Going Beyond Collaboration, Part 2

An Interview with Raymond Miles, author of Collaborative Entrepreneurship
By Vern Burkhardt
If a firm is highly innovative it is likely an indication that its leaders and employees are skilled collaborators. Developing collaborative capabilities requires learning new values and behaviors and unlearning old habits. It takes time, training and participants who value the contributions of their colleagues. Building trust is a time-consuming but necessary component.

Instead of reworking old approaches to running a business we need to focus on creating new business models.

Raymond MilesLast week I interviewed Raymond Miles who has studied and written about successful business models for over thirty-five years. That discussion continues.

Vern Burkhardt (VB): You were a professor at Haas Business School at the University of California, Berkeley from 1963 to 1992. During eight of those years you were the School's Dean, and you currently are Professor Emeritus there, and are still active in research and publishing. What were your beginnings?

Raymond Miles: I began working for the railroad at night and going to school in the daytime in Texas. I was a journalism major.

After a stint as a pilot and captain in the US Air Force I taught for a couple of years at a college in Texas. I had switched from journalism to management because, having read books by some interesting people, I saw it as a challenging field. I read one of Peter Drucker’s books in the mid-50s which explained why the railroad was as screwed up as I thought it was looking at it from the point of view of an employee working at the bottom of the echelon. And why the military was also.

I went to Stanford for a PhD, and then came to Berkeley. The thing that has really intrigued me through graduate school and since is the study of leader’s guises. At the time it was a hot new topic. Newly published was Douglas MacGregor’s thoughts about Theory X and Theory Y and Rensis Likert’s Four Types of Management. So my research in what was later to be called Silicon Valley, when Hewlett-Packard had only two divisions, looked at managers' leadership attitudes, and the impact of those attitudes and approaches on their subordinates and the whole organization. All my early research was in this area because it's what intrigued me.

I gradually began to look at issues of job design and team structure in matrix organizations which were becoming prominent in the 60s. I became intrigued with the publishing industry because the computer was turning it upside down. It was a totally new technology and one of the first major industry-shaking innovations. I was fortunate because the publishing companies gave us total access to study how they were adapting. I guess it was because they wanted us to write books for them to publish!

VB: You co-authored, with Charles Snow, Organizational Strategy, Structure and Process in 1978.

Raymond Miles: Yes. Another edition was published by Stanford Business Books in 2003 with a new introduction by Donald Hambrick. Charles Snow and I also added new introductory material to update the book's central concepts. It seems to still have relevance for management studies. It’s even been translated into Chinese, Japanese, German, and Italian. In fact, we’re going to Great Britain later this year to take part in a 30th anniversary review of the research that it stimulated.

VB: It’s hard to believe you wrote the book thirty years ago! What are its central concepts?

Raymond Miles: The fascinating thing is that most firms do develop a strategic vision of how they will operate. The exception is what we called the reactor, the type of company that lacks the ability to adapt to external competition and doesn’t have a systematic strategy, structure or internal business process. Likely today there are few companies of this type.

Not surprisingly there was the defender strategy—a mature company operating in a mature industry seeking to protect market position. The company focuses on efficient production, strong controls, reliability and maintaining low costs.

We argued there was also the prospector that thrives in changing business environments, seeks new opportunities, and is first to market with new products and services.

Another strategic type was the analyzer that avoids the risks of the prospector, but is more adaptive than the defender. These companies take a small range of products, services and technologies and simply focus on being more efficient, and outperforming other companies in terms of quality. Analyzers are more matrix-like in that they follow the prospectors into two or three new product or service areas but quickly make them more efficient.

That’s the whole book in a few sentences.

We also said that manager’s attitudes are crucial. For example, a business can’t be a prospector unless it’s led by what we called a human resources manager. They focus on using their people’s true and full capabilities.

VB: As we discussed last week, you think collaborative entrepreneurship is the key future business model?

Raymond Miles: Let me recommend an article I wrote on this topic. It is entitled "Innovation and Leadership Values" and was published in the fall 2007 edition of the California Management Review. It focuses on entrepreneurial leadership through collaboration.

VB: This is a winning style of leadership?

Raymond Miles: It will help you if you are an analyzer or defender, but is absolutely crucial if you are a prospector company. It’s a new organizational strategy, a new approach, noteworthy in terms of the attitudes and values required and the vision of how you manage people.

VB: You identified a number of business examples in different countries, including the USA, where collaboration is evident in solving problems and making decisions. Have you made any observations about whether the ability to collaborate has a cultural basis?

Raymond Miles: It is value-based. I recommend you read an article titled "The Ideology of Innovation" that I co-published with Grant Miles and Charles Snow in the November 2007 edition of the Strategic Organization Journal. The main theme of the article is that in economically leading nations innovation generates the most income. Innovation flourishes, we argue, where there is an increased amount of collaborative behaviour.

VB: It is cause for optimism, isn’t it?

Raymond Miles: It is cause for optimism. We say in the article it took a depression and a global war to generate these values last time; let’s do our best not to require a shock of that sort to ignite collaborative behaviour on a wide scale.

VB: One issue that has the potential to cause an enormous shock wave is climate change.

Raymond Miles: It should, yes. In most of our published materials that’s where we’ve been going. We’ve been saying that clearly the global climate is everyone’s challenge and if it is going to get solved, as we sincerely hope, in a timely fashion it will be through collaborative behaviour. It is not going to be solved in the usual way because there is no one to delegate this problem to. It has got to be dealt with by multiple efforts including collaboration across industries.

VB: Exactly.

Raymond Miles: If industries took this challenge on, then the expense involved would be included in the product prices. The response to the challenge would have no competitive implications or disincentives but it would have a long-term societal implication. That type of thinking was common in the 50s.

VB: In the 50s?

Raymond Miles: Within various industries firms collaborated with each other.

The solution will also need to deal with the long-term problem in the global economy of five or six economies using 85% of the globe’s resources.

VB: It becomes a zero sum game, doesn’t it? As other countries are trying to advance…

Raymond Miles: Oh absolutely. We’re behaving like the robber barons of the 19th century.

VB: Unlikely to be sustainable in the long-term.

Raymond Miles: Absolutely not. That’s how we are creating bomb-throwing radicals.

Besides that, it is simply wrong. It is morally wrong. So I think these are all connected points.

I’m not surprised that IdeaConnection is coming out of Canada and out of progressive communities like Victoria and Vancouver because that’s the way these things develop. Part of your initiative is to invite people to identify and collaboratively seek solutions for the good of all, for the good of the commons. These types of initiatives occur in communities whose core values are likely to allow them to flourish. The same thing is happening in Denmark and in Norway, not always as progressively and as quickly as you’re doing it, but it is in the right direction. I have little doubt it will be successful in making contributions.

VB: And that’s key, isn’t it? Collaborating to move in the right direction?

Raymond Miles: Yes, that’s right. And Finland, for example, has a remarkable economy where collaborative behaviour is fairly common across lots of small firms and even big firms which don’t exploit small firms in the process.

VB: You say that historically innovation has always played a central role in wealth creation. Innovations in products or processes are costly and often resisted in firms that have a business strategy based on market penetration. Given, as you say, that many major firms such as Wal-Mart Stores, Inc have market penetration as their key strategy do you think they may become less dominant in the marketplace over time unless they change their strategy?

Raymond Miles: Wal-Mart has been pretty innovative in terms of its distribution systems. At least initially Sam Walton’s focus on lowest price was pretty creative. My biggest concern is not so much with Wal-Mart’s internal management—they have some problems there—I’m concerned that until recently they have not been community-focused and sensitive to the local community they operate within.

VB: A large challenge.

Raymond Miles: That is their biggest challenge and they are feeling it. They can’t keep doing exactly what they have been doing. They can’t just keep opening another store and getting an incremental boost in their distribution flow. If they are going to continue to grow they are going to have to become more creative. They are going to have to manage more effectively and they are going to have to become more focused on the communities they operate within or want to expand into if they want to be accepted.

Another example is Starbucks. They can't simply keep opening up more outlets with the same business strategy.

VB: In the case of Wal-Mart, market penetration in some areas has created a backlash.

Raymond Miles: Absolutely it has. They have been totally oblivious to their community impact and that is going to be painful for them.

VB: You say that today most firms are organized to accommodate only limited, planned innovation and that most new product or service ideas that are outside their markets are not accepted. You also conclude that the more innovation is managed, the narrower and less spontaneous it becomes. Do you have any advice for business leaders on how to create a climate where innovation is not only encouraged but becomes an integral part of the way their business operates?

Raymond Miles: Inside a typical organization there are plenty of people who know how to innovate and want to innovate. What companies have to do first of all is remove the constraints on them.

When I was working nights on the railroad as a 17-year-old the machinist with a 5th grade education knew more about running the railroad than the foreman who came in the morning.
There were smart people who had ideas all the time.

VB: There wasn’t any opportunity for them to share their ideas.

Raymond Miles: The employees on the night shift could use the machinist's creative ideas but it would never be permitted during the day shift when the foreman was present. In addition, companies encouraging creative ideas must also ensure they are not constraining or inhibiting innovation.

VB: How do we encourage collaborative behavior?

Raymond Miles: The capability for collaborative innovation exists in most organizations. All we have to do, really, is what you’re doing with IdeaConnection.

Managers and leaders have to make it legitimate for people to share ideas, which means creating a climate where people can trust one another. And spending time promoting and encouraging that trust and helping people learn how to demonstrate trustworthiness.

Trustworthiness extends to equitable treatment. An atmosphere must be fostered where all are so committed to equitable treatment that no one has to worry that, when they ask you a question or for assistance, you will steal or claim ownership of their idea.

The same applies to trustworthiness between companies that are collaborating. Each must know that after jointly working on something the credit, including revenues and profits, will be split appropriately.

VB: People in the United States seem to be talking about change. Do you think when people are talking about change they are thinking of some of these basic human principles?

Raymond Miles: I think the level of change they are talking about is addressing the serious economic and social situation faced by a lot of people. They want a return to priorities that involve an investment in addressing the human condition.

VB: I find it intriguing that you said "a return to". When people talk about change they often think of it as something completely different and new.

Raymond Miles: Sometimes we incorrectly think change and innovation must be new or different. Sometimes it is simply a reaction to serious conditions at the time.

Roosevelt was elected the year I was born. He faced an enormous set of issues but it was also a time for innovative solutions to emerge. He pulled together a highly creative Cabinet that was able to create the basic conditions of the New Deal. A lot of mistakes were made. Some of the programs that were begun under the New Deal were full of holes but the commitment was strong. Most of the problems with these programs got cleaned up. The initiatives weren’t perfect when they were finished but they were a lot better than before.

The USA was two decades behind Europe in terms of the labour movement and commitment to addressing the plight of the lower and middle classes, so the depression, as bad as it was, was a period that fostered an incredible transition which had lasting effects.

I don’t think we would have been nearly as successful in World War II without the camaraderie across the society, the commitment to collaborative behaviour that had been fostered by the depression. The amazing thing was that in a very short period of time the USA went from totally unprepared to the world’s most progressive and dominant military force. An awful lot was built by women and minorities—in airplane factories and shipyards. Illiterate mountain women from West Virginia were taught not only to assemble radar equipment but how to read. This was an incredible investment in people. When the USA came out of the war it immediately invested in the GI Bill and we actually behaved responsibly in the world. We had the Marshall Plan and a host of things that were value-strewn.

VB: Even today the United States is very responsible and responsive to the need for international aid. Whenever there is a world disaster—earthquake, tsunami or whatever—one of the first countries on the ground with support, relief and money is often the USA.

Raymond Miles: Frequently that is true. It helps that the World Red Cross is operationally headquartered in the USA and the Salvation Army emerged here. But if you look closely at our capabilities compared to the assistance we provide, one finds that many smaller countries do proportionately more. I think we still have good features; they just get smothered by behaviors that are motivated by wrong values—in my judgment, at least.

VB: You talked about women coming into the workforce as part of the war effort. Do you think the positive human attributes we have been discussing are more female-like traits?

Raymond Miles: We did some research about this question years ago. Early research on behavior in groups identified two types of behaviors in a well-run group. Those groups had effective sets of mother behaviors and father behaviors. This type of research wouldn’t happen today because there would be a hue and cry of protest.

VB: Would you talk more about this?

Raymond Miles: The mother behaviors were nurturing and being sensitive to the fact that an individual in the group was being left out. The male behaviors focused on getting organized, ensuring an order for the group's processes, setting priorities and so forth.

Women do a lot of planning. In typical homes women do more of the planning than men. In fact, most men are likely not as good at it.

These are likely cultural rather than innately sex-related factors. Young girls by and large are taught more nurturing roles than little boys. So I don’t think these are genetic. They may have small, genetic components.

VB: The reason for my question is that when establishing management teams and forming other groups, it is good to have—given that trust and a commitment to collaboration are core values—people with a range of skills and backgrounds, including strong talent from women who can make unique contributions.

Raymond Miles: Including men who understand and behave in collaborative ways.

VB: Yes.

Raymond Miles: Men can be just as collaborative and cooperative in their behavior. I think men often don't know how, they have not been taught.

When I taught leadership one of the things I did was put students into small teams and give them a task requiring them to be collaborative in order to be successful. I didn’t use the term “collaborative” prior to the assignment. I would subsequently ask participants to complete questionnaires asking them to comment not only on the effectiveness of their teams, but also behaviors they appreciated in their teams and behaviors they found troubling. Then they would give feedback to one another. As they did these assignments they became more and more open and communication and collaboration improved.

These traits are not genetic. They are learnable. We’ve taught them so I know they can be taught.

You have to build into your organization a climate in which people feel free to point out to one another behaviors that are not productive or not appropriate when collaborating.

VB: You say the biggest organizational barrier to operating future innovative firms is everything managers have learned about how to operate organizations today: leadership and planning approaches; control and reward systems; and decision making processes. Do you know if some business management schools are beginning to adapt their curricula to ensure graduates are ready to think in terms of collaborative enterprise networks and to lead these new types of organizations?

Raymond Miles: There has been some recognition in business schools dating back at least to the late 80s that the values we have been embodying are in need of change. But we're not anywhere near where we were in the 60s. Only the most progressive faculty members are focusing on collaborative behaviors. And if it’s only a fraction of a student’s learning experience it’s easy to ignore. I conclude there is not the same level of commitment to this type of education as there was in the 60s and it is impacting the behavior of managers. It wasn’t perfect at that time, but there was certainly a movement toward collaboration.

The business practices of the 60s were supported by political values and processes. For example, in the 60s we had the creation of the Job Corps and the Peace Corps. We had, after the unfortunate death of John F. Kennedy, a commitment to the civil rights movement and to the extension of the Rooseveltian New Deal and the Fair Deal. There was a substantial investment in social enlightenment and social mechanisms. But that commitment faded. Through the late 60s and the 70s, there was the turmoil of the Vietnam War and a host of other issues. In the late 70s and into the 80s there emerged a middle class that had not experienced the deprivation of the depression or the challenge of World War II. It was easier for people to focus on their personal well-being and forget the common good.

VB: Do you think the move toward today’s more conservative politics has also been caused by prosperity or has it, in fact, created this phenomenon in business?

Raymond Miles: I’m not even prepared to call present day politics in the US conservative. Real conservatives don’t have extravagant deficits. What we have is a self-serving political process. It has some roots. Much of it owed, as the Republicans in the US will tell you, to Ronald Reagan. Part of Reagan’s philosophy, linked with similar views held by Margaret Thatcher, was a belief that the market system would triumph over the "Godless communists"—that was their terminology. Well, they were right. We continued our military spending, pumping out airplanes, ships and other military items, and the Soviet economy couldn’t keep up.

VB: We out spent them.

Raymond Miles: We did. That, of course, is remembered as a glorious achievement. Who knows? It may, in the long run, have been justified.

But it set a value tone that had some less fortunate aspects.

VB: It was a cause to mobilize behind a moral crusade.

Raymond Miles: You’re exactly right, yes. It was viewed as a noble cause. You could run hefty and ever growing deficits in a noble cause.

VB: Whether or not it was a right cause it was viewed as a noble cause.

Raymond Miles: Exactly. That’s the way national values get shaped and how they work their way into politics. Every country has examples of these periods and these evolutionary prophecies. What you hope is that you don’t stay in the wrong set of national values too long.

VB: It intrigues me that when people talk about leadership at a national level they often say "we lack leadership". This is said in Canada as well, even by the media. I wonder if it relates to a longing for a leader with charisma, someone good at providing interesting sound bytes, and communicating a consistent message rather than a leader who is truly effective while honoring core societal values. Is that being too critical?

Raymond Miles: No. I believe that is an accurate reflection of the situation.

An effective leader has to understand what's right and it’s not a matter of giving shallow messages for media consumption. It certainly helps if leaders are effective at explaining their vision. I grew up listening on the radio to Franklin Roosevelt and Winston Churchill—my gosh, how could you be more effective at communicating a purpose and a vision for a nation?

VB: Great orators.

Raymond Miles: That’s right. They were selling a just cause, and they were very effective at doing so. It was a definite asset.

But I agree with you. It is not the whole answer for effective leadership. What made both Roosevelt and Churchill succeed was not only their oratory; it was the fact that there was substance behind their messages. Roosevelt brought the smartest minds in the country into his cabinet and great decisions resulted.

Churchill pulled in the most effective military leaders and the most effective national domestic directors.

Oratory by itself is not going to do much. You’ve got to have a program and content but it doesn’t hurt to be able to sell it.

VB: What is your biggest accomplishment?

Raymond Miles: Oh gosh. I have three kids and six grandchildren and stayed married to the same person for 55 years. Those are my biggest accomplishments.

VB: Personal relationships often do crop up when we think about what we would like to be remembered for, don’t they?

Raymond Miles: Yes, because they relate to the most important values in life.

In terms of my academic career I’ve been incredibly fortunate. I was able to get an undergraduate degree because I found a job that allowed me to work and go to school. I won a fellowship that allowed me to go to Stanford for their doctoral program. I’m sure they wouldn’t have accepted me had I not come to them with my own money. So I’ve had fortune along the way.

I think growing up in the era I did helped me. Joining Berkeley at a highly exciting time enabled me write and publish several articles that attracted some attention. For example, Rensis Likert, a scholar at the University of Michigan's Institute for Social Research, read one of my early articles on leadership values in 1965. I was an assistant professor at the time and his call to me was incredibly rewarding. Subsequently we collaborated on a number of action research projects with assistance from members of his research team. I am very cognizant of the fact that I was the beneficiary of a lot of support from high caliber thinkers. I have tried to do the same for my doctoral students.

Chuck Snow, one of the co-authors of Collaborative Entrepreneurship, was one of my doctoral students dating back to about 1971. We’re still writing articles together, which is a lengthy engagement!

My 1975 book, Theories of Management: Implications for Organizational Behavior and Development, was the first one that tied manager’s theories to job design and organizational design. The 1978 book, Organizational Strategy, Structure and Process, has been recognized as the first to make strategy an understandable phenomena and also link it to structure and process. I think we were the first to write pieces on innovation networks and on collaborative supply chain networks. I think we’ve now been the first to write about collaborative communities and inter-firm design structures.

So, if I was trying to summarize achievements, I would say I have been fortunate in many ways and have tried to push forward the thinking about evolving management practices and adapting to change.

VB: You’ve also been able to synthesize a lot of ideas and thinking.

Raymond Miles: I think I referred to myself in that vein at one time, but if I have a talent it is the ability to pull together a great deal of research and explain it in ways people understand—and then add to it and sometimes be creative as well. It’s not a huge achievement. Certainly not Einsteinian! It’s a minor talent.

It’s been fun. I’ve had an incredibly good time.

VB: Who is Grant Miles, the other co-author of Collaborative Entrepreneurship and a number of other publications?

Raymond Miles: He’s our oldest son and an Associate Professor at the Department of Management, University of North Texas. In the early 90s he was an assistant professor in your country, at Wilfred Laurier University in Waterloo, Ontario.

VB: You have been very generous with your time. Thank you so much.

Raymond Miles: It’s been a lot of fun. I’m investing in the future because I would like to have you send me stuff or make contacts you think would be productive. Pushing in the direction of OpWin Global Network is a collaborative venture.

I’m pleased about IdeaConnection's approach to creativity and enabling companies to tap into innovation problem solving across a wide range of diverse experts world-wide. It’s a great idea. IdeaConnection's invitation to collaborators to post problems for the common good is admirable. It sounds a lot like some of the things we talked about as being key parts of OpWin Global Network—one of the core value requirements was that every firm in the network become a good citizen, and all managers were required to undertake project-focused collaborative efforts that would benefit the communities in which they lived and worked. I think IdeaConnection's approach fits nicely with the concepts we have been discussing in recent years. So I’m delighted to find another collaborator.

It was a pleasure talking to Professor Raymond Miles. It was early in his professional career when Douglas MacGregor’s Theory X and Theory Y were innovative ideas. Now we’re talking about new business models for encouraging the best from Gen Y.

Raymond Miles has a journalism degree from the University of North Texas, an MBA in industrial relations from the University of North Texas and a Ph.D. in organizational behavior and industrial relations from Stanford University. He has been a professor at the Haas School of Business, University of California Berkeley since 1963 and was Dean from 1983 to 1991. He is presently Professor Emeritus at Haas and continues to study, write and publish, and act as a Faculty Advisor. He has also served as business consultant and board member for a number of large companies.

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