by Yves Morieux
13. Cooperation is often used synonymously with coordination or collaboration. But there is a difference in meaning between these three terms, and that difference is not inconsequential. Collaboration is about teamwork as people get along, based on feelings and good interpersonal relationships. As we will see, such relationships often lead to the avoidance of real cooperation in the interest of maintaining convivial relations within the group or team. The legacy of the human relations approach, with its soft initiatives and focus on bonding in the informal group, can only, at best, encourage collaboration. Coordination refers to allocating an order of some sort among predefined activities that have to be made compatible. Scientific management can only, at best, obtain coordination by means of procedures, interface structures, metrics, and incentives. Cooperation, by contrast, involves directly taking into account the needs of others in creating a joint output. As is often the case, the best way to see the difference in concepts is to go back to their origins. The three notions have distinct Latin roots. Collaboration refers to co-laborare, working side by side. The emphasis is on the proximity in the action, neighborly relationships, and there is no notion of output. Cooperation relates to co-opera, which is about sharing an opus; there is a clear emphasis on joint goal, output, and result. Cooperation contains a notion of shared intentionality: we define objectives together and share the outcome. However, as we will see in chapter 1 with the concept of adjustment costs, contributions and sharing may be imbalanced to a certain extent. Coordination comes from co-ordo (the sharing of a rank) and relates to setting an order in terms of sequence and/or importance among decisions, actions, or resources. Cooperation is a generative interaction, inasmuch as it allows for the emergence of new capabilities to handle the complexity of more numerous, fast-changing, and contradictory requirements. Coordination and collaboration are only allocative interactions: allocating an order, a favor, and so on. See Yves Morieux, “To Boost Productivity, Try Smart Simplicity,” BCG Perspectives, July 2011, http://www.bcgperspectives.com. The kind of interactions that are central to cooperation, notably in dealing with weak signals, are explored further in Yves Morieux, Mark Blaxill, and Vladislav Boutenko, “Generative Interactions: The New Source of Competitive Advantage,” in Restructuring Strategy: New Networks and Industry Challenges, eds. Karen O. Cool, James E. Henderson, and René Abate (Oxford, UK: Blackwell, 2005), pp. 86–110.
14. The increase in contradictory performance requirements makes it more and more elusive to predefine and specify the “right” behaviors. This fact constitutes a specification uncertainty for the hard approach. On the other hand, growing specialization entails a multiplication of interdependencies between the specialized functions. These interdependencies make individual behaviors less directly controllable through structures, processes, and systems (because the behavior of one depends on the behaviors of others), which constitutes a programming uncertainty. Each person partly “controls”—influences and shapes—the behavior of others in a way that escapes the direct control intended by structures, processes, and systems. Interdependencies create “noise” and disturbances for the hard approach. The two uncertainties together undermine an approach to organization design that focuses on structures, processes, and systems instead of focusing on what people really do and how they mobilize their intelligence at work. The result is an organization whose output is often opposite to the intents and efforts of its members. For instance, hospitals in which the staff genuinely cares for patients, and in which structures, processes, and systems are all dedicated to caring for patients, can still be hospitals that treat patients poorly and even hurt and infect them.
15. On the theme of simplification, see Alan Siegel and Irene Etzkorn, Simple: Conquering the Crisis of Complexity (New York: Hachette/Twelve, 2013); and Ken Segall, Insanely Simple: The Obsession That Drives Apple’s Success (New York: Portfolio, Penguin Group, 2012).
16. Herbert A. Simon, “A Behavioral Model of Rational Choice,” Quarterly Journal of Economics 69, no. 1 (1955): 99–118; Michel Crozier, The Bureaucratic Phenomenon (Chicago: University of Chicago Press, 1964); Thomas C. Schelling, Micromotives and Macrobehavior, rev. ed. (New York: Norton, 1978, 2006); and Robert Axelrod, The Evolution of Cooperation, rev. ed. (New York: Basic Books, 1984, 2006). Another seminal work is Graham Allison and Philip Zelikow, Essence of Decision: Explaining the Cuban Missile Crisis, 2nd ed. (New York: Addison Wesley Longman, 1999). We should also mention the work of Richard Cyert, James March, Philip Selznick, Oliver Williamson, Rosabeth Moss Kanter, Erhard Friedberg, Jeffrey Pfeffer, François Dupuy, and Jean-Claude Thoenig. The cross-fertilization of these developments constitutes modern organizational analysis in organizational sociology. A thorough account of organizational analysis and its multiple branches is given in Erhard Friedberg (ed.), The Multimedia Encyclopedia of Organization Theory, DVD (Paris: R&O Multimedia, 2011). The first three simple rules draw on the notion of power and strategic analysis in organizational sociology. The last three simple rules particularly draw on game theory, and their titles are inspired by Axelrod’s writings. These last three rules build on rather than mirror Axelrod’s seminal writing. For instance, the concept of multiplexity for networks of interactions, explained in chapter 4, is not part of Axelrod’s framework.
17. The way we use the term “rationality” in this book is based on Herbert Simon’s concept of “bounded rationality.” According to this idea, people do not act on the basis of an exhaustive and consistent cost-benefit analysis of their options because they do not have access to all information and cannot process it all, and their preferences may be changing or even contradictory. Their rationality is bounded, that is, relative to their context of goals and perceived resources and constraints. People use their intelligence to adapt to this context. It is in this sense that organizational sociology, in the wake of Simon’s work and developments in the field of game theory, analyzes behaviors as rational strategies.
18. See Daniel H. Pink, Drive: The Surprising Truth About What Motivates Us (New York: Riverhead Books, 2011); and Adam M. Grant, Give and Take: A Revolutionary Approach to Success (New York: Viking Adult, 2013).
Chapter One
1. Just because we use the word “nudge,” do not confuse our approach with a stream of thought found in public policy, for instance as described in Richard H. Thaler and Cass R. Sunstein, Nudge: Improving Decisions About Health, Wealth, and Happiness (New Haven, CT: Yale University Press, 2008). The difference between this approach and ours is that we look not only at individual rationality and behavior, but also at how individual behaviors adjust to each other and combine to produce collective outcomes that do not boil down to the addition of individual motives and conducts.
2. For a more detailed description of this framework, see Yves Morieux and Robert Howard, “Strategic Workforce Engagement: Designing the Behavior of Organizations for Competitive Advantage,” The Boston Consulting Group, discussion paper, August 2000, http://www.bcgperspectives.com.
3. For more detail on this topic, see Yves Morieux, “Management: A Sociological Perspective” in Erhard Friedberg (ed.), The Multimedia Encyclopedia of Organization Theory, DVD (Paris: R&O Multimedia, 2011); and Erhard Friedberg, “Local Orders: Dynamics of Organized Action,” Monographs in Organizational Behavior and Industrial Relations, vol. 19 (London: Jai Press, 1997).
4. See Eldar Shafir, “Introduction,” in The Behavioral Foundations of Public Policy, ed. Eldar Shafir (Princeton, NJ: Princeton University Press, 2013), pp. 1–9.
Chapter Two
1. Indeed, some airlines have tried to create the equivalent of a rule book for pilots in the form of a standard employment contract that specified the desired behaviors of a pilot. But according to a report in Slate, management discovered that “formal contracts can’t fully specify what it is that ‘doing your job properly’ constitutes for an airline pilot. The smooth operation of an airline requires the active cooperation of skilled pilots who are capable of judging when it does and doesn’t mak
e sense to request new parts and who conduct themselves in the spirit of wanting the airline to succeed.” See Matthew Yglesias, “Friends Don’t Let Friends Fly American Airlines,” Slate, October 1, 2012, http://www.slate.com/blogs/moneybox/2012/10/01/don_t_fly_american_airlines_conflict_with_pilot_s_union_is_destroying_american_airlines_service_quality_and_you_have_to_stay_away_.html.
2. For more on this subject, see Yves Morieux, “The Hotel Clerk,” BCG Perspectives, December 2005, http://www.bcgpersectives.com.
3. Based on a talk by Christine Arron and Yves Morieux at a BCG seminar on collective efficiency, March 8, 2004. Thanks to colleague Mathieu Ménégaux for his insights on cooperation in athletics. The French team consisted of Patricia Girard, Muriel Hurtis, Sylviane Félix, and Christine Arron. The US team consisted of Angela Williams, Chryste Gaines, Inger Miller, and Torri Edwards. Bronze went to Russia. Based on the personal 100-meter best of each runner, the aggregate time for the US team over 400 meters is 43.59 seconds vs. 43.95 seconds for the French team. Of course the actual relay race takes much less time, notably because runners begin their leg already running (except the first one). Based on the 100-meter best performance for each of the US and French runners for that year, the aggregate time for the US team is 44.10 seconds vs. 44.82 seconds for the French. In terms of individual speed the US team is faster. But during the 2003 final it took the French team 41.78 seconds to run the relay race, and 41.83 seconds for the US team. The French were collectively faster. To watch the race go to YouTube and search for “2003 World Athletics Champs Women’s 4 × 100 m. relay final.”
4. Anita Elberse with Sir Alex Ferguson, “Ferguson’s Formula,” Harvard Business Review, October 2013, pp. 116–125.
Chapter Three
1. The control of uncertainties as the origin of power is well described in Michel Crozier and Erhard Friedberg, Actors and Systems: The Politics of Collective Action, trans. Arthur Goldhammer (Chicago: University of Chicago Press, 1977, 1980). A seminal article on the theme of power from the managerial literature is by sociologist Rosabeth Moss Kanter, “Power Failure in Management Circuits,” Harvard Business Review, July–August 1979, pp 65–75. The power factors analyzed by Kanter constitute uncertainties controlled by power holders. For example, if the “variety of task” is a source of power, it is because those in charge of these tasks control a greater uncertainty (a greater range of possible outcomes) for the rest of the organization than those in charge of tasks with less variety. Very often, when people enjoy tasks with greater variety it is not so much because of some kind of psychological need or dislike of boring uniformity. It is much more concrete: the power they derive from controlling a greater uncertainty allows them to advantageously negotiate their situation with the rest of the organization. The terms of exchange between them and the organization are more favorable and they can obtain more in return (better conditions, more indulgence, and so on).
2. For more on this theme, which is known as “the paradox of absolute dependency,” see Yves Morieux, “Resistance to Change or Error in Change Strategy?” in Erhard Friedberg (ed.), The Multimedia Encyclopedia of Organization Theory, DVD (Paris: R&O Multimedia, 2011).
3. See Martin Reeves, Mike Deimler, Yves Morieux, and Ron Nicol, “Adaptive Advantage,” BCG Perspectives, January 2010, http://www.bcgperspectives.com.
4. See André Beaufre, Introduction to Strategy (New York: Praeger, 1965).
Chapter Four
1. It is precisely this positive impact of each one’s behavior on the contribution of others to the output that makes cooperation create what is called a supermodular production function in economics. In that case, the production function can’t be broken down into an addition of separate contributions that could be measured. In the simplest terms, the whole is worth more than the sum of its parts. This nonseparability is at the root of the metering problem described by Armen A. Alchian and Harold Demsetz, “Production, Information Costs, and Economic Organization,” American Economic Review 62 (December 1972): 777–795. The theme is developed in the excellent book by John Roberts, The Modern Firm (Oxford, UK: Oxford University Press, 2004). Game theory considers supermodularity from the perspective of incentives and calls this phenomenon a strategic complementarity: one agent’s decision increases the incentives of others to do something. But the word “incentives” is misleading. The whole issue with cooperation is that what one does in one’s task increases the effectiveness of others in their own tasks. Pierre-Joseph Proudhon already had the intuition of supermodularity of cooperation as the basis for economic profit when he wrote: “Two hundred grenadiers stood the obelisk of Luxor [in 1836 in the center of the Place de la Concorde in Paris] upon its base in a few hours; do you suppose that one man could have accomplished a same task in two hundred days?” Proudhon went on to suggest that capitalist accounting would pay for two hundred grenadiers working one day the same as for a grenadier working two hundred days, even though the results are not the same. This difference is the basis of economic profit, the flip side of the laborer’s spoliation in Proudhon’s view. See Pierre-Joseph Proudhon, What Is Property? trans. Benjamin R. Tucker (New York: Dover, 1840, 1970).
2. For a detailed description of the negative impact of internal monopolies on R&D productivity in the biopharmaceutical sector, see Peter Tollman, Yves Morieux, Jeanine Kelly Murphy, and Ulrik Schulze, “Can R&D Be Fixed? Lessons from Biopharma Outliers,” BCG Focus, September 2011, http://www.bcgperspectives.com.
3. We can certainly work much longer, and we often do. The share of employees working forty-nine hours or more per week increased by 40 percent from 1980 to 2000 in the United States (employed population, except in agriculture). (Source: Bureau of Labor Statistics employment database.) A study of US male employees (not self-employed) aged twenty-five to sixty-four showed that, in the highest earnings quintile, the share of employees working fifty hours or more per week has more than doubled from 1980 to 2000 (Peter Kuhn and Fernando Lozano, “The Expanding Workweek? Understanding Trends in Long Work Hours Among US Men, 1979–2004,” no. w11895, National Bureau of Economic Research, 2005).
4. For more on this concept, see Etienne Wenger and William M. Snyder, “Communities of Practice: The Organizational Frontier,” Harvard Business Review, January 2000, pp. 139–145.
5. The power of face-to-face interactions was described by Erving Goffman in his seminal article, “On Face-work: An Analysis of Ritual Elements of Social Interaction,” Psychiatry: Journal for the Study of Interpersonal Processes 18 (1955): 213–231.
Chapter Five
1. That structure follows strategy was originally a historical observation of Alfred Chandler in the early 1960s. This observation progressively became a prescription that structures, processes, and systems had to be designed as alignment devices. See, for instance, Robert S. Kaplan and David P. Norton, The Balanced Scorecard: Translating Strategy into Action (Boston: Harvard Business School Press, 1996); and also their Alignment: Using the Balanced Scorecard to Create Corporate Synergies (Boston: Harvard Business School Press, 2006). The same alignment function has also been prescribed to information systems, as discussed by Yves Morieux and Ewan Sutherland, “The Interaction between the Use of Information Technology and Organizational Culture,” Behaviour and Information Technology 7, no. 2 (1988): 205–213; and also Ewan Sutherland and Yves Morieux, eds., Business Strategy and Information Technology (London: Routledge, 1991).
2. The mechanistic model assumes as many parts in the machine as there are requirements that it has to satisfy: N parts for N requirements. Each of the N parts has to coordinate with the N – 1 other parts so there are N(N – 1)/2 coordination needs. We know that the number of requirements has increased by a factor of 6 over the past 55 years. Today there are 6N requirements rather than N. Our mechanistic model becomes 6N(6N – 1)/2. This is 36 times its original value, plus something more or less negligible depending on the initial situation.
3. A company’s IT department often has a holistic perspective on the comp
any’s information, roles, and capabilities from which an efficient and effective organizational solution could be derived before structures, processes, and system functionality are set. Because IT comes into the picture only toward the end of the alignment process, however, there is little room for maneuver to come up with inspired solutions. For example, IT can be used to facilitate the cooperation between specialized roles, thus removing the need for an additional coordinating layer such as the project manager. Indeed, the new frontier of IT is to improve collective productivity by being a force for cooperation. See Yves Morieux (BCG), IT Is a Force of Cooperation, video, http://www.dailymotion.com/video/xgfcnb_yves-morieux-bcg-l-it-est-une-force-de-cooperation_tech; and Yves Morieux, Mark Blaxill, and Vladislav Boutenko, “Generative Interactions: The New Source of Competitive Advantage,” in Restructuring Strategy: New Networks and Industry Challenges, eds. Karen O. Cool, James E. Henderson, and René Abate (Oxford, UK: Blackwell, 2005), pp. 86–110. Instead of just attempting to improve individual productivity and cut transaction costs, IT systems must be used to fuel the generative value of interactions and improve collective productivity.
