Lynda Gratton on cooperation


Lynda Gratton is a Senior Fellow at the Advanced Institute of Management in the UK, and Professor of Management Practice at London Business School where she directs the school's executive programme, "Human Resource Strategy in Transforming Organisation's".

In 2002, Dr. Gratton published Living Strategy: putting people at the heart of corporate purpose (FT Prentice Hall). This book was voted one of the 20 most influential books by American CEOs and has been translated into eight languages.

More recently her research has focused on flexibility in organisations. The need for greater flexibility, in particular the issues arising from fundamental changes in the psychological contract between employees and organisations of the 21st Century, is explored in her most recent book, The Democratic Enterprise (FT Prentice Hall 2004).

Lynda Gratton talked to Des Dearlove about her research and the broader issues it raises.

But what exactly does cooperation mean in the business context?

Cooperation is something that happens when lots of different things are done right. Basically, it's about the way that an organisational culture is designed to create goodwill. It's about the way that the practices and processes are developed, so there is a whole discipline around that which is about the way that people learn habits as individuals.

Why is this topic so important now?

The reason I'm working on this is that I believe that as knowledge development intensifies, and as you've got to be much smarter about being innovative, so old-style competition becomes too slow, too bureaucratic, and too uninteresting. As a consequence of that, organisations will need to become more cooperative and they will need to develop higher collaborative skills.

But why should companies change what's worked in the past?

There is no innovation in the last 50 years that's been about individuals

Competition was great when the world was simple, and all you had to do was to become the best as an individual. Most innovation these days is created by teams of people working together. In fact, there is no innovation that we can find, in the last 50 years, that's been about individuals. It's always been about teams. So, innovation now comes from working in teams.

The real trick with cooperation is to understand that the greatest amount of innovation and new ideas comes from people who work together in very distributed networks. They're working across time zones, and so on.

Working effectively in these sorts of projects is really complicated. To succeed you just can't be competitive, because if you are then the whole process breaks down. If you don't create sufficient goodwill, then the relationships become very transactional. Once that happens, then you have to get lawyers involved, and everything just slows down. So, if you want to be fast and fleet of foot, you have to build cooperation. That's a completely different imperative to 50 years ago.

What have you discovered about cooperation?

What I've done is distinguish between what I call cooperative hotspots and cooperative cold spots. Cooperative hotspots are places where cooperation flourishes.

In our research we've identified some of those, so the question is what drives cooperative hotspots? What is it that organisations need to do to create places where they have cooperation which is capable of building innovation, capable of building knowledge, capable of building initiatives? That's the fundamental question of the whole research.

Can you give me an example of a cooperation hotspot?

Well, BP has peer groups, for example. The way that BP has developed a structure that enables them to move ideas around the organisation is an example. It has created a big horizontal hotspot in BP. The way that Nokia manages the development of its new products creates a cooperation hotspot. The way that Goldman Sachs puts its partners together to serve clients is a cooperative hotspot.

So, the question I'm asking is what is it that these organisations do to develop that and what can other organisations learn from that?

So you are interested in cooperation within the same organisation?

Not necessarily. In fact, there has been a lot research done on cooperation across companies. My basic argument is that cooperation is important wherever the boundaries are located. So one of the papers that we're writing is a paper on boundaries - and that boundary could simply be between you and somebody in another function. Or it could be between you and somebody in another company.

As organisations become more diffuse, so the boundaries become more commonplace, and of course, more complex. So, what I'm arguing is that the practices, the processes and the habits which I believe to be critical are important wherever the boundary is located.

Are you saying that most companies do things that discourage cooperation?

Creating an organisation of goodwill is largely about stopping doing things

Yes, one of my arguments is that creating an organisation of goodwill is largely about stopping doing things.

In particular, it is about stopping recruiting people who are very assertive and aggressive, and who are going to destroy those norms. It is also about stopping reward systems that reinforce competitive behaviour and prevent the necessary socialisation processes.

So if these are some of the obstacles, what are some of the characteristics of more cooperative organisations?

The first thing that you notice is that organisations which are cooperative have transformed quite a lot of what you might call transactional processes into relational processes. So that's one thing. The second thing is, just on an individual basis, what you find is that individuals in cooperative hotspots are personally better at cooperating. They've got the habits of cooperation.

Now, some of those were habits they got because they watched other people. Some of those are habits that they were friends, and some of them were habits because they were selected to have those habits.

So, for example, at Goldman Sachs, a massive amount of the selection process that goes on to get into Goldman Sachs isn't really around how clever you are - because everybody they interview is already clever – rather, it's about whether you're prepared to cooperate with other people in Goldman Sachs.

So the habits are really important, and the creation of collaborative tests is really difficult. It's really difficult to get that right because you have to get the pacing right, you have to get the sequencing right. So, we've also found that there's a set of practices and processes associated with that.

So what does this all mean for companies and managers?

The basic argument is that we've spent hundreds of years perfecting the language, practices and processes of competition and we now have to start creating a language, a set of practices and a set of processes about being cooperative. And actually, it turns out that cooperation is more difficult that competition. It's not the easy way out. It's actually really difficult to get right.


About The Author

Des Dearlove & Stuart Crainer
Des Dearlove & Stuart Crainer

Des Dearlove is a long-term contributor and columnist for The Times and a contributing editor to Strategy+Business. Stuart Crainer is a contributing editor to Strategy+Business and executive editor of Business Strategy Review.