Hang Together or Hang Separately (2.3)

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"We must, indeed, all hang together or, most assuredly, we shall all hang separately."
-- Benjamin Franklin

"Leadership is influencing people--by providing purpose, direction and motivation--while operating to accomplish the mission and improving the organization. Leadership transforms human potential into effective performance. At any level, anyone responsible for supervising people or accomplishing a mission that involves other people is a leader. Anyone who influences others, motivating them to action or influencing their thinking or decision-making is a leader."
--The army leadership manual

The hardest problem of teamwork has a soft solution. It cannot be managed. It can only be led.

A Hard Problem

The problem is "hard" not just because it's difficult to solve. It's hard because it is mathematical.

In order to incentivize the team members to pursue the best for the whole (global objective) you must allow them to not do the best for their part (local objective). But in order to incentivize the team members to perform at their best, you must evaluate them on the performance of their part (local objective)--which will lead them to not always pursue the best for the whole (global objective).

In mathematical terms, in order to optimize the system each team member must be willing to sub-optimize her sub-system. But in order to incentivize each team member she must be evaluated and compensated based on the performance of her sub-system. So team members will optimize their sub-systems and sub-optimize the system.

It is impossible to make every team member better off when she contributes to the team's mission than when she maximizes her own performance metrics. Therefore, self-interested agents with private information cannot be managed to give their best to the team through financial incentives. That's why every team, from a couple to the largest organization, suffers from misalignment and conflict.

In the next two videos I summarize the argument I made in the last two posts:

Your Job Is Not Your Job

Doing Your Job Can Be Hazardous to Your Career

A Soft Solution

The solution is "soft" because it is psychological.

Self-interested agents with private information cannot be managed, yet can be led to give their best to the team. Leadership is, precisely, the process of eliciting the internal commitment of each member of the team to pursue the team's mission to the best of their abilities.

While management imposes behavioral controls to produce compliance, leadership provides emotional narratives to inspire commitment. Instead of trying to make the self-interested agents better off through rewards and punishments, it makes them better off by motivating to believe that the best way to serve their interest is to subordinate it to the team's mission.

I developed this argument in a previous post, The Number One Killer of Organizations.

Notice how in the next video the coach inspires the team to overcome their personal (racial) differences and commit to winning the game.

Readers: How do you resolve the misalignments in your team?

Fred Kofman, Ph.D. in Economics, is Vice President at Linkedin. This post is part 2.1. of Linkedin's Conscious Business Program. You can find the introduction and structure of this program here. To stay connected and get updates join our LinkedIn Group: Conscious Business Friends