TeamResearch News

December 2004
Vol. 2, No. 6

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From the Editor: Why do managers resist empowered teams despite the overwhelming evidence of their benefits, both to people and the bottom line? Since the journals were a little light on team studies this month, I have included a couple that address that question. But I suspect the answer is pretty similar to why people won't eat right or why they keep dating the wrong partners. It relates to my half-joking belief that the Buddha missed a Noble Truth.

As you may know, the basis of Buddhism is the Four Noble Truths. Basically they say that 1) suffering is everywhere; 2) unreasonable desire is the cause of suffering; 3) if you eliminate unreasonable desire, you eliminate the suffering; and 4) to eliminate that desire, you can follow the daily practices the Buddha called the "Eightfold Path." In short, to a certain degree we cause our own suffering by wanting things we can't have.

But I think he missed a fifth truth: People would rather suffer than change. Even though there are proven methods to reduce most of the complaints I hear, people will rationalize the reasons that those methods won't work for them. Or if things are going well, they will say "there's always room for improvement," but won't seek ways to achieve it. I have been as guilty as anyone of this, and when I was the only person affected, that was fine. But as it has affected others in my life in recent years, I have had to take further steps. It isn't fun. But it's worth the rewards.

Note: If you are on or have virtual teams, don't miss the second article in this issue. It tells you everything we know about virtual teams to date—at least, everything I can fit in a newsletter format!

Is it Time to Do Better?

Are you frustrated by something related to your work group? Do you complain about it to yourself or others, but see no movement toward change? The answer is probably a lot easier to implement than you think, and likely is cheaper than the "hidden costs" of letting the problem continue. Contact me today to find out.

Contents

Studies and Articles

• Decision Consensus and Efficiency Can Go Together
• Review Provides the State of Virtual Team Knowledge
• Manager Fears about Workplace Democracy are Valid
• Middle Managers Create Own Meanings During Forced Change

Newsletter Information

• About This Newsletter
• Reprinting Articles
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Decision Consensus and Efficiency Can Go Together

Study: Michael Roberto of Harvard Business School writes in a recent study, "for firms to perform well, managers must make high-quality decisions in an efficient manner and simultaneously build consensus to facilitate implementation." The problem is, managers (and many scholars) believe the time required to build consensus takes too long.

Roberto worked with executives at Military Engineering, Inc., a supplier of military systems, to identify 10 strategic decisions—high-impact, complex decisions whose solutions would require significant resources and various company functions—they had made in the previous 18 months. Then he interviewed and surveyed people at four organizational levels (not just top managers) to find out how the decisions were made. He determined "efficiency" based on how often groups reconsidered options or revised goals, and how much time they spent on the process. "Consensus" was defined by how similar each person's understanding of the final decision was, and how committed they were to fulfilling it. A year later, Roberto looked at company and public documents to judge how the decision panned out, and the results were mixed. For example, four decisions resulted in "new contracts, increased revenues, and productivity improvements," but three led to "cost overruns, dismantled alliances, and lost contracts."

Contrary to popular belief, there was no direct relationship between efficiency and consensus. Three of the ten groups were able to both reach decisions efficiently and build strong consensus, and they had better outcomes than the others groups. Of those, three failed at both efficiency and consensus, and four teams achieved only one. The "Application" section describes how the top groups achieved both.

Application: Making decisions efficiently cuts the costs of the decision-making process and reduces opportunity costs (the business opportunities you lose while making your decision). However, building consensus is well-proven to lead to better implementation of a decision. This happens because team members and the groups they represent are more committed to the solution and feel more personal investment in success. To achieve efficiency and consensus, Roberto proposes several tactics.

Create and agree on criteria for your decision before starting the process. In my SuddenTeams® Program, I offer the example of deciding what kind of vehicle you want, what features are most important to you, the price you can afford, etc., before setting out to buy a car. Then you can focus on choosing the option that best fits those criteria. Similarly, effective decision-makers in this study combined and "winnowed" out options to narrow down the list.

Make a tentative decision allowing for events out of your control. When some participants are worried about events beyond a group's control, decision-making can drag. But virtually every decision is affected by such events. Effective groups allowed for that uncertainty by saying: "'we are going to do this if we can get x, y, and z…,'" as one participant put it, so the decision "'was always contingent on certain events happening.'" This approach reduces concerns about a decision, paving the way to agreement, and "provides an opportunity for additional learning prior to a final decision…"

Make sure everyone is working from the same information at the same time. In short, all research done to support a position needs to be shared with everyone at the same time. "During a group decision," Roberto writes, "people felt disadvantaged if they were examining data for the first time, while others had reviewed it earlier." The practice of "pre-selling" some members also made the others question whether "their views and opinions were truly valued…"

Do not propose or waste time on options no one really supports. Though an occasional "straw man" discussion can kick up creativity, in that case everyone knows the option isn't real. What Roberto found was that inefficient groups wasted time on options included just "to make the process appear thorough and analytical." This is similar to the common complaint of a manager who will act like he is seeking the opinions of his employees because he thinks it makes him look good, even though it is clear to them that his decision has already been made.

Do not allow strong advocates for an option to evaluate that option. Strong believers tended to filter out information that hurt their positions or otherwise slant the data to support their beliefs. Besides hurting decision quality, this, too, caused other members to question their roles in the process. The more effective groups "invited third parties to provide objective analysis" of the options, such as "the firm's strategic planners, its financial analysts, or external consultants."

To summarize, effective decision-making teams follow formal decision-making practices that cut the list of possible solutions down to a manageable few and then compare them based solely on objective criteria and facts that acknowledge the factors beyond the team's control.

Source: Roberto, M. (04), "Strategic Decision-Making Processes: Beyond the Efficiency-Consensus Trade-Off," Group & Organization Management 29(6):625.

Review Provides the State of Virtual Team Knowledge

Article: Three management professors have reviewed all 93 studies and theory articles ever published on virtual teams to look at what we know about them. (Not surprisingly, 70 were published just in the last decade). There are still far more questions than answers, but the article is the most complete look to date at this newest form of work team.

The researchers define virtual teams as those that use technology to overcome differences in location; time or availability; and/or organizations. So "virtualness" is a characteristic of any team that, for example, occasionally uses e-mail. (I consider a team "virtual" if its members interact mostly through electronic means.) The authors grouped their findings using a typical framework for looking at team operations: inputs-processes-outputs. I'll mirror their approach below as I hit the highlights, focusing on the differences between virtual teams (VTs) and face-to-face ("regular") teams. In some places I have added context from my research, usually in parentheses, but all quotations are from the article.

Team Inputs

• Group Size
• The "number of ideas generated in VTs has been found to increase with group size," while in regular teams the number goes down as the team gets too large (over 8-12 people depending on the type).
• On the other hand, increased VT size made audio-conferencing more difficult.
• Technology
• Higher technical expertise is linked to VT success (obviously, given the greater reliance on technology).
• Technology that engages more senses improves VT performance: for example, "the addition of video resources results in significant improvements to the quality of a team's decisions."
• The lack of nonverbal and visual cues in most interactions is part of why VTs take longer to make decisions, and why members have a harder time determining each others' area of expertise or predicting what another member will do in a given situation.
• Task: Task type strongly affects the success and speed of VT decision-making; for example, when a task is unclear, virtualness increases the time to create a goal, but may also increase the quality of that goal (unfortunately, the article didn't specify which tasks have been studied and the results).
• Diversity
• Status differences (management level, tenure in company, etc.) among members tend to have less of an impact on VTs than on regular teams.
• The effects of personal diversity (race, gender, etc.) are mixed; though they seemed to carry less weight in VTs than in regular teams, VT members still tended to create subgroups along those lines.
• Cultural differences hurt coordination and communication, just as they do in face-to-face teams (if not addressed, I would add).
• Though it may seem better to have a bunch of extroverted people on VTs, diversity on that trait did not hurt VTs enough to worry about it.

Team Processes

• Planning
• As with regular teams, setting goals for VTs is very important for commitment, decision quality and other traits.
• It is "harder for members to establish a unified sense of purpose…"
• "Nonetheless, formalizing work processes and strategies has been found to be critical for VT performance."
• Virtual teams have a much harder time with project management.
• Implementation
• The overall amount of communication is lower in VTs, as you might expect, but there are exceptions.
• One situation in which a VT has higher participation is when members use technology to overcome differences in work schedules (even regular teams members can have very different office hours).
• Virtual communication raises unique issues, "such as how to react to no participation and the multiple meanings attributed to silence."
• "Likewise, human-computer interface mistakes and technology failures…hamper communications," but these errors often are mistakenly blamed on personal failings such as a poor work ethic.
• New members on VTs are more active in seeking information than those on regular teams.
• Members of VTs are more likely to participate equally than those of regular teams.
• The technology used by VTs makes it easier to track individual performance and thus reduces social loafing (the tendency for some people on teams to let others do the work).
• Interpersonal Issues
• VT members are more likely to use inappropriate behavior such as swearing and name-calling.
• VT members are less likely to discuss personal matters with each other initially, though the differences in that versus regular teams goes away over time.
• Trust is especially important in VTs because it can balance out the lack of professional intimacy.
• A face-to-face meeting early in a VT's life helps develop trust significantly.
• One study found VTs have lower cohesiveness ("members' attraction to the group and its task") than regular teams; for teams in general, cohesiveness improves satisfaction and performance.
• A "shared group identity" is even more important to VTs than to regular teams.

Team Outcomes

• Emotional Outcomes
• Overall, VT members are less satisfied with the team experience than regular team members.
• However, brainstorming and decision-making are more satisfying when done virtually.
• Using instant messaging increases frustration levels.
• Performance Outcomes
• Virtual work "increases the amount of time required to accomplish tasks."
• We don't know yet whether virtual teams perform better or worse than regular teams as a rule.

The researchers' bottom line: compared to face-to-face teams, there still is a lot we don't know about virtual teams.

Application: A lot of what we do know about teams in general applies to virtual teams. Based on this research review and the individual studies I've read, however, there is some specific advice for optimizing VTs that I will be adding to my SuddenTeams Program:

• It is more important to provide training or facilitation on the following for virtual teams than for regular teams: technology use, project management, appropriate communication behaviors, group identity, and trust-building.
• Use an initial face-to-face meeting to create a shared sense of mission in the team, a code of conduct, and social relationships: these are harder to do virtually, while brainstorming and decision-making can be done as well or better virtually.
• Be prepared for a virtual team to take longer to do a particular type of project than a regular team.
• Diversity issues will likely be no more or less of a factor in virtual teams.
• Especially when on a virtual team, don't assume that delays in response are due to a personal failing of the other person.
• Contrary to some managers' concerns, tracking team member contributions can actually be easier with virtual teams, which in turn reduces the chances for social loafing.

Manager Fears about Workplace Democracy are Valid

Article: For decades now, researchers and consultants have been calling for companies to become more democratic in their operations by giving real decision-making authority to workers, for a variety of financial and ethical reasons. They have pointed to the sustained success of relatively democratic companies like Hewlett-Packard and Southwest Airlines as proof it can be done. Yet few companies have joined the ranks of those exceptions. Often the blame for this resistance is placed with "power-hungry" managers. But Jeffrey Kerr, a professor of strategic management, argues there can be good reasons for the resistance.

In an article introducing his, two other business professors outline the reasons to give employees a greater voice:

• Greater commitment by employees when decisions are jointly made.
• Greater alignment of employee actions.
• Enhanced innovation and willingness to change.
• Broader skill development, making employees more valuable as individual contributors.
• "It is the right thing to do, from a moral perspective."

But based on Kerr's article, they admit that greater empowerment also has disadvantages:

• Lower-level employees, lacking the "big picture" view and/or knowledge of top managers, might make decisions that go against the company's best interests.
• Democratic processes take time, which can hurt efficiency.
• Switching to those processes require institutional changes that are difficult and could fail.
• Managers may resist the changes because of loss of power; employees may do so because of the "increased demands and accountability"; and both may resist because of the new skills they must learn.
• Democracy may not fit some situations: the extreme example is a battle, where high-value decisions must be made very quickly.
• It may not be the moral thing to do, if changes reduce company performance and thus hurt "shareholders, communities, suppliers, financiers, society," or employees (or customers, I add).

Kerr points out that there are fundamental differences between democracy in a government and in a company. But he also notes that "the vast majority of citizens are passive participants" in government, only paying their required taxes and (maybe) voting. In a work organization, employees are both very actively involved in implementation of decisions and more directly affected. So it seems like workers are both "better prepared and more motivated than the citizen to participate in a democratic process…"

However, since workers rarely have a direct say over who manages them, and there are considerable risks in switching to organizational democracy, managers do not feel as compelled to listen to employees as politicians do to citizens (in theory). The only real reason to do so, Kerr argues, is if the switch will improve company performance enough to outweigh its costs. "To make the case for democratic process, management must answer two essential questions," Kerr says:

1. "will democratic process provide competitive advantage in the markets in which we compete?"
2. "can the organization learn to function effectively as a highly participative system based on democratic values and practices?"

Several factors need to be considered, Kerr writes. An organization that needs flexibility and creativity will likely gain more from democracy than one "where the work is more structured and routine" like a fast-food restaurant. Similarly, a workforce that possesses a wider range of functions and skills will likely gain more.

The more levels of managers there are, the more people there are who will feel threatened, Kerr says. "It is not uncommon for resistant managers to undermine the transition…by subtly limiting the information available to decision-making teams, by holding them to unrealistic expectations, by failing to provide necessary resources, or by abandoning them…" Managers also may view employee-team decisions as "recommendations" rather than final decisions. Impatient to complete the process of change, managers may fall back on the old ways of control, "arguing that 'in this particular case' the decision needs to be made quickly." Those last two actions slow the transition and increase employee cynicism.

A change to democratic control requires a total commitment, but risk-averse managers often try limited change, don't commit the needed training and other resources, and retreat from the full effort when the going gets rough. (Then when they fail, I add, they will say that "we tried empowerment and it didn't work," even though poor implementation was the problem.) Nonetheless, Kerr defends organizations that hesitate to adopt a more democratic or empowered approach. "In the final analysis," he writes," the slow proliferation of organizational democracy probably has less to do with managers' desire to hoard power and resources and more to do with their generally rational consideration of costs and benefits."

Application: I cannot be as forgiving about resistance to empowerment as Kerr. Humans tend to resist giving up power once it has been attained. I have heard some impressive rationalizations against even considering empowering teams despite overwhelming proof that empowerment would optimize those teams' performances. If you are a manager in an organization that has a range of functions, my first advice is that you question your real reasons for not taking a sober look at the possibilities.

For those considering the plunge, Kerr offers some conclusions about how to go about it:

• Implementing democratic processes for reasons other than competitiveness and performance "will be an expensive failure" (of course, I note that resisting those processes for any other reason is equally invalid).
• The benefits can only be realized if management does everything necessary to implement those processes correctly.
• Those benefits also require a motivated and able workforce, including the middle managers.

Middle Managers Create Own Meanings During Forced Change

Study: Although this was not the point to the study, an example of how not to implement significant change appeared when two researchers looked at how middle managers tried to make sense of a transition that split one division of a utility company into three. Senior managers developed the new structure without significant involvement of middle managers, who nonetheless "had to develop the details of their roles and responsibilities themselves once appointed to (reassigned within) the new structure," the authors report.

The researchers asked 26 middle managers (out of the 90 involved) to keep diaries over the year the transition was scheduled to take. The diarists were asked to record their thoughts periodically on these questions:

1. "What is going well and why?
2. "What is going badly and why?
3. "What problems do you foresee?
4. "What have been the significant events?
5. "What rumors and stories are circulating?"

The researchers then categorized the responses and followed up with interviews. They were interested in the managers' thought processes, but I will focus on the practical results reported. Not surprisingly, significant tensions developed, "leading to poor customer response times…" The managers started out with a strong sense of purpose and identification when they were part of the same division. As the split advanced, some managers seemed to expect everyone to both maintain "business as usual" while also handling their new responsibilities, a position other managers resented. Managers in the service divisions thought those remaining in the core division began to treat them as contractors instead of colleagues as they used to. (The new engineering and support divisions provided services to the core division, and could lose that business to outsourcing if their costs were not competitive.) When identification with the new divisions occurred, it often was of the "us versus them" variety.

Eventually negotiations and a formal service contract approach reduced the problems. The researchers concluded that even though previous studies focused on the role of senior managers in change, the thoughts and actions by middle managers "have a more direct impact on change outcomes, and therefore on the way a structural blueprint designed by seniors works in practice."

Application: If you are going to implement change, it is critical to involve the people who will make the change happen when designing it. The truth is, they are involved whether you want them to be or not. It is very difficult to get 90 people to follow the same set of directions the same way even in routine operations. If you don't find out their obstacles and ideas before making changes, they will be forced to deal with those obstacles using whatever ideas they can whether or not those are in line with the company's best interests. "Change recipients" actually create change, the researchers write, as they discuss the meaning of top-manager directives with each other.

Because of this, it is important to remember that change agents' views can only be aligned to a certain degree. You cannot control how a change you desire is implemented no matter how detailed your plan is. The reality is that you can't control the "how" of change, so why not just:

• Negotiate the goal of the change with all the players;
• Set the boundaries of what they can change;
• Provide the resources they need; and
• Go work on the other things you always wanted to do "if you could make the time?"

About This Newsletter

TeamResearch News summarizes the latest information from studies or articles on business teams, along with guidance on how to apply that research in your workplace. It is published the first full weekend of each month as a free service from TeamTrainers^TM Consulting (www.suddenteams.com). Learn how to subscribe below and see the newsletter Web page for details about the newsletter, cautions about studies, and our privacy policy.

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Your questions and suggestions are always welcome. Contact:

Jim Morgan
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