Workplace, Teams, & Culture

For innovation, corporate culture matters more than location.

In their 1998 Sloan Management Review article "Preserving Employee Morale During Downsizing," the authors maintained that strong organizations need to develop resilience so they could take advantage of new opportunities that arise during periods of economic retrenchment. They detailed four stages of downsizing programs: deciding to downsize, planning the program, making the announcement and implementing the program. In this sequel, the authors argue that downsizing programs aren't just about "doing more with less." They also provide opportunities to build a sense of trust and empowerment between managers and employees, which can provide significant benefits going forward. In addition to examining the impacts downsizing has on surviving employees and how survivors can influence whether a program is successful, the article explores three new areas that the authors have come to recognize as important to the success of downsizing efforts: (1) how organizations must become more flexible, (2) how they must become more innovative and creative, and (3) how they must improve their communications with stakeholders who are increasingly skeptical of downsizing efforts.

Companies have long used teams to solve problems: focus groups to explore customer needs, consumer surveys to understand the market and annual meetings to listen to shareholders. But the words “solve,” “explore,” “understand” and “listen” have now taken on a whole new meaning. Thanks to recent technologies, including many Web 2.0 applications, companies can now tap into “the collective” on a greater scale than ever before. Indeed, the increasing use of information markets, wikis, crowdsourcing, “the wisdom of crowds” concepts, social networks, collaborative software and other Web-based tools constitutes a paradigm shift in the way that many companies make decisions. Call it the emerging era of “Decisions 2.0.” But the proliferation of such technologies necessitates a framework for understanding what type of collective intelligence is possible (or not), desirable (or not) and affordable (or not) & #8212; and under what conditions. At a minimum, managers need to consider the following key issues: loss of control, diversity versus expertise, engagement, policing, intellectual property and mechanism design. By understanding such important issues, companies like Affinnova, Google, InnoCentive, Marketocracy and Threadless have successfully implemented Decisions 2.0 applications for a variety of purposes, including research and development, market research, customer service and knowledge management. The bottom line is this: For many problems that a company faces, there could well be a solution out there somewhere, far outside of the traditional places that managers might search, within or outside the organization. The trick, though, is to develop the right tool for locating that source and then tap into it.

Over the past several decades, research has shown how both cognitive biases and small group dynamics can undermine effective decision making in organizations. However, there has been little work on the ways that informal networks impact framing and execution of decisions. In this article, the authors examine the roles decision networks play, both within teams and throughout organizations, in the way decisions are framed and carried out. Although company leaders frequently recognize the importance of such decision networks, they fail to leverage their potential and focus instead on the organization’s formal structure. The authors present two indepth case studies to show how network analysis applied to decision-making interactions within organizations can help improve the effectiveness and efficiency of decision making. The first case demonstrates how a rapidly growing pharmaceuticals company used process mapping and network analysis to streamline decision-making interactions. A team found that decision-making inefficiencies permeated the organization. Decision rights were not clearly delineated or allocated, and even mundane approvals had high collaborative costs. The second case, based on a larger, more established company, shows how network analysis can improve top-team decision making and execution in organizations slowed by bureaucracy and a culture of consensus. The company had sought a technological fix in an effort to rescue itself from organizational gridlock, but the problems persisted. A network analysis helped senior managers identify the underlying network drivers of gridlock, thereby enabling them to take targeted steps to speed up and improve decision making. In both cases, the authors highlight the insights and performance impact that can result when decisions are viewed through a network perspective. Although it is still early, the benefits of understanding how decision-making networks affect the top team appear to be compelling. The number of collaborations required to execute decisions at key points in the network was significantly reduced. This had a positive effect on both company performance and morale.

Airline companies may be the businesses everyone fantasizes the most about trying to fix. And just now, the fixing would require more work than usual. A new round of mergers, a new climb in costs and a new wave of customer dissatisfaction all pose fresh challenges. Add to that an industry work force whose wages have plummeted by $15 billion since 2001 and whose morale is at a low ebb plus an air traffic infrastructure that experts as well as customers realize is overstressed, and the overall industry repair problem can seem impossible. Thomas A. Kochan, along with Greg J. Bamber, Jody Hoffer Gittell and Andrew von Nordenflycht, takes up the task in the forthcoming book Up in the Air: How the Airlines Can Improve Performance by Engaging Their Employees (Cornell University Press, January 2009). In this interview with MIT SMR editor Michael S. Hopkins, Kochan, who is a professor of management at MIT and a leading analyst of workplace relations, identifies the need for totally altering employee/employer relationships as the critical opportunity and threat faced by the airline industry. Kochan explores the airline industry models that have worked (and are working) along with those that haven’t. And he suggests that the airline industry isn’t alone in encountering fundamental choices about how collaborative their workplaces will become. One of the keys, Kochan explains, is employee engagement and empowerment of service employees on the front lines.

There are 12 million reasons why Marten Mickos isn’t afraid that his rivals in the database software industry will ever overtake him. “Let them try,” he says brazenly of his competitors. “Our secret is in the way we operate our culture, and I’m convinced others cannot imitate that.” MySQL AB, the business Mickos has built since 2001, has committed itself to “open-source” innovation since its founding, giving 12 million coders & #8212; who typically receive no compensation & #8212; permission to debug, add features or otherwise modify the product before redistributing it. Mickos, now a senior vice president at Sun Microsystems Inc. after it acquired MySQL AB for $1 billion, talks with Josh Hyatt, freely sharing his ideas about why this Internet-age version of a barn raising produces superior innovation and the strengths and limitations of in-house innovation. He also discusses how open-source innovation isn’t for every company and how many organizations fail to engage the community and thus are forced to fold their open-source innovation projects. Mickos discusses engaging software developers who are so devoted to a process they seldom get paid for, and how these contributors are even willing to spend their own money to be a part of the process. Finally, he talks about whether dangers exist in open-source innovation, including potential damage to the code from malicious entities, competitors stealing code or ideas, and whether people will perceive this style of innovation as just a passing fad.

Having one member in a remote location helps teams communicate.

In leading international cities, companies gain access to knowledge and networks.

CEOs need to scan for the faint — but vital — signals that will help give their companies an edge.

Innovation is the mandate of the day, and it has companies increasingly looking outside of their own organizations for new ways to grow. At the same time, shrinking federal research budgets are forcing universities to find alternate sources of funding for their research efforts. Consequently, just as companies are searching for new capabilities, sources of knowledge and means of growth, universities are feeling the urge to come down from the ivory tower to do business with corporations in order to keep their labs open. The convergence of these circumstances results in an unprecedented opportunity for successful partnerships between universities and corporations, and universities are making this easier every day. Recent years have seen a steep increase in the number of university-sponsored industrial or corporate liaison programs aimed at increasing university funding from private sources. But, given their differing needs, universities and corporations approach collaboration from different perspectives. How can managers reconcile the various needs of the two types of institutions? Drawing upon 20 years of experience as a corporate liaison officer, the author examines how best to manage relationships between companies and universities. He suggests that one point of common ground in corporate and academic partnerships is mutual respect for the use of the scientific method to solve problems. In such a context, academics feel more comfortable entering into dialogue with corporations without fear of "selling out," and corporate interests shed their aversion to so-called "pure" research. This allows both parties to follow the author's advice of shifting from a transactional approach to a relational approach. He examines three case studies and identifies three key factors in their success: The relationships moved beyond short-term vendor relationships to become lasting partnerships that built new capabilities for the companies; senior management was highly involved; and the companies involved the university in their strategy, not merely in technical tasks or isolated business problems.