Constructing Collaborary

By Michael Maccoby

Research Technology Management; Vol. 54, No. 1 January-February pp. 59-60.

A manager leading an essential development project, one central to the large technology company’s stated strategy, needed collaboration from other parts of the organization to reach project goals. But he faced resistance from other managers who felt threatened that his project would replace theirs. After an extended delay, caused by arguing about the budget and attempting to gain support from the other managers, key staff members left the team for more promising jobs. Finally, the manager gave up and left the company, and the project was dropped. This manager’s problem was an extreme case of what happens when organizations fail to transform bureaucracies of managers with competing agendas into flexible collaborative communities with shared purposes.

In The Collaborative Enterprise (2007), Charles Heckscher argues that "extended collaboration is the critical capability for long-term success in complex knowledge businesses" (247). Heckscher describes companies that have developed their collaborative capabilities in order to adapt quickly to changing environmental demands, engage in continuous improvement and learning, and implement strategies that respond to customer demands with solutions combining products and services while maintaining cost efficiency.

However, Heckscher finds that transforming bureaucracies to enable collaboration requires leaders with the skill and courage to lead a difficult cultural shift that threatens bureaucratic values of security, loyalty, and seniority. The values that support collaboration include:

  • Authority based on capability to contribute rather than on formal position in the hierarchy;
  • Dialogue and openness, including willingness to challenge peers and superiors; and
  • Helpfulness to others, including free sharing of information.

In his study of companies that have been effective in creating collaboration, including IBM, Nestle, and ABB, Jay Galbraith (2006) describes how these companies construct different types of networks, and he highlights the role of network leaders and coordinators who get specialists to work together across organizational boundaries. The effectiveness of these leaders comes from their skill in connecting people and building trust, not their position in the hierarchy. Galbraith writes that there is a good deal of evidence that personal relationships are important for network building, and he cites a study by Tsai and Ghoshal (1998), which reported that divisions in an electronics company that scored high on measures of trusting relationships and shared purpose produced more new products than those scoring lower on these scales.

But shared purpose and trusting relationships alone will not create a collaborative community. A flexible structure of roles and processes is also required. An accurate organizational chart of a complex global technology company would have to be automated so that temporary teams and networks lit up when they became operational. To design and manage such a complex organization, managers need to think systemically. Each complex project or network is a social system. It will function effectively only if its members share a common purpose and the values that support that purpose and if it has access to processes that facilitate and incentivize collaboration.

In complex collaborative organizations, different types of leaders with complementary competencies—strategic, operational, network—must be able to partner in developing and implementing strategies and visions. Without the processes to accompany the organizational strategy, collaboration may still fall apart. For example, in the late 1990s, although ABB's managers had been encouraged to build good relationships across boundaries, when Cominco, a Canadian zinc-producing company, asked them to collaborate in providing cheaper and cleaner energy, ABB’s structure got in the way. At that time, ABB’s many business units all had profit-and-loss responsibility. They were structured to produce and sell products, not solutions or results. Evaluations and bonuses were based on selling products. To collaborate with Cominco, an ABB business unit might have to forego its profit for the benefit of the company as a whole. New processes and measurements of contribution were needed to support the collaboration. ABB was fortunate to have an exceptionally competent network leader in Borje Fredriksson, who was able to facilitate the collaboration with Cominco.

IBM has undergone a similar transformation, remaking itself as a collaborative organization. IBM’s CEO, Sam Palmisano, took the lead in transforming IBM into a collaborative community by organizing “jams” where all employees were invited to join in shaping company values and suggesting ideas for new products and services— allowing for contributions from all levels. This approachat first worried traditional bureaucrats, but it energized the new generation of workers who tend to have more interactive personalities. At the systemic level, IBM has at least nine types of networks across the company, and there are also knowledge networks and various communities of practice. Galbraith notes that while IBM struggles, as all companies do, to manage and coordinate these networks, the company has created management decision processes to respond to this complexity. Roles have also been redesigned to support collaboration at IBM. Instead of a single corporate chief technology officer (CTO) focusing on products, IBM puts CTOs in different product lines and areas. They not only stay tuned to new technology, but also collaborate in optimizing processes. Parmar Rashik, CTO of IBM in Europe, described his role at a company conference this year as improving visions and inspiring people to realize them.

The manager who led the failed development project introduced at the start of this article reflected that he should have paid more attention to the class he took on organizational behavior at business school. But it wouldn’t have helped him, unless the top management of his company had the vision, competence, and courage to transform a cumbersome bureaucracy into a flexible collaborative community.

References

Galbraith, J.R. 2006. Mastering the law of requisite variety with differentiated networks. In The Firm as a Collaborative Community, ed. C. Heckscher and P. S. Adler, 179-198. Oxford, UK: Oxford University Press.

Heckscher, C. 2007. The Collaborative Enterprise: Managing Speed and Complexity in Knowledge-Based Businesses. New Haven, CT: Yale University Press.

Tsai, W., and Ghoshal, S. 1998. "Social capital and value creation: The role of intrafirm networks." Academy of Management Journal 41(41): 464-476.



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