Note: This post was written by SuccessFactors’ Director of Customer Results, Erik Berggren. Erik is leading a team focused on understanding - through detailed, data-driven analysis - how specific talent management behaviors drive business results – and then working to build those learnings into our product for the benefit of our customers. I’m excited to host his thoughts here, and I look forward to sharing more of our new knowledge via this blog in the future. So please enjoy Erik’s contribution and as always, I encourage comments. We want to know what you think. – Max
I read the McKinsey Quarterly Article “Competitive advantages from better interactions” with delight today. It is a great article and raises a few interesting issues for me.
Let me explain.
Over the years, I have had the opportunity to work in numerous countries around the world on dozens of projects as a management consultant. Sometimes, working in different industries and across disparate geographies makes you feel like you are traveling in time, as it occurs to you that some places are just so far behind others when it comes to business practices.
It is always correct and sometimes popular to promote the idea of relentless teamwork. But frankly, I don’t believe it. My hypothesis is that there is a diminishing return on the margins when it comes to teamwork. There is such a thing as too much. I have had consulting experiences in which an idea or new concept was evaluated by senior executives based on a “did she see it?” or “was he involved?” analysis. The obvious assumption in the thinking is that the more interaction, the more “teamwork,” the better the result.
Recently, we conducted some rigorous research leveraging our vast customer data on performance and talent management behaviors, including the aggregate usage of more than 1.5 million users. We studied in detail the financial performance of our clients both in terms of profitability (Return on Equity) and in terms of top line growth. The idea was to understand what over and under-performers were doing in terms of steering and measuring teamwork as a core competency.
Of course, all business are not alike and one could argue that any comparison would be difficult, and indeed this is the case. But there are nevertheless some opportunities for analysis besides the obvious verticals in which companies reside. We can standardize analysis around things like primary strategic levers and progression within a maturity cycle for a company’s main product or service and market .
In any event, the results show a clear correlation between teamwork as a core competency and business results for more mature companies. There is also a strong positive correlation between teamwork and both growth and profits in the Industrial Manufacturing sector. On the other hand, when we look at the Retail sector in detail we find that teamwork is positively correlated with growth but negatively correlated with profit.
The point is that every industry, every business, and every situation has a different optimal level of teamwork. The trick is to figure out the correct amount for your company and to strike that balance. There is no doubt in my mind that this will be a key managerial competency in the future.
Going back to my own experience, I have come to believe that teamwork is great when more is contributed to the end-goal at hand. But it is not always necessary to make decisions by committee – especially when doing so gets in the way of actual execution. The key to producing real results in an environment where jobs can neither be streamlined nor automated is really the alignment of corporate goals within a culture of execution.
Smart people who are motivated to perform need direction and a common set of goals in order to execute any strategy. So, collaborate with your colleagues where it makes sense, and only then. Otherwise, your actions will produce more heat than necessary and you’ll end up wasting gas on the wrong bets.
– Erik Berggren, Director of Customer Results, SuccessFactors
If you’d like to contact Erik directly, his email address is firstname.lastname@example.org