1

Drag

Gravity

Thrust

Lift

Beyond TeamworkCollaboration

Building a Cooperative Work Environment

James Robert Crow, PrincipalCrow Consulting

Collaboration, What is it?Collaboration, What is it?

How do you define Collaboration?

2

Why Collaborate?Why Collaborate?

What can be gained personally and as an organization through Collaboration?

3

Who can we collaborate With?Who can we collaborate With?

Internally and externally?

4

Problems with CollaborationProblems with Collaboration

Collaboration can be risky. What are some potential risks associated with Collabortion?

5

Barriers to CollaborationBarriers to Collaboration

What are some things that make collaboration difficult/risky within organizations?

6

Organizational ChartOrganizational Chart

7

8

A system is a series of interdependent components that try to work together to achieve the aim of the system.

 

SystemSystem

9

Optimization is a process of orchestrating the efforts of all components toward achievement of the stated aim.

Optimization is management’s job. With optimization everybody gains - stockholders, employees, suppliers, customers, community, the environment - over the long term.

OptimizationOptimization

10

Sub-optimization is the result of doing things that ignore the existence of a system, and the interdependence of the components.

SuboptimizationSuboptimization

11

Closely Held Beliefs

Affect Systems Design

Affects IndividualAnd Group Behavior

Systems Drive Behavior

What Do the Following have in What Do the Following have in Common? Common?

Pay for Performance Systems

Ranking (People, Plants, Shifts, etc.)

Reward and Recognition Programs

Performance Appraisals

Contests

Quotas

Management by Objectives

13

  

Our Expectations of the Performance Appraisal Process ·       Reward exceptional performers·       Provide a method of identifying poor performers·       Serve as a method for determining pay rates·       Enhance the communication process between supervisor and

employee·       Serve as a planning device for achieving career goals·       Provide feedback on job performance·       Build the relationship between the boss and subordinate·       Create documentation, which can be used to support other

actions.·       Motivate employees to greater performance·       Solve most - if not all - of our employee-relations problems. 

“The performance appraisal process is a cart which is asked to carry too heavy a load.”

Peter Scholtes

Performance AppraisalPerformance Appraisal

14

How the Performance Appraisal Results in Sub-optimization of the

System 

• Acts as a barrier to the communication process• Helps to reinforce the boss vs. subordinate

relationship• Is counterproductive to “driving out fear”• Helps to establish an internally competitive system• Takes away from the “focus” on the customer• Requires tremendous time and resources to develop

and administer• Ignores the interdependence of the components

within the system• Tends to be a subjective instead of an objective

measure of performance• Measures most recent performance• People similar to the appraiser tend to receive higher

appraisals.

15

A Replacement for the Performance Appraisal Process?

• More frequent discussions of performance• No summary judgments or ratings• Salary action discussions held separate• Mutual goal planning and problem-solving 

Work Planning and ReviewWork Planning and Review

16

Study Results

Traditional Performance Appraisal process - no measurable change.

One-half of the managers used the traditional performance appraisal process and the other half switched to the work planning and review process.  

17

Significant Improvement in the Following:• The amount of help employee received from their

manager to improve their performance • Degree to which the manager was receptive to new

ideas and suggestions• Ability of the manager to plan• Extent to which the manager made use of their

abilities and experience• Degree to which employees felt the goals they were

shooting for were what they should be• Extent to which employees received help from the

manager in planning for future job opportunities• Increase in number of the performance discussions

they had with their manager.

Work Planning and Review Results

18

Theory: Good performance should be rewarded, bad performance punished. Money is a motivator. Tying pay to performance is a way to enhance the performance of individuals. Is this true? The Candle Problem

Pay for Performance

The Candle ProblemThe Candle Problem

19

Samuel Gluxman Princeton University

Top 25% $5.00Fastest $25.00

20

The incentivized groups took on average 3.5 minutes longer than the other groups

Replicated for over 40 years

21

22

Reality: Money is at best a satisfier. Money is not a motivator.

 

What do we do about outstanding performers?

 

Pay for Performance

23

What is Outstanding What is Outstanding Performance?Performance?

Name Qu 1 Qu2 Qu3 Qu4 Year Rank Ken 8 10 12 9 39 5

Barbara 6 4 11 7 28 1Lenny 11 11 11 8 41 6

Noboru 8 11 8 11 38 4Cathy 15 5 12 4 36 3Steve 5 9 9 10 33 2

Defects per worker for the year

24

What is outstanding What is outstanding performance?performance?

55 Upper Control Limit = 51.79504540 Average 35.833530252015 Lower Control Limit = 19.9710 39 28 41 38 36 3305 Ken Barbara Lenny Naboru Cathy Steve

25

We still have the problem of achieving an objective measure of performance for all jobs and all individuals in the system. However, wide variation in performance among employees is an indicator of a problem with the system, i.e. hiring, promotion, training and development.

Problem of Objective MeasureProblem of Objective Measure

26

The Six Dangerous Myths About The Six Dangerous Myths About

CompensationCompensation 1) Labor rates and labor costs are the same thing.2) You can lower your labor costs by cutting labor

rates3) Labor costs constitute a significant proportion of

total costs.4) Low labor costs are a potent and sustainable

competitive weapon5) Individual incentive pay improves performance.

Most merit-pay systems share two attributes: they absorb vast amounts of management time and make everybody unhappy.

6) People work for money.

London School Of EconomicsLondon School Of Economics

Evaluated 51 Pay for Performance Programs.

May have a Negative Influence on Performance

27

28

Despite the evident popularity of this practice, the problems with individual merit pay are numerous and well documented. It has been shown to undermine teamwork, encourage employees to focus on the short term, and lead people to link compensation to political skills and ingratiating personalities rather than to performance. Indeed, those are among the reasons why W. Edwards Deming and other quality experts have argued strongly against schemes.

 Jeffrey Pfeffer, “SIX DANGEROUS MYTHS ABOUT PAY”

HARVARD BUSINESS REVIEW, May-June 1998

The Role of MoneyThe Role of Money

Money should enable you to hire and retain the work force you need to run a successful organization.

Reward and Recognition ProgramsReward and Recognition Programs

Theory: People will work harder to receive recognition and be rewarded for their efforts:

Reality: Programs have little if any impact on performance, and create win/lose working environments.

31

Reward and Recognition programs result in sub-optimization of the system in the

following ways:

• Administration of programs is time-consuming for employees and managers

• There are always more losers than winners

• The selection process can cause conflict within the group

• Any positive impact on performance is short-lived

Contests/Competitions/Contests/Competitions/Ranking/IncentivesRanking/Incentives

Reality:Reality:• Creates Winners and Losers, Creates Winners and Losers,

and there will always be more and there will always be more losers than winnerslosers than winners

• Ignores the existence of a Ignores the existence of a system and the system and the interdependence of the interdependence of the components within the components within the systemsystem

• Counterproductive to Counterproductive to Teamwork, destroys Teamwork, destroys teamwork.teamwork.

Theory:Theory:

Since our economy is Since our economy is based on competition and based on competition and we can see the benefits of we can see the benefits of competition all around us, competition all around us, we will benefit as an we will benefit as an organization by making organization by making competition the way we do competition the way we do business internally also.business internally also.

33

The question, then, is, how do you produce internal commitment? One thing for sure is that the incentive programs executives have used - higher compensation, better career paths, employee of the month, recognition awards simply do not work. On the contrary, in all my years as a change consultant, I have repeatedly witnessed how offering employees the “right” rewards creates dependency rather than empowerment. Inevitably, the power of such methods wears off with use, and all that has been created is more external commitment.”

Chris Argyris, EMPOWERMENT: THE EMPEROR’S NEW CLOTHES, HARVARD BUSINESS REVIEW, May-June 1998

34

 

Theory: To achieve increases in sales, production, quality, etc., we must set quotas. People will strive to achieve these quotas and our sales, productivity, quality will increase. Without a quota no one will sell/produce anything. Reality: Quotas limit performance and contribute to sub-optimization of the system.

QuotasQuotas

35

• Sales tend to come in at the end of the month, quarter, year which causes staffing problems and encourages shipping defective material.

• Sales reps tend to limit their sales to the quota or only slightly above because next year’s quota will be based on attainment of current year’s sales.

• Sales reps sometimes hold orders as a “cushion” towards attainment of quota for the next month.

• Creates winners and losers through competition between sales reps.

RealityReality

36

HONG KONG Allegedly inflated revenues by faking sales of Ray-Ban sunglasses to real customers. The glasses were allegedly then sold at cut-rate prices to gray-market dealers.

         MIAMI By accepting cash payments and third-party checks, a Miami warehouse may have indirectly helped launder drug money until mid-1990. Senior managers tolerated the lucrative trade, say former executives.

CONTACT LENSES Contact lens managers shipped products that doctors never ordered and forced distributors to take up to two years of unwanted inventories.

GRAY-MARKETEERING Many U.S., Asian, and Latin American managers knowingly sold contact lenses and Ray-Bans to Gray -market distributors, creating a huge gray-market problem for B&L.

 BLIND AMBITION, Business Week, October 23, 1995

  

Management by Objectives/Management by the

Numbers

Under pressure from management to “hit the numbers” Bausch & Lomb’s executives got creative.

37

TEAM-WORKTEAM-WORK COMPETITIONCOMPETITION

WIN-WIN OPEN/SHARED

INFORMATION WORKING TOGETHER TRUSTING TRUSTWORTHY COLLABORATION

WIN-LOSE SECRETIVE/CLOSED

WORKING FOR SELF SUSPICIOUS UNTRUSTWORTHY US VS. THEM

38

• Competition Undermines Cooperation and Trust

 • Excessive Competition Undermines Quality

Decision Making

• Too Much Competition Promotes Anti-Social Behaviors

• Competition Leads to Under-Investment in Training and Workforce Development

 

Bruce Kaufman, HR Atlanta, April 1999

 

Can there be too much Can there be too much competition?competition?

39

Moving From Competition to Cooperation

Rule One:

• Stop doing things that result in sub-optimization of the system.

• Move from win-lose to win-win.

40

Move from Control to Move from Control to DevelopmentDevelopment

 

Rule Two:

Develop an understanding of Deming’s System of Profound Knowledge

• The organization as a System• Theory of knowledge• Knowledge of variation• Psychology

41

Appreciation for aSYSTEM

Knowledge aboutVARIATION

Theory ofKNOWLEDGE

Understanding ofPSYCHOLOGY

A System of Profound Knowledge

42

Develop an Understanding of Why the Develop an Understanding of Why the Organization Exists and the External Organization Exists and the External

Focus of the OrganizationFocus of the Organization

• What is the aim of our system?What is the aim of our system?• Who do we serve?Who do we serve?• Who are our customers?Who are our customers?• What is happening in our markets?What is happening in our markets?• What is changing in our industry?What is changing in our industry?• What are our critical success factors?What are our critical success factors?• What must we do consistently well to be What must we do consistently well to be

successful as an organization?successful as an organization?

43

VariationVariation

Common Cause Variation:

In a state of statistical control, the variation to expect in the future is predictable. Costs, performance, quality, and quantity are predictable – a stable state. If the process is not stable, then its performance is not predictable.

44

VariationVariation

Special Cause Variation:

A special cause of variation is something not a part of the system of common causes. A special cause is detected by a point that falls outside of the control limits, or a trend.

45

Two MistakesTwo Mistakes

1) React to an outcome as if it came from a special cause, when actually it came from a common cause of variation.

2) To treat an outcome as if it came from a common cause of variation, when it actually came from a special cause.

46

Theory of KnowledgeTheory of Knowledge

Management is Prediction  Knowledge is build on Theory  The use of data requires Prediction  Need for Operational Definitions  Information is not Knowledge

47

Seven Rules for the Theory Seven Rules for the Theory of Knowledgeof Knowledge

1) Any plan requires prediction.2) There is no knowledge without theory.3) There is no prediction without knowledge.4) Experience teaches nothing without the

aid of theory.5) Operational definitions put communicable

meanings into a concept.6) A single counter example destroys a

theory.7) There is no absolute value to anything.

48

PsychologyPsychology

Intrinsic Motivation Extrinsic Motivation Overjustification Management cannot motivate, but it is

possible to create a working environment, which enables the intrinsic motivation within a person to come out.

AutonomyAutonomyMasteryMasteryPurposePurpose

49

Fedex DaysFedex DaysMust deliver within 24 hoursMust deliver within 24 hours

50

GoogleGoogle20% Time20% Time

51

52

The purpose of organizations is to enable common men to do uncommon things. Management cannot rely on genius. Genius is in short supply and is unreliable. 

Peter Drucker.

The Appraisal Process:The Appraisal Process:

Other ViewsOther Views “The aim of reviewing the subordinate’s performance is to increase his effectiveness, not to punish him. But apart from those few employees who receive the highest possible ratings performance review interviews, as a rule, are seriously deflating to the employee’s sense of importance and personal worth.... Not only is the conventional performance review failing to make a positive contribution, but in many executive’s opinions it can do irreparable harm.”

 Rensis Likert, Harvard Business Review, July-August

1959, Volume 37, Number 4

54

“The theoretical assumptions of Theory X lead quite naturally to a strategy of telling people what to do, judging their performance, and rewarding or punishing them, and to procedures such as those involved in performance appraisal. It appears to be something of a tribute to the adaptability of human beings that these procedures work at all. The main point, however is that the managerial strategy underlying them is not particularly appropriate for controlling human behavior in the setting of industry today. Certainly, the strategy of management by integration and self-control is more appropriate for intelligent adults and is more likely to be conducive to growth, learning, and improved performance.” “Conventional programs for providing large numbers of people with differential and relatively small merit salary increases, in the light of our present ability to measure managerial contributions to the enterprise, are not very realistic. The absence of objective criteria of performance and the problems involved in measurement are such that equity cannot be achieved through such methods. Moreover, there is reason to doubt that such rewards have much motivational value relative to other opportunities which can be provided through applications of the principle of integration.”

 Douglas McGregor, The Human Side of Enterprise, McGraw-Hill, 1960

55

“Comprehensive annual performance appraisals are of questionable value. Certainly a major objective of the manager in traditional appraisal discussions is motivating the subordinate to improve his performance. But the evidence we gathered indicated clearly that praise tended to have no effect; perhaps because it was regarded as the sandwich which surrounded the raw meat of criticism. And criticism itself brought on defensive reactions that were essentially denials of responsibility for a poor performance.”

 Herbert H. Meyer, Emanuel Kay, and John R. P. French, Jr.,

Split Roles in Performance Appraisal, Harvard Business Review, January-February, 1965

 

56

Many companies in America have systems by which everyone in management or in research receives from his superiors a rating every year. Some government agencies have a similar system. Management by objective leads to the same evil. Management by the numbers likewise. Management by fear would be a better name, someone in Germany suggested. The effect is devastating: 

It nourishes short-term performance, annihilates long-term planning, builds fear, demolishes teamwork, nourishes rivalry and politics. It leaves people bitter, crushed, bruised, battered, desolate, despondent, dejected, feeling inferior, some even depressed, unfit for work for weeks after receipt of rating, unable to comprehend why they are inferior. It is unfair, as it ascribes to the people in a group, differences that may be caused totally by the system that they work in.  Basically, what is wrong is that the performance appraisal or merit rating focuses on the end product, at the end of the stream, not on leadership to help people. This is a way to avoid the problems of people. A manager becomes, in effect, manager of defects.”

W. Edwards Deming, Out of the Crisis, MIT Press, 1986 

57

The Case Against Performance AppraisalThe Case Against Performance Appraisal

1. Disregards teamwork; undermines teamwork.2. Disregards the existence of a system.3. Disregards variability in the system. Increases variability in the

system.4. Uses an unreliable and inconsistent measurement system.5. Encourages a superficial and “culprit” oriented approach to

problem solving.6. Encourages circumventing the system for personal gain.7. Tends to establish an aggregate of safe goals, a ceiling of

mediocrity in an organization.8. Creates losers, cynics and wasted human resources.9. Seeks to provide multiple managerial functions (pay, promotion,

and feedback,communications, direction setting, etc.) yet is inadequate to accomplish any one of them.

 Peter R. Scholtes, Motivation or Performance Appraisal, Choose One.

58

If you’re a change-minded senior executive looking for ways to improve performance, cut costs, or free up resources that can be redirected against important issues waiting in the wings, you might give serious thought to scrapping your company’s performance appraisal system. It devours staggering amounts of time and energy, it depresses and demotivates people, it destroys trust and teamwork, and adding insult to injury, it delivers little demonstrable value at great cost.

 Fred Nickols, DON’T REDESIGN YOUR COMPANY’S

PERFORMANCE APPRAISAL SYSTEM, SCRAP IT!, Corporate University Review, May-June 1997

 

59

Chris Argyris’s Model I and Model II Action Maps:Chris Argyris’s Model I and Model II Action Maps:Understanding Interpersonal Interactions as a Understanding Interpersonal Interactions as a

SystemSystem

Model I Defensive Routine

Purpose: To save face (I.e., to avoid embarrassment or threat)

Mental Model: Somebody has to win Unilateral control is important Expressing negative feelings is

bad

Action Strategies: Advocate your point of view Don’t inquire into your own or

others’ thinking Act on your private assessments Blame or protect others Don’t discuss these strategies

Model II Productive Routine

Purpose: To learn (I.e., to think and act more effectively

Mental Model: Everyone can win

Informed choice is important All relevant feelings are

necessary

Action Strategies: Advocate your point of view:

Inquire into you own and other’s thinkingPublicly check out assessmentsTake personal responsibilityMake these strategies discussible

60

Model I and Model II Action Model I and Model II Action Plans (cont’d)Plans (cont’d)

Outcomes Low trust and morale High fear, resentment, blame Double binds Internal competition, turf building Low responsibility and accountability

Type of learning: Single-loop(All mental models go unexamined)

Outcomes: High trust and morale Low fear, resentment, blame Openness to change Cross-functional cooperation High responsibility and accountability

Type of Learning: Double-loop(all mental models are open to scrutiny)

61

Model I becomes a self-sealing loop, taking on a life of its own. It explains why people can communicate well one-on-one and yet feel frustrated in unproductive group meetings with the same people.

It also explains why changing the players rarely fixes a bad situation. Model I eventually reasserts itself and the same counterproductive conditions return. 

Model IModel I

62

Model II requires a mindset and actions that are open, trusting, and committed to continuous learning. In a Model II environment, people want to learn how to learn together.

Model II is not an anti-Model I system, however. It is a profound shift in consciousness needed for organizations to become more effective, creative places to work.

Model IIModel II

63

The Deming Cycle ofThe Deming Cycle of

Continual ImprovementContinual Improvement

Improve Quality

Costs decrease because ofLess rework, fewer mistakes, fewer delays,Snags: better use of machine time, materials and people. Productivity Improves

Capture the market withBetter quality and lowercosts

Grow the business

Provide jobs and createopportunity

64

BibliographyBibliography

W. EDWARDS DEMING, The New Economics For Industry, Government, Education, Massachusetts Institute of Technology (1993)

HERBERT H. MEYER, EMANUEL KAY, AND JOHN R. P. FRENCH, JR Split Roles in Performance Appraisal, Harvard Business Review (January- February 1965)

 JEFFREY PFEFFER, Six Dangerous Myths About Pay, Harvard Business

Review (May-June, 1998) Business Week, Blind Ambition, (October 23, 1995) GEOFFREY COLVIN, What Money Makes You Do, FORTUNE (August 17,

1998)  PETER R. SCHOLTES, The Team Handbook, Straus Printing Co., Madison, WI

(November 1990)