tailor matching solutions to those barriers. Motivational barriers require motivational solutions, while ability-related barriers require structural solutions.

You can diagnose these obstacles using a structured assessment:

• Step 1. Take a brief, subjective poll by assessing your organizational unit from 1 (not at all) to 100 (to a large extent) on which barriers to collaboration are present.
• Step 2. Benchmark your score against a sample of 107 companies.

4. Lever 1: Unify People

You can tear down motivational barriers by introducing compelling unifying goals, fostering a core value of teamwork, and adopting collaborative language.

Creating Unifying Goals

Leaders can easily induce destructive rivalry between groups, but they can also unite warring factions by introducing compelling goals that require mutual cooperation. In 1954, Muzafer Sherif divided 22 boys into two competing camp groups, the Eagles and the Rattlers, at a summer camp in Robbers Cave State Park in Oklahoma. After 3 weeks of fierce tournament competition, researchers introduced shared challenges like fixing a broken water valve and pushing a heavy food truck to force cooperation.

A compelling unifying goal must meet four strict criteria to successfully elevate people above parochial interests and foster collaboration.

• Create a common fate where all groups must pull together.
• Be simple and concrete to avoid ambiguity.
• Stir passion and inspire.
• Place competition strictly on the outside of the company.

President John F. Kennedy united NASA and external contractors around the specific goal of landing a man on the moon and returning him safely before the decade was out. This effort required the coordination of 400,000 people and space suits that had to withstand a searing 250 Fahrenheit heat in the sun and minus 250 degree chill in the shadows. During the 1990s, Airbus pursued the unofficial common-fate goal of beating Boeing when commercial aircraft orders stood at 273 versus 101 in favor of Boeing. By 1999, Airbus passed Boeing for the first time with 476 orders against 355.

Avoiding Teamwork Sins

When promoting teamwork, leaders must avoid three common traps that undermine companywide collaboration. Steve Bennett took over Intuit in 2000 and found a consensus-oriented culture where 30 employees attended meetings simply because they were on the invitation list without knowing the purpose.

You must follow specific rules to avoid these teamwork sins:

• Ensure involvement of the appropriate people inside the company across roles, departments, and locations to accomplish goals.
• Practice teamwork within the top executive team so lower-level managers see a united leadership.
• Link teamwork directly to performance and results rather than doing teamwork all the time.

The specific language and terminology chosen by leaders heavily influence how people perceive situations and whether they choose to cooperate or compete. Stanford researchers ran a game where 70 percent of students chose to cooperate when it was called the community game, but 30 percent chose to defect when the exact same game was named the Wall Street game, with both players earning $40 if they chose to cooperate.

To prevent employees from hiding behind group efforts, you must balance broad unification mechanisms with strict individual accountability. Henrik Madsen became CEO of DNV and spent roughly 20 percent of his time promoting collaboration across the company's global offices, which had to be balanced with individual delivery.

You must apply balanced pairings to maintain performance:

• Match unifying goals with individual goals.
• Pair the value of teamwork with the value of individual responsibility.
• Complement the language of collaboration with the language of accountability.

5. Lever 2: Cultivate T-Shaped Management

You must cultivate T-shaped managers who deliver individual unit results while actively collaborating across the wider company through two-sided performance systems.

T-shaped managers simultaneously deliver results in their own primary job and drive results by collaborating across the wider company. The vertical bar of the T represents executing individual job responsibilities and hitting personal unit targets. The horizontal bar represents engaging in cross-unit collaboration activities, such as peer assists and sharing expertise.

David Nagel, general manager of BP's gas business unit in Egypt, spent 15 to 20 percent of his time on cross-unit collaboration activities while managing his unit's profitability and capital expenses.

Effective leaders must eliminate both lone stars who destroy teamwork and butterflies who neglect their primary jobs in favor of endless committee work. Lone stars deliver exceptional individual numbers but create hostile environments and break procedures. Butterflies are pleasant team players who jet around to meetings and task forces while their individual performance suffers.

At Morgan Stanley, star producer Rob Parson brought in massive client revenues and market share but broke internal rules, questioned traders' knowledge, and lacked team player skills. Prior to Parson, the firm stood in tenth rank with 2 percent market share, reaching third rank with 12.2 percent market share under Parson.

Rewarding Collaboration

Leaders must implement two-sided performance management that evaluates and rewards both individual results and contributions made to other units. At BP, David Nagel's annual review consisted of two equally important conversations covering his unit's performance and his broader cross-unit contributions. Overarching concepts like teamwork must be translated into concrete, observable behavioral rankings to make cross-unit contributions measurable. SAP defined three observable degrees of collaboration behavior:

• Needs development: Misses opportunities to involve people from other businesses, functions, and locations across SAP
• Satisfactory: Involves some people from other businesses, functions, and locations across SAP to accomplish goals
• Highly effective: Ensures the involvement of the appropriate people from other businesses, functions, and locations across SAP to accomplish goals

Anonymous 360-degree peer evaluations forced into specific buckets provide reliable data on how useful a colleague has been across units. A global investment bank required 2200 bankers to fill out an online survey where peers were named and ranked by usefulness into forced allocation buckets with a 93 percent participation rate and 78 colleagues named on average as having provided input. In that survey, you had to follow a specific instruction:

• Assign the ranks in terms of usefulness to you and not your perception of their contribution to the bank in general

Incentive systems based solely on individual unit performance or broad company-wide performance actively undermine cross-unit collaboration. Incentive structures must tie a fixed portion of annual compensation directly to demonstrated individual collaborative contributions. Bain & Company evaluated partners annually on help given to colleagues, with high-quality collaboration accounting for up to a quarter of annual compensation. Your incentive structures should follow a split:

• Base 50 percent of the bonus on individual performance
• Base 50 percent of the bonus on demonstrated individual collaborative contributions

Companies must proactively recruit candidates with inherent teamwork attitudes rather than attempting to train or change poor attitudes later. Southwest Airlines asked job applicants to read short statements aloud while recruiters observed whether candidates cheered and supported other applicants. During such interviews, you should apply specific methods:

• Ask job applicants to prepare a short statement about themselves and stand up and read it aloud in front of the group
• Observe how applicants listen, cheer, and clap for other applicants rather than preparing their own speeches

Leaders should focus on changing specific behaviors first, as actionable plans drive behavioral change more effectively than trying to alter abstract attitudes. In a 1960s Yale University experiment, students who received a detailed map and class schedule for getting a tetanus shot had a 28 percent turnout compared to 3 percent for those who only saw graphic photos. Executive coaching must be paired with systemic office interventions because individual behavior changes cannot survive within an unchanged organizational context. European retail executive Anthony worked with coach Roger Lehman for nine months, combining individual coaching, mentor support, and explicit peer interventions. To coach for this behavior, you should follow practical steps:

• Concentrate on changing behaviors rather than attitudes
• Provide a detailed plan on how to reach the goal
• Review schedules to find an available time
• Recognize self-oriented behaviors and personal 'I' statements
• Develop a list of small actions to help other units in the company
• Meet alternately with an executive coach and a workplace mentor to discuss progress

Leaders can systematically transform an inherited executive team into a T-shaped majority by combining firings, promotions, pay structures, and coaching. A realistic simulation involving 100 top managers starting with 20 percent T-shaped managers achieved 65 percent T-shaped managers after three years of firing 10 percent laggards annually, managing 10 percent natural turnover per group, and cultivating 10 percent of remaining people into T-shaped managers each year. You can execute this team transformation through structured moves:

• Fire a few laggards to create vacancies
• Promote and recruit managers who exhibit T-shaped behaviors
• Implement a pay-for-performance system based on two-sided performance
• Institute leadership development and coaching aimed at changing collaborative behaviors

6. Lever 3: Build Nimble Networks

Common network beliefs often mislead you. Extroversion and charm do not determine effective networking. Indiscriminate networking with bloated Rolodexes wastes time and hurts performance.

You can optimize network performance by building outward, maximizing diversity, utilizing weak ties, leveraging bridges, and switching ties for complex knowledge.

Rules for Identifying Opportunities

Employees often remain isolated in insular networks. You must connect units across the company.

At a European media company, 200 top managers communicated frequently within their own country units and print newspapers. Interaction across different countries like France and the Baltic region was near zero, with a communication score of 0.2 compared to 1.0 with U.K. headquarters.

You can apply concrete steps to build outward:

• Build relations to other units.
• Connect pairs of units across the company.

Network performance depends on diversity rather than sheer size. Having more contacts increases time costs without improving outcomes. At Hewlett-Packard in the 1990s, product-development units with many contacts took 20 percent longer to finish projects. Edmonton in Canada had only 3 contacts but accessed 11 technologies, whereas Melbourne had 3 contacts and accessed only 5 technologies.

You should use specific criteria to evaluate relationships:

• When investing in new professional relationships, ask what additional diversity the new contact brings.
• Target contacts with different cliques, technologies, experts, customers, consumer trends, ages, tenures, genders, nationalities, ethnicities, styles, manufacturing sites, sales offices, and country operations.

Weak ties act as inexpensive bridges to unfamiliar worlds. In Hewlett-Packard's measurement sector, project teams with weaker links spent only 50 percent of the time that strongly tied teams spent to obtain the same amount of technical expertise.

You must look for organizational bridges rather than familiar faces. Les Owen worked at BP for 26 years across various global locations and served as a vital bridge routing a Siberian lightning protection query 15,700 miles through e-mailing to an expert in Houston.

You can cultivate bridges through specific actions:

• Look for long-tenured people who have worked in different places and know a broad range of topics to serve as bridges.
• Expand job rotation programs across units to cultivate future bridges.

Rules for Capturing Value

Going alone without preparatory introductions often leads to rejection. You must enlist influencers ahead of time to swarm the target. Roger Horchow secured the rights to revive George Gershwin's musical Girl Crazy by methodically invoking mutual acquaintances like Mildred Knopf and Emily Paley during his meeting with Lee Gershwin.

You can employ deliberate tactics to influence resistant targets:

• Enlist the help of others to convince a resistant target ahead of time.
• Invoke common links and shared contacts to influence the target.
• Enlist bosses to get people from other units to collaborate.

Transferring complicated knowledge requires strong ties. A software project code-named Shield with engineers split between Los Angeles and Bangalore collapsed due to mutual distrust and distance across 9,000 miles and a 12-hour time difference.

You must engineer trust upfront for complex tasks:

• Bring cross-unit teams together at the beginning of a project in one location for a few days.
• Conduct active team building and executive coaching to establish trust and a one-team culture upfront when transferring complicated knowledge.

7. Grow to Be a Collaborative Leader

A collaborative leadership style requires redefining success, involving others through inclusive decision making, and demanding individual accountability.

Organizational tools alone cannot guarantee success. You must also transform your own personal style to guide disciplined collaboration.

Three Collaborative Behaviors

Mastering a collaborative leadership style requires three specific behaviors:

• Redefining success: transcend narrow agendas and define success as a bigger goal by seeking common ground, pragmatic solutions, and compromises.
• Involving others: move from autocratic to inclusive decision making by showing an open mind to alternatives, divergent views, dialogue, and working with others.
• Being accountable: hold yourself accountable, take personal responsibility, and demand accountability from others rather than shifting blame.

Arnold Schwarzenegger shifted from an autocratic terminator style to a collaborative leader by bonding with Democratic leaders over cigars in a smoking tent to pass major legislation.

Tearing Down Personal Barriers

Five psychological barriers prevent you from adopting a collaborative leadership style: a hunger for power, arrogance, defensiveness, fear, and big egos. Benchmark data collected with Roger Lehman on 162 top-performing managers showed that only 16 percent scored high on all three collaborative behaviors. Arrogance acts as the biggest block to involving others, while power hunger blocks the redefining of success.

10 Key Ideas

1. To achieve high performance, you must execute disciplined collaboration by evaluating opportunities, spotting specific barriers, and applying precise leadership levers.
2. You must evaluate the true upside of collaboration across innovation, sales, and operations while subtracting opportunity and collaboration costs.
3. Modern management practices inadvertently create silos and fiefdoms maintained by motivational and ability barriers that block teamwork.
4. You can tear down motivational barriers by introducing compelling unifying goals, fostering a core value of teamwork, and adopting collaborative language.
5. You must cultivate T-shaped managers who deliver individual unit results while actively collaborating across the wider company through two-sided performance systems.
6. Incentive structures must tie a fixed portion of annual compensation directly to demonstrated individual collaborative contributions.
7. You can optimize network performance by building outward, maximizing diversity, utilizing weak ties, leveraging bridges, and switching ties for complex knowledge.
8. When transferring complicated knowledge across distances, you must engineer trust upfront by bringing cross-unit teams together in one location.
9. A collaborative leadership style requires redefining success, involving others through inclusive decision making, and demanding individual accountability.
10. Psychological barriers such as a hunger for power, arrogance, defensiveness, fear, and big egos prevent you from adopting a collaborative leadership style.