December 2005
Vol. 3, No. 6
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From the Editor: With my family on the other side of the continent on the U.S. national holiday of Thanksgiving, I turned down several offers from kind friends to join their celebrations in favor of a rare day of staying home in "comfy clothes" and watching some television. I was rewarded by this quotation from a sports coach: "To get something you never had, you have to do something you never did."
This was from a documentary mini-series about a high school American football team. After a season in which the team won only one game, a couple of former professional stars came on as coaches for a year to turn the program around. The quote is from the head coach, Dick Butkus, one of my heroes when I was a teen-ager. His statement eerily matches the headline I recently added to my Web site's home page: "'Good' Means 'Different.'"
But what should you do different when you want to change? I think a lot of people don't actively change because they don't know where to start. So this month I am going to start a series of lessons on how to change. At the end of each lesson, I will give you a challenge. If you're serious about making things better for yourself and those around you, you should use the following month to meet that challenge. If you're not serious about change, that's fine, but you might as well skip to the Contents list!
Recently I had a discussion with a young man who is trying hard to make a major change in himself after committing a crime. When he mentioned something about himself he didn't like when becomes romantically interested in someone, I asked him what he thought about when faced with that situation. He admitted that he didn't know. I suggested that this was a place to start. To change your behavior, you have to recognize the situation that triggers the disliked behavior at the moment it arises. Then you have to "hear" the thoughts that situation triggers in you. Because concious actions are spawned by concious thoughts, whether or not you are aware of those thoughts. Only by changing those thoughts can you then change the actions you take. The sequence is always this: stimulus event; internal response to the stimulus, which becomes the stimulus for your external response; then the responding action. The opportunity for change lies in that middle step, in controlling how you respond internally to the initial stimulus.
So here is your challenge for the month. Take a piece of paper and write down one situation that you want yourself or your team to react to in a different way. It can be in the workplace or in your personal life. Put that paper in a drawer where you will see it on occasion. Then start working to recognize when that situation is happening, and when it does, to identify what thoughts run through your head. If you don't seem to think anything, ask yourself what you are feeling. For example, as part of my Zen practice I have begun recognizing what desire I am feeling when a negative feeling arises inside me. They are always related, and I believe that by changing my relationship to those desires, I can reduce those negative feelings. Recently, when I felt upset over something my current client's boss wrote in an e-mail, I recognized it as "desire for respect." In a teamwork setting, think of team members' words or routine actions as the equivalent of an individual's thoughts.
On that piece of paper, start to write down the thoughts or feelings that result from the situation you chose. You don't have to do anything about them yet. Just have a list ready by next month's issue—just in time for some New Year's Resolutions you can actually achieve!
P.S. I like to give credit where it is due: This series was inspired by newsletter guru Jessica Albon's training series in her publication, Newsletters in Focus. If you produce a newsletter or are just thinking about it, she is an outstanding source of useful tips and motivation.
Need some help identifying "team thoughts?" I'm always here to help you. Contact me today to find out how.
Article: Teams can be "virtual" even with all of their members sitting in the same building, according to a recent paper by oft-cited teamwork scientist John Matheiu and fellow business professor Bradley Kirkman. They argue that researchers and managers alike need to view "virtuality" based on the way members interact rather than where they sit, which is important when you consider the different management needs of virtual and face-to-face teams.
Kirkman, of Texas A&M Univ., and Mathieu of the Univ. of Connecticut say virtuality can range on a three-dimensional continuum. The first measure is how much the team relies on electronic communications like e-mail to get its work done. Teams scattered across a country or the globe are the best-known example of virtual teams, but some meet face-to-face on a regular basis. On the other hand, some teams that are in the same city never do. The latter would be more virtual by this measure.
Their second measure is, "the extent to which the combination of virtual tools being used conveys communication and data that are important for the team to be effective." An example they give is teams that use videoconferencing regularly, which more closely mimics face-to-face communication than simple e-mail and thus is less virtual. Similarly, a text e-mail shared among engineers can't illustrate spatial relationships as well as computer animations. The less rich or important the information is that the team exchanges electronically, the more virtual the team is, the authors argue.
Finally, the more a team's electronic communications go back-and-forth in "real time"—that is, the closer they are to an in-person or phone conversation—the less virtual they are. (For example, a team with members in Canada and India that had daily phone team meetings might be less virtual than a team on the same corporate campus that only had monthly face-to-face meetings.)
Given this premise, Kirkman and Matheiu then delve into what might cause a team to be more or less virtual, including the obvious answer of geographic differences. They come up with eight conditions (directly quoted in italics):
Kirkman and Mathieu go so far as to urge that researchers drop the classification of teams into "virtual" or "traditional" entirely. If teams "make choices about virtuality" that are not strictly tied to geographic location, "teams would be better described using our continuum of virtuality."
Application: Regardless of how one defines the term, "virtual" teams are different from co-located ones. Though all teams are more similar than different, managers must recognize and account for these differences to get the most from each type. The scary thought from this article is that team managers should come to recognize whether their team is and/or should be more virtual—that is, whether the nature of their electronic communications are appropriate for the number of boundaries, task complexity, and stage of team development and projects.
In fact, the authors suggest that managers, rather than "viewing virtuality as a necessary evil of linking people at a distance," should "consider how team virtuality can be leveraged to enhance team effectiveness, even with co-located team members." In short, if you recognized one of your teams as being more virtual than you realized, based on the eight conditions above, you may want to rethink the how it uses computer applications normally considered important only for dispersed teams. An example the authors give relates to the "rhythms" condition. A relatively new project team may need a lot of face time to "identify common ground, to prioritize work projects, and to set agendas. But as they move into the action phase, they may be able to rely more on "task scheduling and organization tools such as 'Microsoft Project'" to maintain focus and coordinate efforts.
You will also need to make a greater commitment to properly planned and delivered training, Kirkman and Mathieu said. Too often, manager uses technology simply because it is available. The authors say that to leverage virtuality, you have to thoroughly analyze what you want to accomplish through virtual needs, what skills are needed to do so, and who needs to be trained. You then will have to decide the best means and timing of that training. This is one project for which you are going to want a specialist. If you don't have a technical trainer on staff, look into a consultant. In the U.S., find your local chapter of the American Society for Training and Development through the Internet for resources.
One last thing you can do is educate yourself more on what we know about managing virtual teams. A great place to start is the article on that topic in this newsletter's December 2004 issue.
Source: Kirkman, B., and J. Mathieu (05), "The Dimensions and Antecedents of Team Virtuality," Journal of Management 31(5):700.
Article: Employees of a Dutch railway company rejected an agreement between their representatives and management because they believed some crews got easier schedules than others. A new arrangement called "Sharing Sweet-and-Sour" brought an end to nationwide strikes and has had significant positive affects on company performance because it is considered more fair, even though good and bad routes are not perfectly balanced for everyone.
"NS Reizigers (Netherlands Railways) is the main Dutch railway operator of passenger trains, employing in total 3,000+ drivers and 3,500 conductors in 29 crew depots," report the authors, a team of consultants and members of the company's logistics department. It runs 5,000 trains each workday. An agreement on crew schedules had been developed in 2001 in cooperateion with unions and an employee representative group known as a "works council," but apparently those groups did not communicate any better with the workers than did management. "Because drivers and conductors would work on fewer different lines, they complained that they would have almost no variety in their duties: the resulting monotony would decrease the quality of their working conditions," the authors write. Furthermore, some of those train routes were better than others for the workers. On some, passengers were know to be especially aggressive, and the crews assigned those routes would have to bear an unfairly large share of the burden of dealing with those people. The workers "went on strike for serveral days" to try to stop the rules from being introduced. Eventually all agreed to go forward with that set, but with the understanding that a new set would be negotiated.
The consultants first "conducted discussions with 700 people from all crew depots," and a "central theme… was the demand for more variety in the duties." The consultants then lead four groups of 75 people each in two-day conferences that created alternate schedule solutions. During the conferences, the logistics department provided results from a computerized crew-scheduling system, allowing participants to see the effects from various propositions. Everyone in the company "could follow the whole process at the project's Web site, and all employees received dedicated newsletters." Based on that input, the works council chose the Sweet-and-Sour approach, and management eventually agreed.
Given the complexity of the schedules, perfect fairness was not possible. "A timetable consists of thousands of train movements," the article says, to which the 6,500 crew members had to be assigned. There were restrictions from employment law and collective bargaining rules. Efficiency required quick crew changeovers to keep the trains moving, and drivers only had licenses for certain kinds of trains and lines. But the new schedule incorporated an acceptable minimum amount of variety and maximum exposure to the undesireable lines for each crew member, and limited the schedule differences between members.
The new system went into effect in 2003. Besides eliminating the labor problems, it has had other posotive effects. Though total workload went up by 3.2% between that year and 2004, this only required a 1.2% increase in labor required. That might not sound like much, but given the number of employees, even after some financial concessions to increase the schedule's acceptance the company estimates it saves $4.8 million in the first year. These are 20% higher than the company had targeted. It expects to save more than $30 million over the first five years—not counting, I would add, the significant losses that further strikes would have caused.
Application: This article is from a journal on operations research, and was focused more on the computer system than the people elements. But in recent issues of TeamResearch News the issue of perceived fairness within and between teams has come up as having an impact on team performace, and this article provides a good case study. Apparently, even those charged with representing the employees in two different capacities (the union and the work council) underestimated the importace of what researchers call "distributive justice," and it cost everyone involved money, time, and heartache.
If you are a manager, one application of this is to not rely on worker representatives alone when making decisions that will have a significant impacts on workers' lives. To the degree allowed by your agreements with the formal organizations, make sure workers have open access to the same information you are using in your decision-making (like the project Web site the article mentions). Don't be afraid to use your company newsletter to "float trial balloons," but make clear the approach is just the latest thinking and solicit input. If you don't have formal worker organizations, coming up with ways to involve the workers in the decision is even more important. Also make sure your managers know what to say to employees, communicate that in team meetings, allow discussion, and ask for feedback—and then use it. If you're a lower-level manager, there's nothing preventing you from adding this information to your team site and sending out e-mails in addition to holding team discussions.
Direct-marketing gurus say it takes an average of seven contacts to get an individual to respond to a solicitation. Training experts say information should be provided in at least three different media to ensure absorption by students. Persuasion experts say the key point in a message should be repeated several times for maximum impact. I suspect you are sensing the same pattern here that I see: You can reduce problems with employees by communicating early, often, and in multiple ways
Source: Abbink, E. (05), et al., "Reinventing Crew Scheduling at Netherlands Railways," Interfaces 35(5):393.
Article: A solution to the continuing scandels among American corporations, and concerns about the gap between CEO compensation and that of lower-level employees, is to build boards whose members reflecting all risk-taking stakeholders in and outside of the company. According to management professors Allen Kaufman of the Univ. of New Hampshire and Ernie Englander of The George Washington Univ., this would be a sharp change from the emphasis on shareholder value. They say that emphasis was introduced in the 1980s as a reform of corporate governance but has had the opposite effect. Their suggested "team production" focus would also bring the benefits of better team performance shown by teamwork research to result from diverse skills on teams and to include in decision-making everyone affected by decisions.
Kaufman and Englander say that the American stock market slide of the 1970s led to financial experts to call for loading boards with outside directors from the senior levels of their own companies to curtail many of the excesses and maximize financial returns to stockholders. But studies have shown that the compensation committees that determined CEO pay were more likely to offer stock options to the CEO, and, the article says, "were no less likely to award 'excessive' pay packages. Stock options themselves had a perverse effect. They created power incentives for managers to misrepresent corporate performance." CEOs as a group have a vested interest in keeping average CEO compensation high, so even without any other connection to the company, CEO members of a compensation committee cannot be considered objective decision-makers.
The shareholder focus has not helped corporate performance either, the authors say. General Motors, the U.S. car manufacturer reported to be in serious financial trouble, switched to the shareholder model beginning in 1992 and by 2004 had only one corporate employee on its board—the CEO. The authors' recommended "team production" model is similar to the model used to identify a firm's "core competencies," in that it focuses on whether:
Based on these, the authors present a decision matrix for board members and shareholders to consider when looking at board membership. Institutational investors like mutual funds tend to get a lot of attention, but in truth, their members risk only a tiny portion of their overall portfolio in a single company. People who invest large amounts of capital in a company, in contrast, "have converted themselves into property owners" and have earned greater representation. Similarly, employees with general skills that can easily be transferred to other companies do not risk as much as employees with skills or knowledge unique to or uniquely shaped by their work at the company.
Regarding contributions, stockholders obviously add value to a company and must be represented. But so do, again, skilled (versus unskilled) labor and workers whose knowledge includes specifics on how the company creates its output. Regarding information held, people who can read accounting statements are almost interchangeable, as are those with general technical knowledge. But people who understand a company's cash flow from the inside, or other investements a company could make on the outside, add useful diversity to a board team. Similar to that are, yet again, employees who understand how the company operates or have invested their knowledge in creating the company's innovations.
The authors conclude, "A consensus now exists that an enlightened stakeholder model corrects for managers' tendency to try to satisfy all consituent groups…" by letting the shareholders represent themselves, and corrects for "shareholders' misunderstanding that only they have claims" on profits. Building boards that reflect the diversity of all stakeholders with substantial risks in theh company, including insiders and outsiders, CEOs and lower-level specialists, managers and skilled employees, is the best way for directors to meet their "large responsibility, a fiduciary obligation, to all those who contribute to the firm's new wealth creating enterprise."
Application: Although this was a (well-documented) opinion piece instead of a detailed analysis of existing research, I think this article has power because it parallells what we are learning about the kind of diversity that helps any team perform better: a range of skills, stakeholder representation, and tenure within the organization. (Not to dismiss the importance of diversity based on demographics like race and gender on moral grounds; it's just that these have not been proven scientifically to help teams perform better on objective measures.) So if you have the ability to influence board membership, whether of a mutinational corporation or a local charity you support, suggest that the board use the critiria this article provides. Ask:
Note, by the way, that the article doesn't say the people who traditionally serve on these boards have no role. It simply makes the point that under the current model that is focused on keeping stock prices up, the boards are often dominated by people with no direct investment in or unique knowledge helpful to the organizations. Besides other considerations, this model may not even be meeting its goal of maximizing shareholder return.
Source: Kaufman, A., and E. Englander (05), "A Team Production Model of Corporate Governance," Academy of Management Executive 19(3):9.
Article: Companies that adopt high-performance work systems (HPWS), also known as employee-centered management, are known to enjoy stronger financial performance as a result. The reason is the effect these systems have on relationships within the company, according to management doctoral candidate Randy Evans and Assistant Professor Walter Davis of the University of Mississippi.
An HPWS is a set of the kind of management techniques often discussed in this newsletter. One is the use of self-managed teams, which have no team leader and instead spread those administrative duties among the members. Other HPWS techniques include more careful screening of new employees than most employers use; empowering employees to make decisions their bosses used to make; above-average levels of training; rotation of jobs; sharing with line workers of financial information top managers usually keep to themselves; and above-average pay tied to individual and/or team performance. The research has shown that companies using this whole package are much more efficient financially and are better able to adapt to new market conditions. Both of those, of course, lead to greater profitability. After reviewing the relevant studies, the authors concluded this occurs by improving the "internal social structure" within the organization—the way its employees relate to each other in their work. This summary will focus on the team-related ideas they propose.
One way an HPWS helps performance is through "bridging weak ties." A "strong tie" is a relationship between two employees who have a lot of colleagues in common. If they share with each other stuff about work they learned through other relationships, chances are good a lot of it is the same information because it came from similar networks of people. But if two people who operate in separate circles at work exchange information, it's more likely that unique information will get passed between them and thus to the others in their different networks. By helping information flow between these weak ties, the HPWS techniques speed the spread of new knowledge and resources throughout the company. When a team has no immediate boss to act as a single point of contact, each member interacts with more people in other teams. "Increased access to information resulting from bridging ties may at least partially explain why self-managed team frequently result in increased productivity and reduced product and service defects," the authors say.
Another variable in the social structure is whether employees worry about tit-for-tat equality in exchanges of help or information. If everyone has developed trust that it will all work out in the end, rather than keeping score on who did what for whom, this helps reduce costs because neither the workers nor the managers have to spend as much time monitoring fairness. And it makes companies more flexible because employees are less likely to "hoard" information to get ahead of their colleagues. One feature of an HPWS, pay for team performance such as "gain sharing or bonuses for new product developments," reduces a worker's focus on themselves. ("Gain sharing" is giving a portion of a team's monetary improvements such as cost savings to the team.) Self-managed teams also tend to develop high levels of trust.
"Shared mental models," meaning similar beliefs among members about what the team is like and how it is treated, etc., help teams to coordinate efforts. Evans and Davis write that these models are certainly facilitated by an HPWS, expecially the open sharing of "information about business strategy, performance, and goals." Also, an HPWS enhances a worker's ability to be an active "role maker," flexing their job description to meet the needs of the organization and its customers. This is obviously true in properly formed self-managed work teams, in which members are free to volunteer for any role that becomes available with the team rather than having to stick to managers' assignments. Role-making has been proven to increase productivity and increase worker satisfaction, which in turn lowers such costs as absenteeism. It obviously makes for teams better able to adapt to chaning conditions. Finally, the techniques of an HPWS tend to increase "organizational citizenship behavior," the degree to which workers choose to help each other. The closeness of members of self-managed teams certainly encourage these tendencies, as will the sense of fairness brought about when employees are allowed to participate in the decisions that affect them.
Overall, the authors conclude, the techniques that make up an HPWS lead to the positive human relationships among workers and managers that make a company more productive and adaptable. They recommend, however, that researchers look at how these various elements work in detail, because each of these connections work in their own particualr ways.
Application: This is more of a "how it works" article than one from which you can draw recommendations about "what to do." But I think it raises the question of whether most managers concentrate their profit-improvement efforts in the areas with the greatest promise for adding value. Managers like to focus on better technology, better understanding of the market, better marketing, reduced headcount and materials costs—anything that doesn't require the effort of helping people to change. In short, we humans understandably like to take the easier route even if there is more to gain from greater effort.
The problem is, businesses aren't a bunch of machines and supplies. When I was a child, my mother, raising me in the Christian church, made it very clear that the church was not the building where services were held: it was the people inside. Businesses are people. Thus, an HPWS focuses on the biggest part of the company's performance. The rule of thumb is that 70% of an organization's costs to to worker compensation. So a 10% increase in human performance by definition will make more profit than a 10% reduction in material costs. Consider that the next time you are asked to cut costs or raise output, regardless of whether your organization is the whole company or just one team.
Source: Evans, R., and W. Davis (05), "High-Performance Work Systems and Organizational Performance: The Mediating Role of Internal Social Structure," Journal of Management 31(5):758.
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