Beyond Teamwork
Collaboration
Building a Cooperative Work
Environment
Lift
Thrust
Drag
Gravity
James Robert Crow, Principal
Crow Consulting
1
Collaboration, What is it?
How do you define Collaboration?
2
Why Collaborate?

What can be gained personally and as an
organization through Collaboration?
3
Who can we collaborate With?

Internally and externally?
4
Problems with Collaboration

Collaboration can be risky. What are some
potential risks associated with Collabortion?
5
Barriers to Collaboration

What are some things that make
collaboration difficult/risky within
organizations?
6
Organizational Chart
7
System
A system is a series of interdependent
components that try to work together to achieve
the aim of the system.
8
Optimization
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.
9
Suboptimization
Sub-optimization is the result of doing things that
ignore the existence of a system, and the
interdependence of the components.
10
Systems Drive Behavior
Closely Held Beliefs
Affect Systems Design
Affects Individual
And Group Behavior
11
What Do the Following have in
Common?
Pay for Performance Systems
Ranking (People, Plants, Shifts, etc.)
Reward and Recognition Programs
Performance Appraisals
Contests
Quotas
Management by Objectives
Performance Appraisal
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
13
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
14
appraisals.
Work Planning and Review
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
15
Study Results
One-half of the managers used the traditional
performance appraisal process and the other half
switched to the work planning and review
process.
Traditional Performance Appraisal process no measurable change.
16
Work Planning and Review Results
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 17
had
with their manager.
Pay for Performance
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
18
The Candle Problem
19


Samuel Gluxman Princeton University
Top 25%
 Fastest
$5.00
$25.00
20

The incentivized groups took on average 3.5
minutes longer than the other groups

Replicated for over 40 years
21
Pay for Performance
Reality: Money is at best a satisfier. Money is not a
motivator.
What do we do about outstanding performers?
22
What is Outstanding
Performance?
Name
Ken
Barbara
Lenny
Noboru
Cathy
Steve
Defects per worker for the year
Qu 1
Qu2
Qu3
Qu4
8
10
12
9
6
4
11
7
11
11
11
8
8
11
8
11
15
5
12
4
5
9
9
10
Year
39
28
41
38
36
33
Rank
5
1
6
4
3
2
23
What is outstanding
performance?
55
50
45
40
35
30
25
20
15
10
05
Upper Control Limit = 51.79
Average 35.83
39
Ken
Lower Control Limit = 19.97
28
41
38
Barbara
Lenny Naboru
36
Cathy
33
Steve
24
Problem of Objective Measure
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.
25
The Six Dangerous Myths About
Compensation
Labor rates and labor costs are the same thing.
2) You can lower your labor costs by cutting labor rates
3) Labor costs constitute a significant proportion of
total costs.
4) Low labor costs are a potent and sustainable
competitive weapon
5) 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.
1)
26
London School Of Economics

Evaluated 51 Pay for Performance
Programs.

May have a Negative Influence on
Performance
27
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
28
The Role of Money
Money should enable you to hire and
retain the work force you need to run a
successful organization.
Reward 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.
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 shortlived
•
31
Contests/Competitions/
Ranking/Incentives
Theory:
Since our economy is based
on competition and we can
see the benefits of competition
all around us, we will benefit
as an organization by making
competition the way we do
business internally also.
•
•
•
Reality:
Creates Winners and Losers, and
there will always be more losers
than winners
Ignores the existence of a system
and the interdependence of the
components within the system
Counterproductive to Teamwork,
destroys teamwork.
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
33
Quotas
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.
34
Reality
• 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.
35
Management by
Objectives/Management by the
Numbers
Under pressure from management to “hit the numbers” Bausch & Lomb’s
executives got creative.
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 graymarket 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
36
huge gray-market problem for B&L.
TEAM-WORK






WIN-WIN
OPEN/SHARED
INFORMATION
WORKING TOGETHER
TRUSTING
TRUSTWORTHY
COLLABORATION
COMPETITION






WIN-LOSE
SECRETIVE/CLOSED
WORKING FOR SELF
SUSPICIOUS
UNTRUSTWORTHY
US VS. THEM
37
Can there be too much
competition?
•
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, April381999
Moving From Competition to
Cooperation
Rule One:
•
Stop doing things that result in suboptimization of the system.
•
Move from win-lose to win-win.
39
Move from Control to Development
Rule Two:
Develop an understanding of Deming’s System of
Profound Knowledge
•
•
•
•
The organization as a System
Theory of knowledge
Knowledge of variation
Psychology
40
A System of Profound Knowledge
Appreciation for a
SYSTEM
Theory of
KNOWLEDGE
Knowledge about
VARIATION
Understanding of
PSYCHOLOGY
41
Develop an Understanding of Why the
Organization Exists and the External
Focus of the Organization
•
•
•
•
•
•
•
What is the aim of our system?
Who do we serve?
Who are our customers?
What is happening in our markets?
What is changing in our industry?
What are our critical success factors?
What must we do consistently well to be
successful as an organization?
42
Variation
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.
43
Variation
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.
44
Two 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.
45
Theory of Knowledge
Management is Prediction
 Knowledge is build on Theory
 The use of data requires Prediction
 Need for Operational Definitions
 Information is not Knowledge

46
Seven Rules for the Theory
of Knowledge
1)
2)
3)
4)
5)
6)
7)
Any plan requires prediction.
There is no knowledge without theory.
There is no prediction without knowledge.
Experience teaches nothing without the aid of
theory.
Operational definitions put communicable
meanings into a concept.
A single counter example destroys a theory.
There is no absolute value to anything.
47
Psychology
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.

48
Autonomy
Mastery
Purpose
49
Fedex Days
Must deliver within 24 hours
50
Google
20% Time
51
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.
52
The Appraisal Process:
Other 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
“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
54
“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
55
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.”
56
W. Edwards Deming, Out of the Crisis, MIT Press, 1986
The 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.
57
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
58
Chris Argyris’s Model I and Model II Action Maps:
Understanding Interpersonal Interactions as a
System
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
thinking
Publicly check out assessments
Take personal responsibility
Make these strategies discussible
59
Model I and Model II Action
Plans (cont’d)
Outcomes
Low trust and morale
High fear, resentment, blame
Double binds
Internal competition, turf building
Low responsibility and
accountability
Outcomes:
High trust and morale
Low fear, resentment, blame
Openness to change
Cross-functional cooperation
High responsibility and
accountability
Type of learning: Single-loop
(All mental models go unexamined)
Type of Learning: Double-loop
(all mental models are open to
scrutiny)
60
Model I
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.
61
Model II
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.
62
The Deming Cycle of
Continual Improvement
Improve Quality
Costs decrease because of
Less rework, fewer mistakes, fewer
delays,Snags: better use of machine time,
materials and people.
Productivity Improves
Capture the market with
Better quality and lower
costs
Grow the business
Provide jobs and create
opportunity
63
Bibliography
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)
64