If you want to encourage cooperation in your firm, take a look at your organization structure, accounting, and incentive compensation.
I found myself in a debate with someone on LinkedIn recently in response to an HBR article on collaboration inside organizations. This fellow and I got into the subject of how to actually encourage collaboration inside our businesses.
This isn’t the first time I have had one of these debates, and in my opinion, it is one of the best aspects of LinkedIn. You get a chance to interact with intelligent people who are interested in business.
I won’t get into all the details, but suffice it to say that this particular individual – a self-proclaimed “leadership coach and transformation catalyst” who is dedicated to “inspiring change and growth” – was making solving the problem of a lack of collaboration inside organizations much simpler than it really is.
I suggested that, “the lack of collaboration in many companies is because of how they are organized and how they do their accounting, combined with their incentive compensation schemes. You can have all the values you want to espouse, but they mean little if the structure pits people against each other and the reward system is designed to incentivize individual or unit performance versus overall company performance.”
His response was, “Shouldn’t we be talking about embracing, engaging, enabling, empowering, and energizing with genuine enthusiasm, rather than ‘enforcing’?”
Besides the fact that nothing in my responses suggested enforcing anything, I am going to call BS on his approach and others like it. As a lifelong career management consultant, I cannot tell you how many failed management initiatives and leadership training programs I have either witnessed or been made aware of. When all you do is have meetings and talk, versus dealing with the actual underlying causes of a lack of cooperation and collaboration inside AEC firms, you will waste a whole bunch of time and your efforts will fail.
That’s right. I said that your efforts will fail.
They may not fail, however, if you have the courage and fortitude to change some of the things inside your company that are creating the situation, that being a lack of collaboration between individuals and across business units. That lack of cooperation and collaboration creates all kinds of problems for firms in this business. You will see situations where two or more business units are pursuing the same project with the same client. You will see a complete lack of cross selling the firm’s full range of services when the client is currently using only one of their services. You will see disciplines fighting with each other and not coordinating their work which wastes countless hours and creates quality and client service problems. You will see people fighting with each other and speaking disparagingly about one another, even though they are both principals in the same firm. None of these situations are acceptable and they all hurt the business.
So if you are actually serious about solving this problem, here’s what I would be looking at (versus trying to do it all with BS training put on by coaches):
- Organization structure. Do you have geographic office profit centers? Do you have discipline-based profit centers? If so, I would be willing to guess that you have issues related to sharing work or clients between units. The structure is an issue – it’s not just some academic abstraction.
- Accounting. Do you track and report on the profitability of your organizational units? If so, don’t be surprised when disputes erupt between units or when one unit withholds work that could be done by another unit whose staff is underutilized. No reason to do it. Hurts your P&L to let any work be done by another unit in the company.
- Incentive compensation. Do you pay people based on their success in selling more work? Do you pay people based on the profitability of their discipline-based or geography-based organizational units? If so, anticipate a lack of willingness on the part of your managers to turn over any client or work to someone else in the firm.
These three things are the reason for a lack of cooperation. Of course, there are other reasons for it. A lack of faith in someone’s ability to perform and please a client brought in by someone else is a big issue. How the principals get along with each other is an issue, too, because those feelings and prejudices often get passed down to the people who work for them. The lack of cooperation and collaboration is not a matter of “embracing, engaging, enabling, empowering, and energizing.” I’m calling BS on that one!
Mark Zweig is Zweig Group’s chairman and founder. Contact him at email@example.com.