Teams Blog

The railroad industry is probably not the first one you think of when you think of innovation. An American transported through time from before the Civil War would be stunned by cars and space shuttles, but instantly recognize a train.

The best-known firm in the niche market of railway high-technology came up with an innovative way to create innovation, however. Railinc Corp. provides a variety of products and services to help railroads run their businesses. With market penetration of more than 90%, clearly it has been doing things right. Director of Corporate Communications Patrick O’Neil provided me with examples of novel products, and CIO Rob Simora said that Railinc has creative people. But that is not the same thing as having a culture of innovation, and Railinc is not there yet, Simora said.

Coming from a company noted for creativity, General Electric, Simora wants to change that. But he knew better than to simply hold a meeting and tell people to start innovating. Instead he came up last year with an “Innovation Challenge.” CEO Allen West mentioned it at a North Carolina Technology Association panel discussion (see video) a couple of weeks back as a way to engage employees. I asked him how I could learn more. West pointed to Simora, literally—he was sitting right behind me.

We met last week at Railinc’s offices in Cary, N.C., USA. Simora explained the Challenge’s set-up. He picked seven teams of six people each with a couple of criteria in mind. The teams had to be cross-functional, bringing together people who normally did not work together. And they could not have any managers, to prevent the tendency to look to the highest job title for answers. The teams were allowed 3-1/2 months to come up with ideas. Simora gave them only one rule, saying the idea “had to provide value to Railinc.” Otherwise, it could be anything: a process, technology, or product.

The company offered small monetary awards to the top three finishers. Initially, Simora said, that is probably what drove participants. But later, the motivation was “meeting new folks (and) coming up with different technology.” This small investment of cash and time paid off, he said. The company expects to implement all seven ideas, with the teams leading the way. A trophy awaits each member upon completion of a team’s project. I think Simora tapped several best practices for motivating employees here, including time to pursue ideas, empowerment to implement them, tangible recognition, and visibility to upper management.

The ideas were judged by a panel of company executives on the potential value and the likelihood the company would implement the idea. The winner was a venture into “crowd sourcing,” the idea of tapping the expertise of a mass of people to address an issue (see The Crowd Sourcing Blog). The winning team proposed what it called the “Predictive Market” and “Idea Market.” According to team member Bill Dupre, “The rail industry has a lot of information that’s probably very dispersed” across roles. Dupre, an application architect, already had an outside interest in the crowd-sourcing concept. He suggested to his team that Railinc should host a site allowing people to come together to make predictions on various topics. This could help Railinc, and eventually customers, forecast support requirements, legislation, volume, etc. Since the team’s win in April, the company has purchased a tool for collecting responses and Dupre is moving forward with the project. An in-company version is already under test.

As with any first effort, there were some problems, Simora and Dupre readily admitted. The Challenge started in November, but some teams waited until January to get started. Because it was not anyone’s primary job, some of Dupre’s team could not participate after the initial meeting. Part of the team ended up doing the bulk of the work. Next time, Dupre said, he would try harder to build more collaboration, to help people share his passion for the team’s idea.

Railinc is so pleased with the results, it plans to hold another Challenge later this year. When I asked what lessons he plans to apply from the first round, Simora said he will provide more criteria up front to the judges and teams, so teams would have a better idea of how to “focus their effort.” He will also allow the teams to choose their own members.

Thanks to Railinc’s willingness to share their lessons learned, you can use them if you try a similar challenge. Most organizations make the mistake of throwing groups of people together without providing teamwork training or structure. That’s not a big deal for part-time, short-lived teams like Railinc’s Challenge teams. Unfortunately, most companies handle their permanent teams the same way, creating an ongoing waste of time, money, and goodwill. (Not wishing to seem ungrateful, I didn’t ask what Railinc does!) My first client in Raleigh, a university professor, decided the hands-off approach was a problem when two large students nearly came to blows in his office—between him and the door, he noted.

For an individual worker, small-group dynamics are more complex than either large-group or one-on-one interactions, yet they are the least emphasized of the three in most corporate environments. Left to their own devices, most groups will work out their problems, but the organic process takes two to three years and rarely creates optimal results. Providing formal guidance can slash that time to months. Even for short-term teams, a few structures like team rules, an action item spreadsheet, weekly reports, and a project timeline will pay huge dividends for small investments of time… just as the Innovation Challenge has for Railinc.

“We’re getting innovation improved in our culture,” Simora said. But the biggest payoff may simply be an increase in cross-functional cooperation, one type of diversity that science has found to consistently improve team performance.

Dupre said, “For a long time we have been so siloed into, ‘You work here,’” but he and Simora said that is changing. Dupre’s team demonstrated this by the way it decided to use its $1,000 prize. Members could have split it amongst themselves. Instead they spent it on a critical piece of technology for any hi-tech firm, one Railinc had nonetheless failed to provide its workers.

They bought a pool table.

Action Item: If your company needs new ideas, follow Railinc’s lead and create your own challenge. For suggestions, contact me.

I just finished reading a horror story, made all the worse because it is a true story involving failure to protect nuclear weapons secrets, lost management—and indirectly, me.

The story is told in a new book, Implosion at Los Alamos: How Crime, Corruption and Cover-Ups Jeopardize America’s Nuclear Weapons Secrets, by Glenn Walp, Ph.D. Walp’s credentials are impeccable: former head of the Pennsylvania State Police, a master’s in criminal psychology and doctorate in human services, national police awards, and national media appearances. The latter were mostly about one other job he held: Office Leader of the Office of Security Inquiries at Los Alamos National Laboratory, the home of the atomic bomb. Walp did not hold the job long. He did it too well.

The Lab hired him as part of an agreement with the U.S. Department of Energy, which oversees it, to professionalize the Lab’s criminal investigations. Almost immediately upon arriving, he began to uncover massive problems. Walp details how employees’ refusal to follow equipment management procedures left many items missing and untraceable, including computer equipment that might have held nuclear secrets. A mini-Mafia ran free at one facility, buying spy equipment with federal money and protected by a thug who threatened potential whistleblowers with violence. Walp describes rampant abuses of a system that allowed any Lab employee to purchase items at various stores by showing a Lab badge. From another source, I know that one year, more Leatherman tools were bought than there were employees at the Lab. Walp criticizes an internal delivery system that dropped off packages, including high-cost equipment, in open areas without anyone signing for them. He points out numerous lapses regarding both nuclear weapons information and “special nuclear materials,” raising the very real specter of terrorists getting at least enough of the latter to create a “dirty bomb”—a regular bomb that would irradiate people it didn’t kill outright.

The most shocking discovery was that upper managers had known about these problems for years. Furthermore, when Walp tried to do his job, those same managers began interfering with his investigations. When he tried to call in the FBI, he almost immediately received pushback from above. Eventually the chief lawyer at the Lab inserted himself between Walp and the FBI, to the point that Walp warned him of violating “obstruction of justice” laws. Every incident of missing computer memory devices brought the standard Lab refrain that no classified material was compromised, even though there was no way to be sure. The constant message was that Walp’s first loyalty must be to the Lab and the University of California, which had managed the Lab from the start, in 1943. Protecting the UC contract clearly was more important to top managers than protecting U.S. property or nuclear secrets. Walp and others had to resort to DOE’s formal whistleblower process. Despite the extra protections this gave them and outstanding written performance appraisals, Walp and an associate were fired because they “did not fit” with the Lab’s culture. They were quickly escorted off the property by armed guards. The “Mafia” don and his thug had only been placed on administrative leave initially (though they eventually went to prison).

All of this has been corroborated, by DOE and FBI investigators, many journalists, public interest groups, and the U.S. Congress. As a result, two Lab directors in a row and some managers were fired. Walp was rehired as a UC consultant and won a $1 million settlement for his firing, clearly retaliation for his whistleblowing.

I wish I could report things are much better, but they are not. The Lab was forced to team with defense contractor Bechtel and compete for the contract for the first time in 2005. Unbelievably, they won. No surprise, then, that Walp lays out yet more problems and continuing Lab denials through 2009.

One exchange in the book leapt out at me. Walp is talking to his boss. “Glenn, have you ever worked for a corporation before?, Falcon responded. It’s much different working for a corporation than it is for a government or for a governor, continued Falcon. The lab has a certain corporate philosophy and certain corporate rules that the employee must abide by…” Walp himself misses the massive problem with this statement. Los Alamos Lab is not a corporation! It is a federally owned facility managed at the time by a state government entity. This is the most egregious example of management denial I have ever read.

I was relieved the see, however, that Walp did not criticize the Lab’s written procedures for managing equipment (called “personal property”), but the failure to follow them. “Relieved” because, I wrote them.

The lab hired me as a contractor in 1994 to rewrite their equipment management manual. (I had my best-ever boss, Peggy Durbin, who sent me Implosion after I saw it in the world’s funniest business newsletter. She writes it for the bookstore in Los Alamos she co-owns now. You should sign up.) Realizing instantly the manual was an antiquated mess, I started over from scratch. When it became clear the only way to do this quickly was to get four groups of stakeholders working more efficiently, I requested permission to create self-directed work teams (SDWTs). It worked. Within a few months, we had a 350-page draft. In two years, these dedicated people had raised the property management system’s rating by outside auditors from failing to “Outstanding.” Four of the people I served are named, favorably, in Walp’s book.

However, I saw the rampant cultural problems he mentions, especially after I became a manager. My introduction of “management by walking around” was taken by many employees as micro-managing because they weren’t accustomed to any oversight. Most people in our group were treasures, but a significant number would have been fired by private industry years earlier. Upper managers gave little material support to best practices, clearly more interested in smooth sailing. The property SDWTs lost their empowerment. I heard the refrain about protecting the UC contract often. After three years in management I had enough, and I started TeamTrainers.

This post has been painful. I still love the Lab, both for many of the people and for much of the work it does. Walp praises the Lab’s science, which helps prevent the spread of nuclear materials, ensures U.S. weapons still serve as a deterrent, and has led research in a surprising array of topics from computer modeling to alternative energy sources to quantum physics.

I want to call the leaders in the book “blind,” but that would be an insult to blind people. “Lost managers” is a better term. They lost sight of who they really worked for. They lost sight of the real source of damage to the Lab, greater than PR problems. Some of them lost their jobs over it. If you as a manager make any effort to squelch reports of ethical violations, policy violations, and especially legal violations, you may be a lost manager. Let this book help you find your way, lest you destroy what you are trying to protect—even if it’s only your own backside.

Source: Walp, G. (2010) Implosion at Los Alamos: How Crime, Corruption and Cover-Ups Jeopardize America’s Nuclear Weapons Secrets. Justice Publishing, LLC: Gold Canyon, Ariz. (received from Otowi Station Bookstore).

“We’re all going to die!”  This was how Ryan Allis, CEO of iContact, started his presentation at a recent Greater Raleigh Chamber of Commerce event this week. He credited another speaker for the line, but his point was made: keep things in perspective. He shared stories that proved having and staying true to one’s goals and values can contribute to the bottom line. He should know. He set a goal when he was 16 that he would have a $1 million business by the time he was 21. Sadly, he missed the milestone… by 18 days.

Allis said he gave up a $200,000 job right out of high school to go to college. (Granted, it was the University of North Carolina, not that I’m biased.) While there, he and another Tar Heel started what would become iContact. The first year they lost $5,000. In 2008, they made $15 million. Allis described a corporate culture of practical jokes and parties that might have seemed alien to that audience, but sounded normal to someone recently moved from high-tech Seattle. He really caught my ear when he said his company used to have a list of 10 values “that was really sucky and nobody remembered them.”

This reminded me of a study I carry to all of my trainings, “Inspiration and Cynicism in Values Statements.” A survey of executive MBA students found, “On the whole, respondents evaluated the impact of their firms’ value statements on decision-making positively.” Reasons included: “positive outcomes… both inside and outside the company, guidelines provided for decision-making, increased accountability, and clarity of expectations.” But I think it important to note that high-level executives made up half of those respondents. They may indeed use those values, but I am willing to bet most of their employees do not. Allis’ statement surprised me because he had recognized at the top level what you generally only hear from people down the line.

In response, he took his senior leadership team on a retreat and came up with five values that form the acronym WOWME:

1. Wow the Customer.
2. Operate with Urgency.
3. Without Mediocrity.
4. Make a Positive Wake.
5. Engage as an Owner.

From the scientific standpoint, this was not the ideal way to create the list. The study found respondents were most likely to feel value statements had an impact when everyone in the company was involved in creating them, which fits what we know about the psychology behind motivation. There’s no better way to build buy-in than to involve from the start those from whom you want the buy-in. iContact is small enough that this could have been accomplished without a huge investment of time. Allis said they ended up laying off 10% of their employees who could not get on board with the new values as implemented. He probably would have lost far fewer with a bottom-up approach, and most of the turnover would have been voluntary, saving the company heartache and unemployment costs. Plus, each team in the company would have brought out its team values, in alignment with the eventual corporate ones.

That said, everything they have done to implement the values are right on target. I caught him for a quick interview after his talk. Allis said the values are used on performance appraisals and in coaching sessions. The company also has a values recognition program that is very high tech: a poster and stickers. Each time someone exemplifies one of the values, they get a sticker by their name. With a certain number of stickers, they get a gift card. The person with the most stickers at the end of the year gets a prize, Allis explained.

The company lives its values in the more general sense through its “4-1s” program, under which it gives each year:

• monetary donations equivalent to 1% of payroll,
• its product for free to area nonprofits,
• 1% of each employee’s time (2.5 days) for volunteer work, and
• 1% of its equity to The Humanity Campaign.

Given the company’s financial success, it seems to be fulfilling his statement, “The purpose of business is to create value and solve human problems…” Allis is personally proving you can do both with his own extensive volunteer work, including serving as the head of Nourish International, which engages college students to fight poverty.

I can’t resist pointing out, however, that the whole company may not have bought into the values yet. Allis would probably be surprised to learn that five months after WOWME was introduced, his company Web site still lists the old 10-item values list!

Source: Urbany, J. (2005), “Inspiration and Cynicism in Values Statements,” Journal of Business Ethics 62:169.

In parts one and two of our walk through team-building history, researchers Skipton Leonard and Arthur Freedman showed us that much of what we think of as recent advancements actually date back as much as a century. We’ll finish up the journey with a look at the ’90s and what should have changed in the Aughts, according to them.

In the 1990s, the authors write, team-based structures became more commonplace in part because IT companies adopted them. “Owing to the spectacular success of these corporations in the global marketplace, organizations of all varieties—from low tech smokestack industries to governmental agencies and educational institutions—enthusiastically embraced team-based structures in efforts to improve productivity and quality,” they report.

However, almost all of the books on teamwork were based on the experiences of their authors as team developers, not on hard science about what works and what doesn’t. Even the book I most often recommend as a starting point for those interested in teams (other than my own teamwork book, of course), was based primarily on its authors’ work at consulting firm McKinsey and analysis of Gulf War logistics operations. (The Wisdom of Teams, 1994.) Solid research on teamwork had dropped by the wayside. Most university researchers even gave up membership in the National Training Laboratory, discussed in Part 1 as one of the birthplaces of modern teamwork efforts. This parallels my constant griping that many consultants seem out of touch with the science, which I’ll repeat shortly.

The journal article upon which this series of posts is based was published in 2000, so we can see if their advice for the “future” was heeded in the past decade, as quoted below.

“1. Don’t oversimplify the process.”

Leonard and Freedman recognize the need for easily understood concepts, but say team builders must know and address the complexity of group dynamics. Too often consultants try to make team development seem easy, and it simply isn’t. An example is the overuse of the “Forming, Storming, Norming, Performing” model first proposed in 1965. Unfortunately, this is still quoted as gospel by too many presenters and team builders. I use it as a frame of reference, but always add that teams can be in various phases at once and the curve through them is rarely smooth. Also, with proper development the “Storming” phase is not inevitable. On the down side, teams can drop out of the Performing phase after hitting it, so you can never completely stop your teamwork efforts.

“2. Start studying teams as they exist and function in real-life contexts today.”

This, I’m happy to say, has become more prevalent in research over the past decade. For example, research on business project teams in automotive and railway companies since I started TeamTrainers in 2000 has influenced my work. A study in a large bank showed that good teamwork was more important to branch performance than diversity training.

“3. Practitioners need to revive their historically active partnership with researchers.”

Amen. The biggest barrier to my marketing efforts are the myths that continue to be spread by many in the team building industry who don’t take the time to learn the science. On the research side, however, too many studies are still simply “correlational,” as Leonard and Freedman lament. That is, they merely describe high-performance teams at a given point of time or rely on participants’ recollections instead of using more sophisticated methods to detail what caused that high performance. A lot of my recommendations are built on likely results based on the science combined with my real-world experiences. I’d rather they were all based on studies that compared monetized performance of similar teams at Point A to performance of the same teams at Point B (and C) with just one change in the way those teams were operated. Then we’d know much better whether that change worked and was the difference.

“4. The research and theory regarding teams needs to move beyond the linear, homeostatic view of organizational systems.”

In other words, much of the research has viewed organizations as progressing in a straightforward way that works toward internal balance. Have you ever worked in one of those? I’m sorry to say there has not yet begun to be enough research into how the corporate culture limits team performance, or how teams react to and cause changes in the corporate environment, or the role of decisions by some upper managers. My definition of a high-performance team says that the team performs as well as it can given its environment. The classic example is when a company declares itself “team-based” but continues to give raises and bonuses based on individual performance. Said company should not be surprised when people then put their own agendas ahead of the team’s.

“5. Finally, researchers and practitioners need to have a better appreciation for the history of research and theory regarding teams.”

That’s part of the reason for this series of posts (and last week’s anti-”team-building” rant). Much of what we think is new is not, and much of what we need to know is known. If you’re a manager and want better teamwork, it’s just a matter of learning what really works and applying it. If you don’t want it, then you are wasting your company’s money and causing yourself and others unnecessary pain. Have the courage to admit team leadership is not your thing and find a position that will be healthier for you and the team.

Source: Leonard, H. S., and A. Freedman (2000), “From scientific management through fun and games to high performing teams: A historical perspective on consulting to team-based organizations,” Consulting Psychology Journal 52(1):3.