Firm as a Collaborative Community

Book: The Firm as a Collaborative Community - Reconstructing Trust in the Knowledge Economy / Charles Hecksher & Paul S. Adler.

Review

Tom Haskins has been reading the book, and took extensive notes.

Chapter Two: Bureaucratic vs. Collaborative Efficiency

"In the second chapter, Charles F. Sabel contrasts the efficiency of bureaucratic hierarchies with the efficiency of collaborative communities.

In my view, bureaucracies efficiently employ enormous workforces to execute the same routines everyday. The staggering amounts of conformity successfully avoids both the high cost of deviant conduct and the expensive impacts of high maintenance personalities. Sabel shows us how these efficient organizations function inefficiently when faced with crises. The conformity to foregone routines need to be dropped while new problems get defined, new solutions get proposed, new evaluations get completed and new changes get fully implemented. Collaborative enterprises handle crises much more efficiently. He calls this "A Real Time Revolution in Routines".

Collaborative enterprises cannot be efficient in the bureaucratic sense. Their functioning involve extra efforts, unforeseen expenses and necessary duplications to arrive at different "path dependent" outcomes. Collaboration is more improvisation than routine. What collaborations can do efficiently is explore options, decide on the least-worst alternative and make changes. Collaborations are inherently resourceful, enterprising and responsive to unfamiliar situations.

When we've adopted a collaborative outlook, efficient bureaucracies appear stagnant, slow and unresponsive. When we're chasing after cost efficiencies and economies of scale, collaborations appear costly, unmanageable and plagued by exceptions to the rule. Because these two mindsets are incompatible, "skunk camps" were created in the eighties to launch new products within big corporations. The team that developed the Macintosh computer stayed away from the rest of Apple. More recently Clay Christensen has advised us to "apply tools of separation" to any disruptive innovation developed internally, rather than seek consensus or majority vote in favor of the disruption.

Bureaucracies and collaborations are both efficient in their own way and strike a good balance between them both." (http://growchangelearn.blogspot.com/2009/12/paradox-of-collaborative-efficiency.html)

Chapter Three: Peer Learning as Weakness

"I've been assuming that P2P learning would link together learners who are close in their level of current comprehension and curiosity for furthering their mutual development. Maccoby is a psychoanalyst who has given us great insights into workforce motivations in previous books: Why Work and The Gamesman. He suggests that this latest generation has developed an interactive social character that contrasts with previous bureaucratic predispositions. He makes psychological connections to the widespread texting, tweeting and accumulating of fans, followers and friends online. He's related behavior patterns I call "approval seeking" and "people pleasing" to their feeling abandoned by both working parents. He connects their absence of longer communications and deeper relationships to the the pressure-cooker nature of their own jobs as well as the emotional disconnect from both parents.

Maccoby cast Gen Y's predisposition toward collaborative endeavors as a weakness. He implicated some of my assumptions about peer learning as a set-up to fail, infect others with incompetence and get stuck easily. He thankfully provoked me to rethink peer learning immediately." (http://growchangelearn.blogspot.com/2009/12/rethinking-peer-learning.html)

Chapter Five: Hierarchies can collaborate

1.

"In Beyond Hacker Idiocy - The Changing Nature of Software Community and Identity, Paul S. Adler reveals how huge software development projects evolve into collaborative dynamics. Bureaucracies don't necessarily rule out the inefficient and serendipitous process of innovative collaborations.

In my own language, there is a process of acculturation of the "cowboy coders" to do both the "work and the paperwork". Once they see value of leaving a paper trail of their own thinking, work and changes to the project, they begin to value the required reporting process. They switch from complaining about so many "rules and regs" and think instead about how to improve them.

When collaborative dynamics emerge among the software coders, they work together to improve the processes, policies and design standards they work under. They get more buy-in to the imposed constraints because they have participated in their formulation and final selection. The outcomes of collaborative efforts yield less rework, cost overruns and schedule slippages. They realize some "best of both systems combined": top down controls and bottom up innovations." (http://growchangelearn.blogspot.com/2009/12/collaborations-within-hierarchies.html)

2.

"According to Paul S. Adler's Chapter Five in The Firm as a Collaborative Community, work processes gradually mature. The way work gets done migrates from informal to formalized and externalized. Others can then move out the learning curves for those processes more quickly. The quality of the work improves as individual conduct becomes more consistent with everyone else involved. When these processes mature into formalized procedures and standards, a surprising thing occurs: collaboration emerges!

This emergent collaboration reveals a pattern of vanishing three kinds of chronic management conflicts:

1. staff/line conflicts over authority and compliance issues

2. horizontal conflicts over expertise and access to special knowledge

3. vertical conflicts between managing up to please higher ups and managing down to protect underlings

When collaboration emerges from mature work processes, those involved with production then work together with those who look after quality measures, schedule slippage and budget overruns. They benefit more from colleagues in other disciplines who bring different viewpoints to undefined problems. They realize more of both what they don't yet know and what they need to learn from "inhabitants of other silos" who attend different conferences, meetings and trainings. They also find fewer incidents of higher ups reverting to authoritarian supervision styles. This means they need to protect their brood less from mismanagement raining down from above. There is far more listening to, trusting and respecting each other up and down the levels of the hierarchy. This suggests to me that it is possible to realize the best of both kinds of efficiency by investing in the maturity of work processes." (http://growchangelearn.blogspot.com/2009/12/collaboration-vanishes-chronic.html)

Chapter Six: Collaborative Learning Communities in Health Care

"This chapter, Health Care Organizations as Collaborative Learning Communities, imagines the collaboration only among the experts providing medical services. The patients are the mere recipients, beneficiaries and consumers of those services. There is no exploration of the patients learning, trusting and collaborating more when also supported by additional information access. Likewise the patients are not envisioned as becoming more responsible for initial self diagnosis, periodic self medication and ongoing self management of chronic conditions. There's no exploration of community health programs, support groups and preventative efforts.

I expect the viable solution to emerge from the decline of privileged professionals, due to crowdsourcing and other P2P dynamics. We only need experts in charge of our health when we are feeling personally helpless and very much dependent on them. As information, tools, working arrangements and community support all come into play, collaborative efforts to keep each of us healthy and to orchestrate quick recoveries -- will result from everyone around us, including experts, contributing to those outcomes." (http://growchangelearn.blogspot.com/2010/01/collaborative-learning-communities-in.html)

Chapter Nine: Collaborative tribal market hierarchies

"Chapter Nine of The Firm as a Collaborative Community explores collaborations between enterprises. The author: Lynda M. Applegate sits on an advisory board for the Nasdaq Exchange which gives her an intimate view of its complexity. Her chapter is a treasure trove of insights that I had to read more than once to extract all the value I was realizing.

Nasdaq is a market for the exchange of securities founded in 1971. The Nasdaq Exchange and many of the member issuers of stock are institutions with hierarchical structures. The ways they work together to maintain the vibrant marketplace and their own institutions are intensely collaborative. To facilitate the numerous transitions, adaptations and revisions needed as the market grows or changes, there are special teams with cohesive tribal characteristics that respond to each of those challenges. Nasdaq has proven to be very responsive to setbacks as well as complex enough to be sustainable over several decades. It provides a model for collaborative endeavors that David Rohnfeldt would call a "quadriform society". It embodies tribe, institution, market and network (TIMN) functionalities." [1]

See the pattern description here

"Chapter Nine further explores contrasts between Nasdaq and two other, less successful large-scale collaborations. Situations where large buyers seek set up "collaborations without trust" with their sellers end up breaking down. Their unilateral price squeezing undermined the long term viability of collaborations for both automakers and health care providers with their suppliers. Both examples feed our appetites for a "peak hierarchy" phase of evolution and a demise of obsolete bureaucratic institutions. However, this chapter suggests that hierarchies won't go away, they will get integrated into far more viable and sustainable combinations of collaboration, market mechanisms and tribal cohesiveness." (http://growchangelearn.blogspot.com/2010/01/collaborative-tribal-market-hierarchies.html)

Chapter Ten: Dead set against collaborating

Tom Haskins:

"In the many times I've taught negotiation skills and strategies, I've made a big deal about the difference between adversarial and collaborative contexts. I visualize adversarial negotiations as sitting on opposite sides of the table, keeping secrets and working against the opposing side. Collaborative negotiations sit on the same side of the table, sharing information and working together to satisfy common interests.

• Adversarial tactics threaten to walk away from the bargaining table, to throw a deal breaker into the mix and bring a winner-take all competitor under consideration. The negotiations comes down to price, rather than satisfying secondary and long term objectives. They leave a legacy of mistrust, guarded revelations and suspicions of each others' deceptive maneuvers.

• Collaborative tactics explore each others secondary and long term objectives. They interact to uncover common ground, shared interests and mutually agreeable compromises. They set a standard for working together again, understanding each others' viewpoint and trusting underlying intentions.

Chapter Ten of The Firm as a Collaborative Community explores this same distinction within industry supply chain negotiations. Following on Albert Hirschman's 1970 book: Exit Voice and Loyalty, John Paul MacDuffie and Susan Helper contrast the "exit approach" and "voice approach" in auto industry procurement practices. Detroit automakers have long practiced the adversarial, "exit approach" of dropping suppliers to force added price reductions and relying on competitive bidding to get the best price. Japanese automakers have a long history of the collaborative "voice approach" of listening to suppliers while working together on cost reductions. Large suppliers of parts for both kinds of automakers, like Delphi, realized several fascinating differences within their organizations.

When faced with the adversarial, exit approach, auto parts were small, poorly designed, and different for each model of car. Cost reductions were sought from design 5%, material 50%, labor 15% and overhead 30%. Parts suppliers were told by auto executives to "stop your whining" Cost reductions occurred at the expense of quality which resulted in considerable returns, rework and warranty expense. The automakers displayed a "sink or swim" attitude toward the suppliers which undermined the long term health of the Detroit automakers themselves.

When immersed in collaborative, voice approaches, auto parts have been integrated into larger assemblies, become much better designed and are made uniform across many different models of cars. Cost reductions were sought from design 70%, material 20%, labor 5% and overhead 5%. The increase from 5% to 70% design impact necessitated much more delegation of design responsibilities to suppliers, coordination of designs across bureaucratic silos and learning by the automakers from the suppliers' considerable expertise. Cost reductions were accompanied by improvements in quality, reductions in returns, rework and warranty expense. The automakers displayed a "we're all in this together" attitude toward the suppliers which nurtured the long term health of their entire industry.

Neither the outcome measures, positive role models or the rapport with suppliers realized by the "voice approach" has had much influence on Detroit automakers. Having recently sabotaged their unusually collaborative, Saturn Car Company, GM appears to be "dead set against the voice approach". This provides us with a wonderful case of "conflicts with the adoption of collaborative networks". To those not already benefiting from collaboration, the change from working against into working together appears like a very bad idea to be avoided at all cost." (http://growchangelearn.blogspot.com/2010/01/dead-set-against-collaborating.html)

Conclusion

In the conclusion, Tom Haskins writes:

"the value proposition of the book has been limited by their lack of process transparency. It's loaded with good ideas, insights and case examples. It's ideal for becoming more of an expert, like the authors themselves. It falls short of nurturing our own collaborative praxis." (http://growchangelearn.blogspot.com/2010/01/conspicuous-absence-of-process.html)