The Implications of a Collaboration Economy

Sally Blount, our dean here at Kellogg, has recently been writing about the prospect of a Collaboration Economy.  She suggests that our rapidly changing world is and will be forcing businesses and organizations to take a markedly new approach to what they do and that this reorientation and change is not just smart but necessary.  As she puts it, “value is being created daily through complex, technology-enabled architectures of interconnection that link people and ideas across all types of interfaces.”  I could not agree more.

For leaders everywhere, what will it mean to be part of a Collaboration Economy?  The first implication of this new approach to business is that effective leaders will need to recognize that everyone on your team must be able to step up and lead.  Herbert Simon, a Nobel-prize winning psychologist, long ago noted that we all have serious limits in our ability to process information – what he called ‘bounded rationality.’  None of us can know everything that we might want to know.  But we don’t need to know everything if we know people who know what we don’t know – and if we know enough about what they know to be able to connect with them to help us find better solutions.

Teams can be wildly effective when they use the expanded information sets that their collective membership commands – especially if they can access and use that information exactly when it is critical.  This process has its own straightforward implication: everyone in a team must know as much as they can about their team members’ skills and limitations.  This is also where great leaders come in, because it’s most important for them to have this kind of knowledge.  (This happens far too rarely because leaders don’t always follow my favorite tactic – Asking Questions.  By asking and asking and asking, leaders can learn an enormous amount about their team members, and all of this interpersonal knowledge is not only incredibly useful, the mere process of asking of questions also helps build trust.)

This desire for super-efficient interconnectedness has additional implications, one of which is that coordination and trust are incredibly important within a team.  Coordination has all sorts of obvious value for efficiency and speed, but real coordination can’t be achieved without trust.  As I’ve noted before, the truly effective Do Nothing! leader must make the first move and trust people more – more than they might expect and more than a leader might be comfortable with.  Leaders gain trust quickly by giving trust.  Far too often, leaders are risk averse, and not just financially.  More importantly, they often don’t trust their team members enough.  (Here’s the intuition: How have you responded when someone has trusted you more than you expected?  If your team members are anything like you, they will also step up when you trust them more than they expected.)  So do your homework – check out people’s reputations and do as much as you can to make sure that they are trustworthy before you risk too much.  Then, trust them more than they expect.  Not lots more and not to have skills that they don’t have.  You don’t want to set them up for failure.  But our research suggests that true professionals always want to show you that they are trustworthy: they almost inevitably step up and reciprocate.

One final implication.  (Not to suggest that there is only one more, but to keep this blog short and to the point.)  No team has all of the resources that it needs to succeed.  As a result, they will need to connect with other teams of all kinds – customers, suppliers, superiors, and knowledge brokers.  As a leader, you want your team members to use their connections to bring in new ideas, advance your team’s own ideas, and become more efficient.  Thus, your team’s network ties will become increasingly important – and the good news here is that all of us have hundreds if not thousands of network ties.  We can’t keep them all active all the time – that would be overwhelming – but my colleagues Daniel Levin and Jorge Walter and I have shown that reconnecting dormant ties can be incredibly useful.  Not only have we established a strong basis of trust with people we have known for a long time, but not having been in touch with them means that they have been learning all sorts of things that we didn’t know about, and we can now tap.

Thus, as a leader, success in a Collaboration Economy will require that we

1. Find out what our team members know and what they can and can’t do.
2. Trust them to do what they can do.
3. Orchestrate by letting them lead when they have key skill sets.
4. Build trust by trusting people more.
5. Seek knowledge from your extensive supply of dormant ties.

Our fast-paced, interconnected Collaboration Economy may seem daunting.  Building a strong team will make this so much easier.

References:

Larson and LaFasto. (1982). Teamwork. Thousand Oaks CA: Sage.

Levin, D. Z., Walter, J., & Murnighan, J. K. (2011). Dormant ties: the value of reconnecting. Organization Science, 22: 923-939.

Levin, D. Z., Walter, J., & Murnighan, J. K. (2011). The power of reconnecting. MIT Sloan Management Review, 52 (Spring), 45-50. sloanreview.mit.edu/x/52309

Pillutla, M., Malhotra, D., & Murnighan, J. K. (2003). Attributions of trust and the calculus of reciprocity. Journal of Experimental Social Psychology, 39, 448-455.

Simon, Herbert (1991). “Bounded Rationality and Organizational Learning”. Organization Science 2 (1): 125–134. 10.1287/orsc.2.1.125.