Case Incident 2 view TEAM-BUILDING RETREATS Team-building retreats are big business. Companies believe such retreats, where team members participate in activities ranging from mountain climbing, to trust-building exercises (where team members let themselves fall backwards into their colleagues' arms), to Iron Chef-inspired cooking contests (used by UBS, Hewlett-Packard, and Verizon) can foster effective teamwork. But why do organizations have teammates participate in activities that seem irrelevant to the organization's primary activities? Howard Atkins, chief financial officer at Wells Fargo, believes that corporate retreats aid team building, which in turn improves company performance. At a luxury hotel in Sonoma, California, Atkins-along with several other corporate executives- participated in an exercise in which he and his team had to build a bridge out of boxes and unstable wooden planks. To the delight of his colleagues, Atkins was able to make it across the bridge. The team succeeded. According to Atkins, "What I have been trying to do is get them to see the power of acting more like a team. It's really a terrific success." Part of the success that Atkins is referring to is the double- digit gains in earnings by Wells Fargo-gains that he says are one of the effects of the corporate retreats. "Success more often than not is a function of execution, and execution is really about people, so we invest pretty heavily into our people." How heavy is the investment? Wells Fargo paid $50,000 for the retreat in Sonoma. Given the level of expense, some companies are now dis- continuing their team-building activities outside the organi- zation. According to Susan Harper, a business psychologist, "team-building has definitely gone down. People are reluc- tant to spend money on what they think is not an absolute necessity." Atkins believes otherwise: "I know intuitively the payback here is huge. It's a very small investment to make for the payback we are going to get." Hard drive maker Seagate takes it even further. Every year, Seagate flies roughly 200 managers to New Zealand to participate in "Eco Seagate," its annual team-building exercise. The tab? $9,000 per manager. Chief Financial Officer Charles Pope says it's one of the last things he's cut from Seagate's budget. It's clear that companies that invest in team-building retreats think they're worth the investment. Sometimes, though, they have unintended consequences. In 2001, a dozen Burger King employees burned themselves while participating in a "fire walk"-a team-building exercise that requires teammates to walk barefoot across an 8-foot pit of burning-hot coals. The results were injured employees and some very negative publicity for Burger King. In 2006, an employee of security systems company Alarm One was award $1.7 million in damages in a lawsuit in which she claimed she had been spanked on the job as part of a camaraderie-building exercise. One observer of these retreats said, "Most of the time, people asking for these activities aren't interested in real teamwork building. What they really want is entertainment." Some companies are taking team-building exercises in a different direction, having their employees engage in hands-on volunteer work. When the breweries Coors and Molson merged, they wanted to use a team-building exer- cise to acquaint the executive teams, but they didn't want to go the route of the typical golf outings or ropes course. So they helped Habitat for Humanity build a home. UPS has new managers participate in various community pro- jects, such as distributing secondhand medical equipment in developing countries. It is questionable whether team-building exercises such as mountain climbing, cooking contests, and fire walks result in improved company financial performance, and it may be better to think of such activities as morale boosters. According to Merianne Liteman, a professional corporate retreat organizer, "Where good retreats have a quantifiable effect is on retention, on morale, on productivity." Daryl Jesperson, CEO of RE/MAX International, says, "There is a productivity boost anytime you have one of these. People feel better about themselves, they feel better about the company, and as a result will do a better job." Questions 1. Do you believe that team-building activities increase productivity? Why or why not? What other factors might be responsible for increases in profitability following a corporate retreat? 2. What are some other ways besides those described here to build effective teams and increase teamwork among company employees? How might these alter- natives be better or worse than corporate retreats? 3. What should companies do about employees who lack athletic talent but are still pressured to partici pate in physical activities with their colleagues? How might poor performance by those with low athletic ability affect their status within the organization? 4. How might you increase teamwork when team members are not often in direct contact with one another? Can you think of any "electronic" team-building exercises? Sources: Based on C. Dahle, "How to Avoid a Rout at the Company Retreat," New York Times, October 31, 2004, p. 10; S. Max, "Seagate's Morale-athon," Business Week, April 3, 2006, pp. 110-112; M. C. White, "Doing Good on Company Time," New York Times, May 8, 2007 p. C6; and N. H. Woodward, "Making the Most of Team Building," HRMagazine, September 2006, pp. 73-76.