Good collaboration is key to success in almost every field, from business to finance to sport. We explore how organisations can encourage staff to work together to share ideas, avoid mistakes and improve performance.
12 minute read
Vince Lombardi knew a thing or two about building successful teams. An American Football player turned coach, Lombardi led Wisconsin’s Green Bay Packers to an unprecedented five NFL Championships and two Super Bowl trophies in the 1960s.
But while his leadership abilities were legendary, Lombardi was aware his achievements would not have been possible without the contribution of his colleagues, from his players and fellow coaches to the ground-staff who tended the turf at Lambeau Field stadium. As he once put it: “Individual commitment to a group effort – that is what makes a team work, a company work, a society work, a civilization work.”
Individual commitment to a group effort – that is what makes a team work, a company work, a society work, a civilization work.
Individual commitment to the group effort has never been more important in driving success, especially in industries where the knowledge base is becoming increasingly specialised. Take science, technology, engineering and mathematics. In the 1960s, when Lombardi’s team were conquering all before them, it was common for a STEM paper authored by a single expert to rack up citations. Nowadays, single-author papers are more-or-less unheard of; the most influential research tends to come from cross-disciplinary and even cross-university research teams.1
The same is true in other complex, technical fields; including asset management. Collaboration is crucial in ensuring investment professionals can build portfolios that deliver the outcomes clients want. In firms that lack good communication, asset-class specialists may work in silos; failing to share insights that would enable their colleagues to identify opportunities and avoid risks. But while the importance of collaboration is widely recognised, putting it into practice is another matter.
How can you incentivise a truly collaborative process? Without attention to the details, it’s just a buzzword.
“Finding, testing and implementing the best ideas is crucial to good performance, and that is impossible without interaction among teams at all levels of the business,” says Sunil Krishnan, head of multi-asset funds at Aviva Investors. “The real question is how best to facilitate collaboration. How can you ensure staff commit to the group effort? How can you get the best from everyone, not just a few stars? How can you incentivise a truly collaborative process? Without attention to the details, it’s just a buzzword.”
In this article, we highlight four key principles for successful collaboration: promote idea flow; challenge groupthink; choose the right technology; and incentivise. These solutions needn’t be operationally difficult or expensive – but they can deliver big results.
1. Promote idea flow
- Optimise office layouts to promote interaction
- Don’t allow the loudest voices to dominate meetings
- Promote ‘psychological safety’ so everyone feels able to contribute
‘Idea flow’ may sound like a piece of management-speak, but it denotes something simple and important: the transmission of ideas and creative energies around an organisation. For large companies that rely on bringing together professionals with different specialisms, idea flow is key to making the best use of their talent.
Companies in technical and creative industries have long experimented with different ways of improving interaction among staff, with some surprising results. Take Google. In 2013, as the company’s executives surveyed the canteens at its plush San Francisco offices, they noticed staff in long queues were more likely to strike up conversations with those around them. They devised an experiment to find out the optimal length of time baristas should spend making a coffee: long enough to promote serendipitous conversation, but not so long as to annoy employees thirsty for a caffeine hit. The answer was four minutes.
“We try to make it so that you wait four minutes for a coffee on average, regardless of the amount of people who are waiting,” says Kirk Vallis, global head of creative capability development at Google. “The baristas speed up or slow down depending on the length of the queue. It’s all about maximising the opportunity for that productive collision.”
Tweaking the layout of workspaces – or ‘optimising spatial management’ to use the technical phrase – can also make a difference. A recent study from the Kellogg School of Management found evidence of a positive spill-over from high-performing individuals to colleagues sitting in a 25-foot radius around them, boosting team-wide performance by as much as 15 per cent – the kind of results usually associated with expensive training and recruitment initiatives.2
What we know about idea flow is that the environment needs to be ‘psychologically safe’ for it to work.
But for collaboration to truly take hold, employees need to feel comfortable sharing ideas in more formal settings such as meetings, and this can be more difficult than engineering casual conflabs in the coffee queue or around a desk. One widespread problem is that meetings can be derailed by powerful voices – wary of contradicting senior members of staff, individuals may be reluctant to contribute their thoughts, allowing louder colleagues to dominate discussions. We are culturally hard-wired to pay attention to hierarchy, which can stifle credible voices.
“What we know about idea flow is that the environment needs to be ‘psychologically safe’ for it to work,” says Tabitha Alwyn of Alliance Coaching, a consultancy. “Creating such an environment can be challenging, because it requires a measure of equality within a space. Generally, meetings tend to be governed by historic levels of seniority. People want to impress the higher-ups so they say what they believe people want to hear, rather than what they really think.”
In more substantive debate it’s important to have the senior leaders speak last, so they don’t influence the others.
There are some simple ways to ensure meetings are truly collaborative, according to Alwyn. Interruptions should be disallowed; psychologists have observed that when a speaker is interrupted their brain often goes into ‘fight or flight’ mode, in precisely the same way as it might react to a physical threat. The consequent surge of adrenaline hampers creative thinking and may increase tension among other people in the room.
Structuring meetings so that everyone has an equal chance to contribute can also help, according to Krishnan. “We have found that opening a meeting by inviting everyone present to speak in turn – even on a relatively routine matter such as recent portfolio activity – can loosen up the group. In more substantive debate it’s important to have the senior leaders speak last, so they don’t influence others. Everyone has to believe they will be listened to, and challenged, equally if the best ideas are to be discovered, properly scrutinised and implemented.”
2 . Challenge groupthink
- Question consensus through devil’s advocates
- ‘Diversity versus merit’ is a false choice
- Avoid reliance on stars
One of the chief barriers to good collaboration is groupthink: a desire for harmony that overrides the inclination to correct bad decisions. Psychological safety may be important in freeing up individuals to contribute to discussions – but if the group is too comfortable a stultifying consensus may take hold, and ill-thought through ideas may go unchallenged.
In his landmark 1972 study, Victims of Groupthink, psychologist Irving Janis uncovered groupthink at the heart of some of the 20th century’s worst political miscalculations, from the failure to anticipate the bombing of Pearl Harbor to the escalation of the Vietnam War.
The dangers of groupthink are exacerbated by a related psychological phenomenon known as the ‘risky shift’, whereby an individual feels less responsibility when acting as part of a group than when they are alone – a particular hazard among financial professionals who manage risk on the behalf of others. Krishnan believes appointing a designated ‘devil’s advocate’ to take the other side of an argument and probe its weaknesses can focus minds.
...if as a group you believe an investment decision is a no-brainer, that should set alarm bells ringing.
“As an individual you might think an investment decision is a no brainer, but if as a group you believe an investment decision is a no-brainer, that should set alarm bells ringing. There must be an argument on the other side, otherwise the price of the asset wouldn’t be where it is. As chair of a meeting, I might push someone forward to take the other side and attack a proposition. That can mitigate the risk of groupthink.”
Groupthink can also take hold at an industry level, which means challenging received wisdom on a particular subject can open up new ways of approaching problems.
Diversity is another important factor. Groupthink is more likely to arise in an environment that lacks diversity: diversity of gender, ethnicity, sexual orientation and social class are all important. Bringing different perspectives to bear on a problem can yield solutions that might not seem immediately obvious.
This is not about political correctness or box-ticking. Numerous studies suggest diversity is a better indicator of high-performing teams than other metrics, such as aggregate academic performance or IQ. In 2015, McKinsey surveyed 366 public companies and found those in the top quartile for ethnic and religious diversity in management were 35 per cent more likely to have financial returns among their industry mean, while those in the top quartile for gender diversity were 15 per cent more likely to outperform.3
Bank of England economist Andy Haldane argues organisations should approach recruitment in the same way investors approach portfolio construction. The best asset may not be the one that offers the highest returns or the lowest volatility, but the one whose characteristics complement the wider portfolio – a low correlation to existing assets will offer diversification benefits, for example.4 Following the analogy, the right hire may not be the candidate with outstanding individual skills – the ‘star’ performer – but an alternative whose qualities fit better with the existing talent pool.
The evidence for this is compelling across different fields. In a study of NBA basketball over a decade, for example, teams with only three ‘star’ players won more games than those with four or five. The star-studded teams had fewer assists, missed more shots and grabbed fewer rebounds as the players struggled to coordinate – they all wanted to be ‘top dog’. Or consider football: it may be significant neither Lionel Messi nor Cristiano Ronaldo – the most famous and talented players of their generation – have won the FIFA World Cup.
3. Choose the right technology
- Use technology to facilitate interaction among dispersed teams
- Choose the right platform – not necessarily the most sophisticated tech
From Flock to Fuze, Skype to Slack, organisations have a plethora of shiny digital tools at their disposal to allow employees to chat and share ideas. These platforms are increasingly important in an era of flexible working, ‘hot-desking’ and open-plan offices. Today, 49 per cent of meetings depend on technology to connect participants far and near, according to research from Forrester Consulting.
Modern collaborative platforms such as Skype can display charts and data in high definition, allowing teams to share and discuss research in real-time as they chat, even if they are based on opposite sides of the globe. And in the near future, augmented- and virtual-reality technology could make these meetings even more immersive. Although it may not always feel like it, we have come a long way from the crackly conference call.
Integrating new-fangled productivity tech is not just a gimmick; it can boost output. Research shows that process and networking tools improve productivity by 20-30 per cent among global software development teams. Modern social communication tools such as Skype and Slack are credited by senior managers with making their organisations more dynamic and agile, because they facilitate communication between different business units (they also cut costs associated with older technologies such as phone-calls and texts).5
Several software platforms have been developed specifically to facilitate knowledge-sharing and idea flow. Collokia, for example, is a machine-learning powered tool that plugs into Google: whenever team members enter a search term, the interface presents them with annotations and feedback on the topic from colleagues with similar interests. Others, such as LeanKit and Workfront, offer digital solutions to make project management more efficient.
But the right technological tool needn’t always be something specifically designed for the purpose. As well as web-based communication tools such as Skype and Webex, Aviva Investors found that Confluence - ordinarily deployed as an IT workflow tool - could be repurposed to compile and circulate research and assign tasks across teams, aiding collaboration.
Confluence allows everyone on the team to access presentations used in meetings, read minutes from previous discussions and assign action points.
“The platform facilitates knowledge sharing and communication, allowing managers to keep track of which ideas are being implemented,” says Krishnan. “Confluence allows everyone on the team to access presentations used in meetings, read minutes from previous discussions and assign action points. There is also a comment function that allows people to continue the debate offline. All of this has come from a piece of software that wasn’t designed for asset managers but in our case happens to suit our purposes very well.”
4 . Incentivise collaboration
- Recognise contribution to the process – not just the outcome
- Ensure teams are motivated to collaborate
- The carrot works better than the stick
Incentives are key to improving collaboration. It is especially important to distinguish between process and outcome, a distinction long recognised in the sporting world. Athletes who focus solely on beating a personal best are likely to neglect the sorts of processes – undertaking a set number of practice sessions per week, for example – that may indirectly contribute to that goal.
The same principle holds for collaboration. If only outcomes are incentivised, those who contribute to the process may not receive their due recognition. Indeed, competitive, outcome-focused incentive structures are likely to be antithetical to good collaboration, as team members may come to feel that by helping their colleagues they are wasting time that would be better spent focusing on individual goals.
To properly recognise the collaborative efforts of team members, it therefore makes sense for managers to retain some discretion over pay and rewards. While quantitative data-driven methods of tracking performance are becoming more sophisticated, they tend to track outcomes while ignoring important factors such as idea generation and support for the work of the wider group.
“Periodically you hear of firms that operate formulaic pay and reward structures. Sometimes it’s individuals who agitate for it because they want to understand directly how their own performance feeds through,” says Krishnan. “We feel that’s a mistake because long-term performance depends on contributions that might not be picked up in short-term, metric-focused appraisals.”
Improving collaboration is not just about monetary incentives, though. Richard Ryan, a US psychologist who advises Fortune 500 companies, says “culture is king” when it comes to ensuring teams work in tandem. Financial rewards are only a small part of what makes individuals feel valued; creating a collaborative culture in which people are encouraged to help and learn from each other can be a far more effective way to motivate teams. One simple method is to ensure individuals demonstrably recognise and appreciate their colleagues’ work – a kind word is more powerful than a cajoling critique.
We know receiving any positive feedback from colleagues provides a hit of dopamine and puts an individual in a state of mind that is more conducive to idea flow; negative criticism does the opposite.
“If you talk to sports scientists who advise some of the best sports teams around the world, there are varying magic ratios of positive feedback you have to give someone so that any negative feedback is actually taken on board, and it’s a wide range – between seven and 25 positive to each negative,” says Alwyn. “Though that ratio may seem huge, we know receiving any positive feedback from colleagues provides a hit of dopamine and puts an individual in a state of mind more conducive to idea flow; negative criticism does the opposite.”
A collaborative, supportive culture can also promote flow in a different sense. As defined by the Hungarian-American psychologist Mihaly Csikszentmihalyi (pronounced ‘chick-sent-me-high’), flow is a highly-focused mental state conducive to creativity, high-level cognitive performance and professional contentment.
In his landmark book Flow: The Psychology of Optimal Experience, Csikszentmihalyi describes how, in the right environment, flow can be a collective experience that optimises performance on a given collaborative task. The team becomes “a single organism, moved by the same purpose…all involved share in a feeling of harmony and power.”6
...a single organism, moved by the same purpose…all involved share in a feeling of harmony and power.
In many fields collaboration is key to finding and implementing the best ideas and, as Csikszentmihalyi’s poetic turn of phrase suggests, perfecting a collaborative atmosphere is as much art as it is science. However, by following the four principles we have outlined, organisations can take the first steps towards achieving it. The rewards can be significant – after all, as Vince Lombardi said, individual commitment to the group effort is what makes a team work. His cluttered trophy cabinet is all the proof you need.
Past performance is not a guide to future performance. The value of an investment and any income from it may go down as well as up. You may not get back the original amount invested.
Except where stated otherwise, the source of all information is Aviva Investors as at 15th March 2019. Any opinions expressed are those of Aviva Investors and they should not be relied upon as indicating any guarantee of return from an investment in our funds.
Nothing in this article is personalised advice or a recommendation. If you need a personalised recommendation based on your personal circumstances, you should seek financial advice.
1 ‘The science behind the growing importance of collaboration,’ Kellogg School of Management, September 2017
2 ‘Sitting near a high performer can make you better at your job,’ Kellogg School of Management, July 2018
3 ‘Why diversity matters,’ McKinsey Global Institute, January 2015
4 ‘Diversity vs merit is a false choice for recruiters,’ Financial Times Op-ed, July 2018
5 ‘Advanced social technologies and the future of collaboration,’ McKinsey Global Institute, July 2017
6 Flow: the Psychology of Happiness (Rider Books, 2013)