Golden rules

That is to say, whoever has the gold makes the rules.

By Jerry Ash

The most frequent opportunities for external collaboration come through consultants and subcontractors. But Michael Heaney of Benchwhistler Associates, based in Aberdeen in Scotland, says that in the end the ‘Golden’ Rule generally prevails – that is to say, whoever has the gold makes the rules.

He tells the story of a client on the periphery of a major oil field project where all the major suppliers were given incentives to share the risk and reward of beating the budget and the time frame for completion. This required everyone to focus on ‘what’s best for the project’ rather than ‘what’s best for each company’. A saving of millions was expected.

On completion of the project everyone claimed success. Participants were awarded bonuses and everyone wrote and presented papers. Yet, the next oilfield project for the same oil company returned to the traditional contractor/subcontractor relationship without any talk of collaboration.

When oil prices fell, collaborative working was forgotten altogether and CRINE (cost reduction in the new era) became the order of the day. Subcontractors were subjected to mandatory price cuts and reverse auctioning where suppliers who were already pre-qualified were forced to bid against each other online. All the previous talk about trust, alignment of aims, shared goals, shared risk and reward evaporated in a race to the bottom. Go figure.

Peter Marshall of Helix Commerce in Irvine, California guesses that in most cases managers tend to see collaboration as a threat. Those who prove their mettle and gain the trust of their colleagues may not be the executives, he says. "Indeed, we can all easily imagine that it usually will not be the executives. Collaboration is unsettling for a company when the employees get a sense of who’s really capable and worthwhile, leaving the company to live with that hard-to-refute result."

The cultures of power and hierarchy are hard to kill.

Elizabeth Lank (IK, February 2006) tells a story about a cross-company community of nearly 100 people pulled together to fly to Hungary to help build an orphanage over a weekend. According to her source, it was a fantastic experience for all and they bonded in a way that would never have happened in a boring meeting room with Microsoft PowerPoint slides on the wall. "Think of the courage it took to suggest that and get the funding for it," she says. "The lesson for me is we can’t get different results if we work in the same old ways."

But, will the executives think in the same old ways?

In the oilfield story, executives took the risk. What they apparently did not take was a step towards corporate culture change. Company executives simply offered short-term incentives to others to collaborate. Apparently the executives themselves were not involved in the collaborative work per se and therefore did not personally experience the power of trust and teamwork.

Theirs was a short-term tactic, a manipulation – not long term collaborative strategy – to get sub-contractors to improve performance. Yes, it worked, but the managers were uncomfortable enough with the process to slip back into the familiar and more comfortable tactics of managing through command and control, mandatory price cuts and reverse auctioning.

In the case of the orphanage project, it was the human experience of those who actually built the orphanage that created trust in people and the collaborative process. One must wonder how the company executives felt.

Michael Heaney tells another oilfield story, this one about a typical lack of trust. A few years ago in the North Sea an oil company was testing a new well to see what the production rate would be. Sand flowed up with the gas and oil and blocked the tubing. The company’s day-rate independent consultant reviewed the company procedure, concluded it would not work and would actually compound the problem. He quickly wrote an unauthorised procedure which cleared the tubing safely and effectively. You might say he did his job – applied his knowledge, solved a problem, avoided a catastrophe.

In the morning he recalled all copies of his procedure and lied to the company in his morning report, saying the situation was remedied by following the company’s approved procedure. When Heaney asked him why, the consultant explained he would be dismissed for deviating from standard procedure without conferring with the company, even though it was the weekend and he had no one with whom he could confer.

Trust. Clearly none between the company and the consultant – ‘end-arounds’, cover-ups, lies, big and small form the domain of command and control, of covering your backside, of usury, deception and worse. A tough place to work.

Unless you have the mind of a modern-day Willie Sutton, the US bank robber who practiced his trade from the late 1920s to 1952, when he retired and became a security consultant to banks. He is best known for a response to a reporter who is said to have asked, at the height of Sutton’s career, "Why do you rob banks?"

Sutton reportedly replied, logically enough, "Because that’s where the money is". The quote is still attributed to Sutton even though he later confessed it was fabricated by the reporter. "I’d probably have said it was because I enjoyed it. I loved it. I was more alive when I was inside a bank, robbing it, than at any other time in my life." Now there’s honesty!

For Willie Sutton in his day and for macho managers, in ours, Gold Rules. Collaboration is the victim.

Jerry Ash is a special correspondent for Inside Knowledge and founder of the Association of Knowledgework (http://www.kwork.org). He can be contacted at jash@kwork.org