Issue: Summer 2002 Mission Current Issue Editorial Board Past Issues Kravis Leadership Institute Claremont McKenna College Fairness in Leader-Member Exchange Theory: Do We All Belong On The Inside? By Nathan Harter Purdue University and Donna Evanecky, Purdue University at Kokomo Contact Us Call for Papers Academic Citation: Nathan W. Harter and Donna Evanecky, \"Fairness in Leader-Member Exchange Theory: Do We All Belong on the Inside?\" Kravis Leadership Institute Leadership Review, Summer 2002. An abridged version of this paper was presented in March, 2002, at the thirtysecond annual conference of the Popular Culture Association, in Toronto. About the Authors: Nathan Harter has taught Organizational Leadership for twelve years at Purdue University, after practicing law in Rising Sun, Indiana. Associate Professor Harter has pursued studies into the philosophical underpinnings of leadership. Donna Evanecky joined the Purdue University School of Technology at Kokomo as Assistant Professor for the Department of Organizational Leadership and Supervision in August 2001. Evanecky has eight years of supervisory, engineering, and quality experience, along with extensive education, teaching, and technical expertise. The past ve years of Evanecky's career were spent at DaimlerChrysler's Indiana Transmission Plant in Kokomo. INTRODUCTION Leader-Member Exchange theory (or LMX) describes differences in the way leaders treat the in-group and the out-group. LMX then prescribes bringing all followers into the in-group. This paper questions the justice of arrangements both described and prescribed by LMX. In what respect are distinctions between in-groups and out-groups unfair? Are these distinctions eradicable in fact? Would it even be fair to try eradicating them? E-mail this page THE IMPORTANCE OF FAIRNESS TO LEADERSHIP GENERALLY A number of writers emphasize the role of fairness in the relationship between a leader and a follower, even if they do not agree on its importance or what exactly constitutes being fair. Jerald Greenberg, one of the most prominent authors in the eld of organizational justice, makes the observation that people all have perceptions of fairness. People behave as though it matters (Greenberg, 1996). So, for all intents and purposes, in the leadership process, fairness matters. This is a reassuringly empirical place to begin. In what way does it matter? The answer to this question is not so clear. Going all the way back to The Prince (Machievelli, 1531/1991), the perception of fairness matters a great deal because followers believe that it matters. It is that simple. For this reason, a prudent leader would certainly try to seem fair. The truth of the matter (Machiavelli argued) is that leader effectiveness is more important ultimately than fairness, so a leader may in fact be unfair when it serves his ends - so long as he remembers to keep up appearances. Fairness is an expectation that followers have and little else. What a leader must remember is that a follower's perception is their reality. Seem to others to be fair, he advises, and you can literally get away with murder. Machiavelli was responding to a series of writings about political leadership that had told leaders to practice virtue. He changed the tone of the discussion by saying that in reality, doing the right thing morally or spiritually often meant doing the wrong thing when it came to being effective. In other words, being fair does not always work. Right does not make might. Virtue can ruin leadership. Effectiveness and ethics are two separate things. Many writers since have tried to refute the old Florentine, with varied success. The noted philosopher John Rawls insists for example, \"Justice is the rst virtue of social institutions.... [L]aws and institutions no matter how efcient or well-arranged must be reformed or abolished if they are unjust.\" Rawls then wrote that \"one may think of justice as fairness...\" (Rawls, 1971, p. 111). His famous principle of fairness \"holds that a person is required to do his part as dened by the rules of an institution when two conditions are met: rst, the institution is just (or fair),...and second, one has voluntarily accepted the benets of the arrangement or taken advantage of the opportunities it offers to further one's interests\" (Rawls, 1971, p. 111f). We shall return to this principle soon. The point is that not everyone agrees in what way fairness matters. So, people all have perceptions of fairness, but they do not agree. Why should leaders try to understand and overcome these differences? The answer is that patterns of fair dealing build trust. Trust accumulates, making relationships more reliable. Reliability Trust accumulates, making relationships more reliable. Reliability makes relationships more efcient, if not more pleasant, including the relationship between a leader and a follower, (e.g., Gardner, 1990, p. 33; Fukuyama, 1995, p. 21; & Young, 1991, chap. 2). This is part of the reason why issues of fairness and trust lie at the heart of leadership. This paper questions the justice of arrangements both described and prescribed by Leader-Member Exchange Theory. In what respect are its distinctions between in-groups and out-groups unfair? Are these distinctions eradicable in fact? Would it even be fair to try eradicating them? The rst step in this paper is to explain LeaderMember Exchange Theory and its ethical implications. WHAT DOES LMX DESCRIBE? Leader-Member Exchange Theory (also known at one time as vertical-dyad linkage) goes back over twenty-ve years (Northouse, 2001, p. 111), and builds on the seminal work of the sociologist Georg Simmel, nearly one hundred years ago. In its current form, Leader-Member Exchange Theory (or LMX, for short) emphasizes that the relationships a leader has with followers can be divided into two types. These two types of relationship tend to divide followers into two groups - one group for the one type of relationship and another for the other type. The two groups are referred to as the \"ingroup\" and the \"out-group\". Again, the determining factor as to which sub-group a follower belongs to has to do with the nature of that person's relationship with the leader, (Northouse, 2001, p. 112). This is important because it places a great deal of responsibility for the split on the leader directly and not on cliques or coalitions. Thus, the ethical implications of LMX are to be traced to the leader, which is one of the theory's limitations. The distinction between the two groups is not arbitrary. According to LMX, the in-group can be distinguished from the out-group in the following manner. Members of the in-group will have more responsibility and decision-making inuence than those in the outgroup. Quite probably, the in-group member will have higher job satisfaction and access to valuable resources, such as money, time, and authority because of their status with the leader. Along with these, the leader will demonstrate trust, support, collective goals, as well as initiative beyond the scope of the everyday job toward the member of the in-group, in exchange for more effort and enthusiasm (Northouse, 2001, p. 114-115, 118). In contrast, members of the out-group are given little support or responsibility, along with minimal inuence in decision-making. Overall, lack of interaction with out-group members by the leader is apparent. For example, perhaps the leader disagrees with a member's views and work style. The leader may interact very little with the member because of this dissimilarity. Thus, it is likely that the member and the leader will develop a low quality relationship, ultimately driving the member into the out-group. He or she becomes marginalized. This distinction between groups goes all the way back to biblical times. In the Old Testament, II Kings 14:28 refers to King Jeroboam's administration ignoring policies of justice and fairness. As a result, the rich became richer, and the poor, poorer. There was an in-group and an out-group created by the different relationships they had with the king. This historical anecdote correlates with organizations today with respect to the in-group getting more than the out-group. People in the out-group are so oppressed or invisible that it is hard for the leader to notice their plight. Instead, the leader continues to give more challenge, freedom, and responsibility to the in-group members. They in turn do more to justify their status, which puts them at the forefront of the leader's mind the next time a job needs to be done and the next time a perquisite comes along, and so it continues in a spiral: the rich do get richer. In other words, LMX describes a disparity that can be traced to the leader. Something the leader says or does over time contributes to the creation of two unequal factions. On the surface, this seems unfair. Disparities of any kind are highly suspect, especially if one begins from an egalitarian viewpoint that everyone ought to be treated the same. Making matters worse is the tendency for the disparity to become more pronounced and permanent, so that people become xed in their groups, notwithstanding their talent or efforts. Once the groups take shape, they tend to stay that way and rigidify. This too seems unfair, because now members begin each new day on an uneven playing eld. The out-group would have to go to extraordinary lengths to reach the status and power already being enjoyed by the in-group, and it becomes simpler to give up. The disparity supposedly affects productivity, and that makes sense (Northouse, 2001, p. 115 & 119). Once the disparity strikes participants as unfair (Northouse, 2001, p. 120) and they conclude that the leader either caused it or at least has not repaired it, they are likely to question the leadership itself. That is not good. So what does LMX recommend that the leader do? WHAT DOES LMX PRESCRIBE? LMX proceeds as though the division into in-groups and out-groups is both unproductive and unfair. Consequently, it offers to a leader certain prescriptions to prevent or x the situation (Northouse, 2001, p. 115-118). LMX prescribes rst that leaders become cognizant of their attitudes toward all of their members. Certainly a leader may not like some people as much as others, but a leader must separate personal feelings from the task at hand. The task is leadership. If a member sees that a leader treats members differently, especially over time, he or she may perceive inequity. As the Equity Theory attributed to J. Stacey Adams (1965) states, a member perceives what they can get from a situation (outcomes) in relation to what they put into it (inputs), and then compare their input-outcome ratio with the inputoutcome ratio of others. If an inequity is perceived, the member will attempt to correct it, perhaps by reducing effort or quitting altogether. Say for example that six people work for a given manager. All but one of these employees is male. As time passes the female begins to realize the boss is not treating her as he does her co-workers, even though she works longer hours and completes more successful projects than do her co-workers. She is likewise not given extra responsibility, freedom, or special perks. She is in the out-group. Or, in this instance, she is the out-group. As time goes on, she begins to do things to make the situation equitable -- things like discontinuing her long hours, losing dedication, and ultimately resigning. Although this is an illustration, it is not ction; it actually happened to one of the authors in a previous career. Can and will a leader stop this segregation of in-group and outgroup from occurring? That is the question LMX expects a conscientious leader to answer. Warren Bennis has been quoted as saying, \"Good leaders make people feel that they're at the very heart of things, not at the periphery. Everyone feels that he or she makes a difference to the success of the organization. When that happens people feel centered and that gives their work meaning.\" (EduLeadership.com) This is the rst step under LMX that a leader must take toward ending the segregation of in-group and out-group members. The leader's success depends upon grasping this truth. It has been said that for a leader to be successful, they must surround themselves with competent people. More likely than not, a leader will have very competent people within the out-group, but if he or she is not using these valuable resources fully, then they cannot contribute to the leader's success. At the end of the day, if not everyone is a member of the in-group, then the leader has failed and has jeopardized the potential for success. This at least is the prescription for managers. In the end, LMX advises a leader to avoid the temptation to participate in creating disparities and to become especially sensitive to the perceptions of followers, so that as a consequence all followers might be brought within the in-group. QUESTIONS OF FAIRNESS LMX is coherent, and it takes workplace justice seriously. For these two reasons, if for no other, it deserves further study and respect. Our purpose in this section is to raise questions about the ethics of LMX: Is it fair? By the same token, is the situation it hopes to remedy unfair? 1. As a preliminary matter, we would ask whether LMX is overly simplistic, offering an either/or schema (one is a member either of the in-group or of the out-group) rather than a more subtle continuum of being more or less \"in\" as a matter of degree, so that clear groups are really the product of one's imagination or interpretation, like polar extremes on a graduated scale? Could that not be possible at least sometimes? Andy is more favored than Betty, who in turn is more favored than Clark, and so on. The assumption that there are in fact two distinct groups, as opposed to degrees of being \"in\Allied Academies International Conference page 15 CONFLICT IN WORK TEAMS: PROBLEMS AND SOLUTIONS Brittany Sikes, Florida Institute of Technology Robert D. Gulbro, Athens State University Linda Shonesy, Athens State University ABSTRACT Conflict is almost certain to occur in work teams due to the fact that they are comprised of different people possessing different perceptions, personalities, and behaviors. Although incredibly effective, work teams may stumble upon barriers which must be overcome to allow for growth and continuation towards the common goals of the group. It is quite possible that a work team may perform without the presence of conflict, but oftentimes certain measures have been implemented to prevent such conflict from occurring. Occasional conflict, if managed appropriately, can lead to creativity, better decision-making, and improved results. However, too much conflict can lead to a decrease in performance and group cohesion. In global organizations there is an opportunity for cross-cultural differences that may increase conflict. Contained herein are both the positive and negative consequences of conflict, as well as courses of action to understand, prevent, and resolve conflict that occurs within work teams or groups. THE VALUE OF WORK TEAMS A work team is defined as an organized group, committed to the individuals within the group, whose members share the same intent of accomplishing a common goal. Managers have become more inclined to utilize work teams when presented with missions involving problem solving, solution development, and decision making. One advantage a team has over an individual is its diversity of resources, knowledge, and ideas (Townsley, 2009). Teams allow for greater creativity due to the eclectic styles of thinking that collaborate when groups are formed. Benefits derived from using teams include quality improvements and enhanced productivity gains obtained by bringing individuals with complementary skills together (Ivancevich, Konopaske, & Matteson, 2005). Teams enable better outcomes since there is a combination of multiple experiences and knowledge bases joining together to resolve issues and make decisions. An example would be the development of a new car line by a major dealership. In order for the dealership to make the best decision possible, it should utilize members from all departments: marketing, finance, legal, production, engineering, etc., in order to develop the best overall plan for the company. This allows management to have knowledge obtained from every area within the organization that is potentially involved in determining the success or failure of the new product line. From the organized work team, all necessary information is provided and analyzed in order to effectively create the new line. As problems arise from a specific area, the team will be able to resolve issues more effectively by the input provided from the various departments. On the contrary, if the company were to choose a single individual to create the plan for the new line, he or she is unlikely to be capable of making such decisions alone. In most circumstances, work teams tend to be more successful at formulating these types of decisions because they use input from team members who may be experts in that field. Proceedings of the Academy of Organizational Culture, Communications and Conflict, 15(1) New Orleans, 2010 page 16 Allied Academies International Conference CAUSES OF CONFLICT IN WORK TEAMS Despite the recognizable improvements in the proficiency of organizations through the use of teams, there is also an increase in the likelihood of conflict occurring due to the presence of overall differences among members of a team. When individuals come together in work teams there are differences in terms of power, values and attitudes, and social factors that all contribute to the creation of conflict. Conflicting factors such as these may cause deviation from the key goals of the group and may generally fall into three categories: communication factors, structural factors and personal factors\" (Townsley, 2009). Communication factors are often the primary source of disagreement among individuals. Barriers to communication can result from misunderstanding of information, differences in interpretation and perception, cultural differences among the team, as well as poor listening. Different communication styles, if not interpreted correctly, might also prove to be problematic. For example, problems arise when value judgments are made on the basis of different communication styles. If team members disagree and one represents views and feelings forcefully with a raised voice, another more restrained team member may see that as arrogant and aggressive. The same 'arrogant' team member may conclude that the restrained team member is untrustworthy because eye contact is not maintained (Ford, 2001). Such misinterpretation can easily trigger false opinions of the sender or receiver's intent. The second category, structural factors, can stem from elements such as the background of the team members, infrastructure issues, participation levels (within the team), or possibly the size of the team. Personal factors that could also promote the chance for conflict within a team include: individual values and goals, needs, self-esteem, or individual motives (Townsley, 2009). Furthermore, an individual's perception of the situation that is significantly different from that of another team member's may also bring about conflict. With the increase in the globalization of organizations, a new source of conflict can come, not from just cross-functional team members, but cross-cultural members as well (Northouse, 2010). here are two cultural factors to keep in mind when considering conflict-causing factors. The first is internal group culture. There will always be variation within a group. However, \"the majority of a group culture will conform to a dominant set of beliefs, attitudes and behaviors. But, there will be members of the cultural group that differ in significant ways from the norm\" (Ford, 2009). Despite the internal group culture established, there may be individual cultural factors affecting differences among the group. These cultural differences may result from individuals within the team who come from different nationality groups, religious groups, ethnic groups, and organizations. Although the team has an inherent culture that is formed, the team must be cognizant of external cultural factors that differ from the norm of the team, or else conflict may occur. For instance, \"the dominant culture in the USA, Canada, Western Europe, Australia, and New Zealand is individualistic, while collectivism predominates the rest of the world\" (Ford, 2009). Therefore, countries such as the USA, Canada, and Australia are going to place more emphasis on autonomy, creativity and authority in decision making. Meanwhile, other countries focus more on a collectivist culture where group conformity and commitment are preserved at the expense of personal interests. These types of cultural differences can greatly impact the dynamics of a work team and must be understood and respected in order for the team to function successfully. CONSEQUENCES OF CONFLICT IN WORK TEAMS Conflict can produce either positive or negative results within work teams. An effective team is one where members are capable of handling conflict and drawing out the knowledge gained from disagreements to arrive at a better decision. However, negative consequences occur whenever conflict is not resolved by the team members. If conflict is not properly managed, the effects can be damaging to the team, as well as the organization. Oftentimes a work team may consist of individuals or groups of individuals from different areas within an organization. Thus, those groups New Orleans, 2010 Proceedings of the Academy of Organizational Culture, Communications and Conflict, 15(1) Allied Academies International Conference page 17 within the work team depend on one another for information to make the best possible decisions. Whenever there is conflict among these groups, it can either be classified as functional or dysfunctional. Positive functional conflict is a confrontation between groups that enhances and benefits the organization's performance (Ivancevich, Konopaske, & Matteson, 2005). For instance, in the example mentioned previously about the dealership and its implementation of a new car line, individuals from the finance department may disagree with individuals from the marketing department on how to implement the marketing plan for the new line. As long as they are able to work through the conflict to derive the most optimum decision, then this can be considered functional conflict. Positive consequences of functional conflict include: awareness of problems, search for solutions, positive change and adaptation, as well as innovation. Thus, the absence of functional conflict in organizations might inhibit change from ever occurring and could cause a team to become stagnant and unproductive (Ivancevich, et al 2005). Dysfunctional conflict is confrontation between groups that harms or hinders the goals of the organization (Ivancevich, Konopaske, & Matteson, 2005). At this point functional conflict can lead to disruption of activities and extreme dissention among the team members when the conflict becomes dysfunctional. If the individuals within the team are not able to successfully resolve such conflict, it could prove damaging to the morale, relationships and goals of the group and the organization. Further consequences from a work team's inability to properly resolve conflict may include decreased group cohesiveness, damaged communication channels, a decline in innovation and idea creation, project cancellation, and possibly extreme profit loss. Hopefully, in order to prevent the occurrence of negative consequences from dysfunctional conflict, teams will practice good conflict resolution skills and will be well-prepared and properly trained on how to handle such disagreement within the team. However, if such is not the case, then conflict may become a direct cause for team failure instead of a positive influence in achieving optimal outcomes. RESOLVING CONFLICT IN WORK TEAMS Conflict resolution is an integral part of effective teams and organizations. Conflict is inevitable but the important takeaway is not necessarily knowing how to eliminate conflict all together, but to eliminate the problems before they begin or be prepared deal with the conflict as it is presented. There are several recommendations that prove effective in managing and resolving group conflict. The leader of the group should develop a strategy for training and preparing team members for group process, in particular, training to proactively manage or avoid conflict. Conflict management and resolution training is a great way for an organization to coach employees on how to prepare for resolving conflict when working in teams. It provides awareness of how conflict may arise and different methods of managing conflict to maximize effectiveness of the team. Such training allows the organization and its members an opportunity to develop strategies to effectively tackle conflict before it even occurs. If the conflict can be traced to cultural differences between two or more group members, obtaining cultural synergy may be necessary (Adler, 2008). Cultural differences should be embraced, and used to enhance group performance. Ethnocentrism should be discouraged, as it tends to lift up one culture at the expense of another (Northouse, 2010). Open communication is necessary to resolve differences in perception and interpretation. Some sort of compromise between individuals or sub-groups may be necessary in order to move beyond the situation. Commonalities between members of different cultures should be emphasized and differences minimized. At times facilitators should be designated to assist with managing and resolving group conflict. Implementing the use of a group facilitator can alleviate many problems resulting from conflict because he or she can coach the team(s) through dealing with conflict openly and successfully. This person can facilitate effective communication by intervening in conversation to allow for disagreements to be approached in a methodical and rational manner. Facilitators may also Proceedings of the Academy of Organizational Culture, Communications and Conflict, 15(1) New Orleans, 2010 page 18 Allied Academies International Conference help to resolve conflict in situations where members develop different conceptualizations of a conflict situation or event in the group. For instance, individuals may have unique internal frames of reference which cause them to interpret conversation differently than someone else (Mitchell, 2006). In addition to the implementation of conflict management training and the use of facilitators, other processes exist to aid in the practice of conflict resolution. In an article written by Dr. Thomas Capozzoli, six processes are discussed that can be used when practicing conflict resolution. The first states that the group should explore the reasons for disagreement and if emotions are still high, continue only after emotions have calmed. Only at this point can groups make decisions rationally based on logic and thoughts verses emotional deterrents to communication. Within the first process, Capozzoli emphasizes the need for active listening and he also discusses the importance of refusing to criticize the perceptions of other group members. The second process deals with recognizing alternative solutions presented by different sides of the group, but only after the disagreement has been fully identified. Third, all the reasons for why each solution is appropriate should be explored. Then negotiations should begin to determine which solution seems most practical. Once the solution has been identified, it should be implemented with each party understanding its responsibilities. Once the fourth process has been completed in resolving conflict, the fifth one states that the group should thoroughly evaluate the chosen solution to ensure that it is most successful in solving the disagreement (Capozzoli, 1995). If the solution does not appear to be adequate in resolving the disagreement, another solution should be evaluated. The final step presented in the conflict resolution process is to continue practicing the conflict resolution process. This will enable team members of the organization to be more equipped when handling future conflicts. Five generic approaches are mentioned when resolving intergroup conflict: dominating, accommodating, problem solving, avoiding, and compromising. The dominating approach requires that one group holds a balance of power so that it can force its resolution on the other group. This can be a successful approach when differences need to be resolved quickly or when unpopular actions need to be taken such as imposing new policy. The accommodating approach involves one group meeting the needs of another over its own. This can be beneficial when the issue is more important to the other group or when preserving peace is more important than maximizing one's own interest. The third approach, problem solving, involves collaborating and working together to maximize results for all involved. Out of these five intergroup conflict resolutions, problem solving is probably the ideal approach due to the collaboration of parties and the merger of insight, experience, knowledge and perspective. Avoiding conflict, the fourth approach, is only effective when used as a temporary method. Sometimes avoiding the conflict is necessary when other issues are more important, parties need an opportunity to cool down from a heated disagreement, or when additional time is needed to gather more information. Avoiding can be useful as long as it is used for a particular reasoning and not as a permanent solution to the conflict. When utilizing the fifth approach, known as the compromising approach, usually the resolution reached is not ideal for either group but a resolution is achieved through negotiation. Compromise is the middle-of-the-road approach and is a good backup strategy when other approaches fail at resolving conflict (Ivancevich, Konopaske, & Matteson, 2005). Each of the five mentioned approaches could prove effective in resolving conflict in teams, depending on the situation. CONCLUSIONS Organizational work teams will inevitably encounter conflict whether the conflict exists among the individuals within the work team, or among multiple teams working together. Regardless, a good understanding of how conflict occurs, the consequences of conflict, and how to manage conflict, may allow groups to arrive at better solutions for the team and the overall organization. Learning how to manage and resolve conflict requires training and preparation, active New Orleans, 2010 Proceedings of the Academy of Organizational Culture, Communications and Conflict, 15(1) Allied Academies International Conference page 19 listening, open communication, as well as an understanding of the perceptions, personalities, and behaviors shared among the group. Leading a group requires an understanding of different cultural factors, both internal and external, are also helpful in managing conflict within a group. But most importantly, adopting good practices and approaches to conflict resolution will allow conflict to enhance the behavior of the group members and the work performance of the group. References are available from the authors. Proceedings of the Academy of Organizational Culture, Communications and Conflict, 15(1) New Orleans, 2010 Eight Ways to Build Collaborative Teams - HBR 4/4/15, 10:00 PM COLLABORATION Eight Ways to Build Collaborative Teams by Lynda Gratton and Tamara J. Erickson NOVEMBER 1, 2007 W hen tackling a major initiative like an acquisition or an overhaul of IT systems, companies rely on large, diverse teams of highly educated specialists to get the job done. These teams often are convened quickly to meet an urgent need and work together virtually, collaborating online and sometimes over long distances. Appointing such a team is frequently the only way to assemble the knowledge and breadth required to pull o many of the complex tasks businesses face today. When the BBC covers the World Cup or the Olympics, for instance, it gathers a large team of researchers, writers, producers, cameramen, and technicians, many of whom have not met before the project. These specialists work together under the high pressure of a \"no retake\" environment, with just one chance to record the action. Similarly, when the central IT team at Marriott sets out to develop sophisticated systems to enhance guest experiences, it has to collaborate closely with independent hotel owners, customer-experience experts, global brand managers, and regional heads, each with his or her own agenda and needs. https://hbr.org/2007/11/eight-ways-to-build-collaborative-teams Page 1 of 21 Eight Ways to Build Collaborative Teams - HBR 4/4/15, 10:00 PM Our recent research into team behavior at 15 multinational companies, however, reveals an interesting paradox: Although teams that are large, virtual, diverse, and composed of highly educated specialists are increasingly crucial with challenging projects, those same four characteristics make it hard for teams to get anything done. To put it another way, the qualities required for success are the same qualities that undermine success. Members of complex teams are less likelyabsent other inuencesto share knowledge freely, to learn from one another, to shift workloads exibly to break up unexpected bottlenecks, to help one another complete jobs and meet deadlines, and to share resourcesin other words, to collaborate. They are less likely to say that they \"sink or swim\" together, want one another to succeed, or view their goals as compatible. The Research Our work is based on a major research initiative conducted jointly by the Concours Institute (a member of BSG Alliance) and the Cooperative Research Project of London Business School, with funding from the Advanced Institute for Management and 15 corporate sponsors. The initiative was created as a way to explore the practicalities of collaborative work in contemporary organizations. We sent surveys to 2,420 people, including members of 55 teams. A total of 1,543 people replied, a response rate of 64%. Separate surveys were administered to group members, to group leaders, to the executives who evaluated teams, and to HR leaders at the companies involved. The tasks performed by the teams included new-product development, process reengineering, and identifying new solutions to business problems. The companies involved included https://hbr.org/2007/11/eight-ways-to-build-collaborative-teams Consider the issue of size. Teams have grown considerably over the past ten years. New technologies help companies extend participation on a project to an ever greater number of people, allowing rms to tap into a wide body of knowledge and expertise. A decade or so ago, the common view was that true teams rarely had more than 20 members. Today, according to our research, many complex tasks involve teams of 100 or more. However, as the size of a team increases beyond 20 members, the tendency to collaborate naturally decreases, we have found. Under the right conditions, large teams can achieve high levels of cooperation, but creating those conditions requires thoughtful, Page 2 of 21 Eight Ways to Build Collaborative Teams - HBR four telecommunication companies, seven nancial services or consulting rms, two media companies, a hospitality rm, and one oil company. The size of the teams ranged from four to 183 people, with an average of 44. 4/4/15, 10:00 PM and sometimes signicant, investments in the capacity for collaboration across the organization. Working together virtually has a similar Our objective was to study the levers that executives could pull to improve team performance and innovation in collaborative tasks. We examined scores of possible factors, including the following: impact on teams. The majority of those we studied had members spread among multiple locationsin several cases, in as many as 13 sites around the globe. But as teams became more virtual, we saw, cooperation also The general culture of the company. We designed a wide range of survey questions to measure the extent to which the rm had a cooperative culture and to uncover employees' attitudes toward knowledge sharing. declined, unless the company had taken measures to establish a collaborative culture. As for diversity, the challenging tasks facing businesses today almost always require the Human resources practices and processes. We studied the way stafng took place and the process by which people were promoted. We examined the extent and type of training, how reward systems were congured, and the extent to which mentoring and coaching took place. input and expertise of people with disparate views and backgrounds to create crossfertilization that sparks insight and innovation. But diversity also creates problems. Our research shows that team members collaborate more easily and Socialization and network-building practices. We looked at how often people within the team participated in informal socialization, and the type of interaction that was most common. We also asked numerous questions about the extent to which team members were active in informal communities. naturally if they perceive themselves as being alike. The dierences that inhibit collaboration include not only nationality but also age, educational level, and even tenure. Greater diversity also often means that team members are working with people that they know only supercially or have never met https://hbr.org/2007/11/eight-ways-to-build-collaborative-teams Page 3 of 21 Eight Ways to Build Collaborative Teams - HBR The design of the task. We asked team members and team leaders about the task itself. Our interest here was in how they perceived the purpose of the task, how complex it was, the extent to which the task required members of the team to be interdependent, and the extent to which the task required them to engage in boundaryspanning activities with people outside the team. 4/4/15, 10:00 PM beforecolleagues drawn from other divisions of the company, perhaps, or even from outside it. We have found that the higher the proportion of strangers on the team and the greater the diversity of background and experience, the less likely the team members are to share knowledge or exhibit other collaborative behaviors. The leadership of the team. We studied the perceptions team members had of their leaders' style and how the leaders described their own style. In particular, we were interested in the extent to which the leaders practiced relationship-oriented and taskoriented skills and set cooperative or competitive goals. The behavior of the senior executives. We asked team members and team leaders about their perceptions of the senior executives of their business unit. We focused in particular on whether team members described them as cooperative or competitive. In total we considered more than 100 factors. Using a range of statistical analyses, we were able to identify eight that correlated with the successful performance of teams handling complex collaborative tasks. (See the sidebar \"Eight Factors That Lead to Success.\") https://hbr.org/2007/11/eight-ways-to-build-collaborative-teams In the same way, the higher the educational level of the team members is, the more challenging collaboration appears to be for them. We found that the greater the proportion of experts a team had, the more likely it was to disintegrate into nonproductive conict or stalemate. We found that the greater the proportion of experts a team had, the more likely it was to disintegrate into nonproductive conict or stalemate. Page 4 of 21 Eight Ways to Build Collaborative Teams - HBR 4/4/15, 10:00 PM So how can executives strengthen an organization's ability to perform complex collaborative tasksto maximize the eectiveness of large, diverse teams, while minimizing the disadvantages posed by their structure and composition? Collaboration Conundrums Four traits that are crucial to teamsbut also undermine them To answer that question we looked carefully at 55 large teams and identied those that demonstrated high levels of collaborative behavior despite their complexity. Put Large Size Whereas a decade ago, teams rarely had more than 20 members, our ndings show that their size has increased signicantly, no doubt because of new technologies. Large teams are often formed to ensure the involvement of a wide stakeholder group, the coordination of a diverse set of activities, and the harnessing of multiple skills. As a consequence, many inevitably involve 100 people or more. However, our research shows that as the size of the team increases beyond 20 members, the level of natural cooperation among members of the team decreases. dierently, they succeeded both because of and despite their composition. Using a range of statistical analyses, we considered how more than 100 factors, such as the design of the task and the company culture, might contribute to collaboration, manifested, for example, in a willingness to share knowledge and workloads. Out of the 100-plus factors, we were able to isolate eight practices that correlated with successthat is, that appeared to help teams overcome substantially the Virtual Participation Today most complex collaborative teams have members who are working at a distance from one another. Again, the logic is that the assigned tasks require the insights and knowledge of people from many locations. Team members may be working in ofces in the same city or strung across the world. Only 40% of the teams in our sample had members all in one place. Our research shows that as teams become more virtual, collaboration declines. https://hbr.org/2007/11/eight-ways-to-build-collaborative-teams diculties that were posed by size, longdistance communication, diversity, and specialization. We then interviewed the teams that were very strong in these practices, to nd out how they did it. In this article we'll walk through the practices. They fall into four general categoriesexecutive support, HR practices, the strength of the team leader, and the structure of the team itself. Page 5 of 21 Eight Ways to Build Collaborative Teams - HBR Diversity Often the challenging tasks facing today's businesses require the rapid assembly of people from multiple backgrounds and perspectives, many of whom have rarely, if ever, met. Their diverse knowledge and views can spark insight and innovation. However, our research shows that the higher the proportion of people who don't know anyone else on the team and the greater the diversity, the less likely the team members are to share knowledge. High Education Levels Complex collaborative teams often generate huge value by drawing on a variety of deeply specialized skills and knowledge to devise new solutions. Again, however, our research shows that the greater the proportion of highly educated specialists on a team, the more likely the team is to disintegrate into unproductive conicts. 4/4/15, 10:00 PM Eight Factors That Lead to Success 1. Investing in signature relationship practices. Executives can encourage collaborative behavior by making highly visible investmentsin facilities with open oor plans to foster communication, for examplethat demonstrate their commitment to collaboration. 2. Modeling collaborative behavior. At companies where the senior executives demonstrate highly collaborative behavior themselves, teams collaborate well. 3. Creating a \"gift culture.\" Mentoring and coachingespecially on an informal basis help people build the networks they need to work across corporate boundaries. 4. Ensuring the requisite skills. Human resources departments that teach employees how to build relationships, communicate well, and resolve conicts creatively can have a major impact on team collaboration. 5. Supporting a strong sense of community. When people feel a sense of community, they are more comfortable reaching out to others and more likely to share knowledge. 6. Assigning team leaders that are both task- and relationship-oriented. The debate has traditionally focused on whether a task or a relationship orientation creates better leadership, but in fact both are key to successfully leading a team. Typically, https://hbr.org/2007/11/eight-ways-to-build-collaborative-teams Page 6 of 21 Eight Ways to Build Collaborative Teams - HBR 4/4/15, 10:00 PM leaning more heavily on a task orientation at the outset of a project and shifting toward a relationship orientation once the work is in full swing works best. 7. Building on heritage relationships. When too many team members are strangers, people may be reluctant to share knowledge. The best practice is to put at least a few people who know one another on the team. 8. Understanding role clarity and task ambiguity. Cooperation increases when the roles of individual team members are sharply dened yet the team is given latitude on how to achieve the task. Executive Support At the most basic level, a team's success or failure at collaborating reects the philosophy of top executives in the organization. Teams do well when executives invest in supporting social relationships, demonstrate collaborative behavior themselves, and create what we call a \"gift culture\"one in which employees experience interactions with leaders and colleagues as something valuable and generously oered, a gift. Investing in signature relationship practices. When we looked at complex collaborative teams that were performing in a productive and innovative manner, we found that in every case the company's top executives had invested signicantly in building and maintaining social relationships throughout the organization. However, the way they did that varied widely. The most collaborative companies had what we call \"signature\" practicespractices that were memorable, dicult for others to replicate, and particularly well suited to their own business environment. https://hbr.org/2007/11/eight-ways-to-build-collaborative-teams Page 7 of 21 Eight Ways to Build Collaborative Teams - HBR 4/4/15, 10:00 PM For example, when Royal Bank of Scotland's CEO, Fred Goodwin, invested 350 million to open a new headquarters building outside Edinburgh in 2005, one of his goals was to foster productive collaboration among employees. Built around an indoor atrium, the new structure allows more than 3,000 people from the rm to rub shoulders daily. The headquarters is designed to improve communication, increase the exchange of ideas, and create a sense of community among employees. Many of the oces have an open layout and look over the atriuma vast transparent space. The campus is set up like a small town, with retail shops, restaurants, jogging tracks and cycling trails, spaces for picnics and barbecueseven a leisure club complete with swimming pool, gym, dance studios, tennis courts, and football pitches. The idea is that with a private \"Main Street\" running through the headquarters, employees will remain on the campus throughout the dayand be out of their oces mingling with colleagues for at least a portion of it. To ensure that non-headquarters sta members feel they are a part of the action, Goodwin also commissioned an adjoining business school, where employees from other locations meet and learn. The visitors are encouraged to spend time on the headquarters campus and at forums designed to give employees opportunities to build relationships. Indeed, the RBS teams we studied had very strong social relationships, a solid basis for collaborative activity that allowed them to accomplish tasks quickly. Take the Group Business Improvement (GBI) teams, which work on 30-, 60-, or 90-day projects ranging from back-oce xes to IT updates and are made up of people from across RBS's many businesses, including insurance, retail banking, and private banking in Europe and the United States. When RBS bought NatWest and migrated the new acquisition's technology platform to RBS's, the speed and success of the GBI teams confounded many market analysts. https://hbr.org/2007/11/eight-ways-to-build-collaborative-teams Page 8 of 21 Eight Ways to Build Collaborative Teams - HBR 4/4/15, 10:00 PM BP has made another sort of signature investment. Because its employees are located all over the world, with relatively few at headquarters, the company aims to build social networks by moving employees across functions, businesses, and countries as part of their career development. When BP integrates an acquisition (it has grown by buying numerous smaller oil companies), the leadership development committee deliberately rotates employees from the acquired rm through positions across the corporation. Though the easier and cheaper call would be to leave the executives in their own unitswhere, after all, they know the businessBP instead trains them to take on new roles. As a consequence any senior team today is likely to be made up of people from multiple heritages. Changing roles frequentlyit would not be uncommon for a senior leader at BP to have worked in four businesses and three geographic locations over the past decadeforces executives to become very good at meeting new people and building relationships with them. Modeling collaborative behavior. In companies with many thousands of employees, relatively few have the opportunity to observe the behavior of the senior team on a day-to-day basis. Nonetheless, we found that the perceived behavior of senior executives plays a signicant role in determining how cooperative teams are prepared to be. Executives at Standard Chartered Bank are exceptionally good role models when it comes to cooperation, a strength that many attribute to the rm's global trading heritage. The Chartered Bank received its remit from Queen Victoria in 1853. The bank's traditional business was in cotton from Bombay (now Mumbai), indigo and tea from Calcutta, rice from Burma, sugar from Java, tobacco from Sumatra, hemp from Manila, and silk from Yokohama. The Standard Bank was founded in the Cape Province of South Africa in 1863 and was prominent in nancing the development of the diamond elds and later gold mines. Standard Chartered was formed in 1969 through a merger of the two banks, and today the rm has 57 operating groups in 57 countries, with no home market. https://hbr.org/2007/11/eight-ways-to-build-collaborative-teams Page 9 of 21 Eight Ways to Build Collaborative Teams - HBR 4/4/15, 10:00 PM It's widely accepted at Standard Chartered that members of the general management committee will frequently serve as substitutes for one another. The executives all know and understand the entire business and can ll in for each other easily on almost any task, whether it's leading a regional celebration, representing the company at a key external event, or kicking o an internal dialogue with employees. While the behavior of the executive team is crucial to supporting a culture of collaboration, the challenge is to make executives' behavior visible. At Standard Chartered the senior team travels extensively; the norm is to travel even for relatively brief meetings. This investment in face-to-face interaction creates many opportunities for people across the company to see the top executives in action. Internal communication is frequent and open, and, maybe most telling, every site around the world is lled with photos of groups of executives country and functional leadersworking together. The senior team's collaborative nature trickles down throughout the organization. Employees quickly learn that the best way to get things done is through informal networks. For example, when a major program was recently launched to introduce a new customerfacing technology, the team responsible had an almost uncanny ability to understand who the key stakeholders at each branch bank were and how best to approach them. The team members' rst-name acquaintance with people across the company brought a sense of dynamism to their interactions. Creating a \"gift culture.\" A third important role for executives is to ensure that mentoring and coaching become embedded in their own routine behaviorand throughout the company. We looked at both formal mentoring processes, with clear roles and responsibilities, and less formal processes, where mentoring was integrated into everyday activities. It turned out that while both types https://hbr.org/2007/11/eight-ways-to-build-collaborative-teams Page 10 of 21 Eight Ways to Build Collaborative Teams - HBR 4/4/15, 10:00 PM were important, the latter was more likely to increase collaborative behavior. Daily coaching helps establish a cooperative \"gift culture\" in place of a more transactional \"tit-for-tat culture.\" At Nokia informal mentoring begins as soon as someone steps into a new job. Typically, within a few days, the employee's manager will sit down and list all the people in the organization, no matter in what location, it would be useful for the employee to meet. This is a deeply ingrained cultural norm, which probably originated when Nokia was a smaller and simpler organization. The manager sits with the newcomer, just as her manager sat with her when she joined, and reviews what topics the newcomer should discuss with each person on the list and why establishing a relationship with him or her is important. It is then standard for the newcomer to actively set up meetings with the people on the list, even when it means traveling to other locations. The gift of timein the form of hours spent on coaching and building networksis seen as crucial to the collaborative culture at Nokia. Focused HR Practices So what about human resources? Is collaboration solely in the hands of the executive team? In our study we looked at the impact of a wide variety of HR practices, including selection, performance management, promotion, rewards, and training, as well as formally sponsored coaching and mentoring programs. We found some surprises: for example, that the type of reward systemwhether based on team or individual achievement, or tied explicitly to collaborative behavior or nothad no discernible eect on complex teams' productivity and innovation. Although most formal HR programs appeared to have limited impact, we found that two practices did improve team performance: training in skills related to collaborative behavior, and support for informal https://hbr.org/2007/11/eight-ways-to-build-collaborative-teams Page 11 of 21 Eight Ways to Build Collaborative Teams - HBR 4/4/15, 10:00 PM community building. Where collaboration was strong, the HR team had typically made a signicant investment in one or both of those practicesoften in ways that uniquely represented the company's culture and business strategy. Ensuring the requisite skills. Many of the factors that support collaboration relate to what we call the \"container\" of collaborationthe underlying culture and habits of the company or team. However, we found that some teams had a collaborative culture but were not skilled in the practice of collaboration itself. They were encouraged to cooperate, they wanted to cooperate, but they didn't know how to work together very well in teams. Our study showed that a number of skills were crucial: appreciating others, being able to engage in purposeful conversations, productively and creatively resolving conicts, and program management. By training employees in those areas, a company's human resources or corporate learning department can make an important dierence in team performance. In the research, PricewaterhouseCoopers emerged as having one of the strongest capabilities in productive collaboration. With responsibility for developing 140,000 employees in nearly 150 countries, PwC's training includes modules that address teamwork, emotional intelligence, networking, holding dicult conversations, coaching, corporate social responsibility, and communicating the rm's strategy and shared values. PwC also teaches employees how to inuence others eectively and build healthy partnerships. A number of other successful teams in our sample came from organizations that had a commitment to teaching employees relationship skills. Lehman Brothers' agship program for its client-facing sta, for instance, is its training in selling and relationship management. The program is not about sales techniques but, rather, focuses on how Lehman values its https://hbr.org/2007/11/eight-ways-to-build-collaborative-teams Page 12 of 21 Eight Ways to Build Collaborative Teams - HBR 4/4/15, 10:00 PM clients and makes sure that every client has access to all the resources the rm has to oer. It is essentially a course on strategies for building collaborative partnerships with customers, emphasizing the importance of trust-based personal relationships. Supporting a sense of community. While a communal spirit can develop spontaneously, we discovered that HR can also play a critical role in cultivating it, by sponsoring group events and activities such as women's networks, cooking weekends, and tennis coaching, or creating policies and practices that encourage them. At ABN Amro we studied eective change-management teams within the company's enterprise services function. These informal groups were responsible for projects associated with the implementation of new technology throughout the bank; one team, for instance, was charged with expanding online banking services. To succeed, the teams needed the involvement and expertise of dierent parts of the organization. The ABN Amro teams rated the company's support for informal communities very positively. The rm makes the technology needed for long-distance collaboration readily available to groups of individuals with shared interestsfor instance, in specic technologies or marketswho hold frequent web conferences and communicate actively online. The company also encourages employees that travel to a new location to arrange meetings with as many people as possible. As projects are completed, working groups disband but employees maintain networks of connections. These practices serve to build a strong community over timeone that sets the stage for success with future projects. Committed investment in informal networks is also a central plank of the HR strategy at Marriott. Despite its size and global reach, Marriott remains a family business, and the chairman, Bill Marriott, makes a point of communicating that idea regularly to employees. https://hbr.org/2007/11/eight-ways-to-build-collaborative-teams Page 13 of 21 Eight Ways to Build Collaborative Teams - HBR 4/4/15, 10:00 PM He still tells stories of counting sticky nickels at night as a childproceeds from the root-beer stand founded in downtown Washington, DC, by his mother and father. Many of the rm's HR investments reinforce a friendly, family-like culture. Almost every communication reects an element of sta appreciation. A range of \"pop-up\" events spontaneous activitiescreate a sense of fun and community. For example, the cafeteria might roll back to the 1950s, hold a twist dance contest, and in doing so, recognize the anniversary of the company's rst hotel opening. Bill Marriott's birthday might be celebrated with parties throughout the company, serving as an occasion to emphasize the rm's culture and values. The chairman recently began his own blog, which is popular with employees, in which he discusses everything from Marriott's eorts to become greener, to his favorite family vacation spotsthemes intended to reinforce the idea that the company is a community. The Right Team Leaders In the groups that had high levels of collaborative behavior, the team leaders clearly made a signicant dierence. The question in our minds was how they actually achieved this. The answer, we saw, lay in their exibility as managers. Assigning leaders who are both task- and relationship-oriented. There has been much debate among both academics and senior managers about the most appropriate style for leading teams. Some people have suggested that relationship-oriented leadership is most appropriate in complex teams, since people are more likely to share knowledge in an environment of trust and goodwill. Others have argued that a task orientationthe ability to make objectives clear, to create a shared awareness of the dimensions of the task, and to provide monitoring and feedbackis most important. How Complex Is the Collaborative https://hbr.org/2007/11/eight-ways-to-build-collaborative-teams Page 14 of 21 Eight Ways to Build Collaborative Teams - HBR 4/4/15, 10:00 PM Task? In the 55 teams we studied, we found that the Not all highly collaborative tasks are complex. In assembling and managing a team, consider the project you need to assign and whether the following statements apply: truth lay somewhere in between. The most productive, innovative teams were typically led by people who were both task- and relationship-oriented. What's more, these __ The task is unlikely to be accomplished successfully using only the skills within the team. leaders changed their style during the project. Specically, at the early stages they exhibited task-oriented leadership: They made the goal __ The task must be addressed by a new group formed specically for this purpose. __ The task requires collective input from highly specialized individuals. clear, engaged in debates about commitments, and claried the responsibilities of individual team members. However, at a certain point in the development of the project they switched to a __ The task requires collective input and agreement from more than 20 people. __ The members of the team working on the task are in more than two locations. relationship orientation. This shift often took place once team members had nailed down the goals and their accountabilities and when the initial tensions around sharing knowledge had begun to emerge. An emphasis __ The success of the task is highly dependent on understanding preferences or needs of individuals outside the group. throughout a project on one style at the expense of the other inevitably hindered the long-term performance of the team, we __ The outcome of the task will be inuenced by events that are highly uncertain and difcult to predict. __ The task must be completed under extreme time pressure. https://hbr.org/2007/11/eight-ways-to-build-collaborative-teams found. The most productive, innovative teams were led by people who were both taskPage 15 of 21 Eight Ways to Build Collaborative Teams - HBR If more than two of these statements are true, the task requires complex collaboration. 4/4/15, 10:00 PM and relationshiporiented. What's more, these leaders changed their style during the project. Producing ambidextrous team leadersthose with both relationship and task skillsis a core goal of team-leadership development at Marriott. The company's performance-review process emphasizes growth in both kinds of skills. As evidence of their relationship skills, managers are asked to describe their peer network and cite examples of specic ways that network helped them succeed. They also must provide examples of how they've used relationship building to get things done. The development plans that follow these conversations explicitly map out how the managers can improve specic elements of their social relationships and networks. Such a plan might include, for instance, having lunch regularly with people from a particular community of interest. To improve their task leadership, many people in the teams at Marriott participated in project-management certication programs, taking refresher courses to maintain their skills over time. Evidence of both kinds of capabilities becomes a signicant criterion on which people are selected for key leadership roles at the company. Team Formation and Structure The nal set of lessons for developing and managing complex teams has to do with the makeup and structure of the teams themselves. Building on heritage relationships. https://hbr.org/2007/11/eight-ways-to-build-collaborative-teams Page 16 of 21 Eight Ways to Build Collaborative Teams - HBR 4/4/15, 10:00 PM Given how important trust is to successful collaboration, forming teams that capitalize on preexisting, or \"heritage,\" relationships, increases the chances of a project's success. Our research shows that new teams, particularly those with a high proportion of members who were strangers at the time of formation, nd it more dicult to collaborate than those with established relationships. Newly formed teams are forced to invest signicant time and eort in building trusting relationships. However, when some team members already know and trust one another, they can become nodes, which over time evolve into networks. Looking closely at our data, we discovered that when 20% to 40% of the team members were already well connected to one another, the team had strong collaboration right from the start. It helps, of course, if the company leadership has taken other measures to cultivate networks that cross boundaries. The orientation process at Nokia ensures that a large number of people on any t