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Collaborative Leadership: The Role Of The Team Leader

The fifth C in our model is collaborative leadership. The reason we use the term collaborative is because successful team leaders typically need to collaborate with those within the team as well as persons outside the team in order to help the team function effectively. For example, to change the team's performance appraisal systems often requires the team leader to get approval from senior managers and help from human resources. A company's human resource managers typically play an important role in recruiting and training team members as well as helping the team develop competencies to succeed as a team. So the team leader may need to solicit their support. Team leaders may also want advice from outside consultants to help the team manage change effectively. Thus, the team leader needs to be willing to collaborate with a variety of stakeholders who can help the team improve its performance.

In addition to this “collaborator” role, we have found that effective team leaders do the following:

• Articulate a clear vision of the team's goals and the metrics that will accurately measure team performance.
• Set clear direction for the team with regard to how to achieve team goals.
• Motivate and inspire team members as they pursue team goals.
• Teach and coach team members in developing the skills necessary to complete team tasks.
• Help each team member feel that she or he is valued and an important contributor to the team.
• Hold team members accountable for their contributions to team performance.
• Include and listen to team members when making decisions that affect the team.
• Manage conflict and solve team problems effectively.

We find that team leaders often do not receive adequate training for the role of team leader. As a result they are ill equipped to lead the team and have been set up for a potential disaster. Bain & Company has a well-thought-out process for developing and selecting team leaders that ensures competent team leadership. No one at Bain is promoted to be the manager of a team without demonstrating the skill set necessary to be an effective team leader. Each manager may have one or two “case team leaders” who have responsibility for a portion of the team's work and lead the work of perhaps two or three consultants or business analysts. The company has adopted a promotion process that essentially results in the flipside of the Peter Principle.2 Rather than promoting people to their level of incompetence, Bain requires that prospective managers demonstrate the full complement of managerial skills, and particularly “intellectual leadership,” in a “case team leader” role before they are promoted to manager.

Just like any other manager or partner, they receive a monthly evaluation from the team regarding their leadership performance. Over time the company has studied what makes an effective team leader. In the early days in the firm, they found that extraordinary teams (as measured by quantifiable results for the client) were led by team leaders who exhibited great “intellectual leadership.” Intellectual leadership might best be defined as the ability to create and communicate a clear vision for the team's client work. Effective managers are able to identify the key client problems that need to be addressed and they excel at laying out a structured problem-solving approach for the team. They also excel at drawing upon their knowledge and experience to brainstorm and generate value-added ideas for the client. The ability to personally solve client problems is at the heart of “intellectual leadership.”

However, more recent studies of employee satisfaction at Bain have found that the most effective team leaders are those who “motivate, inspire, and value” their team members. In other words, just being a smart, effective problem solver isn't enough to inspire a team of individuals to work collaboratively—drawing upon their collective knowledge and skills—to generate a value-added solution. Thus, Bain now evaluates and gives roughly equal weight to both intellectual leadership and collaborative leadership. Individuals must demonstrate these skills as a case team leader in order to qualify to be promoted to the position of case team manager. This approach has helped the company develop a core of managers who are generally highly effective at leading productive teams right from the start.

The Changing Roles of Team Leadership

Most managers and supervisors have worked with their subordinates primarily in boss–subordinate relationships. Such relationships typically are based on the assumption that the boss sets the direction and leads, and the subordinate's role is to carry out the directives of the supervisor. From this view of team leadership, team leaders set team goals, make key decisions by themselves, determine team members' assignments, keep information to themselves, and, in general, create a climate within the team that encourages team members to “follow the leader.” This leadership style may be appropriate in certain situations where: (1) the task requires little input from team members; (2) the skill level of team members need not be very high to accomplish the task; (3) there is high turnover in the team, requiring managers to provide direction to new team members; and (4) little innovation is needed for the team to be successful. Teams in fast-food restaurants, for example, may need more direction from the leader due to the nature of the work and the high turnover experienced in that industry.

However, we have found that in most situations developing effective teams requires team leaders to think of their subordinates as teammates rather than merely individuals designated to carry out their orders. In such teams, goals are jointly set by team members with team leaders. Decisions are team decisions and assignments are made after consultation between the team leader and team members. While team members support the team leader, feedback—sometimes negative—is shared about the team and the team leader and communications are open and honest. Team leaders also share all relevant information with the team so that the team can make well-informed decisions. Finally, the team as a whole, not just the team leader, feels responsible for the conduct and the performance of the team.

When a team is just forming or when team members are relatively inexperienced or do not have the requisite skills yet to function effectively in the team, the team leader may need to be more directive. However, over time, as the team matures, the team leader's role needs to change from a more directive role to one that is more participative and collaborative. The following discussion outlines how these roles change over time as a team matures.

The Shift from Individual to Team Leadership

If team leaders see their role as one of dominating the team, there will be little, if any, synergy among team members or empowerment of team members. Effective teams are successful because they take advantage of the complementary knowledge and skills of team members: everyone on the team contributes something different to team performance. The team still has a recognized leader, but that person's use of power and definition of the role are very different from an authoritarian leader. The team's leader tends to give more responsibility to the team, opens up lines of communication, encourages collaboration and mutual helping among members, and allows—even encourages—differences of opinion and helps the team work through those differences. At Bain, everyone is taught to follow the mantra: “Listen, Execute, Add Value.” Team members should certainly listen and execute on the directions of the leader. But they are encouraged to “add value,” meaning that they should provide valued input to the direction of the team and its work product. This is expected if a consultant hopes to be promoted to the next level of responsibility. Thus, effective leaders spend time encouraging the input and ideas from team members so that team members feel responsible for working together to accomplish common goals.

To achieve this shift in leadership style, over time team leaders need to move more power and responsibility to team members and redefine their leadership role. Figure 6.1 shows how power and roles need to shift to change an immature team into an effective team.

In the beginning of team development, the team leader is usually in a traditional leadership role, with a minimal amount of power or authority delegated to subordinates. But to be effective over time, the leader must be helped to see the leadership role as being more collaborative in nature, both with team members and those stakeholders outside of the team. This transition is often very difficult for a team leader who feels more comfortable making the decisions and being in control of the team. Sharing authority and responsibility with the team can create uncertainty and anxiety for the team leader, and thus resistance to this change in role is not uncommon. However, an effective team leader generally sees his or her role changing from initially being an educator, to becoming a coach, and eventually moving into the role of a facilitator. We'll discuss each of these roles in turn.

Team Leader as Educator

Assuming that the leader is committed to leading a high-performing team, the first task for the leader in the team development model in Figure 6.1 is to understand how the other 4Cs of team performance are affecting the team and develop a plan to align team context, composition, competencies, and plans for change. This generally requires the team leader to educate the team regarding the 5C model and in particular to help train team members in those competencies that will be needed for the team to function effectively.

While the team needs to be aware of the context and composition issues that may affect the team and be willing to work with the team leader to make needed changes in those areas, most team education programs begin with a focus on team competencies. The team leader should review the ten team competencies we described in Chapter 4 along with the competency of “change management” presented in Chapter 5 and identify with the team those areas where the team needs to improve.

Having team members fill out the team competencies survey in Chapter 4 and sharing the results with the team will help identify those competencies that need attention. For example, if, after taking the survey, meeting management is seen as a problem for the team, then the team could review the best practices related to meeting management outlined in Chapter 4 and then implement those practices in the team. Ideally, the team leader should educate the team members about the key competencies. However, if the leader feels inadequate to conduct these education sessions, an outside facilitator or consultant might be called in to provide assistance. In most companies, the human resources department is a good training resource that team leaders can use to help facilitate training sessions.

In this education phase, the leader:

• Demonstrates a willingness to share power and responsibility with team members
• Encourages team members to become more active in sharing leadership responsibilities
• Develops team performance metrics and guidelines on how the team will function in the future to achieve those performance goals
• Develops with team members the basic competencies of an effective team
• Presents and practices the key competencies that the team needs: being trusting and trustworthy, fostering open communications (sharing all relevant data), giving and receiving feedback, making decisions that have the commitment of all, and observing and critiquing group processes, etc.

Educating the Team

During the education phase of team development, team leaders, in additional to competency training, need to train the team regarding the changing nature of their leadership role. Over time, the team will need to take more responsibility for team functioning and results as the team leader begins to share power with the team. To facilitate this process, the team leader needs to show commitment to a more participative leadership role. This can be done in a variety of ways: asking a team member to build a team meeting agenda by contacting all of the other members for agenda items; allowing a member to chair a team meeting; asking members for their ideas, suggestions, or criticisms of proposals on the table; setting goals and making decisions that require full participation; or delegating significant work to team members without continually checking up on them. Sharing power is the basis of true participative management. Team members must feel that they are partners with the team leader in the work to be done, that their ideas are listened to and respected, and that they can disagree with the team leader without fear of reprisal.

The concept of leadership to be taught and practiced is that leadership is not something located in a position but is instead a process that can be shared with others. A person who shares in the leadership process sees an action that is needed to move the team ahead and then has the initiative to take the action. Leadership is truly shared when every team member feels responsible to initiate an action whenever he or she sees the team struggling or getting bogged down. Team members do not wait and say, “If the leader doesn't do something soon, we are going to waste a lot of time and make some very poor decisions.” Thus, all team members, not just the leader, feel responsible for improving the functioning of the team.

Team Leader as Coach

As the team matures and the leader shifts more power and responsibility for team functioning from his or her shoulders to the team, the leader's role begins to change from educator to coach. This should not occur until team members understand the team leader's leadership role and have developed some competence in their own leadership skills. Team members also should have experienced the willingness of the team leader to share responsibility and authority with them.

Coaching involves identifying problems facing the team and then helping the team or team member take actions to address that problem and improve performance. It is also a way to reinforce and encourage positive behaviors that the team or an individual exhibits. Coaches must observe and have regular contact with members of their team. Hence, they must be “out with the troops,” watching how they perform, critiquing their performance, and providing specific, helpful feedback.

Effective coaches tend to ask questions more than give answers. Certainly coaches may have their own views about what the team should be doing, but they encourage team members to develop their own insights regarding what to do and how to do it. This Socratic method of asking questions helps team members discover what they need to do to help the team succeed and gain insights about how to improve themselves personally. This coaching process helps team members feel empowered and consequently they develop a deeper understanding of the competencies necessary to achieve team excellence. Most important, team members must recognize that the coach's role is to help them succeed—not merely to be a critic or a purveyor of advice. People generally are willing to listen, take advice, and make needed changes if they see the source of such advice as being both authoritative and caring. Thus, the team leader needs to be seen as a knowledgeable helper or mentor in order to function effectively.

One of the mistakes a leader can make is to move too quickly and start to coach when the team has not been adequately educated. If the leader starts to make decisions by consensus and the team members do not understand what consensus is, they could be confused by and suspicious of the leader's behavior. But if they understand the role of the leader as coach, the team generally comes to accept and welcome this leadership style. Sometimes coaching is best done with the whole team present, reviewing again the guidelines for consensus or for critiquing group processes. But sometimes coaching is most appropriate for a particular team member in a private session.

Team Leader as Facilitator

In this final phase in making the transition to a high-performing team, the leader functions as a facilitator. The leader's primary role is to intervene in the team's actions only when attention needs to be focused on a matter the team is having a problem with. Like coaches, facilitators often get more mileage out of asking questions than giving answers. Thus, the leader as facilitator might say, “It seems to me that a vote is being taken before everyone has been able to speak. Do you see the same things I do?” Or the leader might intervene by saying, “If we move ahead in this direction, will this really get us to the overall mission or goals we have set? Have we reached a real or a false consensus? Does everyone feel satisfied with the way we have been functioning at this meeting?”

At this stage in the team's maturity, the intervention of the leader at certain points is enough to get the team back on track, for members are now used to handling team actions themselves. However, the role of the team leader is never fixed. Just because he or she has been able to move from educator to coach doesn't mean that there won't be a need for the leader to fill the educator role again. It is quite possible that when new ideas, concepts, or skills are identified, the leader may need to shift back to the educator role or perhaps to the coaching role until the team is comfortable with the new situation.

Leadership Roles in Self-directed Teams

Some organizations create a context for their teams based on the idea that teams need to have more authority to deal with the issues they face. Such teams, often called self-directed work teams, are also called autonomous or semiautonomous work teams. In these types of teams the leader, if one is designated, will typically act in the role of a coach or a facilitator. An autonomous team, however, does not have a formally designated leader. It can select its own leader, rotate leadership among members, or operate without a leader—a kind of “leadership by committee” process during which leadership functions are assigned to different members of the team. A semiautonomous team, by contrast, does have a designated leader with a formal title and position, but the leader's role is defined in such a way that the team makes its own decisions and takes actions independent of the leader. This has led to one of the dilemmas of the semiautonomous team: determining the role of the leader if the team has the right to function without the direct influence and control of that formal leader.

Organizations that have successfully adopted semiautonomous teams have begun to redefine the role of the formal leader in some combination of the following:

• The leader functions primarily as a training resource or facilitator to help the team examine how it is working and give the team the needed training, coaching, or facilitation.
• The leader spends most of his or her time dealing with issues with other units or with upper management. Or the leader may increase the interaction and relationships with customers.
• The leader acts as a consultant to the team and can be asked to help deal with team problems, conflicts, problem members, or other concerns.
• The leader may attend all team meetings or attend only when invited. The leader may formally open the meeting but then turn the activities of the meeting over to team members.

It is apparent that some teams are autonomous or semiautonomous in name only; that is, the formal leader is not willing to relinquish power and continues to function in the traditional leader role of having all activities flow from and through the leader. It should also be apparent that the team can find itself beset with a multitude of problems if team members have never had training or experience in how to work together as a team. Sometimes teams are asked not only to plan, schedule, and coordinate work but also to make decisions about hiring, terminations, allocation of pay raises or bonuses, vacation schedules, training needs, or awarding time off to attend meetings or other activities. These issues, which are central to a number of personal concerns of team members, have proved difficult even for experienced teams, and an untrained autonomous or semiautonomous work team can get buried under a load of activities it is not prepared to handle.

We know of one organization using semiautonomous teams that even made budget cutting and layoff decisions as a team, decisions typically reserved for senior management. When the business experienced a serious downturn, the organization's senior management gave the work teams data on the kinds of budget cuts that were needed to help the business survive, and the teams were then given the autonomy to decide how they would reduce costs, the bulk of which were in payroll. The teams came up with some creative solutions: some team members decided to take unpaid vacations, others decided to job-share or work part time, and still others who wanted to leave the company and had other opportunities were let go. By allowing the team to use its autonomy and creativity in the face of a difficult situation, the company was able to weather the crisis and emerge even stronger.

Identifying Effective Team Leaders

In this chapter we have discussed many of the characteristics of effective team leaders as well as outlined how leadership style needs to change as a team matures and team members are willing and able to accept more responsibility for team performance. Identifying effective team leaders is not an easy task, so we've developed a “Team Leader Survey” which allows an organization's management, team members, and team leaders themselves to determine their strengths and weaknesses as a team leader and hopefully put together a plan for improvement in areas where they are weak.

Team Leader Survey

To what extent does the team leader:	Not al all		To a great extent
1.    Articulate the team's vision and mission	1	2	3	4	5
2.    Help the team set clear goals	1	2	3	4	5
3.    Articulate the strategy to achieve the vision and goals	1	2	3	4	5
4.    Have a good understanding of team's task and what is needed to accomplish it	1	2	3	4	5
5.    Help plan and organize the work	1	2	3	4	5
6.    Build trust	1	2	3	4	5
7.    Follow through on commitments	1	2	3	4	5
8.    Provide good feedback to team members	1	2	3	4	5
9.    Communicate well	1	2	3	4	5
10.    Listen well	1	2	3	4	5
11.    Recognize team members for good performance	1	2	3	4	5
12.    Respect others on the team	1	2	3	4	5
13.    Delegate effectively	1	2	3	4	5
14.    Get resources and support for the team	1	2	3	4	5
15.    Treat team members fairly	1	2	3	4	5
16.    Show commitment to help the team achieve its goals	1	2	3	4	5
17.    Help team members to improve their skills	1	2	3	4	5
18.    Motivate members of the team effectively	1	2	3	4	5
19.    Encourage innovation and new ideas	1	2	3	4	5
20.    Accept responsibility for his/her actions	1	2	3	4	5
21.    Inspire the team to perform at a high level	1	2	3	4	5
22.    Consult with team members appropriately when a decision needs to be made	1	2	3	4	5
23.    Share power appropriately with team members	1	2	3	4	5
24.    Lead by setting a good example for team members	1	2	3	4	5

Scoring: Total the points. Team leaders who have a score from 108 to 120 are generally performing at a high level unless there are some serious problems related to a few of the survey items.

• Scores from 96 to 107 would indicate good performance on the part of the team leader.
• Scores from 84 from 95 would suggest adequate performance.
• A score of 83 or below would indicate relatively poor performance on the part of the team leader.
• A score below 70 should call into question the team leader's ability to lead the team unless some significant improvement is made.

What If the Team Leader Is the Problem?

Sometimes the team leader's behavior is the cause of problems in the team. When the leader lacks the skills, insight, and motivation to help the team achieve its goals, conflict is the inevitable result. Sometimes the problem is between the leader and the entire team and sometimes between the leader and one or two members. Either way, unless the leader is aware of the situation and is willing to take steps to remedy the problem, it is difficult for team members to discuss the issue openly with the leader. It is also not uncommon for leaders to be totally or partially unaware of the problems they are causing. In power relationships subordinates have learned to become quite skilled at masking negative feelings and pretending everything is going well.

When symptoms of major problems in the team emerge, the team leader should ask, “Is it possible that I am at least partly responsible for these problems?” How does a team leader get an honest answer to this question?

1. Ask the team members. Either in a team meeting or in an interview one-on-one with the team members, the team leader might say something like this: “I want you to level with me. I know that things have not been going well in our team (describe some of the symptoms). I want to know if I am responsible for creating negative reactions in the group. I would appreciate it if you could let me know, either openly now or in an email or memo later, what things I am doing that create problems and any suggestions you have that would improve matters.” In asking for feedback, it is often useful if the leader can identify some things he or she has done that may have caused problems for the team member. For example, the leader might say to the team member: “I think that I sometimes come to meetings with my mind already made up and then put pressure on people to agree with me; do you see this behavior in me? (Wait for the response.) If you do, what suggestions do you have that will help me avoid this kind of problem?” If there is a lack of trust in the group or in certain team members, this direct approach may not work. This means that the leader may then need to resort to other means of getting feedback.
2. Use an outside resource. A common method of getting information to the leader is to find an outside person, either outside the team but in the organization (a human resource specialist) or an external consultant. A skilled outside resource can interview team members and try to elicit data about the involvement of the team leader in team problems. This information can then be fed back to the leader and a strategy devised for using the information with the team.
3. Use instruments. Currently many survey instruments are available for gathering data, anonymously if necessary, from subordinates about their perceptions of the leader. These data would need to be gathered and analyzed by someone other than the team leader to ensure anonymity. A human resource person is useful for handling this task and then seeing that the data are summarized and returned to the team leader. Then a method for using this information with the team needs to be devised. One method is for the manager to present a summary of data to the group, indicate acceptance of the data, announce some preliminary actions that will be taken, and ask the team members to suggest other appropriate changes.
4. Undertake training. Another approach is to have the team leader go to a training program that features giving feedback to all participants on their interpersonal style. The team leader then brings a summary of this feedback to the team, checks with them about its validity, and works out a program of improvement.

If team leaders want to get feedback on their performance, there are several options; a more difficult issue remains if the leader is unaware of his or her impact or does not seem to want to find out. In such a situation there are a few options for team members.

1. Suggest a role-clarification session. Such a session could allow the team members to identify actions they need from the team leader or changes they feel would improve activities in the team. This exercise is described in detail in Chapter 8.
2. Give direct feedback. Obviously one possibility is for team members to find an opportunity to give direct, albeit unsolicited, feedback to the leader. Despite the inherent risks, the team—either altogether or through representatives—could say to the leader, “We have a dilemma. There are problems in the team that we feel involve you. Our dilemma is we think we should share this information with you, but we do not want to disrupt our relationship with you. Do you have any suggestions as to how we might deal with this dilemma?” This approach usually results in the leader's asking for the data in a far different atmosphere than confronting the leader unexpectedly with difficult feedback.
3. Use an outside facilitator. It is also possible for the team to go to an appropriate internal resource person (typically from human resources) and ask for assistance. Often the outside person can then go to the leader and suggest a set of alternatives that might surface the concerns of the team.

Notes

1. C. McDermott, N. Brawley, and W. W. Waite, World Class Teams: Working Across Borders (New York: Wiley, 1998).
2. The Peter Principle is articulated by Laurence Peter in which he suggests that managers are promoted to their level of incompetence—thus they reach a ceiling where they aren't promotable. Thus Peter argues that many leaders have risen to their level of incompetence.

What’s the difference between an effective, cohesive work team and one that isn’t? There are a lot of factors, but one often-overlooked, yet highly important aspect is a team charter. A team charter spells out the “North Star” for your team - not just the goals of management, of one stakeholder, or of the loudest team member. A team charter can help create energy, focus, and buy-in from members joining your team, or it can help recharge a team that has been in existence for a long time, but needs to regroup and refocus.

In this article, we’ll explain why team charters can be effective and present a strong opportunity for everyone on a team to do their best work. We’ll walk through the steps of creating a team charter that includes every team member’s input, which will not only hold everyone accountable, but also empower individuals to contribute in a focused, effective way.

Definitions: What Is a Team Charter?

A team charter is a document that states a team or project’s mission, scope of operation, objectives, consequences, and time frame. All team members help to create the team charter.

Team charters are essential because they are used to pinpoint shared goals, get buy-in from individual members, and keep the team cohesive. They also help keep the team on track by articulating the overall purpose.

This leads to the question, what is a team? A team is a group of employees, managers, and even long-term contractors who work together over a lengthy period on a variety of related projects. If members come and go over time, it’s important for the new team to regroup on its charter, and not simply pass it along, or it will become an unhelpful relic.

Some executives may be more familiar with a project charter than a team charter. They serve similar purposes, but for different groups and goals. A project charter covers terms of a specific project, which may last weeks or months (or even years). The defining factor of a project charter is that it applies only to the team and for the duration of a specific project. Such projects could be the creation of collateral for the release of an update to a product, a public-relations initiative, the construction of a building wing, and so on. After the project is concluded, the charter no longer applies.

A team charter, however, takes a bigger look and a longer view. Team members may also find themselves as members of various project charters in their work, and as such the project charters should fit together with the team charter agreements.

Ready to get more out of your project management efforts? Visit our comprehensive project management guide for tips, best practices, and free resources to manage your work more effectively.

What Is the Benefit of Having a Team Charter?

A team charter should provide a succinct vision and mission that everyone on the team supports. The charter should also be a yardstick that can be held up against any activity considered or pursued by the team.

Once a team has been announced or created, all members should come together, before tackling any specific deliverables, to create the charter. In this way, all members get a voice, which can help assure their support and buy-in, and increase accountability. The purposes of a team charter include:

• Getting the buy-in of all team members, including ones who may have initially resisted being included
• Holding team members, including leadership, accountable to all the same principles
• Spelling out roles and responsibilities in a clear, measurable way
• Defining operations, including ways to adapt to change, address roadblocks, and even define actions like attendance
• Demonstrating the team’s purpose and mission transparently to others in the organization
• Providing clarity and reducing confusion in cases where conflicting asks or projects arise

“Why you’re creating the team in the first place should lead your team charter,” says Debbi Tillman, Director of Program Management at Mitchell International in San Diego. “And you need a team charter any time you need to form a deeper synergy among team members.”

“This can be especially critical if you are bringing together two teams that have previously worked separately,” Tillman continues, “Getting everyone’s input and buy-in is really critical to the success of your new team.”

Skipping the Team Charter: Risks to Optimal Success

Although it takes time to create a team charter, it’s risky to skip this step. Not having a charter often results in chaos and missteps because there is no clarity around roles, operations, or the team’s overall direction.

“It doesn’t have to take a long time to create the charter,” Tillman says. It could range from an afternoon or up to two to three days, depending on the size and scope of the team. “But as the principles of Agile say, ‘You have to move slow so you can move fast.’ In other words, take the time for everyone on the team to create the charter, so that everyone is clear and feels empowered to move forward.”

When a team charter is written down, it becomes a powerful toolbox. “It becomes deliberate instead of guesswork,” Tillman adds. “A big risk to not having a charter is inertia. In other words, the loudest or most intimidating team member may end up pushing forward his or her agenda. And this isn’t what the entire team signed up for.”

How to Create an Effective Team Charter

Since teams are made up of individuals with different motivations, team charters should reflect the team’s many dimensions. Additionally, they should include the team’s focus, priorities, and values.

From who’s involved to the charter’s duration, consider the following questions:

• Who is involved: Every person on a team should be involved, or it will end up struggling or failing. Working through resistance or ambiguity in the creation of a team charter at the beginning will “forge bonds and set the foundation” for success, says Tillman. No one gets to opt out.
• Who is the team leader, and who resolves conflict: A key element to decide early on is the team leader, who is second in command, and so forth. If the team is big enough, there may be leaders over different subject areas. These should be agreed upon together and written as part of the charter. The same thing goes for how conflicts are resolved, and if there is an escalation path that should be documented.
• How long does the process of creating a charter take: This can vary. Many business leaders say the time frame can be from a half day to a two- or three-day workshop. The key is ensuring that all members of the team contribute, and that once the charter is created, everyone feels good enough to sign it and proceed with their work.
• How long does a team charter last: The team should decide if the charter will cover all work for a quarter, a year, or ongoing. If the team can agree on a charter that covers a full year, with occasional check-ins as needed, they can feel empowered knowing that it won’t be subject to frequent change.

Below is a diagram that shows typical steps involved in creating a team charter. Note that these pieces don’t necessarily have to be done in any particular order, but all these steps are required to create an effective team charter.

First Element of a Successful Team Charter: Background

Team members should come to the charter creation meeting with any actions or decisions that have led them there. Bring as much information as possible to make your team background outline.

From identifying leaders to stakeholders, here are some questions to ask:

• Who is the team leader? When that person isn’t available, who is the second in command, and so on?
• What do key stakeholders need and expect from this team?
• What does each team member bring to the team, and what are their individual expectations? This last question is essential to get support and buy-in, especially if there are any reluctant parties.

Second Element of a Successful Team Charter: Mission & Vision Objectives

Once you have established the background and leadership of the team, you can focus on the deeper aspects of the charter. These items will become the guiding principles that all team activities should support.

Key items are as follows:

• Decide what success looks like. How is it measured?
• Spell out the principles to guide the team for the length of time they will work together.
• Define the key role that the team plays in the success (financial and otherwise) of the company.
• Craft a mission statement that is succinct. This may or may not be shared more widely beyond the team, but keeping it succinct means it’s easy to mentally grasp and perform checklists against. Tillman says, “My [program management] department’s team mission statement is: ‘We operationalize calm.’ This is part of our value proposition to the entire organization, and we really try to measure everything we do against that.”
• Create interim deadlines, goalposts, and milestones, to determine how work, performance, and team interactions map back to the charter.

Third Element of a Successful Team Charter: Roles and Responsibilities

Once you have created your mission statement and each team member has shared their background and motivations, define the team’s roles and responsibilities.

You can now write down and define these roles, as follows:

• Spell out who is doing what and for whom.
• Assess all the expertise needed for the team to achieve its goals.
• Note gaps to fill. Are new team members needed (contract, part-time, occasional participants from within the company)?
• Create a RACI (Responsible, Accountable, Consulted, Informed) matrix of roles and responsibilities.
• Ensure that every team member’s voice is sought, recorded and reflected in the definitions. This is key to both the charter and the team success. If even one team member doesn’t feel heard or involved, or doesn’t support the structure, the team likely won’t succeed.

Tasks	Role 1	Role 2	Role 3	Role 4	Role 5
Stage 1
Task 1	C	C/I		R/A
Task 2	A		R		A
Task 3		A	C/I		I
Stage 2
Task 1	R			C	C
Task 2		C		A
Task 3	C/I	R/A	I		R
Stage 3
Task 1	A		C/I	R	R/A
Task 2		R	A	A

R = Responsible
A = Accountable
C = Consulted
I = Informed

Fourth Element of a Successful Team Charter: Budget and Resources

Once you have defined roles and responsibilities, the team can assess its budget and resources for the tasks at hand. There are typically two ways to determine a team’s budget: the top-down method and the bottom-up method.

1. The top-down method: In this scenario, the team uses the budget provided for the relevant time period, and decides how to divide it up among projects and tasks.
2. The bottom-up method: There is often not enough time allotted for this method to be used, but it can be much more strategic and useful. In this method, the team as a group (or a dedicated sub-group) decides what kind of budget and resources it needs for its operations, and requests it of the larger organization.

However the budget is ultimately determined, it’s up to the team to ensure that the resources are then allocated correctly. Then the team can create a team budget that reflects projects and milestones.

Fifth Element of a Successful Team Charter: Internal Checks, Balances, and Reviews

A team charter is as effective as the actions that are measured against it, so it’s important for the team to discuss how it will handle internal checks, balances, and reviews. Charters should establish expectations, check-ins, and members’ individual goals.

Team leaders should decide, also, whether team goals assigned to members will be reflected in the team members’ annual reviews. An efficient system is the use of SMART goals. These goals should be:

• Specific
• Measurable
• Achievable
• Realistic
• Time-based

On Debbi Tillman’s team at Mitchell International, some of the team’s goals become akin to a company “service-level agreement.” For instance, as part of her program management department’s team charter, members have agreed that for every request of someone in the department, that person will get back to the requester within two hours. Additionally, any request and next steps will never have more than a two-day wait.

It’s also critical to spell out team members’ accountability. This applies to everything from attendance at team meetings to broad deliverables.

Finally, this step should ensure that there is no confusion about performance and individual comportment as they map back to the highest levels of the team charter.

Sixth Element of a Successful Team Charter: Team Member Assessment and Evaluations

To ensure the team doesn’t revert to a top-down model for evaluations, individual contributors should have the opportunity to give feedback on team leaders’ performance. Additionally, creating a culture of peer-to-peer feedback ensures that everyone’s perspective is heard.

Where to Learn More about Effective Team Chartering

If you’re interested in learning more about the theory and application of team chartering and how to create an effective team charter, there are several business books with useful information. Here are a few:

• “The Six Sigma Way: How, GE, Motorola, and Other Top Companies Are Honing Their Performance”, by Peter S. Pande, Robert P. Neuman, and Roland R. Cavanagh.
• “Creating Effective Teams: A Guide for Members and Leaders”, by Susan Wheelan.
• “Creating Productive Organizations: Developing Your Work Force Manual”, by Elizabeth A. Smith.

5 SMART Goals Examples to Improve Workplace Teamwork

Everyone knows how crucial teamwork is for a company’s success; working alone just isn’t as effective as collaborating with others. Tackling a big project with colleagues allows for multiple perspectives, and that’s a significant advantage. However, it’s not enough to simply work on a task together.

To truly succeed, you need to set and achieve goals as a team. That’s where SMART goals come in. Below, you’ll find some teamwork SMART goal examples to get started and boost your team’s efficiency.

What are SMART Goals?

SMART goals aren’t dreams you wish to achieve someday; they’re realistic. SMART is an acronym representing an effective system for creating actionable objectives. Having a plan is excellent, but you might find the team fizzling out without clear purpose and organization even before getting close to the finish line. Here’s what each of the letters stands for:

Specific

SMART goals are specific, addressing the “five Ws” of “who, what, when, where, and why.” A simple objective is a great starting point, but you can use the letter S and its five Ws to develop it further. One example is asking yourself each of those questions as you discuss the task with your team.

Measurable

Vague goals without a way to measure success and progress can eventually become too overwhelming. Your team will need some standards to compare themselves to, and designing a simple metric will give everyone a significant motivation boost. With some degree of measurability, everyone gets a sense of clarity, which contributes to precision and helps everyone work toward expectations.

Achievable

Of course, when you set targets, it’s not advised to ask too much of your team. Hard work can go far, but it may not help your team achieve the impossible. Therefore, it’s in everyone’s best interest that the targets are accessible, even if they take some time.

Without an achievable goal, you’ll start feeling frustrated, and everyone will gradually give up due to the inability to tackle the enormous task. Moderation is key.

Relevant

Your team’s goal should be relevant to the company’s mission and vision to make it a worthy challenge. If your team knows how important their project is to the bigger picture, you’ll find them more likely to give their all.

Working toward a goal takes time, and time is valuable. Your colleagues must know that working toward this target is worth their hours. If they understand the vision, everyone will also collaborate more effectively.

Time-Bound/Timely

Every practical goal has a deadline, and deadlines are meant to boost productivity and give us a sense of urgency. Daily, weekly, and even monthly plans should lead to annual objectives. How many of these layers is contingent on your project’s time frame.

With time limits in place, you can help everyone avoid procrastination and provide a source of motivation.

SMART goals have several advantages, especially for improving teamwork in the office. First, success increases significantly by setting realistic and achievable goals for the team.

Why SMART Goals Are Important for Improving Teamwork in the Workplace

When teams first start working on an assignment, they’re often at their best, with enthusiasm levels at their highest. However, as time passes and they labor toward the goal, managers will gradually find that motivation dissipates. However, SMART goals can alleviate this problem and keep workers motivated as they reach milestone after milestone.

Without SMART goals, creating a solid objective can become difficult. That’s not to say managers can’t succeed without the SMART goal system. However, it’s much easier using this framework.

The SMART goal system makes creating achievable objectives incredibly straightforward. Everyone can ask themselves the questions and move forward from there.

Even older, non-SMART goals can be salvaged or given upgrades to make them more accessible. By running them through this method, you’ll be surprised how your team will react. They’ll be more likely to invest time and effort toward these new goals.

SMART goals with a clear end vision are highly effective for both the manager and the team. Managers can direct more resources toward the bigger picture when everyone knows what to do. As a result, the risk of getting distracted becomes more negligible.

Clear objectives also improve time management. By adhering to the schedule, all team members will allocate time toward the proper goals.

One rarely discussed benefit of SMART goals is how they promote critical thinking. When setting these goals up, every team member is encouraged to provide their input and perspective. As a team leader, it’s your responsibility to hear everyone out and consider all the options.

Thus, when everyone makes suggestions with SMART goals in mind, you can gather the cream of the crop and implement them for the whole team. Managers can even discover new and creative ways to achieve goals they never considered.

5 SMART Goal Examples for Improving Teamwork in the Workplace

This section will contain several teamwork SMART goals examples. These practical tips are bound to boost collaboration for your team.

1. Reduce Worker Overtime

S: This goal has a specific aim – to cut overtime.

M: The goal is measured by reducing overtime work by 30% by December.

A: This should be achievable by the team.

R: The goal will help workers become more time-efficient, boosting company profits.

T: The deadline is the month of September.

If your team isn’t performing at speeds you like and has to work overtime, you can try implementing this goal. A SMART goal like this tends to motivate the workers more, as they would prefer not to stay in the office for too long. The company will become more efficient after speeding up.

2. Boost Team Morale

S: The plan aims to improve teamwork.

M: The goal is measured by having one icebreaker activity per week each Friday.

A: This goal is highly achievable and good for team cohesion.

R: Playing games together will help coworkers get to know each other better and improve relationships.

T: The deadline is Friday of each week.

A team that can communicate adequately will work much better than a team of strangers. In addition, with the help of some fun icebreaker games, coworkers will find cooperating on projects more manageable. Thus, even some game time will contribute toward team morale. Of course, the games have to be fun and not alienate anyone.

3. Give Feedback to Team Members

S: The goal is to improve feedback culture and provide growth opportunities.

M: Give each team member feedback once a week.

A: This goal can be achieved by any supervisor wanting to build trust with their employees.

R: As feedback helps team members grow, the team will know what to work on in the future. The team’s quality of work will increase.

T: The goal has a deadline of one week, to be repeated.

4. Make Sure Team Members Attend Workshops

S: This goal will help all workers acquire better skills that they can use to improve teamwork on collaborative projects.

M: Team members will attend one workshop focused on improving teamwork skills.

A: The goal is easily achievable.

R: Since workshops can improve team members’ collaborative skills, it’s a great idea to ask colleagues to attend one. That way, the team’s performance will improve.

T: The deadline for this goal is the end of the current year.

5. Review Procedures and Processes

S: This goal will help coworkers better understand how other team members approach projects.

M: The team members will attend a meeting twice a month to review the standard operating procedure.

A: This goal is not too difficult to accomplish.

R: As teammates ought to know how to mesh with each other and collaborate efficiently on projects, it’s excellent for boosting numbers. Better numbers will drive company performance up as well.

T: This goal has a deadline of six months.

Final Thoughts on SMART Goals to Improve Teamwork in the Workplace

Our teamwork SMART goals examples will help you improve your coworkers’ collaboration skills. Setting these types of goals while looking at the bigger picture will also increase the chances of success. Feel free to experiment and listen to your colleagues’ feedback.

If you think your team struggles with accountability, don’t worry – you’re not alone.

A recent study revealed that 82% of managers recognize that they have ‘limited to no’ ability to successfully hold others accountable, and 91% of employees consider effective accountability to be one of their company’s top leadership development needs.

The reality is, most teams could use a lesson on this. Before we get into our tips, let’s clarify what we mean by the term ‘team accountability.’

What does team accountability mean?

You’ve probably grown up thinking that accountability means owning up to your mistakes. While this isn’t an incorrect understanding, team accountability has a bit more to it.

Team accountability is about each member of a team following through on their portion of a teamwide commitment, and holding themselves responsible for delivering high-quality results.

Coworkers must understand that they have a responsibility to fulfill to achieve their collective team goals. If one person fails to take ownership of their work, then the entire team will struggle to meet its objectives.

If your team has accountability issues, you might be experiencing missed deadlines, repeated mistakes, fluctuating team performance resulting in unpredictable quality of work, or an overall lack of trust among team members.

Accountability challenges: Onsite vs. remote

The increased flexibility that has accompanied changes to workplace cultures in the wake of the pandemic has left many teams facing accountability issues.

Three main challenges remote and onsite teams face include the following:

#1 Low levels of trust

There are several causes of low trust – all of which damage team accountability.

Issues like high turnover can prevent coworkers from developing strong relationships, and a lack of personal connection can also prevent employees from feeling like they can rely on one another.

This is prevalent in remote teams in particular, where there are fewer opportunities for socializing, which means people must put in more effort to get to know their team members.

#2 Communication issues

Even teams who spend their days working together in an office face communication issues. But this problem is even more exacerbated for teams who primarily communicate via video calls or messaging platforms like Slack.

Remote or hybrid environments may leave employees with fewer opportunities to communicate updates with their team and work together to overcome challenges. The loss of nonverbal cues in remote workplaces makes it more difficult to practice accountability, especially since there are no body language cues to rely on when discussing shortcomings with a supervisor, for example.

#3 Unclear responsibilities and priorities

In organizations with a structured hierarchy, employees at the bottom of the pyramid can become easily frustrated with changing company priorities. This ties into issues with communication discussed above, as it’s difficult for an employee to practice personal accountability when they’re not even sure what’s expected of them.

12 ways to improve team accountability

Your accountability problem might be minor, or perhaps it’s more severe. Regardless, there are steps you can take to mitigate the issue.

Here are 12 tips to improve team accountability.

1. Check in with yourself

The first step in improving team accountability is taking the time to check in with yourself and assess your team’s current challenges. Ask yourself questions like:

• How are these issues manifesting in our work or productivity?
• Is this issue specific to one team member?
• How am I potentially contributing to this issue?

It may be difficult to think critically about the last question on this list since it involves evaluating your behavior. As you consider it, keep in mind that self-awareness is an incredibly important quality for leaders to have.

Overall, it’s crucial to collect your thoughts and assess the current situation before speaking with your team. You don’t want your concerns to come off as condescending when you eventually relay them, so make sure you’ve thought through your grievances before airing them.

2. Schedule a team meeting

If you don’t have standing check-ins with all of your team members, schedule a meeting to discuss your accountability concerns.

Again, this meeting doesn’t have to be accusatory, rather, start by asking your team members to assess the team’s strengths and weaknesses. This strategy will make your meeting feel more collaborative and will allow your team to share thoughts that you may not have considered.

Acknowledging that there is room for improvement provides a great segway into a discussion about expectations.

3. Set clear expectations

Accountability issues are usually unintentional consequences of a larger problem, such as unclear expectations, responsibilities, and goals.

Before an employee can take responsibility for their shortcomings, they have to know what’s expected of them. With that in mind, take time to address both your short-term and long-term expectations and set milestones they can hold themselves responsible for along the way.

Clearly outlining their responsibilities during this conversation will make it easier for you to hold them accountable if they fail to meet expectations later on.

4. Create a sense of purpose

Instilling a sense of purpose in your team is a great way to motivate them to practice accountability.

85% of employees said in a recent survey that they weren’t sure what their organization’s goals were. If you haven’t already, walk your employees through how their work ties into larger company goals. This can serve as a helpful reminder that their work is larger than just themselves and that the firm is relying on them.

5. Improve communication

Some teams function best with daily standup meetings, whereas others thrive with occasional meetings and maximized individual work time.

Whatever the case for your team, establishing a channel of regular communication allows them to share regular updates and receive feedback, both of which are important to build team accountability.

If regular daily meetings are too much, consider implementing structured written updates where team members briefly summarize their progress and send it to the entire team. Transparency is essential, and keeping tabs on what everyone’s working on is a great way to develop it.

6. Build habits around task planning and goal setting

As we’ve discussed, some accountability issues are caused by an unclear division of responsibilities. The key is to eliminate uncertainty surrounding what needs to get done by assigning specific tasks and setting clear deadlines.

Implementing a project management software like Rodeo can be extremely beneficial for this. For example, Rodeo’s planning feature allows you to create tasks with assigned deadlines, team members, and priority levels. Creating tasks also allows you to plan your team’s capacity at a glance, as you can see how many tasks each team member has on their plate for that day.

Rodeo also allows project managers to see the number of hours that have been tracked toward a particular project and what percentage of the estimated budget has been spent on time activities and expenses.

These metrics all help with accountability, as you can see your team’s progress, who can take on more tasks, who might need more support and coaching, as well as your project budget’s health without having to micromanage.

7. Help your team foster personal relationships

Strong personal relationships between team members establish trust, which is an important aspect of developing an employee’s sense of responsibility. People are far less likely to miss deadlines when they know that doing so will cause more work for someone they care about.

If your team works in person, schedule team outings like happy hours or other bonding events to help everyone get to know each other better. Celebrating birthdays, asking how their weekend was, and showing care for their personal life will help create a positive work environment.

That said, it’s significantly more difficult to promote bonding between employees in an online work environment. Help your team socialize remotely as much as possible by encouraging employees to take part in informal virtual coffee breaks to get to know each other.

8. Mediate strained relationships between team members

This step goes hand-in-hand with the previous one about building personal relationships, as a conflict between team members damages your team’s capacity for trust and accountability.

This sort of harmful conflict should be resolved promptly. There might be larger reasons behind this distrust that require a supervisor’s attention – perhaps work is being unequally distributed and one person is upset that they’re bearing more responsibility.

43% of workers surveyed by the Center for Management & Organization Effectiveness thought managers should be better at resolving conflicts. Trust is critical in building accountability, and effective leaders step in to mend cracks in the team’s foundation when they arise.

9. Maintain relationships with other high-performing teams in your organization

Each team within an organization has its own unique dynamic and workflow, so it could be beneficial for your team to see how other units operate successfully. For example, maybe they have an effective way of planning tasks that your team can implement.

Success depends on your ability to work well with others, so it’s important to get to know your colleagues even if you don’t interact with them daily.

10. Come to a mutual agreement on the next steps

Once you’ve met with your team about your accountability concerns, discussed the team’s strengths and weaknesses, and established a clear method of planning tasks and goals, ensure you’re all in agreement on what’s next.

Your team accountability won’t dramatically change overnight, but agreeing to the changes you’ve discussed allows you to hold them accountable if they fail to follow through. This way you’re all on the same page regarding how to improve.

11. Regularly track progress

Having a centralized place where you can record what projects an employee is working on and what milestones they’re working toward is a key piece of the accountability puzzle. This way you’re knowledgeable about where they should be up to when you check in with them.

As we’ve already mentioned, project management software can keep track of employee progress, tasks, and projects for you. For instance, Rodeo’s reporting feature can provide you with a financial status overview of ongoing projects and closed projects, detailed time registration data, and finally, a breakdown of employee productivity.

12. Celebrate successes

Team members should never feel like their work is going unnoticed, as a lack of appreciation for accomplishments is not motivating.

Celebrating success is a great way to encourage accountability. Use these celebrations as a way for coworkers to strengthen their relationships by expressing gratitude for each other’s contributions to the team's success.

Takeaway

Building accountability is a complex task – and many managers make the mistake of micromanaging their employees instead of establishing a supportive foundation for accountability to thrive.

Instead, we recommend leaning into relationship building, improving your communication channels, and setting clear expectations and team goals to improve performance.

Best of luck in implementing these 12 tips!

Unlike burnout, signs of boreout – a term that describes a serious drop in engagement and motivation are much more subtle. Yet, both result in high turnover and lost productivity. Boreout happens when a person’s work isn’t stimulating enough or they don’t have much to do. After a while, they begin to feel cynical and irritated.

Introduction

Incentive schemes are effective at preventing boreout because they provide an acknowledgement of effort.1 Their overall aims are to motivate, attract, and retain talent. It’s helpful to think of them as a collection of rewards and benefits, such as flexible working, career development opportunities, and corporate discounts.

When creating an incentive scheme it’s important to understand what your employees value so that what you offer is meaningful to them. We also recommend looking at what similar companies offer to get an idea of what suits your organisation.

Read on to learn more about nine effective employee schemes and how to create yours.

What makes a great employee incentive scheme?

Every organisation is unique, so what makes an employee incentive scheme great will differ between companies. However, no matter what type of business you have, when creating a scheme of your own, it’s important to always consider your company values and budget. Once you’ve got those in order, you should focus on how your incentive scheme will help you reach your business goals.

Having said that, some businesses will find this easier than others. Especially more established organisations that have gone through several stages of growth and development. In comparison, a start-up will likely experience a period of trial and error before they know what incentives work well for them and their teams.

To give you an idea of what to include in your employee incentive scheme, we recommend investing in a mixture of financial and non-financial incentives such as:

• A reward and recognition program
• Corporate discounts and perks
• Mental and physical wellbeing resources
• Mentorship opportunities
• Autonomy over a passion project
• Professional qualifications
• Tuition-fee reimbursements
• Performance-related bonuses

Why create an employee incentive programme?

 

More often than not, the purpose of an employee incentive scheme is to improve employee morale and increase engagement – but in reality, they do much more than that.

Now, you may be thinking you’ve no need for an incentive scheme as your employees are happy and hitting their targets. Yet, while this may be the case, many organisations are beginning to recognise the value of incentive programmes. In particular, their influence on attracting new talent.

A well-put-together incentive programme not only gets the most out of your employees but is also a powerful recruitment tool. In wake of the Great Resignation, many employees are prioritising incentives, such as rewards, perks, and work-life balance over salary or base pay.2

It’s also worth mentioning that as remote working is more common, it’s important to keep your people connected. Incentive schemes that focus on peer-to-peer recognition are great for preventing siloed teams and provide a well-needed boost to employee morale.

Of course, while we know the benefits of an employee incentive programme speak for themselves – it’s helpful to think about their impact on both your business and employees. Taking this approach helps you identify what to include in a pitch when approaching senior stakeholders for funding.

Here are some examples to get you started:

Incentive scheme benefits for business

Depending on how comprehensive the incentive scheme is, the benefits for your business may include:

• Higher levels of productivity
• Lower absence rates
• Lower employee turnover
• Increases in revenue and profit
• Healthy company culture

Incentive scheme benefits for employees

An effective incentive scheme could benefit your employees in the following ways:

• They feel happier at work
• They’re more willing to go the extra mile
• They’re mentally and physically more resilient
• Their financial wellbeing is healthier
• They have a better work-life balance

Companies that have great incentive schemes

 

Developing an employee incentive scheme can be very difficult, especially if you’re starting from scratch. If you’re in need of some inspiration, we recommend looking at what other companies are doing.

Companies who have very successful incentive schemes include:

• Google: Perhaps the most famous of incentive schemes. Googlers get free food, start-of-art sports facilities, sleep pods, and more. However arguably their most impressive is their death benefit, where your spouse receives 50% of your salary for 10 years if you pass away while employed by Google.
• Facebook: Facebook prides itself on its family support, with 4 months paid parental leave and a bonus to support the costs of a newborn. Inside the office, employees benefit from a barbershop and video game arcade. They also offer their teams a plethora of wellbeing benefits too.
• Hubspot: Hubspotters enjoy working at one of the most flexible companies in the world. Not only do they get unlimited holiday, their paid leave increases by 4 weeks for every 5 years they stay at the company.
• Starbucks: Coffee lovers will enjoy the free coffee and tea sent to them every week. Beverages aside though, Starbucks employees also benefit from tuition-fee reimbursements and extensive healthcare benefits.

Nine employee incentive scheme examples

We understand that choosing what to include in your incentive scheme is challenging. So, for that reason, we’ve shortlisted the nine most effective incentives that apply to all businesses.

Consequently, you’ll see examples that are applicable to both small businesses and large corporations.

1. A reward and recognition programme

Introducing a reward and recognition scheme is a highly effective incentive that increases both employee motivation and engagement. According to Harvard Business Review, acknowledgement from peers or senior management is especially important for socially-driven employees. And, given that remote working is now more commonplace, it’s important not to assume your teams are fine with fewer interactions with their colleagues.³

When we developed Celebration hub – our digital reward and recognition platform, it was important to us that every employee got value from it. Regardless of where they were working. Using the recognition feature, employees can send each other personalised recognitions on the go and link them to company values. Another useful feature is that you can also create polls, which your teams can vote on. This works well with remote colleagues as everyone can get involved and have their say on where the next social event should take place, for instance.

When building a reward and recognition incentive scheme, you have plenty of options, although some cost more than others.

In your reward and recognition programme you could include:

• Employee of the month
• Thank you notes
• Lunch with the boss
• A digital reward and recognition platform
• Performance-linked bonuses
• Sabbatical

2. A comprehensive perks package

With the ever-increasing cost of living, perks – no matter how small, can make a real difference to your employees’ lives and financial wellbeing. Treating them to a free coffee or cinema ticket may seem like a modest incentive but over time these savings add up to a considerable sum.

Take our Perks hub, we have over 4,000 discounts and deals with some of the biggest retailers worldwide and can save your teams money all year round. In addition to that, you can also give your employees an allowance of points, which they can spend on small treats at no cost to them. These include meal deals, movie streaming credits, and much more.

To give you an idea of the types of perks you can offer your employees, we’ve split our suggestions according to budget, so you can choose what’s right for you.

Perks for smaller budgets include:

• Reloadable coffee shop cards
• Free office drinks and snacks
• Monthly breakfast or lunch events
• Discount schemes with local businesses

Perks for bigger budgets include:

• Contributions to travel expenses
• Dental and medical insurance
• A more comprehensive employee discount scheme
• Company cars

3. Employee wellbeing benefits

Fortunately, many organisations understand that for their employees to perform at their best, they need to be both mentally and physically healthy. And there’s no doubt that building healthy habits can be challenging. Especially as the demands of our professional and personal lives collide.

For instance, with Wellness hub your employees have access to a range of on-demand workouts and yoga flows if they can’t get to the gym. Not to mention soothing sleep stories and guided meditations to help them switch off and get a good night’s sleep.

General wellbeing incentives include:

• Healthy snacks at the office
• Walking clubs
• Discount on supplements and activewear
• Mental health days
• Health cashback plan
• A digital wellbeing platform
• Discounts with local gyms

Additional wellbeing incentives for bigger budgets:

• Employee Assistance Programme (EAP)
• Private medical insurance
• Unlimited sick days

4. Profit-sharing plans

Profit-sharing incentives are a good option for organisations who want to improve retention, engagement, and motivation. When people receive payments from a profit share they feel part of the business. This fosters an entrepreneurial spirit and you may see colleagues sticking around for longer as they directly benefit from your success.

5. Flexible working options

Flexible working incentives have many benefits. But one big benefit for businesses is an increase in output. In fact, a 2021 Gartner survey recorded that 43% of respondents said that working flexibly made them more productive.⁴

Employees who work flexibly also tend to be happier and more loyal than those who don’t. However, when introducing any initiatives around flexible working, it’s important to ensure your people have the right tools to do their job – wherever they choose to work. Connectivity issues and out-of-date tech are common gripes among remote employees for example.

6. Additional time off and unlimited annual leave

Creating an incentive that gives your employees more time off, doesn’t necessarily mean increasing their annual leave. Though this is a good idea if you have the budget. Many people would like to take less pay in return for more free time – when given the opportunity.

Obviously, this all depends on your business needs and individual circumstances, but if some employees want to reduce their hours, it could be mutually beneficial. The money you save on their salary could be reinvested into other areas of the business. Furthermore, the time your employee gains benefits their mental health, preventing burnout and stress.

7. Independent project opportunities

Incentivising your teams to work on their own projects is a great way to show you trust and respect their judgement.

Simply put, high-performing employees need stimulation and when they lose interest their job satisfaction plummets. In these situations, unless something changes quickly, they’ll swiftly move on to the next challenge.

After all, everyone wants to make their mark and highly engaged employees will love working on autonomous passion projects. Before you suggest any project options, take note of your employees' short and long-term goals, so you understand what they want to achieve.

8. Professional development options

It’s not surprising that professional development incentives benefit both your business and employees. Having access to a steady stream of highly-trained staff not only increases revenue but also strengthens the customer service you deliver.

Furthermore, companies who develop their own learning and development programmes tend to see higher levers of job satisfaction and engagement than those who don’t.

Examples of different professional development resources include:⁵

• Seminars and day workshops
• Conferences
• Subscriptions to eLearning platforms
• In-house learning and development opportunities
• Off-site learning for an industry-recognised qualification

9. Bonuses and raises

Financial incentives linked to performance are powerful motivators. However, when an organisation puts an emphasis on individual performance, they risk pitting their teams against each other. For this reason, it’s important not to neglect incentives that grow your company culture and support your employees' mental health.

When you’re drawing up policies that determine what behaviours or results qualify for a raise or bonus, you shouldn’t make the benchmarks too high or low. If the prospect of a bonus or raise seems impossible your teams are unlikely to go the extra mile, as they know their effort will be for nothing. Alternatively, if the benchmark is too low you run the risk of overspending.

Employee incentive programme best practices: three principles to follow

So you’ve got senior leadership to sign off on your employee incentive scheme, now what?

Well, at this stage you want to make sure you give your fledgling incentive scheme every chance of success. You can do this by following these three best-practice principles.

Make your incentive scheme accessible

When your incentive scheme is accessible, it means every employee has access to the incentives they’re entitled to. So, if you’re using a digital platform to deliver any company discounts and wellbeing resources, you should test it before launch. If your app or program is confusing, people won’t use it and this could have a negative impact on your return on investment (ROI)

Promote your employee incentive scheme

Before launching your employee incentive scheme, drum up interest with a company-wide promotion. You can do this by working with your internal communications team to create a promotional campaign. Reaching out to Human Resources (HR) is also very important as your incentive scheme will likely draw job candidates to your company.

When you sign-up with Perkbox, we give you a suite of promotional materials to help you effectively roll out our platform within your company.

Listen to your employees’ feedback

Whether you’re testing or monitoring the launch of your employee incentive scheme, gathering feedback is a crucial component of its success. Pulse surveys are excellent tools for quickly discovering any pain points or ideas you didn’t think of. We also recommend using employee engagement surveys for a deeper insight into the effect of your incentive scheme. For example, have engagement and job satisfaction increased, since its launch?

Reward and recognise your employees today

Whether you’re building an incentive scheme from nothing or overhauling an existing programme, it’s important to remember there are plenty of rewards and benefits for all sorts of budgets.

Usually, companies prefer working with all-in-one platforms as employees have access to all of their incentives in one place. A significant benefit of working with a solution provider is that they can include and remove different features depending on your needs and budget.

It’s good to keep in mind that businesses who are good at motivating and engaging their teams have strong core values and actively listen to what their employees want. So, when creating a solution make sure you’re collecting employee feedback and choosing incentives that give your teams the most value.

If you want to learn more about how Perkbox can help you get the most out of your incentive scheme, request a demo and a member of our team will get back to you.

FAQS

What are the types of employee incentive schemes?

Incentive schemes include a selection of benefits and rewards that motivate and engage employees. Usually, some or all of them are accessible on digital platforms or comprehensive employee incentive programs. Rewarding employees is simpler if you're using an all-in-one solution as all of your benefits and perks are in one place. The exact types of rewards and benefits in each incentive system differ between companies, but usually, most contain a variety of flexible working policies, corporate discounts, and wellbeing resources.

How do you give employees incentives?

Giving your employees incentives is relatively straightforward most of the time. However, if your business is a large corporation you may need to approach the board for permission to make any changes to existing incentive plans. Incentives come in many forms, for example, there are financial rewards which are typically tied to employee performance. On the other hand, there are also non-cash incentives such as additional time off and career development opportunities.

What are the best employee incentives?

There’s no simple answer to this, as what works well for one company may not in another. Smaller companies, for example, may want to consider setting up an enterprise management incentive (EMI). This incentive allows you to grant your employees shares and has some tax advantages. You could tie this benefit to personal performance, or as a way to reward employees for long service.

Consensus decision making Consensus decision making is a creative and dynamic way of reaching agreement in a group. Instead of simply voting for an item and having the majority getting their way, a consensus group is committed to finding solutions that everyone actively supports – or at least can live with.

By definition, in consensus no decision is made against the will of an individual or a minority. If significant concerns remain unresolved, a proposal can be blocked and prevented from going ahead. This means that the whole group has to work hard to find win-win solutions that address everyone's needs.

Consensus is used widely by people around the world working towards a more just and equitable society: from small voluntary groups, cooperatives and campaign networks to businesses, local communities and, in some cultures, across much wider regions.

Why use consensus?

Consensus enables a group to share power - everyone who is fundamentally affected by a decision can work together to find solutions that meet everyone's needs. It’s about working with each other rather than for or against each other.

It helps to build a stronger community. Consensus relies on us respecting other people's needs and opinions, and being open and honest about our own needs. This it turn leads to better relationships in a group.

Making better decisions: Consensus is looking for ‘win-win’ solutions that are acceptable to all. That doesn’t mean everyone has to completely agree on their favourite solution all the time – but nor should anyone have to compromise too much. The idea is to weave together all the best ideas and address all the key concerns to find something that works for everyone - a process that often results in surprising and creative solutions, inspiring both the individual and the group as whole.

Getting things done: When everyone agrees with a decision they are much more likely to implement it. In the long run, people are also more likely to stay involved in a group that is committed to hearing their views and meeting their needs. This is particularly important in voluntary groups, where most people vote with their feet and leave if they don't feel valued and respected.

Consensus protects minority needs and opinions. By definition, in consensus no decision is made against the will of an individual or a minority. If significant concerns remain unresolved, a proposal can be blocked and prevented from going ahead. This means that the whole group has to work hard at finding solutions that address everyone's concerns rather than ignoring or overruling minority opinions.

The decision making process

Each group uses a slightly different process to reach consensus - with different degrees of structure and formality. The key to making it work is for everyone to express their needs and viewpoints clearly, and for the group to use this information to find a solution which builds on the common ground and resolves differences.

The diagram below shows the ‘journey’ that groups usually go on in a good consensus process.

To begin with, the issue may seem simple, but the discussion soon opens out as people bring different perspectives, information and ideas to the table. The group then explores all the different options, wants and needs. This middle part of the discussion can feel quite messy – it can be hard to see the way forward when everyone is grappling with lots of ideas and different people’s needs. You may think you are coming to agreement and then a new factor comes up and you have to go back to exploring differences (as represented by the spikes in the diagram). Don’t lose heart! This exploration is necessary in order to get a good understanding of where everyone is coming from. This in turn enables the group to come together in finding a solution which genuinely has everyone’s support.

The process: step by step

This more detailed step by step guide can help a group go through the process of opening out the discussion and coming back together in a decision as efficiently as possible. The process isn’t always as linear as these models suggest – we may jump ahead and then go back and repeat some stages. But having these stages in mind can help you keep moving forward while staying focused on trying to meet everyone’s needs.

Start by introducing and clarifying the issue. This ensures that everyone has the relevant background information and the group is clear about the remit of the discussion and key questions to resolve.

It can be tempting to launch straight into problem solving. However, a key stage in consensus is opening out the discussion to allow everyone to share their feelings, needs and opinions, before trying to find a solution. Recognising all the different things that are going on for people first is essential for finding a solution which suits everyone. Resist the temptation to make proposals at this stage. If ideas come up you could hear them briefly and then park them for the next stage.

Once you’ve got a good understanding of what is important to people, you can collect and explore all the ideas for moving forward. Looking at the pros and cons of different ideas helps the group with really understanding everyone's key needs and concerns.

The group then looks for common ground and weeds out some of the options, combining all the useful bits into a proposal.

Clarifying and amending the proposal helps to address any remaining concerns.

Test for agreement by clearly stating the final proposal and asking people to signal whether they agree or disagree. This stage is important to check if there are concerns that haven’t been heard. If you don’t have consensus go back to an appropriate earlier stage in the process.

Finally work out how to implement the decision. Making sure group decisions are acted on is essential for building trust in your meetings.

A consensus flowchart

Stage 1: Introduce and clarify the issue

Share background information. Work out the remit of the discussion - i.e. what questions do you need to decide about now?

Stage 2: Open out the discussion

Make space for everyone to share their needs and opinions before launching into trying to solve the problem. If the ideas come up already, you could hear them briefly, then park them for the next stage.

Stage 3: Explore ideas in a broad discussion

Come up with lots of different ways forward. Explore the pros and cons of different options. Identify key concerns, needs and objectives.

Stage 4: Form a proposal

Look for a solution that meets everyone’s most important needs. This might involve weaving together elements of different ideas.

Stage 5: Amend the proposal

Look for changes that will make the proposal even stronger.

Stage 6: Test for agreement

Clearly state the proposal and check whether there is real agreement. Starting by asking for who is against the proposal makes it easier for people to voice their concerns. E.g.:

Any blocks?
Any stand-asides?
Any reservations?
Do we have consensus?

If you have a block, or too many stand-asides you will need to go back a stage, and amend the proposal further, or create a new one.

Stage 7: Work out how to implement the decision

Work out what needs to happen, by when, and who will do it.

Agreement and disagreement

There are many different reasons why someone might not agree with a proposal. For example you might have fundamental issues with it and want to stop it from going ahead, or you might not have time to implement the decision or the idea just doesn't excite you.

Consensus decision-making recognises this – it's not trying to achieve unanimity but looks for a solution that everyone involved is OK with. Not all types of disagreement stop a group from reaching consensus. Think about it as a spectrum from completely agreeing to completely objecting to a proposal.

The words used to describe the different types of agreement and disagreement vary from group to group. It's important to be clear in your group what options you are using and what they mean. Here is a common set of options:

• Agreement with the proposal
• Reservations
• Stand Aside
• Block

Agreement with the proposal: ‘I support the proposal and am willing to help implement it.’

Reservations: You are willing to let the proposal go ahead but want to make the group aware you aren’t happy with it. You may even put energy into implementing it once your concerns have been acknowledged.

Stand aside: You want to object, but not block the proposal. This means you won’t help to implement the decision, but you are willing for the group to go ahead with it. You might stand aside because you disagree with the proposal, or you might like the decision but be unable to support it because you don’t have the time or energy.

The group may be happy to accept the stand aside and go ahead, or they may work on a new proposal. A critical question is whether the proposal requires everyone to implement it. For example, it might be fine for some people not to get involved in particular group activities. On the other hand, if the group agrees a health and safety policy, it is vital that everyone is willing to put it in practice.

Block: A block always stops a proposal from going ahead. It expresses a fundamental objection. It isn’t “I don’t really like it,” or “I liked the other idea better.” Some groups say the block means "I'll need to leave the group if this goes ahead". The group can either start work on a new proposal, or look for amendments to overcome the objection. In cases where the block stems from a fundamental disagreement with the aims of the group it might be more appropriate for the individual to leave.

In an ideal consensus process a block wouldn’t happen since any major concerns about a proposal should be addressed before the decision stage. However, sometimes people aren’t able to express their concerns clearly enough, or aren’t heard by the group. In such situations the block acts as a safeguard to ensure that decisions are supported by everyone.

Being able to block is an integral part of consensus, but it comes with a big responsibility. A block stops other people from doing something that they would like to do, and it should therefore only be used if serious concerns are unresolved.

Conditions for consensus

Consensus is much easier when certain conditions are in place in a group. If your group is struggling, this checklist should help identify underlying issues you need to address in order to have a better experience of consensus. While the conditions aren’t met, it can sometimes be better to use a different method to make a decision (e.g. voting).

Common Goal: Everyone in the group needs to share a clear common goal and be willing to work together towards it. That could be a particular vision for your community, or an injustice you are working together to stop. It is easy to assume everyone is pulling in the same direction – but your group will be in a much stronger position if you take time to explore your aims together. What does each person want to achieve and how do you expect to get there? Share your agreed goals with new members so they know what they are getting into! If major differences come up later, try re-visiting your aims to remind yourselves of the things you have in common, and get clear on how fundamental your differences really are.

Commitment to consensus: Everyone needs to be willing to really give it a go. This means sticking with the process when you disagree, instead of jumping to a majority vote. It also means being prepared to work at building equality in the group, and learning to recognise and value your differences.

Trust and openness: Consensus means being deeply honest with yourself, and the rest of the group, about what you really need to happen, and what is just a preference. Finding win-win solutions often relies on people being flexible about their preferences to meet all the core needs. This requires trust. We need to feel safe to express our needs – and also to give up some of the things we want, in the knowledge that other people will do the same for us. Take time to build relationships within the group to enable people to be more open with each other.

Sufficient time: for making decisions and for learning to work by consensus. Taking time to make a good decision now can save wasting time revisiting a bad one later.

Clear process: It’s essential to have a clear process for making decisions and to make sure everyone has a shared understanding of how it works.

Active participation: In consensus we all need to actively participate. We need to listen to what everyone has to say, voice our thoughts and feelings about the matter and pro-actively look for solutions that include everyone.

Facilitation

Facilitation is about supporting a group to have an effective and inclusive meeting. Often, meetings have one or two facilitators. Their role is to help the group make decisions and work together creatively and efficiently. In a small group it can also work to have everyone responsible for making the meeting work, instead of appointing a facilitator.

Facilitation tasks include: setting up the meeting space so everyone can be comfortable; helping the group prepare an agenda; keeping people focused on one topic at a time until a decision is reached; making space for everyone to think and express themselves during the meeting; listening to all the different points and providing summaries to help the group work out a fair decision; helping the group to address conflict if it arises.

The facilitators shouldn’t have any more power than anyone else and should stay neutral on the issues under discussion. They’re not there to make all the proposals and decide things for a group. They can only do their job with everyone’s support and co-operation.

Group structure

Consensus decision making isn’t just about what happens in a meeting. It also depends on how the whole group is organised.

A key democratic principle is that decisions should be made by people who are fundamentally affected by them. This makes it important that everyone is able to contribute to big decisions which impact on the whole group. For example, decisions about your strategy, vision and policies.

However, that doesn’t mean everyone has to be involved in every single decision. You could create working groups that take responsibility for different areas like publicity and organising events. Or make individuals responsible for particular tasks, like managing the bank account.

These working groups or individuals can then take smaller, day-to-day decisions without taking everything back to the whole group. For example, the whole group might agree a food policy – but let the kitchen team decide what’s on the menu and where they will do the shopping!

Key skills for consensus

Active listening

When we actively listen we suspend our own thought processes and give the speaker our full attention. We make a deliberate effort to understand someone’s position and their needs, concerns and emotions. Active listening can include asking questions to get clear about what someone means or to encourage them to say more.

Summarising

A succinct and accurate summary of what’s been said so far can really help a group move towards a decision. Outline the emerging common ground as well as the unresolved differences: “It seems like we’ve almost reached agreement on that bit of the proposal, but we need to explore this part further to address everyone’s concerns.” Check with everyone that you’ve got it right.

Synthesis

Bringing together different ideas and trying to find a proposal that is agreeable to everyone is at the core of consensus. We call this process synthesis: finding connections between seemingly competing ideas and weaving them together to form proposals.

It is common for people to enter a discussion with strong views on concrete options they do and don't like. This is particularly the case when the discussion starts with only one option on the table, and people in the group end up taking sides according to whether they want it or not. Finding a way forward often involves taking a step backwards and exploring the reasons why people are into different options. This in turn helps you identify core concerns and things people are trying to achieve - which form the basis of the new, synthesised ideas.

Consensus in large groups

It can be more challenging to use consensus in larger groups. It becomes more important to split up responsibilities so you spend less time with everyone in the same meeting. However there will be some issues where you do need make decisions with everyone together. Here are a few extra methods to help everyone participate.

Working groups

If you organise your group with different teams, or 'working groups' responsible for different things, then there are much fewer decisions that need to be taken all together. Make sure there is good communication between working groups and the whole group - e.g. regular reports on working group activities, and opportunities to offer feedback.

Small groups within a big meeting

Even when a large group needs to discuss an issue, you can split the meeting up into smaller groups for the discussion stage to make it easier for more people to join in. Small groups can help everyone think through the issue and come up with ideas, before going back to the whole group to take the discussion further.

Spokescouncil

The spokescouncil process can be used when a very large group is taking a decision together. In this process the whole group breaks up into smaller groups who then communicate with each other through 'spokes' (also called delegates or representatives).

The process: the small groups start by discussing the issue(s) to come up with concerns and ideas. Spokes (delegates) from each group then meet up in a spokescouncil to feed back these thoughts. The spokescouncil uses this information to create one or more proposals. These are discussed back in the small groups to check for any amendments and agreement. The results of these discussions are taken to the spokescouncil who should be able to either confirm agreement or draw up new proposals for further discussion. In this way the power to make decisions lies firmly with the small groups, not the spokes.

The spoke’s role is to feed back information between the small group and the spokescouncil. The spoke needs to act as a voice for everyone within the small group, communicating the breadth of collective thought rather than just their own personal point of view. Being the spoke carries a lot of responsibility to represent information accurately and not to manipulate the process.

Generally spokes don’t make decisions for their group but always check back for agreement before a decision is finalised. However, an individual small group may empower their spoke to take decisions within agreed parameters.

Rotating the role of spoke from meeting to meeting is a good idea, as is having two spokes, one of them presenting the viewpoints and proposals from their small group, the other to take notes of what other groups have to say. This helps to ensure that ideas don’t get lost or misrepresented.

Consensus decision making

Consensus is a way of reaching agreement in a group that is creative and co-operative. Instead of voting on a decision and having a majority of the group get their way, consensus means working together to find win-win solutions everyone supports. All decisions are made with the consent of everyone who is fundamentally affected, meaning that everyone's core needs are taken into account.

This guide offers a short introduction to the values and principles of consensus, a common process for reaching consensus decisions, and offers tips and suggestions for making it work in practice. Also includes sections on core skills and using consensus in large groups.

Developing Team Leadership Skills

At least once a year team leaders should ask their team members to give them feedback on how well they are accomplishing their leadership tasks:

• ‘To what extent have I provided a clear direction for your work?’
• ‘Are you excited and motivated by the work we do?’
• ‘Does the team task really require a team to do it?’
• ‘To what extent does the task stretch us and require us to use our skills to full effect?’ ‘How could the work we do be made more challenging and motivating?’
• 'To what extent do I give enough authority to you for you to get on and be successful as a team?’
• ‘To what extent do I give you sufficient information about how well the team is performing?’
• ‘Do I time my interventions to help the team work well appropriately or do I come across as interfering?’ [always ask for examples]
• ‘Do we have enough team members to do the job effectively?’
• ‘To what extent do we have the resources, information, accommodation and training to accomplish our task?’
• ‘To what extent are you satisfied with the rewards you get as a team for the work you do (rather than individual rewards)?’

The answers provide feedback on team leadership skills, indicating areas that need developing. Seeking such feedback takes courage, but team members regard feedback seeking as a sign of competence and ability rather than weakness in their leaders (Ashford and Tsui, 1991).

Other approaches to leadership development include training emotional intelligence and nurturing a transformational style of leadership.

Transformational team leadership

Two dominant styles of team leadership are transformational and transactional (Howell and Avolio, 1993; Yukl, 1998). Transformational leadership is defined as leadership that inspires followers to trust the leader, to perform at a high level, and to contribute to the achievement of organizational goals. Bass (1985) describes transformational leadership as having four key components:

• Idealized influence: leaders behave in admirable ways so that followers tend to identify with them (e.g., they display conviction; they portray role-modelling behaviours consistent with a vision; they appeal to the commitment and loyalty of followers on an emotional level as well as rational level).
• Inspirational motivation: leaders articulate a vision which is appealing and inspiring to followers (e.g., this provides meaning for the work task; they set high standards and communicate optimism about the achievability of the vision).
• Intellectual stimulation: leaders stimulate and encourage creativity in their followers (e.g., challenge assumptions, take risks, ask followers for their ideas and for suggestions on how to develop them into practice).
• Individualized consideration: leaders attend to each follower individually (e.g., by acting as a mentor or coach, and by listening to their concerns and paying attention to their needs, including their skill and career development needs).

The theory contrasts two styles of behaviour called transformational and transactional leadership. Transactional leadership motivates followers by exchanging rewards for high performance and noticing and reprimanding subordinates for mistakes and substandard performance. Transactional leadership consists of three dimensions underlying leaders’ behaviour:

• Contingent reward: leaders set up constructive transactions or exchanges with followers; for example, clarifying expectations, establishing rewards in order to motivate and shape their performance. Other examples include exchanging rewards for appropriate levels of effort, or responding to followers’ self-interests as long as they are getting the job done.
• Active management by exception: leaders monitor follower behaviour, anticipate problems, and take corrective action before serious difficulties occur
• Passive management by exception: leaders wait until the followers’ behaviour has created problems before taking action.

Transformational and transactional behaviours are not mutually exclusive and research suggests that effective leaders use both styles. However, the most effective leaders use the transformational approach more since it increases follower motivation and performance more. Passive management by exception is negatively related to effectiveness. Both contingent reward and transformational leadership are positively and relatively strongly related to leadership effectiveness (Judge and Piccolo, 2004).

Another category, laissez-faire leadership, represents the absence of leadership. It differs from passive management by exception, where at least some influence is exerted. In effect, this involves leaving staff to manage themselves and make their own decisions regardless of their competence or of the need to structure the task. It is strongly negatively related to effectiveness (Judge, Piccolo and Illies, 2004).

Overall, the research evidence suggests that transformational leadership is effective and that a combination of transformational leadership and contingent reward is powerful in producing desirable outcomes such as effectiveness (productivity, profitability), innovation, employee commitment and engagement, and employee well-being. These are important lessons for team leaders and are consistent with the principles of leading, managing and coaching described earlier.

Team leaders can develop their transformational leadership learning to be optimistic (not unrealistic), and expressing positive emotions in the form of enthusiasm, excitement, appreciation, pleasure, contentment and celebration rather than negative emotions such as anger, anxiety, discontent and irritation. Bring positive energy to work and those around you will be affected by your energy. Moodiness is particularly damaging. Transformational leadership also involves stimulating team members by painting for them an attractive, compelling picture of what they can accomplish and the means to accomplish it. This requires thinking through what it is the team is trying to achieve, developing wise and effective plans for success, and then communicating, discussing and selling these plans to your team. They will have an increased awareness of their tasks, the importance of them to the organization and will be motivated to achieve the goals and to performing their tasks well. Moreover they will be motivated to work for the good of the team and the organization and not just their own personal gain or benefit.

You will transform your team members too by devoting a good part of your considerable energy to thinking through how to help them develop their knowledge, skills, abilities, and careers, and discussing and planning this with them. By doing this you focus them on their own development, increase their skills and confidence, and satisfy one of the basic human needs – the need to grow, develop and discover through engaging with our environments. And of course, that means they are likely to perform to a much higher level and to be more satisfied in their work as a consequence.

A word of warning about charisma and self-esteem: charismatic leaders who are motivated primarily by their own needs for self-advancement and simply use team members to help achieve their own ends are precisely those who most spectacularly derail in organizations (and in history). They are the equivalent of religious cult leaders who are more concerned with using followers to confirm their self-image and beliefs, rather than to help their followers. Check that your decisions are designed to meet the needs of your clients and your team members first and foremost.

What all leaders must develop, if they do not already possess this quality, is humility. Personally this means we have to be aware of our own inadequacies and the strengths of others and that our power should not lead us to assume that we can behave in inconsiderate, arrogant or insensitive ways. An old Zen prescription for all, and it applies particularly to leaders, is ‘keep don’t know mind; only keep don’t know mind’.

Self-managing or Shared Leadership Work Teams

Much of the discussion in this chapter has implied that leadership, management or coaching is the remit of one member of the team. It is certainly more convenient to describe management and leadership in this way, but it is important for the leader to be aware that every member of the team should take responsibility for managing, coaching and leading. If team members evade their own responsibilities for direction, support, influencing and authority in the team, it is likely that the team will be less effective. Managing meetings, for example, is the responsibility of each person in the team. When a team member sees the team going in what they think is an inappropriate direction, it is his or her responsibility to speak up if team effectiveness is to be maximized (for a good discussion of leader-centric versus team-centric leadership, see Zaccaro, Heinen and Shuffler, 2009). Research in this area reveals that shared leadership is increasingly accepted as an idea (Bennett et al., 2003), though it is called a variety of names (emergent, shared, distributed and lateral (Day, Gronn and Salas, 2004)). The research evidence suggests that shared leadership is positively related to team performance generally (Carson, Tesluk and Marrone, 2007; Mathieu et al., 2008).

This chapter has examined team leadership and it is clear there is no simple prescription for managing or leading teams. Being democratic or authoritarian, supportive or directive, hands-off or hands-on are all necessary elements of the role of those leading the team. Much depends on the time in a team’s life, the stage of the projects it is pursuing, the organizational context within which it is working, the individual personalities and skills of team members, and the personality of those delegated to be team leaders (see Kozlowski et al., 2009 for an extensive discussion of some of these contingencies).

Team leadership is the responsibility of all team members and that responsibility should not be abrogated in situations where one person is designated as team leader. The promise of effective managing, coaching and leadership is that the skills and abilities of diverse individuals can be moulded together to produce excellent team performance, in which the ideal of synergy is created in practice. As those who have worked in successful teams will know, the consequences in terms of personal satisfaction, the sense of competence and collegiality are enhanced considerably, and the sense of being part of an effective dynamic unit is indeed a rewarding one.

Key Revision Points

• What does a team leader focus on to ensure team success?
• What are the three main tasks of the team leader and why are they so important?
• How does traditional leadership differ from team leadership?
• What does leading a team involve and how does this differ from managing and coaching a team? How does it affect the performance of the team?
• What are the main tasks involved in managing a team and why are they important for team effectiveness?
• What are the main skills involved in coaching a team and why are they important for team effectiveness?
• What are the main tripwires confronting team leaders and how can they be avoided?
• What is the difference between transformational and transactional approaches to leading teams?
• In what situations are directive, achievement-oriented, supportive and participative styles of team leadership most effective and why?
• What is shared or emergent leadership and how can this be nurtured in a team.

Abstract From a normative perspective, all stakeholders have a right to voice their preferences. Not doing so can diminish loyalty and may even lead to an exit from transactions with the organization (Hirschman, Exit, voice, and loyalty. Cambridge, MA: Harvard University Press, 1970). This chapter tackles the question of why organizations may purposefully identify missing stakeholder perspectives and take action to invite input from those whose perspectives are missing. Two methods for the identification and analysis of stakeholders are presented. The first starts by identifying stakeholders the organization regularly interacts with then moves on to identify stakeholders who could be influenced by or influence the success of organizational activities but do not interact. The second uses three categories of stakeholders based on their position relative to the organization, external, mixed, or internal, to identify stakeholders who could represent the interests of multiple stakeholders and who could provide proxy preference information to make stakeholder engagement more cost-efficient.

2.1 Introduction

Who are the individuals or members of groups and organizations who can or do have an impact on, or influence over, your actions? Are these the same people who are influenced by your actions or upon whom your actions have an effect? The answers to these questions often depend on the issue or potential action you are considering. For each action, there is a wide range of people with whom you could interact to enhance the value created by your actions.

I define stakeholder as anyone who or anything (represented by a human) that can influence, or is influenced by, the activities or behaviors of another stakeholder. From an organization’s perspective, stakeholders are an input into engagement since these individuals already exist outside the organization, even though an organization may not currently be interacting or engaging with specific stakeholders.

Stakeholders can be people as well as inanimates. When we describe stakeholders as people, we may be talking not only about those who are alive now, but we could also be considering the interests of future generations. Discussions about the need for sustainable human activity are very much focused on the need to preserve the environment for our childrens’, childrens’, children. When we describe stakeholders as inanimates, we are acknowledging the impact that nonhuman things may have in our everyday life and consider how they influence our activities. Some examples of nonhuman stakeholders include animals, plants, the environment and common-pool resources, geography, or geographical features of a location, physical structures, social structures, and even the past. Any of these inanimates can impact on our activities.

I refer to these inanimate stakeholders as actants. An actant is a nonhuman actor who influences the activities of humans. Here is an example of the influence of an actant on my activities. While hiking in the desert, my hiking group members learned that a rattlesnake was enjoying the shade under a cactus on the path ahead. The presence of the rattlesnake caused the entire group of hikers to change their path to avoid direct interaction. Considering the flip side of this interaction, the rattlesnake had a stake in our behavior. If the group decided to stay on the path, then the rattlesnake could have chosen to stay put under the cactus, move away, or strike at one of the hikers. I wasn’t willing to take the chance that the rattlesnake would not take the third option, so I was influenced by the shared interest in survival I had with the rattlesnake and modified my actions appropriately!

Of course, stakeholder interactions can only occur between living people. But these people can be acting for themselves, as delegated representatives of other stakeholders, or as members of groups, organizations, or a collective, such as society. Inanimate stakeholders, by their very nature, rely on human stakeholders to identify and represent their interests. Individuals acting in their own interests or acting in the interest of other stakeholders do so to influence, impact, or react to the impacts stakeholders have on their activities.

The taxonomy in this chapter presents a theoretical arrangement of six continua of stakeholders. The continua are arranged in a way that allows for the systematic identification of a universe of stakeholders. Identifying a wide range of stakeholders informs your selection of which stakeholder(s) with whom you might interact. From this description, a typology is developed that arranges common types of stakeholders within the operating context and demonstrates how a stakeholder may interact differently based on the frequency and nature of the contextual interaction.

Robust identification via the taxonomy and placement of stakeholders within the typology can enable an organization to anticipate who is likely to be influential or impactful. Knowing more about who the stakeholders are for an organization, an administrator for the organization can consider proactively inviting interaction on a particular issue. Stakeholder engagement processes increase the likelihood that the interests of all stakeholders impacted by or impacting the organization’s activities can be identified and considered. Purposefully identifying stakeholders and comparing with whom you currently interact to whom you could strategically interact can make the organization more accessible. Identifying a universe of stakeholders can also shed light on strategies to increase the input organizations voluntarily receive from stakeholders for representing a diverse array of interests and preferences.

2.2 The Universe of Stakeholders

The term stakeholder is ubiquitous, yet there is no consensus about what the word means. Academic literature began to systematically address the role and influence of stakeholders on public- and private-sector organizations in the twentieth century. In 1984, Freeman contributed to the business management literature arguing for the need to differentiate between business owners (and/or stockholders) and stakeholders. In 1996, Najam furthered our awareness of definitional differences in the stakeholders for public, corporate, and nonprofit organizations.

A meta-analysis by Miles (2017, p. 29) of 593 definitions of stakeholders identified 16 definitional categories that could be organized within four hyponyms – a stakeholder as an influencer, claimant, collaborator, and/or recipient. These labels are a few of many depicted on a typical stakeholder map. Standard representations of stakeholders place an organization at the center of a diagram with a universe of stakeholders surrounding the organization (Franklin, 2001a). Then other stakeholders are randomly arranged like a solar system with the ones that the organization deals with the most depicted closer to the organizational sun of the solar system.

Within the rings of Fig. 2.1, we can identify stakeholders representing those who are influencers, claimants, collaborators, and/or recipients suggesting the different relationships an organization has with a wide range of stakeholders. Drawing from various strands of literature, in this chapter, I create a more robust taxonomy that arranges stakeholders along six commonly described continua to better capture characteristics of the relationships and suggest why some stakeholders are viewed as influencers or collaborators while others are labeled claimants or recipients.

2.2.1 Continuum #1: Relationship to the Organization

In this Chapter, we use six continua to arrange stakeholders based on their position relative to the organization. Stakeholders are often classified based on the nature of the interactions they have with another stakeholder. On Continuum #1, stakeholders can be placed anywhere between involuntary to voluntary interactions. Anyone who buys from a local business is a voluntary stakeholder. However, someone who lives near a business production facility where noise or high traffic flows are issues is an involuntary stakeholder. Taxpayers are another example of involuntary stakeholders, since everyone who works, lives, or shops in a governmental jurisdiction must pay income, property, sales, and/or use taxes.

Most stakeholder interactions are voluntary, meaning one stakeholder chooses to interact with another. Customers making a food purchase are an example of a voluntary stakeholder. Consider the different ways you could purchase food. You could go to a restaurant, a grocery store, the farmer’s market, have the food delivered to you and so on. Your choice depends on the timing and type of food you wish to eat. To create value, food vendors consider how to make interactions satisfying to you in the hope that a transaction will result. The process of food vendors identifying stakeholders with whom they interact can provide valuable information about unserved needs and potential product innovations that could increase the likelihood of a transaction with you.

2.2.2 Continuum #2: Interests of the Stakeholder

In the academic literature, there has been discussion about who legitimately has an interest in a stakeholder’s actions and how this translates into interactions. Stakeholders with direct interests typically engage in routine transactions. Stakeholders can also have indirect (or derivative) interests. For example, in the legal system, courts require a party to a legal matter to demonstrate standing individually, or as a member of a class of impacted persons, before they can be involved in legal action. Interactions with stakeholders with indirect interests can prove valuable for avoiding diminished value creation by making changes in activities planned by an organization that the indirect stakeholders oppose.

The consideration of indirect interests is particularly important for government organizations since “… the body of persons to whom it is accountable (and, thus, to whom it needs to report on its finances) is much larger and more diverse than that of a business or not-for-profit entity …” (Mead, 2013, p. 95). Indirect stakeholders for government are the people within the jurisdiction who receive goods or services or pay taxes or fees.

Issues related to an environmental ecosystem often include interactions between stakeholders acting as agents for other stakeholders who have no voice. In their representation of actants, the participating stakeholder has indirect interests. Consider the example of wind energy turbines and the reduction in avian populations that occur near where they are installed. A wildlife protection group that seeks to protect local bird species is an indirect stakeholder for the electric company purchasing the alternative energy. This same group is also an indirect stakeholder for the nonprofit university that owns the wind farm, as well as for the government organization regulating tax credits associated with installing the wind turbines.

A stakeholder may have both direct and indirect interests in the actions of another stakeholder. The wind turbine example demonstrates these overlapping interests. The owner of the land where the turbine is installed has a direct interest in the decisions of the electric company, the university, and the tax agency. If that same landowner is also a member of a wildlife protection group, she simultaneously can interact with these same three organizations as a stakeholder with indirect interests.

As this example suggests, interests often overlap, especially for stakeholders who have dual roles inside and outside the organization, such as a nonprofit board member. For some issues, a direct interest will be specific to a transaction or organizational activity. For other issues, especially when policy issues are being considered, interactions may be based on indirect interests. For this reason, identifying stakeholders who have direct as well as indirect interests can contribute to enhanced value creation.

2.2.3 Continuum #3: Location of the Stakeholder

The third type of classification suggests a delineation between those who are internal to the organization (demonstrated by the closest proximity to the center) and those who are external (shown by the distance away from the center). Typical internal stakeholders for an organization include employees – either as a general label or by named groups of employees such as managers, supervisors, frontline employees, occupational specialists, and line and staff units. External stakeholders often include regulatory agencies, competing organizations, interest groups, unions, professional organizations, vendors, partners, clients, customers, suppliers, and citizens. If we were to identify stakeholders for an individual person, internal stakeholders could be partners, family members, or even pets. External stakeholders could be friends, employers, food vendors, future family members, etc.

Categorizing stakeholders, as internal or external, is overly simplistic. In a time when partnerships, collaboration, and co-production are being emphasized (Agranoff & McGuire, 2003), the internal or external dichotomy does not capture the stakeholders who are simultaneously internal and external for a specific stakeholder. This mix of roles can result in multiple and perhaps conflicting interests.

Recognizing this, Continuum #3 includes a third type of stakeholder – the mixed stakeholder. If you were invited to serve as a member of a nonprofit community art board because you are also an artist, you are a mixed stakeholder for the nonprofit. You are an internal stakeholder as a board member but also an external stakeholder, just like all other artists who support community arts. Identification of mixed stakeholders can be a means for discovering areas of overlap in the interests of internal versus external stakeholders. Identifying all three types of stakeholders, external, mixed, and internal, can be important for understanding who the organization’s actions impact and who can influence the organization’s actions.

The first three continua allow the organization to inventory the stakeholders with whom they do (or should) regularly interact. Creating a stakeholder inventory is a multistage process that begins by identifying a stakeholder and then determining where the stakeholder should be placed relative to the ongoing activities of the organization and not when a decision about policy or organization activities is under consideration.

Once the stakeholder is identified, the placement in Table 2.1 can be made by answering three questions (in a process similar to a decision tree):

1. Does the stakeholder have a voluntary or involuntary relationship with the organization?
2. Does the stakeholder have or experience direct or indirect influence from the ongoing activities of the organization?
3. What is the relationship of the stakeholder to the organization, and is the stakeholder an external, mixed, or internal stakeholder?

The answers to these questions may be quite easy for most stakeholders, but thought-provoking for other stakeholders who may fall into more than one category for a particular issue or activity. Choosing the correct type is not a concern. You could choose to place any stakeholder in multiple categories if you think they are interacting with the organization as an individual as well as an agent for another stakeholder.

Table 2.1 Identifying stakeholders by characteristics
#1 Relationship to the Organization
Involuntary						Voluntary
#2 Interest of the stakeholder
Indirect			Direct			Direct			Indirect
#3 Location of the stakeholder
E	M	I	E	M	I	E	M	I	E	M	I

In Table 2.2, I present an example drawn from my experience as a board member for the local Meals on Wheels organization. I identified eight stakeholders with whom the organization regularly interacts and labeled them A–H. For each stakeholder, I noted in brackets the decision I made on each of the questions for Continuum #1, #2, and #3. Then, I plotted the stakeholders in Table 2.2.

• A = Staff (voluntary, direct, internal)
• B = Board members (voluntary, indirect, mixed)
• C = Drivers (voluntary, direct, mixed)
• D = Clients (voluntary, direct, external)
• E = Meal preparer (voluntary, direct, external)
• F = Donors/funders (voluntary, indirect, external)
• G = Community service volunteers (voluntary, indirect, internal)
• H = Meal providers for vulnerable populations (involuntary, indirect, external)

Reviewing the table, I wondered why stakeholder H (other meal providers for vulnerable populations) was the only stakeholder on the involuntary side of the table. This would prompt me to try to identify other stakeholders with whom the organization does not interact regularly. If there were others, then I would view this as an opportunity to invite interactions to get additional input for the organization, especially if there were involuntary relationships with stakeholders who were directly influenced by our activity.

Table 2.2 above is a useful way to identify stakeholders who can or should regularly interact with the organization based on the first three continua. Research has demonstrated that some stakeholders engage in repeated and/or nearly continuous interactions with an organization. One reason for this is quite simple: the stakeholders already have the contact information for providing their preferences. Frequent interactions or transactions can lead to an awareness of more opportunities to interact as well as more interactions, creating a cadre of stakeholders labeled the usual suspects (Franklin, 2001a). It is relatively easier for an organization to develop an invitation list for interacting with the usual suspects than with unfamiliar stakeholders for whom contact information is not yet known. Also, prior interactions with the usual suspects build relationships over time and make future interactions likelier (Orr, 2014).

Table 2.2 Typical stakeholders for Meals on Wheels
#1 Relationship to the Organization
Involuntary						Voluntary
#2 Interest of the stakeholder
Indirect			Direct			Direct			Indirect
#3 Location of the stakeholder
E	M	I	E	M	I	E	M	I	E	M	I
H						D	C	A	F	G	G
						D

Unfortunately, the usual suspects may not represent the interests of all stakeholders who can or will be impacted by another stakeholder’s actions. The challenge is to determine the impacts to and responses by non-represented stakeholders if there are no interactions. Next, I describe three additional continua helpful for considering who is likely to interact with the organization and why they may choose to interact when the organization is considering changes to its current activities.

2.2.4 Continuum #4: Interests Being Represented

In Chap. 1, I argued that it is advantageous for organizations to encourage stakeholder engagement through interactions. These interactions can occur between organizational members and individuals acting on their own or with people representing groups and organizations or even having more abstract representation of institutions and ecological systems as proxies for a collective or society. At any of these levels, a stakeholder can interact with other stakeholders based purely on their own direct and individual interests. Generally, this takes the form of a transaction.

Often, a stakeholder’s self-interests are blended with the interests of others who share similar interests. In this case, the stakeholder can represent shared interests through an agency relationship. Research has identified many kinds of agency relationships for groups of stakeholders who have shared or similar indirect interests. These include the role of profession-based organizations (Kahane, Loptson, Herriman, & Hardy, n.d., p. 8; Ogata, 2017), identity groups (Valentinov, Roth, & Will, 2019), and voluntary membership organizations (Krawczyk & SweetCushman, 2017) who represent a community of interest to improve value creation for those they serve.

Stakeholders who interact as an agent for specific groups of stakeholders tend to represent their own interests as individuals as well those of the organized group they represent. Several authors (Baiocchi & Ganuza, 2014; Craw, 2017; Miller & Evers, 2002; Salahudin & Zumitzavan, 2017; Sulkowski, Edwards, & Freeman, 2018) have recognized the importance of stakeholders who act as intermediaries, such as civil society advocacy organizations (Michels, 2017) for the less privileged and vulnerable persons in society (Morone, 1990; Stenberg, 1972, p. 192).

This situation also applies to stakeholders who interact on the behalf of inanimates and for the public in general. Prohl’s (1997, p. 77) reporting of 102 cases of local government participation in an international network of 10 countries suggests that citizens become involved when decisions are made to improve government services and create a better community for all residents. The Institute for Local Government (n.d.) notes the importance of knowing the interests stakeholders have for the collective since it articulates the kind of community, infrastructure, and programs that residents want. It is also a way for stakeholders to recognize and assert their duties as citizens and as vital members of society (King et al., 1998; Schlupp & Franklin, 2014).

2.2.5 Continuum #5: Focus of Organizational Action

Proposed changes in activities may cause a stakeholder to seek out interactions with the organization. The organization may be considering one of two kinds of proposed actions: a policy or an activity change to enhance activities and improve value creation. Policy issues arise when the current course of action for an organization, group, or social system is not creating sufficient value. This can lead to consideration of new activities to enhance value creation. Policy issue-based interactions often lead to decisions by (s)elected officials authorizing the enactment of new laws, rules, policies, practices, and/or the deliberate realignment of tangible and intangible resources for a more sustainable future. These policy decisions are abstract statements of intent and, sometimes, will reference specific outcomes desired. Decisions on policy issues seldom provide details about how to get those outcomes.

Administrative issues, on the other hand, relate to the processes and practices necessary for implementing policy decisions and engaging in transactions or interactions. Stakeholders providing input on the organization’s activities are typically limited to those stakeholders who are already engaging in, or who have newly become eligible to participate in, transactions and thus have a direct interest in how organizational activities will be conducted. The value being produced for each stakeholder in the transaction is easy to estimate for activities. Based on this, decisions about current or proposed activities can focus on the value-enhancing potential that can be produced for different kinds of stakeholders involved in a transaction.

2.2.6 Continuum #6: Impact of Organizational Action

Any change in the activities of the organization is expected to have positive effects and to create more value for the organization. However, the organization must also consider the potential adverse impacts on the organization, especially if a proposed change will alter the behavior of stakeholders who now engage in transactions with the organization.

Changes in the activities of the organization may improve transactions with stakeholders leading to more positive outcomes. However, changes may lead to transactions that could have negative or mixed impacts on stakeholders who are directly interacting with the organization. The introduction of externalities could also lead to unintended consequences and spillover effects that impact stakeholders who are not a direct party to the transaction. Therefore, the effects of a proposed change in organizational activities on a stakeholder can range from negative to mixed to positive, as shown in Continuum #6.

In Table 2.3, the taxonomy is expanded to include all six continua. In the far left column is Continuum #4, depicting if the stakeholder is acting in their own interest or as an agent for another organization, a group, or a collective. The next column to the right is for Continuum #5. Stakeholders are divided based on the focus of the organization’s proposed action; i.e., is it a policy change or a change in activities? Continuum #6 is in the last column on the right. In this column, the impacts, negative, mixed, or positive, from the proposed change are displayed based on whether it is a change to policy or administration and whether the stakeholder is representing his/herself or others.

Table 2.3 Identifying activity-specific stakeholders

#1 Relationship to the organization

Involuntary

Voluntary

#2 Interests of the stakeholders

Indirect

Direct

Direct

Indirect

#3 Location of the stakeholders

E

M

I

E

M

I

E

M

I

E

M

I

Collective

Policy

Negative

Group

Org

Individual

Negative

Admin

Mixed

Positive

Organization

Policy

Positive

Group

Collective

#4 Interest Repr'd

#5 Org's action

#6 Impact of Org's action

2.3 Using the Taxonomy

By systematically identifying stakeholders and plotting them on the six continua, it is possible to identify who have ongoing interests and will continue transactions or interactions for the foreseeable future. The first three continua were useful for determining the usual suspects with whom the organization regularly interacts. The second three continua help estimate stakeholder reactions when the organization is considering a change to policy or to their activities.

Systematically identifying stakeholders with whom the organization does not regularly interact could help determine where invitations to interact may be needed. These invitations are particularly important for stakeholders who will be directly impacted by a decision, but with whom no interactions are currently taking place. The invitation to interact also matters to stakeholders who may not be aware that changes to policies or activities are being considered and that they can provide input into the decision-making process.

Let’s return to the Meals on Wheels example and use the expanded taxonomy to consider a new activity being proposed. Imagine that Meals on Wheels is considering adding new delivery areas for eligible persons in the growth areas of the city. The challenge is that one of the growth areas is between 5 and 10 miles away from the current meal preparation location. Further, it is hard to attract drivers and to develop routes to deliver the food on time to clients in this area.

The new delivery plan is to develop partnerships with churches and other nonprofits in the growth area who would host a centralized location for a Meals on Wheels food provider to deliver the meals. Then the clients could come to that location and share a congregate meal, or volunteer drivers living in that geographic area could deliver the meals, which would reduce the time and expense of traveling an extra 10–20 round-trip miles to pick up the meals.

To analyze the impact of this proposed change, we first consider stakeholders who have already been identified:

• A = Staff (voluntary, direct, internal + indiv, admin, mixed + org, policy, mixed)
• B = Board members (voluntary, indirect, mixed + org, policy, mixed)
• C = Drivers (voluntary, direct, mixed + collective, policy, positive)
• D = Clients (voluntary, direct, external + indiv, admin, positive)
• E = Meal preparer (voluntary, direct, external + org, policy, mixed)
• F = Donors/funders (voluntary, indirect, external + group, policy, positive)
• G = Community volunteers (voluntary, indirect, internal + org, policy positive)
• H = Meal providers (involuntary, indirect, external + collective, policy, positive)

Next, we add three new stakeholders who could be influenced by or might influence the success of the proposed change and plot them in Table 2.4:

• I = Second meal preparer (voluntary, direct, external, group, policy, positive)
• J = Churches (voluntary, indirect, external, group, policy, mixed)

Table 2.4 Activity-specific stakeholders for Meals on the Wheels

#1 Relationship to the organization

Involuntary

Voluntary

#2 Interests of the stakeholders

Indirect

Direct

Direct

Indirect

#3 Location of the stakeholders

E

M

I

E

M

I

E

M

I

E

M

I

Collective

Policy

Negative

Group

Org

Individual

Negative

Admin

A

Mixed

D

Positive

Organization

Policy

E

A

B

G

Positive

Group

I

C

J

Collective

H

K

G

F

#4 Interest Repr'd

#5 Org's action

#6 Impact of Org's action

• K = Food and shelter (voluntary, direct, external, collective, positive)

With the expanded stakeholder typology, the only stakeholder of concern is the MOW staff since the proposed service expansion, as an additional administrative duty, will require them to identify and manage more clients, more drivers, and more food preparers. Plus, the staff will have to interact with the MOW board during the policy decision process to assure that there are sufficient resources or that additional resources can be secured to cover the additional administrative costs.

Having reviewed these six different dimensions for identifying and classifying stakeholders, it may be easier to understand why organizations find robust identification of other stakeholders overwhelming. Buzz Lightyear’s famous tag line “To infinity and beyond!” seems appropriate since, in today’s increasingly interdependent global society, everyone and everything in the universe potentially can be considered a stakeholder.

The taxonomy provides a means for visualization to anticipate who is most likely to interact and then to place these stakeholders in the graphic. Doing this provides visual cues about where there may be unidentified stakeholders who can provide essential perspectives on the effects, positive and negative, of proposed activities.

2.4 A Typology for Analyzing Groupings of Stakeholders

The taxonomy of stakeholders is valuable for systematically identifying stakeholders who would be placed in categories that currently have no interaction nor representation but who may be influenced by or could seek to influence organizational activities. In this section, I introduce a typology for categorizing stakeholders that can be helpful for organizations to analyze who can be expected to, or who needs to, interact with the organization to fully understand the impacts of current or proposed activities. The type of stakeholder, external, mixed, or internal, is carried forward from Continuum #2 of the taxonomy and displayed on the horizontal axis. Since these types of stakeholders were discussed in the taxonomy, the discussion about the typology is limited to the focus and frequency of interactions that a stakeholder has with the organization, starting at no frequency and ending at a frequency that is nearly continuous. This arrangement allows for the identification and analysis of groups of stakeholders who may have shared interests based on the focus of the activity. Identifying stakeholders with shared interests can reduce the burden to the organization related to collecting data that are representative of many stakeholders’ interests.

2.4.1 The Nature of Stakeholder Interactions

The vertical axis of Table 2.5 portrays the focus of interactions ranging from nonparticipating to continuously interactive. Analyzing interactions is important because expectations about the frequency with which stakeholders will interact are not the same across stakeholders or decisions/activities. Some stakeholders interact with the organization nearly continuously while others are passive, interacting when their self-interests are threatened. Alternatively, some act as principals and delegate their interactions to another stakeholder who acts as their agent. The agent is generally someone who is already interacting and perceived to be more influential. Lastly, some stakeholders may not interact, but for whom an invitation may be sufficient to encourage interactions.

2.4.2 External Stakeholder Analysis

The second column of the typology displays a listing of typical external stakeholders. In this column, we can see that external stakeholders could be an individual acting for their own self-interests; an individual who is a member of a group, organization, or collective; or an official representative of a group, organization, or collective. And, when stakeholders provide input into an organization’s decisions or activities, they may be doing so based on a combination of interests.

Another observation is that the identities of some external stakeholders, such as the public, citizens, and inanimates, are unknown. The stakeholder’s identity becomes known when she/he, or a delegated representative (an agent), contacts the organization about current or future activities or decisions. A specific stakeholder’s identity can also be determined when the organization reaches out to people who are eligible to receive the organizations’ goods or services as well as those who may experience externalities from organizational activities. One example for stakeholders who experience externalities is residents in a coastal area near an oil spill. The organization responsible for cleaning up the oil spill will likely be mentioned in media reports. With this information, people who suffered harm from the spill may contact the organization directly. Or, the organization may get a list of property owners in the area and reach out to them to explain the cleanup activities.

2.4.2.1 Nonparticipating Stakeholders

Starting in the first row of the external column, the category nonspecific describes stakeholders who may not interact but who have an (usually involuntary and) indirect interest in an organization’s activities as a member of a collective. Often they choose not to or are unable to interact as stakeholders of an organization (Franklin, 2001a).

There can be several explanations for nonparticipating stakeholders. Some may feel that their interests are already represented or that the organization already knows their preferences (Ebdon, 2002). Others may be unaware of decision-making that impacts them or do not know that their input would be considered (Yankelovich, 1991). Or, it may just be a logistical problem, like an inconvenient meeting place or time (Franklin, 2001b). A more concerning explanation for not participating may be that individuals fear co-optation or pseudo-empowerment (Arnstein, 1969), describing a situation where stakeholders are pressured to accept the status quo or the views of the majority of stakeholders (Environmental Protection Agency, 2001).

Nonparticipating stakeholders can have a direct but unknown interest in organizational activities. When they discover this interest, they can choose to interact with the organization at any time. When they do decide to interact, then the individual’s stakeholder type would shift to a different location in both the taxonomy and the typology. Likewise, there may be times when the organization wants to reach out to individuals who are representative of nonparticipating stakeholders and invite interactions. In this situation, it would be reasonable for the organizations’ public relations or customer or stakeholder relations function to develop communication materials to reach a broad, but a nonspecific, audience.

2.4.2.2 Case-Specific Stakeholders

In the second row, the organization interacts with a specific stakeholder based on she/he being a case, which involves a transaction with a particular client, customer, consumer, collaborator, or their representative. The interaction can be initiated by external stakeholders who are directly impacted or by their agents; by mixed stakeholders such as ombudspersons or administrative law judges who mediate or adjudicate a dispute; or by internal stakeholders such as line employees in the organization who have responsibility for delivering goods or services. Generally, the interaction is related to concerns about current transactions or organizational activities. In this situation, the organization may decide to allow a variation from the status quo for this one person (case), or the organization may determine that this change should become a regular practice for handling all other similar cases.

2.4.2.3 Policy or Organizational Activity Decisions and Regularized Interactions

Beginning with the third row of the typology, we see a shift in the interactions from interacting on specific decisions to providing input on activities not related to a particular case. Interactions to communicate preferences may occur when multiple stakeholders are impacted as a group (or class) by the organization’s activities. Should the organization change its activities (as shown in the third row of the typology), the change would then apply equally to all comparable cases.

Stakeholders providing input into policy decisions are identified in the fourth row of the typology. This type of interaction is different from that related to organizational activities since the stakeholders may provide insights about changes in the organization’s operating environment that may necessitate policy changes. It is also likely that more stakeholders will communicate their preferences and that conflicting preferences will be revealed when policy decisions are considered since the impacts may extend beyond the current cases being served.

Scheduled interactions with (s)elected stakeholders (row 5) can be related to policy changes or routine activities. These interactions differ from those in rows three and four in terms of the external stakeholders who are involved. These individuals are typically invited by the organization to provide input for a specified time as part of an established group of people who interact at regular intervals. Also, the input that is received is much more focused on making incremental changes to organizational activities than to considering new policies.

2.4.2.4 Continuous Interactions

The last row features external stakeholders who have regularized interactions, both on a scheduled and on an infrequent basis, and the input occurs informally on a nearly continuous basis as the organization. The stakeholders work together do so to produce value for each, respectively. Interactions that occur with an almost continuous frequency can include external stakeholders, like vendors, suppliers, and collaborators with whom the organization regularly transacts as part of the supply chain for the organization. Typically, these stakeholders are the first to be invited to interact with the organization to provide feedback and input on emerging issues about activities or policy decisions. Higher frequency interactions help to align interests since there is a continuing relationship and the prospect for future transactions is high.

2.4.3 Mixed Stakeholder Analysis

In the mixed stakeholder column of Table 2.5, I list persons who have professional credentials, skills, or training directly related to their interactions with the organization. The mixed stakeholders’ affiliation with the organization generally occurs by an invitation that is based upon some combination of an individual’s knowledge, skills, and abilities. For example, since the Sarbanes-Oxley legislation was enacted in 2002 (P.L. 107-204), nonprofit organizations have had to be much more deliberate in identifying potential members for the board of directors since they must assure that there are stakeholders who have the background necessary to fulfill specific financial stewardship requirements.

The first observation for the mixed column is that all the individual stakeholders interact with the organization based on their profession or because they have an oversight or regulatory role for the organization. From the perspective of the organization, interactions with mixed stakeholders can be more influential in policy decisions than input from external stakeholders. Mixed stakeholders can have expectations for deciding or the ability to compel organizational action. The scholarly literature alludes to three kinds of mixed stakeholders without assigning the label of mixed stakeholder: intermediaries, interpenetrating positions, and interlocking relationships. We consider the characteristics of each of these groupings next.

Table 2.5 Stakeholder typology
Stakeholder type
Intercations	External	Mixed	Internal
1. Nonspecific, may not interact	Public, citizens, constituents, inanimates	Elected officials	Public relations
2. Case-specific	Clients, customers, consumers	Ombudspersons, administrative law judges	Caseworker Customer service
3. Administrative decisions	Advocates competitors	Complince, regulatory organizations	Street-level bureaucrat
4. Policy decisions	Industry groups, watchdogs, media, interest groups	Professional associations	Subject matter experts
5. Regularly scheduled with (s)elected stakeholders	Advisory groups - members of boards, councils, commissions	Owners, board of directors, principals in agency relationships	Programs and staff units
6. Continuous	Vendors, suppliers, collaborators	Unions, partners, contractors	Executive leaders, decision-makers

2.4.3.1 Intermediaries

Mixed stakeholders represent the interests of internal and external stakeholders. This can be helpful for reconciling disputes about the organization’s activities. An intermediary can represent the interests of an individual stakeholder or the interests of a group (or class) of stakeholders. An example is a lawyer contacting the organization about his client’s transaction with the organization. However, even when represented by an intermediary, stakeholders do not give up their rights to directly interact with the organization. This first type of intermediary does not have the authority to compel organization action.

The second type of intermediary is independent of both the internal and external stakeholders. These stakeholders have formal authority to resolve a case-based dispute between an individual stakeholder and the organization. An example is an administrative law judge. Some mixed stakeholders, like the administrative law judge, make their determination based on an examination of the policies or the practices of the organization. Other intermediaries, such as officials in compliance and regulatory agencies, monitor the activities of an organization and can compel corrective action or enforce sanctions when violations are discovered. In both situations, the mixed stakeholder is acting to preserve group or collective interests (which includes nonparticipating as well as case-specific external stakeholders).

Another activity for third-party intermediaries is to use their substantive knowledge and professional expertise and experience to monitor organizational activities, persuasively present evidence for policy or organizational activity changes, and enhance accountability to individuals, groups, and the collective (Mead, 2013, p. 111).

Involving an intermediary, whether the intermediary does or does not have the authority to compel organization action, can be an additional source of input about the operating environment. Their perspective can inform decision-making and enhance the value created by the organization’s activities. On the other hand, the involvement of an intermediary can result in a loss of control and higher transaction costs to the organization since an additional stakeholder is now involved in and may have authority over the organization’s decisions and activities. However, all intermediaries provide insight into what is desired by other stakeholders and how these preferences relate to the organization’s activities, so they are labeled mixed stakeholders.

2.4.3.2 Interpenetrating Positions

As we move toward the bottom of the mixed column, we find stakeholders who have a vested interest in the sustainability of the organization. Thus, the interactions between these stakeholders and the organization are more collaborative than are those of third-party intermediaries. Interpenetrating positions occur when a formal or informal arrangement exists for a person to simultaneously serve multiple organizations in an official capacity (Follett, 1918, p. 54). Formal arrangements occur when someone is asked to fill a position on the organization’s board of directors.

When inter-penetrating relationships occur within a policy community or a collaborative network of production partners, formal arrangements are less likely. Typical examples are employees involved with professional associations, unions, partnership collaborations, and contractors. At the National Weather Center building on my campus, it is quite common for weather researchers to have two official positions – one with one of the NOAA agencies housed in the building and the other as a staff or faculty member of the University of Oklahoma. There are also sequential interpenetrating positions that exist when a person leaves an organization in one sector to work with an organization in another sector based on an established pattern of interactions between the organizations but continues to serve as a board member of the first organization.

When mixed stakeholders with interpenetrating positions provide feedback on the decisions being made or activities of the organization, they can act based on individual interests as well as group or collective interests. When this happens, these stakeholders may experience tension when attempting to align their interests with those of the organization simultaneously.

2.4.3.3 Interlocking Relationships

Interlocking relationships reflect formal organizational arrangements where a member of a board of directors serves on the boards of other organizations (known as multiple directorships). The interests of these stakeholders can be direct if the director is an executive of one of the organizations or indirect if two directors both sit on the board of a third organization. Within Table 2.5, owners, members of the board of directors, and principals in agency relationships such as those of elected officials and government programs would participate in interlocking relationships.

Interlocking relationships can raise questions about the independence of a stakeholder’s preferred decision outcome. There can also be social justice concerns because of the de facto creation of an elite community of interest. This is a particular concern when corporate elites are appointed to the boards of government and nonprofit organizations based on influence rather than to assure representation of the stakeholders directly served by the organization.

Mixed stakeholders may have positions of authority that can compel an organization to take some action or to cease some activity. Or, they may have positions of influence whereby the mixed stakeholder’s input tends to be more heavily weighted than those of other stakeholders. Mixed stakeholders can also have standing as a member of an organized group invested with the right to negotiate the terms of transactions the organization has with internal or external stakeholders. Identifying mixed stakeholders and learning their preferences can be a valuable way to avoid challenges to organizational decisions or activities brought by external stakeholders in venues that are outside the organization’s boundaries.

2.4.4 Internal Stakeholder Analysis

The internal stakeholder column identifies the units in an organization that typically have interactions with mixed and external stakeholders at each of the different frequency levels. As suggested above, the employees tasked with the public relations function can assist with the identification of nonparticipating stakeholders. They can devise methods of communication to promote transparency and, when desired, to invite interactions.

Gathering input about current cases from the employees who directly engage in client transactions can improve internal operations at the administrative and policy levels. Direct goods or service delivery employees and subject matter experts in functional and staff units of the organization are best positioned to identify patterns in the organization’s activities that are suggestive of systematic impacts (externalities) on a group or class of stakeholders.

Executives and leaders are listed in the last row because they often play an important role in decision-making on behalf of the organization. These internal stakeholders are boundary spanners who can provide insights on preferences based on interactions with internal, mixed, and external stakeholders.

When reviewing the list of internal stakeholders, however, it is important to remember that all employees, as individuals, are voluntary stakeholders who have individual as well as organizational interests. The literature on public (Perry & Wise, 1990) and nonprofit organizations (LeRoux & Bernadska, 2014) suggests that employees also have varying levels of service motivation and altruism that influences them to consider collective interests as well as their own and the organization’s interests.

The listing of internal stakeholders in the typology suggests segmentation between organizational units based on the different frequencies of interactions. At the top of the column are administrative decisions that relate to the provision of goods or services to a specific case. Internal stakeholders often attempt to make each transaction uniform to gain economies of scale by treating like cases alike, thereby reducing transaction costs.

As the kind of interaction moves from administrative decisions about a specific case to more abstract discussions about policy decisions, we can expect that the input of program employees in line units will be reduced in favor of input from employees in centralized staff units as well as those at the apex of the organization. Input from process owners is still essential, but often the reallocation of resources is necessary. Resource reallocation generally requires the approval of higher levels of organizational officials. As input is gathered from more employees of the organization, one challenge is that interactions with each additional internal stakeholder increase the time necessary to make the decision. Besides, the employee will not be entirely self-interested. Many employees are advocates for those they serve or for group or collective social interests such as human rights or environmental sustainability. In this situation, the employee’s input may also represent the interests of an outside group or organization or collective.

2.4.5 Stakeholder Groupings That Overlap Columns

Table 2.6 places examples of different kinds of stakeholders within the cells in the typology for illustrative purposes, without any attempt to ensure that the categories are mutually exclusive or exhaustive. You could likely identify other stakeholders to include or may place stakeholders in a different cell. The purpose of the typology is not to argue that stakeholders can correctly be placed in the table. The purpose is to suggest a way to organize information and discern patterns for analysis. In the next figure, I have superimposed boxes on the stakeholders in the cells of the typology to identify overlapping stakeholder groups for analytical purposes.

Several different labels for overlapping stakeholder groups have been presented in the literature. Heclo (1978) first introduced the label of the iron triangle to describe a cozy relationship between congressional staffers, industry groups, and agency administrators. Cozy relationships are an excellent way for stakeholders to get the policy or administrative outcomes they desire (Schattschneider, 1960). Other labels for cozy relationships include issue networks (Berry, 1990), policy elites (Pierce, Lovrich, & Matsuoka, 1989), policy communities (Dowding, 1995), and the usual suspects (Franklin, 2001b). These labels similarly describe situations where external and mixed stakeholders directly interact to influence policy and administrative decisions.

Table 2.6 Stakeholder groupings
Stakeholder type
Intercations	External	Mixed	Internal
1. Nonspecific, may not interact	Public, citizens, constituents, inanimates	Elected officials	Public relations
2. Case-specific	Clients, customers, consumers	Ombudspersons, administrative law judges	Caseworker, Customer service
3. Administrative decisions	Advocates competitors	Complince/regulatory organizations	Street-level bureaucrat
4. Policy decisions	Industry groups, watchdogs, media, interest groups	Professional associations	Subject matter experts
5. Regularly scheduled with (s)elected stakeholders	Advisory groups - members of boards, councils, commissions	Owners, board of directors, principals in agency relationships	Programs and staff units
6. Interactive	Vendors, suppliers, collaborators	Unions, partners, contractors	Executive leaders, decision-makers

The box that includes the entire Internal column, as well as portions of rows 4, 5, and 6 of the Mixed and External columns, is used to denote stakeholders who receive compensation as part of their interactions with the organization. Compensated stakeholders are voluntary stakeholders. Most are directly impacted by the organization, as well as being individually and organizationally interested.

Within the grouping of compensated stakeholders, the external stakeholder’s role is typically informal and advisory. The mixed stakeholder’s role is usually formal and vested with binding authority (granted by the organization or delegated from the internal/external stakeholders they represent). There is variation among the internal stakeholders in terms of the degree to which their input is advisory or binding.

2.4.5.1 Mediating Institutions

Third-party intermediaries do not have official status to work with stakeholders to assist in providing input to the organization are presented in the External column. When the third-party intermediary, such as a civil society organization, has a formalized relationship with the organization to assist in gather stakeholder input, or when they have some level of influence over the employees of the organization, such as a government or professional organization accrediting entity, then they become mediating institutions.

In the Mixed column, I list mediating institutions with some overlap between individuals who also participate in interpenetrating relationships. An example of a mediating institution (Berger & Neuhaus, 1996) is a professional association that acts on behalf of specific individuals who have an involuntary, indirect, and passive relationship to an organization. Mediating institutions in the Mixed column enjoy a privileged relationship with the organization causing their input to be valued more highly. Or, the mediating institution may be able to compel action.

Organizations tend to collaborate more frequently with those in overlapping stakeholder groups since they are easier to contact, have a stated interest in the organization, and have more detailed knowledge about organizational policies and activities, making their input more immediately useful. A disadvantage is that it is difficult to judge the concordance of motives and preferences between stakeholders in the overlapping groups with other external and mixed stakeholders who do not benefit from a cozy relationship with the organization (Lando, 1999). Without the organization deliberately inviting input from a representative group of stakeholders, the interests of stakeholders in these overlapping groups may unduly influence organizational decisions and activities.

Using the typology has value for the organization by retrospectively analyzing the stakeholders who predictably interact with the organization. If there are cells in the typology that are blank, then representatives of the missing stakeholders, based on the Focus column, can be identified and invited to interact. Doing this also reveals stakeholders who could provide useful preference data concerning future policy decisions and changes to organizational activities. The typology is an analytical tool that can be used independently of the taxonomy as a quick guide for identifying stakeholders for a specific decision by focusing on the relevant row and then gathering input from a combination of external, mixed, and internal stakeholders.

2.5 Summary

In this chapter, I present two methods for the identification and analysis of the universe of stakeholders. The first starts with identifying stakeholders the organization regularly interacts with then moves on to identify stakeholders who could be influenced by or influence the success of proposed changes in organization activities but do not interact. To assist in the identification of stakeholders, I developed a taxonomy utilizing categories of stakeholders arranged on six different continuums.

In the typology section, I narrowed the analysis to consider stakeholders based on the focus and frequency of interaction with an organization. Starting with three simple categories of stakeholders derived from their position relative to the organization, external, mixed, or internal, overlapping groups of stakeholders within the table were identified, and ways in which these groupings could enlighten stakeholder analysis were described.

Using these analytical tools, the number of potential stakeholders may first seem as vast as the universe. However, not every stakeholder will want to interact on every issue. Further, stakeholders will experience different levels of impact from an organization’s activities or could differentially influence organizational decisionmaking. Finding efficient ways to identify stakeholders and consider gaps and overlaps allows for greater precision in determining with whom the organization might interact on any issue or upcoming decision. Over the long-term, when the organization considers how to meaningfully increase the representativeness of input into activities, the prospect of sustainability is enhanced.

Determining the gap between who does provide input and who may need to provide input is vital for organizations to thrive. From a normative perspective, all stakeholders have a right to voice their preferences. Not doing so can diminish loyalty and may even lead to an exit from transactions with the organization (Hirschman, 1970). Identifying stakeholder perspectives not currently offered nor gathered is one way for the organization to target an administrator’s activities to gather the information that is missing but will be informative. The question of how to do this systematically is one that has not received a sufficient amount of attention by scholars nor practitioners. In Chap. 3, we consider how to categorize the kinds of participation activities available and then to strategically design a data collection routine to make sure that stakeholder input is representative and available to inform organizational decisions.

Critical Upward Communication: ‘Ten Commandments’ for Improving Strategy and Decision Making

Critical upward communication improves decision making in organisations. Without it, senior management teams become out of touch with the mood of their people, and underestimate or miss emerging problems in their marketplace. They are more likely to produce strategies that are misaligned with the perceptions of their employees. The possibility of successful strategic implementation is therefore dramatically reduced. This suggests that two way communication and critical feedback is vital to organisational success. But most of us are suspicious of any feedback to the effect that our behaviour, decisions or most cherished beliefs are in error. We react instinctively against it – in what has been called the automatic vigilance effect. Moreover, most of us are also reluctant to transmit such information, recognising that the hostile reaction of recipients may endanger our standing in their eyes, and possibly damage our careers. We therefore exaggerate how much we agree with the opinions of those who enjoy higher status than us – the ingratiation effect. This causes managers to form inaccurate impressions of the climate within their organisations, with dangerous strategic consequences. This article explores the problems that these dynamics create for companies, and examines the benefits that can be obtained from institutionalising more critical upward feedback into an organisation's communication systems. I propose ‘ten commandments’ that can help organisations to reorient themselves in this direction.

How senior managers become out of touch with their people

The effectiveness of strategy ultimately boils down to the soundness of the vision that underpins it, and the willingness of employees at the coalface to implement it. Employee resistance can undermine the soundest vision or most logical business plan. But poor vision and staff resistance forms a lethal cocktail, and results more often than not in organisational failure. Managers attempt to safeguard their organisations by scanning the external environment for emerging competitive threats and fresh business opportunities. The strategies the senior management team make in response to such environmental stimuli will be the subject of rigorous tests and debate as part of the formulation process by the senior management team. However, the views of those charged with implementation is often neglected.

But scanning the internal environment could give companies equally beneficial information. Employees can provide invaluable feedback on managers' perceptions of threats and opportunities, and the soundness or otherwise of plans to respond to them. It is self evident that, to be effective, much of this feedback needs to be critical in nature. No individual or group makes the right decisions all the time. But here is the paradox. Critical feedback may be indispensable for good decisions, but despite this, most of us react instinctively against it. We reject critical feedback, and then penalise dissenters (‘the awkward squad’), thus ensuring that we will hear less from them in the future. Faced with this, employees quickly realise that the best way to acquire influence and secure their position is to exaggerate how much they agree with the opinions of senior managers. Over time, more and more upward communication in companies becomes flattering rather than critical in nature. This may be gratifying – and, indeed, most of us are more vulnerable to the seductive power of flattery than we like to think. But it poses a serious problem. What happens when strategies wrought by managers are seriously in error, as many of them inevitably are? When sufficient and timely critical feedback is curtailed or eliminated, managers deprive themselves of a crucial means of ascertaining how viable their strategies are. Flattery constitutes a perfumed trap for decision makers. It improves the odds of organisational failure. Consequently, it is vital that the role of critical upward communication as an element of the strategy formulation process becomes more widely recognised.

My attention became focused on this problem in the course of conducting assessments of communication practices and climates in numerous companies with a number of colleagues. Such exercises usually end in a formal presentation to senior managers, describing the good, the bad and the ugly. But I have been consistently struck by the following pattern. The managers concerned generally accepted positive findings uncritically, and indeed often claimed that they knew them already. However, they were frequently shocked by negative information. It appeared that the surveys we conducted were often their first opportunity to find out what their people really thought about the organisation's overall direction, the priorities of its senior management team, and their style of communication. On a day-by-day basis, systems were rarely in place for people to feed this information, formally or informally, into the decision making process. Even when such systems were in place, the resultant information was often dismissed as unimportant. Nor is this experience unique. The British TV series ‘Back to the Floor’ features top executives spending a week working back on the shop-floor. Without fail, in each programme, the person concerned is astonished by what they find. Evidently, formal communication channels tend to filter out crucial bits of information, leaving those at the top more out of the loop than they had realised.

Some managers took data indicating problems as an alarm call, and immediately went to work on action plans designed to remedy the problems. But others bitterly contested the findings. These managers argued that no one had ever brought such issues to their attention before, and that the data must therefore be flawed. Paradoxically, we rarely found these issues provoked any surprise further down the organisational hierarchy: both middle managers and non-managerial employees had a keen awareness of problems in morale and communication climate. In contrast, top managers were much more convinced that their people were well informed on key corporate goals than was the case. Moreover, they often seemed more certain that others could openly speak their minds to them than anybody else we encountered in their organisation. These experiences raise important issues.

My key point is that honest communication between those without managerial power and those with such power, particularly when it consists of openly critical feedback, is an important aspect of decision making. In my view, it is a crucial ingredient of any effective strategy formulation and implementation process, and a barometer of organisational health. In particular, systems should be established to facilitate critical upward communication, both when strategy is being formulated and when it is implemented. It is increasingly clear that strategic dialogue needs to be embedded throughout the organisation, with more employees taking responsibility for a wider range of issues. This requires a constant dialogue between managers and their people, and among varied work groups, about likely competitive threats and the most appropriate means of dealing with them. The debate might not always be polite or pretty. But without it the odds on success are narrowed.

Yet top managers are anxious to move rapidly into implementation. They are often impatient with debate: it appears to take too much time. The danger with such impatience is that senior managers can come up with a new direction that hasn't been properly tested, refined and improved by an ongoing process of challenging dialogue. It is also more likely to run up against uncomprehending resistance, further increasing the likelihood of failure. In such a context, it is scarcely surprising that so many strategic plans are never implemented! Thus, I argue that managers need to face up to the following questions:

• How much importance do we really attach to critical feedback? A huge body of research suggests that decision-making improves in a climate of debate, dissent and discussion. I look at some of the benefits that arise from welcoming critical feedback rather than suppressing it, and with which I believe managers need to become more familiar.
• What are the obstacles that prevent critical feedback being articulated more frequently? However justified critical feedback is, most of us react instinctively against it. On the other hand, we also like and encourage positive feedback. Thus, managers often respond to critical feedback in ways that reduce and then eliminate it altogether, fatally distorting the communication climate within their organisations. In essence, they tend to have their own magic mirror, which reassures them that they are indeed the fairest and most effective communicators in the land. Drawing on the research conducted with a number of colleagues, I look at the communication dynamics involved in this process, which managers need to consider when addressing these problems in their own company.
• What can be done to institutionalise more critical feedback into management communication systems? Action to address this problem can take place at group and individual levels. I propose ‘Ten Commandments’ to equip managers with a greater range of options for dealing with this problem.

The benefits of dissent and upward feedback

Over the past five decades, there has been a growing trend towards more participative working relationships and practices. Communication is consistently recognised as an integral part of participative processes, and its role in these has been widely studied. But most corporate organizations have remained largely autocratic in form. In particular, the need for upward communication that is critical of organisational goals and management performance has been little recognised by management practitioners. Paradoxically, it has long been known that feedback is essential to effective human performance in any task. The more channels of accurate and helpful feedback we have access to, the better we are likely to perform. Most companies recognise the importance of obtaining feedback from key markets to assess how their products are being received. They pay particular attention to data indicating problems with product quality or an ebbing of customer confidence. But, in relation to staff communications, many appear to take the view that feedback is only required from the top down. Such a perspective is consistent with the bias in the literature on both strategic management and transformational leadership which emphasises change as a top down process. Influence is generally conceived as something that flows from those with power to those without, rather than the other way round. A double standard is evident. Senior managers set a strategic direction, but do so after a robust process of discussion and debate. Typically, employees are usually denied similar opportunities – their role is to act as the enthusiastic cheer leaders for decisions already made. They are nevertheless expected to display an understanding of, commitment to, and engagement in strategies similar to those of managers – but without the benefit of a comparable process of debate, dissent and dialogue. This puts them in a position where they lack not only ownership of the organisation's strategic direction, but also the information required to align their behaviours with it. In turn, the ‘lack of honest upward communication from lower levels (makes) it impossible for the senior team to learn about the limitations of their mental models and the capabilities needed to accomplish strategic objectives.’ No wonder that these authors identify the lack of adequate upward communication as one of the ‘silent killers’ of organisational strategy, contributing as it does to an inadequate alignment in goals and purpose between many of the key people who are essential for competitive success. Contrary to such a situation, the weight of research evidence suggests that, where they exist, upward feedback, upward communication and open door policies deliver significant organisational benefits. This evidence is summarised in Table 1.

Such findings are consistent with the view that organisations are best viewed as information processing entities. From this standpoint, research has long suggested that people are more likely to be committed to a course of action if they are involved in the decision making process that gives rise to it. The articulation of employee voice is therefore a vital, if often under-realised, ingredient of efforts at empowerment and involvement. In this context, communication can be viewed as a step on the escalator of participation. People cannot be viewed merely conduits for information. They are active, and questioning, agents in the process of decision making. What can be termed ‘the dialogic organisation’ seeks to institutionalise many forms of employee voice, including dissent, into the strategy making process, and embeds strategic dialogue throughout the organisation.

As uncertainty and complexity increase it is likely that the need for information processing will grow. An upward flow of information is therefore likely to become an increasingly important issue. Yet it is also clear that a smooth flow of critical upward communication does not always occur. As two leading researchers have cogently argued:

Paradoxically, this is more likely to undermine the status of senior managers than to strengthen their position. Research has shown that when managers openly solicit and accept negative feedback they gain a more accurate picture of their actual performance and are rated more favourably by employees. But when they look for positive feedback they acquire no extra insight into their true performance, and are viewed less favourably by others.

Despite this, many managers deny the existence of problems and discourage critical feedback. Research has suggested that, to deny fault and avert the possibility of blame, senior managers sometimes conceal negative organisational outcomes, suppress information, cover up negative financial data, deny failure, and even ‘launch propaganda campaigns that deny the existence of crises.’ Given that they also appear to receive little in the way of critical upward feedback from rank and file employees, it is pertinent to identify the obstacles that get in the way.

Barriers to upward feedback

Fear of feedback

Most of us have a tendency to prefer feedback that is supportive of our behaviour, in both our personal and professional lives. Negative feedback can be personally upsetting and may also impact adversely upon our public image. Feedback to the effect that a cherished course of action is failing or lacks support is bound to be unwelcome. Seeking critical feedback may even be seen as denoting weakness. It isn't surprising, therefore, that people at all organisational levels are often fearful about seeking feedback on their performance or on the quality of their decisions; managers are no different. A range of considerations influence the extent to which we actively look for feedback. Some of these are listed in Table 2.

Followers who are less compliant will be more likely to deliver upward and critical feedback. But many managers value compliance more than dissent, and will be more likely to fire dissidents than to applaud them. As is often the case, Enron provides a good case example. Sherron Watkins was a senior employee who worked with the company's Chief Financial Officer, Andy Fastow. Realising that the company's losses would become apparent sometime in 2003 or 2004, she drew her concerns to the attention of the then CEO, Ken Lay. Support was not forthcoming from other senior executives, who evidently feared that acknowledging the problems would damage their careers. Lay's own response suggests these fears were well founded, as within days of meeting with Watkins, he contacted the organization's lawyers to inquire if grounds could be found for firing her.

Problems of ingratiation

One of the most potent explanations for difficulties with upward feedback can be found in ingratiation theory. This proposes that those with a lower level of status habitually exaggerate the extent to which they agree with the opinions and actions of higher status people, as a means of acquiring influence with them. Studies indicate that decreased power among subordinates is accompanied by an increased tendency on their part to employ some form of ingratiation and an increased use of politeness strategies. The business consequences can be severe. For example, a culture of sycophancy has been identified as a key factor in the profits collapse that afflicted one of the UK's best-known retailers, Marks & Spencer, in the late 1990s. The company chairman's direct reports have confessed that they actively avoided bringing bad news to his attention, fearing his wrath. This meant that he lacked a full appreciation of his organisation's problems. Similarly, British Prime Minister Tony Blair became convinced that Iraq possessed weapons of mass destruction, and took the country to war on the premise that they could be deployed against the UK within forty five minutes. Exhaustive searches of the country after the invasion showed that it had none. It appears that any evidence inconsistent with his instincts was critiqued or ignored, whereas a flawed dossier culled from an old PhD thesis was instantly accepted, as the evidence it appeared to offer was consistent with the Prime Minister's instincts. In effect, different standards of proof were demanded for positions, depending on how supportive or critical they were of the decisions preferred by those at the top. Officials involved in policy and strategy development learned to muffle their views. However, as De Vries has noted in a different situation: ‘Effective organisational functioning demands that people have a healthy disrespect for their boss, feel free to express emotions and opinions openly, and are comfortable engaging in banter and give and take.’

In addition, self-efficacy biases suggest that most of us imagine we are better on various crucial dimensions of behaviour than we actually are. Accordingly, researchers have generally found that managers view the defective and uncritical feedback they receive from subordinates as accurate, sincere and well meant – it is in line with their self-efficacy biases. Inclining to the view that the inaccurate and ingratiating feedback they receive daily is accurate, they grow even less inclined to seek mechanisms that institutionalise critical upward feedback into the decision-making process. Both peripheral and close range vision become tainted, and lead to poor decisions.

Power differentials

Power and status differentials fuel ingratiation practices. But they also cause people to censor the expression of their views more generally. Enron again serves as a good illustration. The company operated a system known as ‘rank and yank’, in which those classified as poor performers stood ultimately to lose their jobs. Given its aggressive recruitment practices, and the pressures of being a new employee, it appears that up to half the organisation's employees were in peril of redundancy at any one time. It is very unlikely that people in such a fearful state would communicate critical feedback to those managers with the power to ‘yank’ anyone perceived as being off-message. Clearly, some imbalances of power are unavoidable. But counter-balancing mechanisms are essential. Otherwise, the communication climate will deteriorate, and those at the receiving end of whatever information is transmitted will find it harder, through the fog, to retain a clear perception of reality.

Groupthink

Problems with upward feedback have consistently been shown to be a key part of what is known as ‘groupthink’. This proposes that groups insulated from critical outside feedback develop illusions as to their own invulnerability, excessive self-confidence in the quality of their decision-making and an exaggerated sense of their distinctiveness from other groups. Furthermore, they deny or distort facts, offer rationalisations for their activities, use myth and humour to exaggerate their sense of worth, and attribute the failure of their decisions to external factors, rather than the quality of their own decision making. It follows that such groups will also disparage criticism from outside their own ranks, since it is more likely to conflict with the group's ideal self-image, depart from its well-entrenched norms, and come from sources outside the high status few who belong to the inner circle of key players. Ironically, while ‘companies of all sizes increasingly recognise that ideas are their most precious commodity and employees who produce them are sought after resources.’, the evidence suggests that the welcoming embrace accorded new ideas stops short of those that are critical of organisational orthodoxy. And this orthodoxy, of course, will blind those concerned to the changes they need to make to enhance their strategic position. Moreover, those attempting to offer feedback are more likely to respond to such a reaction by minimising much needed future critical feedback. In turn, this is likely to reinforce the conviction of those at the top that, rogue indicators aside, things are much better than they are, and additional outside input is not required.

Narcissism and group identity

Critical upward feedback is often systematically distorted, constrained and eliminated. When this occurs, and consistent with the data on groupthink, a narcissistic group identity may result, characterised by such ego-defence mechanisms as ‘denial, rationalisation, attributional egotism, sense of entitlement, and ego aggrandizement.’ People have a need to nurture a positive sense of self, and they embrace ego-defensive behaviour in order to maintain self-esteem. Eliminating or disparaging critical feedback is one obvious means of accomplishing this.

I worked recently with one Senior Management Team (SMT) in the health sector who insisted that they wanted to empower their staff to take decisions, and free them to transmit upward feedback. They complained, however, that people resisted their efforts to accomplish these goals, and that rather than take decision-making power into their hands they continued to ‘delegate it upwards.’ Narcissism implies a tendency to blame others for whatever problems are admitted, rather than owning one's own contribution to their creation, which could be described as a process of blame realignment’. In line with this, the SMT explained all communication problems as the responsibility of the next tier of general managers immediately below themselves. They were held to be uniformly incompetent, and failing in all aspects of their job. Unfortunately, close scrutiny of the SMT's behaviour, as opposed to its avowed intentions, found that the SMT themselves had appointed this now-rubbished management layer in the previous eighteen months; that they had then eliminated two dissenters from their own ranks (thus acquiring a reputation for penalising dissent); that even their direct reports were afraid to openly express critical views; and that transparent mechanisms to facilitate upward communication were absent.

In general, the danger is that managers deprived of sufficient critical feedback can develop a mindset similar to that found among rock stars who surround themselves with a sycophantic entourage. A narcissistic self-image then results, in which all successes is credited to the wisdom of a select few, and all problems are blamed on the frailties of others. Such managers eventually find themselves deceived by their own publicity. The solution requires experimentation with power sharing, and a downsizing of entourages. I use the word ‘experimentation’ deliberately, since it is clear that letting go means someone else taking many decisions for which managers may still be held responsible. Since all humans are fallible, the results may be occasionally unedifying. But most organisations have erred in precisely the opposite direction. They have a long way to go before there is a realistic possibility of over-empowered employees running amok in the boardroom.

One study of the issue which illustrates the problem particularly well involved two twelve-country studies on industrial democracy and a five year longitudinal programme across seven companies. It concludes that ‘organizational influence sharing appears to have made only limited progress during the past 50 years.’ Most employees have no real opportunity to contribute to the operation of their workplace in any context broader than the execution of their own job. To avoid sharing power with subordinates (who they may well narcissistically regard as inadequate), managers will tend to overstate the downsides of power-sharing. They thus fortify themselves with reservations against what are in fact advantageous courses of action. Like dieting and exercise, it is easier to talk about relinquishing power and control than it is to actually do it. Reasons to postpone action can always be manufactured. On closer inspection, most of them turn out to be excuses. In reality, context is everything. Opportunities to share power exist, and should be more thoroughly exploited by managers seeking to make a genuine difference.

Exaggerating the frequency of critical feedback

Managers have a fundamental need to make sense of the business world around them, and indeed spend a great deal of time constructing plausible sounding narratives to achieve this end. However, the process is fraught with error. In particular, sense-making is often driven by plausibility rather than accuracy. Here, I would suggest that irrational belief systems and naïve story construction ensure that managers often have an imbalanced view of the communication climate in their companies, an exaggerated impression of how much upward feedback they receive and an insufficient awareness of the need for more robust systems to facilitate employee communications.

Irrational beliefs are unfounded assumptions about the nature of the physical and social world. In particular, it appears that unusual events stand out in our minds, and in the process of retelling, acquire an added vividness. Even though the event was actually atypical, perversely, those involved in the discourse gradually become convinced that what they are describing is more typical of the category than is actually the case. This is a good illustration of what has been termed the availability error – information that is more readily available to us (such as an unusual event) influences our perceptions much more than information that is harder to access. The effect, however, is that implausible stories become widely circulated, more available to our minds and hence more deeply believed.

Thus, on the relatively rare occasions when managers do receive critical upward feedback they experience it as a striking and hence memorable event. They are likely to pay it special attention – it remains vividly in their memory, and hence convinces them that it is more typical an event than it actually is. Thus, one research project found that positive upward feedback is a more common occurrence than negative upward feedback. However, this study also showed that the managers concerned perceived many more instances of negative feedback than their subordinates, although both managers and subordinates perceived the same frequency of positive feedback. In essence, each instance of negative feedback acquired a heightened sense of vividness for its recipient. Managers then assumed that their heightened awareness of the event rendered it more typical of the feedback category than was the case. Hence, they are less likely to appreciate the need for more of it.

Over-critique of negative feedback

How top managers respond to critical feedback largely determines how much of it they will receive in the future. For most of us, critical feedback is less accepted and is perceived as less accurate than positive feedback. People are especially sensitive to negative input – in what has been termed the automatic vigilance effect. In general, it generates an angry response. (Try telling your friends that their new dress, suit or hairstyle is a disastrous mistake, and then calculate the ratio of welcoming and outraged responses you receive!) In the work context, intentionally or otherwise, it is clear that the generally less than enthusiastic response of managers to critical feedback discourages it. When this happens, the opportunity to grapple with problems recedes ever further into the mist.

I offer an example here from the health sector SMT discussed earlier. During feedback to the team, some mildly critical data was reported which indicated lower-than-ideal levels of staff trust in information received from senior managers. A number of positive issues were also highlighted, including trusting relationships between lower level managers and their own direct reports.

The SMT responded in two markedly different ways. Firstly, they enthusiastically accepted the data indicating strengths in the communication climate. But they rejected outright any feedback that implied weaknesses in their performance, although it was derived from the same methods. Moreover, they invited a trained statistician to interrogate the data, with a view to exposing its shortcomings. In meetings on the issue, their efforts were completely devoted to rejecting critical data, rather than developing an action plan to address the problems it illuminated. In short, the data were simultaneously regarded as prescient, but also as fatally flawed. The process suggests that top managers have a tendency to over-critique negative feedback, while instantly agreeing with positive feedback.

Two results are likely to flow from this. Firstly, most people at the receiving end of such a response will minimise further efforts at conveying what they really feel. The organisational climate is perceived as punitive. Employees crouch in their trenches, rather than engage with each other, or with managers. In essence, this suggests that senior managers engage too readily in a process of unconscious feedback distortion. For example, it has been found that some subordinates who had experienced extremely negative emotional encounters with their supervisors edited future communications to make them more formal, superficial, task-oriented and devoid of personal messages (e.g. self disclosures). Thus, motivating truthful upward communication is widely recognised as a serious problem.

Secondly, when senior managers put themselves in the position of encouraging only the feedback they like and penalising that which they dislike, they acquire an imbalanced view of the climate in their own companies. I suspect that this dynamic underlies a problem I have often encountered – the tendency for senior managers to be the only ones surprised by data offering a critical diagnosis of the communication climate in their companies. The challenge, clearly, is to adopt an equally rigorous approach to both positive and negative feedback.

Characteristics of top teams and communication networks

Top teams are responsible for setting strategic direction, and communicating it widely among teams, team members and other emergent communication networks. But as organisations grow larger, so do distances between team members, between teams, and between teams and senior managers. Meanwhile, the importance of strategic alliances and inter-organisational collaborations has grown in recent decades, and so successful communication networks are more important than ever.

However, there is an obvious problem with the emergence of rich communication networks. The ‘law of N-squared’ proposes that, as the number of people in a given organisation increases, the number of potential links in its network increases geometrically, and can rapidly exceed everyone's capacity for communicative action. The law of propinquity also recognises that the probability of two people communicating is inversely proportional to the distance between them. The number of communication options, as well as obligations, combined with such prosaic matters as physical distance, renders contact between senior managers and those further down the hierarchy increasingly elusive. Although initiatives can be taken to compensate for these difficulties (including the use of e-communications), it is unlikely that much will happen if senior managers themselves do not recognise the absence of upward communication as a problem.

Autocratic models of leadership

Research has long shown that new group members, or those with low status, initially acquire influence within a group by over-conforming to its emergent norms – i.e. in order not to offend key players, they minimise the amount of critical feedback that they are prepared to offer. If they are perceived not to be ‘fitting in’, they are penalised, usually through the withdrawal of valued social rewards. I recently worked in one company that exemplified the resultant mindset. Employees reported the existence of an unofficial culture which revolved around the motion that people were expected to ‘fit in, or f*** off.’

Such over-conformity means that followers comply with destructive forms of action, in order to ingratiate themselves with their leaders. In fact, it puts leaders at risk. The leader takes the absence of overt dissent as assent, viewing it as supplementary evidence – as consensual validation – that the given course of action is correct. The leader marches into battle, armoured by their greater status, authority and power. They fail to realise that the structure which gives them these advantages also deprives them of critical reaction from followers, thus leaving the leader fatally out of touch with reality and bereft of sufficient followers on the battle field. Thus, the most successful leaders are liable to be those with the least compliant followers, ‘for when leaders err – and they always do – the leader with compliant followers will fail.’

Yet many managers view resistance as something to be overcome, rather than as useful feedback. This problem is inherent to myths of heroic leadership. Managers influenced by such myths think of influence in unidirectional terms – as something that flows from leaders to subordinates, rather than vice-versa. And, in fact, research does suggest that most feedback comes from persons in authority to their subordinates. In this environment, it is easy for managers to conclude that the ideal state for their organisation is one of monoculturism. Difference, dissent, debate and critical feedback are banished to the margins of the group's tightly policed norms. This is accomplished through the imposition of both formal and informal sanctions. As has long been known, in a coercive environment, instead of dissent being facilitated,‘tremendous overt and covert pressure is brought to bear on everyone to conform publicly, to participate actively, and to work hard, while a façade is maintained that such conformity and dedication is entirely voluntary or the product of successful ideological persuasion.’

The consequences of such defects are clear. They include the elimination of dissent, an insufficient flow of critical upward communication, the accumulation of power at the centre, a failure to sufficiently consider alternative sources of action, and a growing belief on the leader's part that s/he is indispensable to the organisation's success.

Ten Commandments for Improving Critical Upward Communication

I have argued here that critical upward feedback improves the quality of an organisation's decisions, and is therefore a vital aspect of improved strategic planning and implementation. But I have also pointed to some of the ways in such feedback is eliminated or distorted. Companies affected will be less likely to reach good decisions in the first place, or address emerging problems before they become Enron-level catastrophes.

The question is: what can be done to stimulate more critical upward communication and reduce ingratiation, groupthink and the other problems that get in the way? There is no ‘magic bullet’ on this issue, and no substitute for a patient and persistent approach. Moreover, whatever we do, some status and power differentials are bound to remain. However, their negative impact can at least be minimised. With those caveats, the following ‘Ten Commandments’ may form a modest starting point. They are discussed in detail below, and – inevitably having less authority than a Biblical edict – are committed to paper rather than stone subsequently as Table 3.

1. Experiment with both upward and 360-degree appraisal

Such practices are no longer regarded as revolutionary, and are commonly employed in many leading corporations, including AT&T, the Bank of America, Caterpillar, GTE and General Electric. They are a powerful means of institutionalising useful feedback. Moreover, there is growing evidence to suggest that they genuinely stimulate more focused self-development activities. It is of course vital that the underlying organisational culture is sincerely supportive, and that the feedback obtained is utilised to shape changes in behaviour. Otherwise, both sides grow discouraged and give up on their relationship. Disappointment is more likely to occur when such efforts are freighted with over-optimistic expectations, and the need to transform the wider organisational culture is not recognised. But, implemented with a realistic grasp of what can be achieved and a determination to tackle whatever obstacles arise, both upward and 360-degree appraisal can make a major contribution to the creation of a more open and honest communication climate.

2. Managers should familiarise themselves with the basics of ingratiation theory

I have found that most top teams readily accept the notion of ingratiation. During workshops, many have swapped amusing anecdotes that vividly describe the process in action. But, in line with the great deal that is now known of self-efficacy biases, they then mostly go on to assume that they themselves are immune to its effects. In reality, they almost never are. Senior managers, in particular, should recognise that they will be on the receiving end of too much feedback that is positive and too little that is critical, whatever their intentions. Moreover, they are just as susceptible to the effects of ingratiating behaviours as anyone else. While increased awareness never solves a problem by itself, it is an essential first step. Managers at all levels need to become more aware of ingratiation dynamics, of their own susceptibility to their effects and of the most effective responses to adopt in dealing with it. Such awareness forms part of the ABC of emotional literacy: without it, managers risk building catastrophically imbalanced relationships with their people.

3. Positive feedback should be subject to the same, or greater scrutiny, than negative feedback

Without such scrutiny, positive feedback will come to predominate, managers will give it undue attention, and they will then go on to develop a dangerously rose-tinted view of the climate within their own organisations. In turn, this means that key problems remain off the agenda, and will therefore grow worse. Managers should adopt a thoroughly questioning attitude to all feedback from those with a lower status, and treat unremittingly positive feedback with considerable scepticism. Perhaps Jonathan Swift, author of Gulliver's Travels, offered the most instructive advice on how to react: ‘The only benefit of flattery is that by hearing what we are not, we may be instructed what we ought to be.’Management meetings should combat the tendency to bask in positive feedback, and instead focus on a regular agenda of questions such as the following:

• What problems have come to our attention recently?
• What criticisms have we received about the decisions we are taking?
• Are the criticisms valid, partially or completely? What should we change in response to them?
• How can we get more critical feedback into our decision-making processes?

As in all things, balance is crucial. A focus only on critical feedback would be as detrimental as its opposite, although, in the present climate, there is little danger of this occurring. That is not the intention here. Rather, the suggestion is that both positive and critical feedback should be probed to check for accuracy. In particular, the motivation of those engaged in flattery should be considered. Flattery is best thought of as a non-monetary bribe. It preys on similar weaknesses. Managers should therefore ask themselves: ‘What does this person have to gain by flattering me?’, and also: ‘What have they to lose by disagreeing with me?’

4. Managers should seek out opportunities for regular formal and informal contact with staff at all levels

This should replace reliance on official reports, written communiqués or communication mediated through various management layers. Informal interaction is more likely to facilitate honest, two-way communication, provide managers with a more accurate impression of life and opinions at all levels of their organisation, and open up new opportunities for both managers and staff to influence each other. ‘Back to the Floor’ initiatives are increasingly recognised as a useful means of achieving this. A key focus during such contact should be the search for critical feedback. By contrast, royal tours and flying visits yield nothing in the way of useful feedback. There are many other means by which managers can put more distance between themselves and head office, and less distance between themselves and non-managerial employees. As a rule of thumb, the more reliant a manager is on official channels of communication, the more likely they are to be out of touch with the mood of their people.

5. Promote systems for greater participation in decision-making

Participation involves the creation of structures that empower people, and which enable them to collaborate in activities that go beyond the minimum co-ordination efforts characteristic of much work practice. In general, people should be encouraged to take more decisions on their own. Open, information-based tactics are critical for success. Nevertheless, on this crucial issue, many communication efforts remain rudimentary. In working with senior managers, I have frequently been astonished by how many admit that their organisations do not have even a formal suggestion scheme in place. Its benefits have been documented over several decades. Yet a recent survey of members of the Institute of Management in the UK found that no more than 42% of them made significant use of what is an elementary practice. As with all systems developed to address this issue, suggestion schemes have their limitations. In my experience, the biggest predictors of failure are:

• A reluctance on the part of managers to take them seriously;
• A tendency, in the face of initial setbacks or a lacklustre employee response, to give up rather than persevere;
• An expectation of revolutionary new employee initiatives to start flowing immediately;
• A slowness to respond to whatever ideas employees do produce, combined with a criticism that more hasn't been forthcoming;
• The absence of even minimal rewards. As an example, a large aerospace company with which I worked had a long-standing and modestly successful suggestion scheme. Suggestions implemented attracted a small cash reward. Senior managers decided to eliminate the reward, since ‘it is employees’ job to provide suggestions, and they are paid for it already.’ Employees felt that their input was no longer appreciated, and the flow of suggestions dried up. Managers, meanwhile, concluded that employees weren't interested in ‘the bigger picture.’

A more systematic, creative and persistent focus on this issue is clearly required. It is important that employees are fully involved in such efforts, rather than simply presented with senior management's vision of the systems it thinks are required to produce it. Lessons can be drawn from General Electric's famous ‘Work Out’ program, where ‘a series of assemblies… brought together large cross-sections of a business unit to identify ways to dismantle bureaucracy.’ The program was a pivotal element in the company's transformation. Its techniques could usefully be adapted to address the feedback issues identified in this article.

6. Create ‘red flag’ mechanisms for the upward transmission of information that cannot be ignored

Organisations rarely fail because they have too little information. But they will fail if vital information either does not reach the top, or is ignored when it gets there. It is clear, for example, that the spectacular bankruptcy of Enron occurred in spite of the fact that many people who worked for it fully realised the weakness of its position and the unethical nature of its practices. Another telling aspect of the Enron scandal was the fact that whistle blowing occurred. Leaking problems outside the organisation in this manner occurs when employees feel they cannot safely transmit important but critical information up the hierarchy via conventional channels. To prevent such a state of affairs, it is important to create the type of mechanisms proposed in this article. Exhibit 1 gives one example of a communication system that achieved its aim of facilitating clear upward communication, and thus ensured that important information reached the ears or desks it need to reach. Such systems have been found to help organisations make the transition from being merely good in their field to achieving sustained greatness. Organisations need to develop similar mechanisms, appropriate for their own circumstances, and pursue their implementation rigorously.

7. Existing communication processes should be reviewed to ensure that they include requirements to produce critical feedback

With few exceptions, team briefings emphasise the transmission of information from the top to the bottom. This is akin to installing an elevator capable of travelling only in one direction – downwards. Team briefings should also include a specific requirement that problems and criticisms be reported up. Again, balance is vital. As already noted, exclusively critical feedback may end up as damaging as exclusively positive feedback, and create a fearful climate dominated by the expectation of imminent catastrophe. No one can innovate, or work with even minimal effectiveness, if they confidently expect the imminent arrival of the four horsemen of the apocalypse. Nevertheless, with that proviso in mind, most organisations are a long way from having to worry about the risk of too much critical feedback disturbing the tranquillity of those in top positions.

Targets should be set for critical feedback, and closely monitored. A culture change is required. In particular, managers who tell their people ‘Don't bring me problems, bring me solutions’ need to reengineer their vocabulary – they are generating blackouts rather than illumination.

8. Train supervisors to be open, receptive and responsive to employee dissent

When supervisors behave in such a manner they are signalling receptiveness to entire workgroups. However, training in the appropriate skills is often lacking. As with many other vital communication skills, it is frequently just assumed that managers will have access to the right tool kit. This optimistic assumption is unwarranted. Even if people have some notion of which tools are available to them, training is required so that they select the right one for each task. Otherwise, those trained only in how to use a hammer may instinctively reach out for it, even when a screwdriver is more appropriate for the job in hand. The lack of appropriate communication skills on the part of top managers is one of the main reasons for the disconnect so frequently noted between the inspiring rhetoric of strategic visions and the mundane operational reality.

9. Power and status differentials should be eliminated or, where that is impossible, at least reduced

The example given earlier of Enron's ‘rank and yank’ system was designed among other things to instil fear and uncertainty into employees: similar approaches are employed in up to 20% of US companies. I believe that such appraisal systems give managers far too much power over employees, and that open communication is virtually impossible in such cultures. They should be eliminated – at warp speed. More broadly, status differentials can be reduced by blitzing some of the most visible symbols of privilege, such as reserved parking, executive dining rooms and percentage salary increases far in excess of those obtained by other employees. A growing body of research suggests that excessive and highly visible signs of executive privilege undermine organisational cohesion and effectiveness. In particular, they promote an ‘us versus them’ mentality rather than one of ‘us against the competition.’ The risks with addressing this question are few, but the potential gains are immense.

10. The CEO, in particular, needs to openly model a different approach to the receipt of critical communication, and ensure that senior colleagues emulate this openness

An Aboriginal saying in Australia asserts: ‘You must become the change that you want to see in the world.’ And many studies have shown that when people are asked to gauge the efficacy of communication in general and the role of senior managers in particular they personalise the issue into the role of the CEO. My own audits of communication have also repeatedly found the same pattern. Organisations that take communication seriously are led by CEOs who take communication seriously. CEOs that are defensive, uncertain, closed to feedback and dismissive of contrary opinions may indeed get their way – in the short term. At the very least, they will be gratified by effusive public statements of compliance. But coerced compliance is usually combined with private defiance, and will ultimately produce fractious relationships between senior managers and their staff. Organisations where managers and employees are at war with each other, rather than with the competition, cannot conquer new markets. Without a clear lead on communication at the level of the CEO, it is unlikely that progress on the issues discussed in this article will be made.

Summary – implications for theory and practice

The issues raised in this article are fundamental to the theory and practice of management. No one individual or any one group has a mastery of all the problems in any company. The world is too complex. Given the constraints on the feedback they receive, many managers in fact have a poor grasp of their organisation's problems. Winston Churchill put it well: ‘The temptation to tell a Chief in a great position the things he most likes to hear is one of the commonest explanations of mistaken policy. Thus the outlook of the leader on whose decision fateful events depend is usually far more sanguine than the brutal facts admit.’

In managerial terms, it follows that the search for solutions to problems that are multi-causal in nature requires creative input from people of varied managerial rank. In the diverse and pluralistic organisations of today, it is never possible to reach full agreement on important strategic issues. The only place where everyone agrees with everyone else on all vital issues is a cemetery. In the workplace, the inevitable debates and disagreements on strategy are best brought into the open, where they can be engaged by managers, rather than repressed, denied or ignored. The dialogic organisation will always be involved in discussion about strategic direction, including after decisions have been reached. Critical feedback, despite its frustrations, consistently offers fresh opportunities for evaluation. Such discussions sometimes expose differences that may appear insoluble. But the point is that such disagreements exist anyway. There seems little point in attempting to prohibit something that will proceed with or without the encouragement of managers. Rather, decision making and implementation will be improved if the inevitable debates that occur are brought into the open, rather than concealed from the view of senior managers.

From an academic perspective, issues of voice have attracted growing interest. But much remains to be done. In particular, we need to know more about how both managers and employees make sense of their respective communication practices, of the impact that such practices have on bottom line performance, and of the effectiveness of efforts designed to stimulate more robust critical upward communication. For example, it may be that the impulse towards ingratiation and flattery is so pronounced that it is activated by even the slightest intrusion of status differentials in the workplace. However, it is unlikely that such differentials can be completely eliminated. It is also far from clear how organisations can achieve a productive balance between the need for involvement, discussion and critical upward communication on the one hand, and the more rapid decision making and strategy formulation demanded by an increasingly competitive global marketplace on the other hand. There is much empirical and theoretical work to be done.

But, in terms of practice, some things are already clear. Once environmental scanning reveals the existence of a problem or an opportunity, managers need to be able to engage their people in a debate on strategic direction. The design of strategies that will be implemented rather than ones that languish on shelves requires input from as wide a group of people as possible. Successful implementation requires buy-in from all levels of the organisation. The communication lift must serve all floors. This means that managers must recognise the value of debate, dialogue and dissent, in all its inherent messiness. The difficulties in securing wide-spread involvement are obviously considerable. But they are challenges that must be met if an impregnable competitive advantage is to be built.