How can we maximize human potential to make the world a better place? How can we make work more fulfilling–whether in a business, a school, or a government agency?

For the past two days, I’ve been attending a high-powered conference here in Half Moon Bay, California, hosted by Gary Hamel (Wall Street Journal’s “top business guru” and author of The Future of Management). Our goal: to use the latest management research to re-design organizations to release the full potential of their employees, and to generate maximum innovation, adaptability, and engagement. Our starting point is the observation that management today–whether businesses, government agencies, or educational systems–is deeply flawed (think of Dilbert’s cartoons and you’ll know what we’re trying to fix).

Most of the 40 or so in attendance were thought leaders, authors of best-selling business books and/or professors (The photo shows, from left to right, C. K. Prahalad of University of Michigan, Peter Senge from MIT, Gary Hamel (standing), and Eric Abrahamson of Columbia).

But the high point, for me, were the presentations by a few CEOs, representing innovative styles of management: Gore, Google, Whole Foods, and IDEO, all companies I describe at length in my book GROUP GENIUS.

Representing Gore was CEO Terri Kelly; Whole Foods, CEO John Mackey; and IDEO, CEO Tim Brown (in the photo). If you’ve read my book GROUP GENIUS you know that all of these companies represent a new sort of management technology, one that is designed to tap into the power of collaboration.

A high point of the event was when Eric Schmidt, CEO of Google, answered questions from the audience about Google’s unique organizational culture (sitting at the right of Gary Hamel in the photo). I haven’t written as much about Google, simply because that company has been so widely reported in the media already; but, like Gore, IDEO, and Whole Foods, Google is a company that maximizes the collaborative potential of its employees.

“Inventing the Future of Management” was designed to be a beginning, so we didn’t come up with concrete advice so much as challenges, obstacles, and important issues. But I was delighted to see that the consensus emerging from this group is directly aligned with my message in GROUP GENIUS: that innovation can’t be forced in a command-and-control organizational design. Innovation always emerges from the bottom up, in teams that form spontaneously and interact improvisationally. In the future, we need organizations that enhance the power of collaboration, managers that facilitate the unpredictable creative work of everyone.

Attendees: Eric Abrahamson, Chris Argyris, Julian Birkinshaw, Tim Brown, Lowell Bryan, Bhaskar Chakravorti, Yves Does, Alex Ehrlich, Gary Hamel, Linda Hill, Jeffrey Hollander, Steve Jurvetson, Kevin Kelly, Terri Kelly, Ed Lawler, Andrew McAfee, John Mackey, Tom Malone, Marissa Mayer, Lenny Mendonca, Henry Mintzberg, Vineet Nayar, Jeff Pfeffer, C.K. Prahalad, J. Leighton Read, Keith Sawyer, Peter Senge, Rajendra Sisodia, Tom Stewart, Jim Surowiecki, Hal Varian, Steve Weber, David Wolfe, Shoshana Zuboff.

I just returned from giving a keynote talk at the Business Process Management Conference. Business Process Management, or “BPM” for short, emerged in the early 1990s as a trend best exemplified by the 1993 book Reengineering the Corporation by Michael Hammer and James Champy. The basic idea sounds like common sense to me: instead of focusing on the structure of your organization–the divisional lines and functional areas–focus on the core processes that create and deliver value (like the order process, supply-chain management). Although “conventional wisdom” has it that BPM was a short-lived fad, in fact the core of the message lives on in widely used management techniques, including six-sigma, and information technology management tools such as ITIL and COBIT.

I worried over my keynote presentation. After all, is innovation a “process”? I think so, and in fact my talk’s title was “the innovation process”. All businesses manage processes of incremental innovation (six sigma might even fall in that category) and new product development (with stage gate approaches). But I don’t think breakthrough innovation can be managed like other business processes. It’s more of an anti-process. By that, I mean breakthrough innovation is not linear; it doesn’t have identifiable stages; the participants and organizational units are unclear. As I say in my book Group Genius, breakthrough innovation is improvisational–it emerges, unpredictably, from a long series of small sparks of ideas. No single one of those ideas determines the final form of the innovation that will later emerge.

What happened in Iowa and New Hampshire?  Yes, we know it’s called “voting,” it’s the democratic process in action, blah blah blah.  But is this the best way to choose a president?

I should say right up front that my answer is “yes.”  I believe in the power of the people—that’s why I wrote my book Group Genius.  But is my belief in people power supported by scientific studies of groups?  For much of history, leading political scholars believed that “the people” generally made bad decisions.  Historically, most people were uneducated and illiterate, and they could easily be swayed by appeals to the basest emotions, grandstanding, and poor logic.  When scholars first began to study group dynamics, they focused on mobs, riots, and panics, making it obvious that these scholars weren’t big fans of groups.  In fact, even the founding fathers of the United States shared these concerns; that’s why they created a “representative” democracy, where the people didn’t actually make the decisions; they elected representatives, who presumably would be properly educated and cool-headed, and could be trusted to make good decisions. 

But in the last few years, research by my colleagues and I has begun to show that groups are often smarter and more innovative than the individual members of the group.  Think of a jazz ensemble—where none of the players is in charge, where no single musician knows exactly where its going.  That’s what I mean by “group genius,” and every one of us has been in a creative conversation, a successful energizing meeting, or a sports team where everything gelled together.

Is primary voting, for example in Iowa and New Hampshire, more like a jazz group—super creative—or more like a crazy mob?

As I’ve found in my research, for a group’s genius to be fully realized, several things have to happen.  First, the members of the group have to share a common body of knowledge—and on top of that, they each have to know some uniquely different information.  Second, they have to trust in each other.  But trust doesn’t mean everyone always agrees; it allows them to challenge other’s ideas, and to propose crazy ideas of their own.  Third, they need to interact with each other, in a special kind of open, improvisational conversation—where something unexpected can emerge.  The best genius groups are like improvisational jazz ensembles.  The outcome is unpredictable, and it depends on a complex sequence of small actions and interactions.  A lynch mob isn’t like any of these—in a mob, everyone is the same, everyone agrees, and the outcome is pretty much predictable ahead of time.

This research gives us some hints about why democracy is sometimes hard to export to other countries.  In a country where the citizens don’t share a culture of democratic values, where tribal and historical rivalries make it near impossible to trust each other, it’s hard to get the conversation going.  And without a truly creative conversation, the group—“the people”—can’t do its creative work.

In Iowa and New Hampshire, thankfully the process has been more like group genius than like a mob.  We’ve seen frequent conversations and debates, with voters and candidates alike.  In such small states, even the media often plays a constructive role, spreading communications among voters.  That’s why it’s a good idea to have the first primaries in smaller states, like Iowa and New Hampshire—because there’s a very real possibility that actual conversations between voters could influence the outcome.  And these interactions have, of course, resulted in unpredictable, emergent outcomes—even four days after Iowa, it was hard to say exactly what would happen in New Hampshire.  And still, we don’t know who the nominees will be.

Both parties have been tinkering with the primary calendar.  But true democracy should be a bottom-up process, one where the choices start in conversations among the people, and then gradually bubble up.  We don’t want a process that allows the party elite to choose their candidate and then ask the people to rubber stamp that choice.  The power of democracy is the power of group genius; and that’s what we’ve seen in these primaries.  If only we could think of a way to get every state involved early on, so that all voters across the nation could participate equally, and yet still allow this emergent creative process to unfold, unpredictably and from the bottom up.

Happy New Year!

Group Genius has been chosen as the 2008 Direction for the Creative Leadership Forum, a group of 3000 senior executives based throughout Asia Pacific and Australia.  Check it out at http://www.thecreativeleadershipforum.com/ They have a partnership with the innovation-focused magazine Fast Thinking, with a subscribed database of 50,000 globally.  You can learn more about Fast Thinking at http://www.fastthinking.com.au

On December 20th, I did a live one-hour interview with Deb Hobson, host of KOPN’s show “A Chautauqua”.  Our conversation ranged widely, from stories in my book, to my blog postings here and on the Huffington Post.  You can listen to it here:

http://www.kopn.org/archive

Today I’m sitting at Harvard Business School, participating in what promises to be a seminal conference about creativity and innovation–with business leaders including Kim Malone Scott (Google) and Scott Cook (Intuit), and top scholars like Howard Gardner (Harvard) and Bob Sutton (Stanford).

The session opened this morning with four top business leaders, who were each asked: “What are the most important unresolved questions about creativity and innovation?” The first to speak was Kim Malone Scott, a senior manager at Google who is director of AdSense online sales and operations. Her question: “Can creativity scale?” Creativity is most active in a small collaborating group: the most innovative companies are small startups. But eventually, as the company grows, collaboration becomes bureaucracy. So how can a company keep benefiting from the power of collaboration, even as it grows? At Google, Kim reported a few ways that Google was trying to solve this problem: (1) permission isn’t required to start something, but you have to tell everybody first; (2) avoid ownership, because that creates silos; most businesses at Google do not have a single top manager. No one is the manager of the Internet search business at Google. (3) Redundant projects, and frequent failure, are absolutely necessary.

Next was Diego Rodriguez, head of the Palo Alto office of the legendary design firm IDEO. His key question was: “How can we move from depending on the lone genius, to tapping the power of collaboration?” As successful examples, he provided Proctor & Gamble’s Innocentive idea marketplace; Mozilla’s open source code base; and Threadless, the web site where you can post t-shirt designs and then vote on your favorite designs. He emphasized that collaboration occurs across boundaries, when you don’t know who’s in charge, and when everyone is intrinsically motivated.

Third, Mark Fishman, head of research at the pharmaceutical company Novartis, asked “Can a company be both efficient and innovative?” Efficiency is critical at a pharmaceutical company, when it can take 10 years and $1 billion to develop a single new product.  One comment of his that stood out for me: “Six Sigma kills innovation.”

Finally, Scott Cook, founder of Intuit (the maker of the Quicken software) asked “Do we even need management anymore?” In his analysis, innovation today almost always results from emergent discovery out in the field. At Google and many other innovative companies, the best ideas emerge from employees or customers, not from managers–who often seem to just get in the way of innovation.

All four of these legendary executives seemed to be reading from the book Group Genius, where the message is that creativity is never about a lone genius, but is rather about collaboration and social networks. However, I’d be surprised (although delighted) if any of them had read my book. What’s really going on here is that the idea of “group genius” is broadly out there, in the culture.  This is my argument in the book: that even though I am the author of Group Genius, my book is just one manifestation of a collective revealing of knowledge about the importance of collaboration.

After this panel, the legendary Howard Gardner spoke on the topic of “Creativity and Responsibility”: can you be both creative and responsible?  Later speakers on Friday included Harvard’s Amy Edmondson (on the role of failure in creativity) and Stanford’s Jim March (on adaptability and creativity).

Kudos to the organizing panel, led by Theresa Amabile.  This is a highly significant event.

What’s your visual image of a brilliant scientist? A nerdy man in a lab coat, working late in some basement laboratory with beakers and test tubes? Someone typing at a computer in their office? Well, clear your mind of that image, because science today is all about collaboration and teamwork. This is the message of a truly impressive study published in SCIENCE magazine 18 May 2007. Three professors at Northwestern University, Stefan Wuchty, Benjamin F. Jones, and Brian Uzzi, analyzed huge databases–of 19.9 million scientific papers over 50 years, and 2.1 million patents–and found that collaboration is rapidly becoming the norm in science and in invention.

They focused on a few key numbers. First, the databases allowed them to determine which papers, and which patents, had one author, two authors, or more. Two or more authors means that the creation was collaboratively generated. In science, the average team size (number of co-authors) doubled over 45 years–from 1.9 to 3.5 authors per paper. Of course, science has become a lot more complex, and requires a lot more funding, and that might account for the larger team size. But the databases also had data about the social sciences and the arts and humanities; social science research hasn’t increased in scale and cost the same way particle physics and medicine have. And surprisingly, even in the social sciences, collaboration has become a lot more important. In 1955, only 17.5% of social science papers had two or more authors; in 2000, 51.5% of those papers did. And although papers in the arts and humanities still are mostly sole authored (over 90%), the trend over the last 50 years has also been toward more collaboration.

But what about quality and creativity? Can we find out if the collaboratively generated papers are any better? Fortunately, the databases allowed the researchers to determine the impact and influence of each paper, and of each patent, because those databases keep track of how many times the paper or patent was cited by a later publication. More citations means a more influential paper; and more citations have been shown to correlate with research quality. And guess what: over the 50 year period studied, teams generated more highly cited work in every research area, and in every time period. The implication is that teams generate better scientific research than solitary individuals.

One final interesting finding is that the creative advantage for teams has increased over the last 50 years. Although teams generated more highly cited work back in 1955, by 2000 the advantage of teams over sole individuals had become even greater. In 1955, team-authored papers received 1.7 times as many citations as sole authored papers; in 2000, they received 2.1 times as many.

In a later issue of SCIENCE magazine (14 September 2007) several letters challenging this research were published; the authors convincingly responded, by providing additional data. There’s no question that teams do better science than solitary individuals, and that the trend is working in teams’ favor.

When I speak to corporate audiences, one of the most common questions I get is “What can we do to support collaboration among people in different locations?”  The most common tool that distant teams use to collaborate is email, but it has well-known weaknesses.  An increasingly popular team coordination tool is the Wiki; it’s better than email exchanges, but still far from ideal.

Most multinational companies have used Web conferencing (where information is delivered to participants in a training session or a Powerpoint) or video conferencing (where a camera in each location captures an image that is displayed in each other location).  Web conferencing isn’t very collaborative because it tends to be one-way: like a lecture hall, where information is delivered from one to many.  And most companies have had only partial success at supporting collaboration with video conferencing.  Two problems: one, the lack of “presence,” the hard-to-describe subliminal messages that you pick up when you’re right next to someone, and two, it’s not that easy to share documents, or to grab a scrap of paper and sketch an image to help communicate a point.

IBM and Microsoft both have far-flung research teams, and in-house tools to support teams, like Microsoft’s SharePoint.   And there’s a relatively new class of software call Group Decision Support Systems (GDSS), with the market leader, a product called ThinkTank by the company GroupSystems.  ThinkTank is typically used when all of the team members are in the same room; each is given a networked laptop, and the software guides the flow of the meeting to foster maximum creative idea exchange.  My own research, as reported in my book Group Genius, shows that this kind of “electronic brainstorming” is more effective than ordinary brainstorming.

But this still doesn’t really help companies with far-flung teams scattered across the globe.  I don’t think there’s an obvious best solution here; I think there’s a huge potential market, for the company that can figure out how to best support geographically distributed collaboration.  What are your experiences with long-distance collaboration?

A study reported in this weekend’s Wall Street Journal, authored by Rob Cross, Andrew Hargadon, Salvatore Parise, and Robert J. Thomas, confirms the key arguments made in my book Group Genius. Their lead paragraph is straight from the book jacket of Group Genius: the idea that creativity comes from a lone genius is a myth; creativity always emerges from collaborations and networks.

The four researchers studied innovation networks in 20 organizations, and identified three common patterns associated with innovation. First, collaboration throughout the organization is critical. “Breaking down silos” is common wisdom these days; but the new research I report in Group Genius is showing exactly how to build networks across the organization. Second, connections are critical for enabling knowledge sharing, and the more that knowledge flows freely through the network, the more likely innovation is to emerge. Third, innovation emerges from groups that experience what I call “group flow”–when everything jives together and everyone is energized by the group to create at a higher level.

The article provides a list of four articles, published in the MIT Sloan Management Review, from the last five years that elaborate on these important points.

Peter Gloor and Scott Cooper, Spring 2007, “The new principles of a swarm business”

Polly Rizova, Spring 2006, “Are you networked for successful innovation?”

Jeffrey H. Dyer and Nile W. Hatch, Spring 2004, “Using supplier networks to learn faster”

Mohanbir Sawhney, Spring 2002, “Don’t just relate: Collaborate”

I’m often invited to speak about the importance of networking and collaboration.  After I’m done, one of the most common questions from I get from the audience is “If your company is not innovative and not collaborative, how can you make the switch?  Can you give us an example of a company that’s successfully made the change?”  I have my favorites, companies I talk about in my book GROUP GENIUS, including IBM and Semco, but I’m always looking for new examples.

So I was delighted to read about the transformation accomplished by ICU Medical, Inc., a manufacturer of medical devices based in San Clemente, California.*  The company was founded by an internist, Dr. George Lopez, in 1984.  Ten years later, the company had almost 100 employees but was still being run largely by Dr. Lopez in a top-down manner.  Lopez tells a story about watching his son play hockey; the other team had one incredibly talented player, but his son’s team was a better team.  Even though none of their players could match the other team’s star, the team collectively was able to defeat him.

Dr. Lopez went back to the office and announced a new leadership style: delegate power to the employees.  He took the radical step I’ve seen at innovative companies like Gore and Semco: he decided to allow the employees to create their own teams.  He decided to allow the company to be managed bottom-up, rather than top-down.  When Ricardo Semler did the same thing at Semco, many of his top executives quit; top people quite at ICU Medical, too.  But Lopez’s strategy worked; the company’s stock has gone up sixfold in the last ten years, and revenue growth last year was 28%.  These self-forming and self-managing teams came up with better ideas than any one manager could have.  To take one example, one of the plant workers thought that the forklifted delivery of parts from the warehouse to a molding site was overly inefficient.  He got some colleagues interested, and they formed a team to re-examine the manufacturing process for the Clave, a top-selling product.  Six months later, they introduced a new process that is saving the company a half-million dollars each year. In the new company culture, teams often are allowed to implement their ideas even if top executives are opposed.  Dr. Lopez, as the CEO, has always retained the right to veto a decision, but years later, he still hasn’t done so.

Through trial and error, ICU Medical has learned several of the lessons that you can find in my book GROUP GENIUS.  Teams need some structure to be effective–a set of core values and rules of engagement, and they always elect a leader.  One group created a 25-page manual with advice about team operations.  Team members are rewarded collectively based on the value their work contributes to the bottom line.

So yes, it is possible for a company to make the difficult transition from top-down to bottom-up. You can do it through trial and error; but far better to save yourself the trouble by learning about the research on groups, collaboration, and innovative organizational design.

* Erin White, “How a Company Made Everyone a Team Player,” Wall Street Journal, Monday August 13, 2007, pages B1, B7.

Lots of people work in groups that are not really teams. If you work alone in a cubicle, and meet your fellow team members only in the Monday status meeting, you’re not in a real team. Organizational researchers reserve the term “team” for groups that have high interdependence–each task that you do, sometimes on an hourly basis, is dependent on what the other team members are doing at that same time. Some team tasks need high interdependence, while others don’t. In a recent post at Huffingtonpost.com, I gave a sports example: a basketball team is highly interdependent; a baseball team is low. In an interdependent team, you can’t get anything done without working closely with the other team members. Years of organizational research show that as your team becomes more interdependent, you need more and better communication, and higher cohesion. In my book GROUP GENIUS, I show that real teams need what I call group flow–a state of peak performance that comes from close work, shared commitment to the goals, and pride in the team.

I’ve just read a fascinating academic study* of interdependence in top management teams (TMT)–basically, this is the group of senior executives that has their offices in the executive suite at headquarters and that report directly to the CEO. Professors Murray Barrick, Bret Bradley, and Amy Colbert studied 94 credit unions, with TMT size ranging from 4 to 14 members. They interviewed 517 of the 601 TMT members at these credit unions. To assess TMT effectiveness, they measured the team’s own ratings of their effectiveness, and then they waited one year and measured each firm’s performance using data from the National Credit Union Administration.

Using some fairly sophisticated statistics, they demonstrated that when teams are more interdependent, coherence and communication more strongly predict the team’s performance and the firm’s performance over the following year. But what’s interesting is that there were two different kinds of teams. For teams that were highly interdependent, high coherence and good communication predicted both team performance and firm performance. But for teams that were not interdependent, low coherence and less communication was related to better performance. The top performing teams and firms were those with interdependent teams and high cohesion and communication; but the non-interdependent teams with low cohesion and communication only performed slightly worse.

The key message is that you need a match: between the degree of interdependence on the one hand, and coherence and communication on the other. The least successful teams were those for which these two features were mismatched.

I would add one tip from my own studies of innovation: significant innovations always emerge from interdependent teams, and rarely come from teams low in interdependence. That’s why innovations tend to come from teams that are high in group flow, high in cohesion and with constant communication. Credit unions aren’t generally associated with high innovation; I’d like to see this study repeated, but in an industry that is associated with constant innovation.

*Barrick, M. R., Bradley, B. H., Colbert, A. E. (2007). The moderating role of top management team interdependence: Implications for real teams and working groups. Academy of Management Journal, 50(3), 544-557.