Collaborative Organizations

Tennis players is a zero-sum game

As a recent research paper on the subject of organizational collaboration notes “Collaboration does not come naturally for most employees, particularly those born before the Millennials. Previous generations were taught that competition was good, and that individual hard work—the “nose to the grindstone” mentality—would be rewarded with steady career progression. The nature of work has changed, however, and the management and knowledge silos that were created in the 20th century are no longer tenable today if organizations are to succeed. Collaboration helps break down those silos so that organizations can be creative, flexible, and ready to meet the changing, demanding needs of business today.”

Interdependence is one of the key characteristics of complex systems. In simpler linear systems, there is a low level of connectivity, meaning the elements can be relatively independent of each other. But as we turn up the connectivity, these connections become pathways for interdependency. So although interconnectivity and interdependence are two distinctly different phenomena, interconnectivity does create interdependence. As we turn up the connectivity within the system, the parts develop or evolve in relation to each other and this creates interdependencies over time.

The modern nation state might be an example of this. During the modern era, different societies around the world declared their independence from each other by forming their own sovereign nation states. But today, with the rise of globalization and information technology this interconnectivity is increasingly requiring us to recognize our interdependence whether this is desirable or not. Interconnectivity is making interdependencies increasingly apparent, whether we are looking at the financial system, supply chains or environment concerns. The fundamental dynamics to independence and interdependence are very different from each other. Independence creates zero sum interactions. Because the two elements states are independent one side can win while the other side loses. Like two companies competing in a market, what one side wins the other loses.

But in dynamics of interdependence, we get non-zero sum outcomes. Because the state of each element is coupled with that of the other, we get either negative sum outcomes where everyone loses or we get positive sum outcomes where everyone wins. For example, with increased global interconnectivity, we get the phenomena of complex interdependence. Whereby the welfare of our economies becomes dependent on that of others, meaning going to war with another nation is less of a zero-sum game where one side can win and other loses and more of a negative-sum game where everyone loses because of their interdependence.

Zero-sum games create attractors towards competition because it is possible for one to get ahead by competing and winning against another. Non-zero sum games create attractors towards cooperation because everyone loses or wins together. Much of our traditional management apparatus is designed to manage organizations with a low level of connectivity, where we are trying to coordinate independent members around zero-sum games. And we do this by build up a centralized hierarchy where conflict over rival goods can be easily resolved through a clear chain of command. As we turn up the connectivity and interdependency within an organization, the traditional approach of trying to coordinate relatively independent components in a top-down fashion becomes no longer necessary. Instead, we can now harness this interdependency between the members towards achieving the desired global outcomes.

This interdependency creates a very different type of organization, what we might call a collaborative organization. Collaboration should not be confused with cooperation. Cooperation is when each person on a team develops his or her own plans and shares those plans with the team. There may be joint discussion, but the focus remains on individual actions and achievement rather than on a collective strategy. Collaboration is when two or more members recognize their collective interest in achieving the same overall outcome and through this individual goals become subordinate to the collective achievement. A thing to note here is that we are not talking about the level of altruism of the members in the organization, we are assuming that stays constant. What is happening is that, as you turn up the interconnectivity, people come to more readily recognize the interdependence of their actions with those of others and the whole organization. And from this, the need to achieve an optimal global outcome in order for them to achieve their own desired results. Trying to solve climate change would again be a good example of this. No society can solve it in isolation, each society can only really achieve their desired result by the whole organization achieving an effective result.

The type of organization architecture used to coordinate the members is then relative to the level of interconnectivity and interdependence. At a low level of connectivity, where zero-sum games dominate, it makes sense to use a top-down hierarchical model in order to resolve these conflicting interests through a strong chain of command. But as the organization evolves to become more complex, it becomes more interconnected and interdependent and it is now no longer necessary or even appropriate to use this traditional model. Within these complex organizations, it is more appropriate to switch to a collaborative bottom-up organizational structure that harnesses these interdependencies to achieve optimal global outcomes.

Many traditional organizations structured through hierarchies have a strong dichotomy, with the interests of the entire enterprise only really being closely associated with those of the individuals at the top. Top management’s interests may well often be closely aligned with the overall project, as their positions inherently give them a strong stake in the overall organization. But as soon as we go lower down to mid-management, operations management and the front lines, where people are operating within their own departments and functional domains, this connection and interdependence with the whole enterprise is quickly lost in the silos and departments. Meaning that those in the higher status of the organization have to continuously exert authority and incentives to ensure those lower down are acting in the interests of the whole organization. But this authoritative structure that is required at a low level of connectivity is not really required when we turn up the connectivity and interdependence. In such a circumstance, through intelligent design, it can be more effective to switch to a collaborative model.

Representation of a highly interconnected system

Achieving a collaborative organization means directly connecting the feedback loops and incentives of the individuals with those of the whole organization. In contrast, within the reductionist approach, we break complex organizations and processes into small parts and then have lots of people focus on those individual stages inside different departments. We also develop a hierarchy of management above them in order to ensure their activity it aligned and integrated into the overall project. However, breaking things down and dividing things up into small specialized units disconnects those performing such activities from the whole enterprise. Thus, their activities may no longer become interdependent with others and the whole, as local interests come to dominate. Creating interdependence means directly connecting everyone’s local activities to that of the overall enterprise. Placing the overall project at the center of people’s activities and enabling people to see their interdependence with others in achieving their own desired results, thus fostering collaboration.

In small organizations, this is not very difficult to achieve. Small traditional communities often exhibit strong social solidarity, that is expressive of the dense interactions through which they can recognize their interdependence, driving collaboration. In large complex organizations, this is much less easy to achieve and we see this in modern societies, particularly in large urban centers where there is a high level of inequality. In such complex systems, we have not yet been able to effectively form collaborative organizations. In these circumstances, we have formal traditional organizations or nothing much at all. But information technology is changing this. By reducing the barriers to interaction, connecting people and giving them information, it is much easier for us to now create dynamic low cost collaborative platforms capable of coordinating thousands or even millions of people, in a loosely associated fashion.

Through information technology it is much easier to directly connect people across the entire organization and directly connect their actions with the overall outcome. Even in very large organizations it is becoming possible to recognize everyone’s real contribution to the overall endeavor and make that explicit through feedback and rating systems. The best way to get employees invested in the collaborative process is to give them an opportunity to contribute to a shared vision and purpose. This is about taking the time to articulate the “why” to everyone involved in the collaborative process on a particular project or initiative. Building the values of the organization into everything that is done. Leaders must ensure that all employees understand how their work contributes to the goals of the organization and how collaboration will help them meet their goals. When employees understand their broader purpose, they can make more meaningful contributions to their team.

What should be attempted then is change zero-sum games into positive-sum games, which is part of the systems thinking paradigm. Under this framework, we don’t settle for either-or solutions, where we get one thing but have to sacrifice another. In trying to look at the whole, we have the possibility to find integrative synergistic solutions – not just new different ways to divide up the existing pie, but actually create synergistic solutions that make the pie bigger. Instead of going and competing with others for the same resources within a market, by seeing the whole system, we have the possibility to in fact create an entirely new industry, what is called a “blue ocean strategy”.

One can see these blue ocean strategies abound at the moment. As information technology gives us new ways to connect people, entirely new value propositions and markets are springing up. An analogy would be Apple creating the iPhone that gave rise to an entirely new app industry, which has come from nowhere to the fastest growing market in the US within a decade. This just goes to show that many situations will initially present themselves as zero-sum, either-or dynamics, but if we are committed to finding integrative solutions, we will invariably find a whole new dimension to the situation that has been completely bypassed or underutilized because it is more complex and challenging.

Leadership can be defined as the ability to create collaborative attractors

Creating positive sum integrative outcomes then requires us to resolve the challenges and complexity of this alternative approach. In so doing, we make what was previously a more challenging course of action for the actor into an attract – the course of least resistance – which becomes the default position, while also being the best outcome for the organization as a whole. And this is the essence of being a leader in a complex organization. You can’t control based on the past, you have to create solutions by creating an attractor context that integrates the micro and macro, so as to get the emergence of a future optimal global result.

For example, we see this starting to happen with alternative technologies. Whereas previously we had a strong either-or dynamic between choosing the easiest, cheapest energy source, or some environmentally friendly option. In such a case either you were part of a minority that cared about the environment and was prepared to make that extra effort in order for your activities to be in line with the best overall environmental results, or you simply took the default course that resulted in suboptimal macro outcomes. But, as we have invested in the research and development of alternative energy technology and solar voltaic cells, they are starting to reach grid parity. We are now moving towards a new attractor that resolves this zero-sum game and may well in the long run turn it into a positive-sum game of abundance and secure clean energy that we never possible within the previous model.

But of course this is not easy, it is the essence of leadership and real leadership is never easy. It truly takes intelligence and long term commitment to really solving problems. Leadership is not a position within an organization, it is being aware of and choosing the course of action that leads to the best results for the entire organization, irrespective of what others choose to do. In any organization, there will be a disparity between the micro and macro and, part of being a leader, is in creating synergistic solutions that resolve that, turning it into a positive-sum outcome.