Everyone would agree that cooperation between teams is crucial for effective organizations. However, many organizations are faced with an island culture: teams and departments working in separation rather than integrating and aligning their strategic efforts. This significantly reduces team and organizational effectiveness. In fact, joint research by Harvard Business School and McKinsey shows that of all strategic projects that fail, 75% fails due to poor cooperation between teams.
So, what can an organization do to increase and improve cooperation and alignment between teams? And what role do managers play in this process? In a series of 4 blogposts, Dr. Jeanine Porck shares some important insights of four years of PhD research, which she conducted in collaboration with S-ray Diagnostics. This first blogpost is about why cooperation between teams is such a challenge and why shared strategic understanding is so crucial for cooperation between teams.
Why teams need to cooperate
If you ask people in an organization what they find difficult or what hinders their work, then chances are they will respond "our island culture". When teams behave like an island or silo they focus on their own objectives rather than those of the organization. This is a problem that many organizations struggle with, because in an island culture teams have no more connection with each other, problems are thrown over the fence to another department and cooperation with other teams and departments is frustrated. While –although not often realized– good cooperation between teams is just as important as cooperation within teams. Teams do not operate in a vacuum; they are part of a larger entity and need each other. A production and marketing team, for example, each have their own objectives but also need each other’s knowledge, resources and input. If a new product is under development by the production team, they need the marketing team to market it. Thus if production is behind schedule, marketing must also adapt its planning. But it is precisely this coordination between teams that often goes wrong. Poor cooperation between teams sometimes even makes headlines. For instance, crimes go unsolved due to inadequate information exchange between police departments2 and the Ruwaard van Putten Hospital closed in late 2013 after the Health Care Inspectorate (IGZ )3 concluded that the island culture prevented the hospital and its staff from providing safe and responsible healthcare. Fortunately, organizations can have significant influence on the development and prevention of an island culture. After four years of study, examining more than 170 teams from different companies, we can conclude that a key solution lies in the creation of shared strategic understanding between teams.
Why teams need to share strategic understanding
Why is shared strategic understanding so important? Many assume that the strategy of an organization should provide sufficient guidance to teams, as it summarizes the goals of where the organization wants to go. But in order to ensure the organization indeed achieves those goals, teams need to determine how they will go about doing their share of the work. They need to reach an agreement about how they will contribute to those shared objectives and how they will join forces: they need shared strategic understanding. If teams have shared strategic understanding they find it easier to understand each other’s perspectives and interests and to discuss and coordinate their tasks. Our research in several mid-size and large organizations shows that when teams in these organizations have more shared strategic understanding, they work together better and more effectively. Their shared understanding creates a basis of trust which allows these teams to work independently, without compromising the interests of other groups. Shared understanding thus lays an important foundation for mutual cooperation and thereby prevents an island culture.
This may seem obvious, but in practice it is difficult for many organizations to create shared understanding between teams. Teams prefer to focus on their own goals, which are short term and concrete, rather than the strategic goals of the organization. However, by focusing too much on these proximal goals, teams overlook the fact that they need other teams to do their work, and that other teams need them to do their work. Fortunately there are a number of mechanisms and processes all organizations can adopt to increase shared understanding between their groups. How organizations can do so and ensure that their teams cooperate more effectively will be discussed in the next blog on preventing an island culture.
This post is written by Dr. Jeanine Porck based on her PhD dissertation (http://repub.eur.nl/pub/50141). Currently she is a visiting fellow at the National University of Singapore.