By Monica Lim, B.A. (Hons.), CPE & LPC (U.K.), Solicitor (U.K.), Writer, Legal & Business Markets, CCH Canadian Limited. © CCH Canadian Limited.

Regardless of the size and nature of the business of an organization, it is a given in the modern business environment that, in order to extract the most potential and value from all the staff within an organization, emphasis must be placed on fostering good human relationships between employees, managers, and executives alike.

Gone are the days when employees would remain with a firm from graduation to retirement (with occasional exceptions); it has become the norm for people to move from company to company every few years or so, searching for that elusive "right fit". What this "right fit" consists of is usually a blend of sufficiently interesting and challenging work and appropriate workload, as well as a work environment that not only mirrors the individual's values and preferences, but also enables him or her to develop relationships with his or her colleagues.

How a firm seeks to develop the human dynamics of its work environment will vary depending on its size, the business it is involved in, its objectives, culture, and values. A firm may develop its own "signature experience" that will set it apart from its competitors and attract certain types of individuals—for example, some workers will be most concerned with the interpersonal relationships they form at work; others will prefer to make as much money as possible, or will have an appetite for risk.From "What it Means to Work Here" by Tamara J. Erickson and Lynda Gratton, Harvard Business Review, March 2007, downloaded online at www.hbr.org. In order to bring on board top performers, larger firms often invest heavily in compensation schemes, employee benefits, and training. Regardless of the preferences of the kinds of people firms may wish to draw in, research has found that, in general, firms that provide a working environment that enables the development of human relationships may, in the longer term, not only improve the performance of their employees byencouraging the development of informal networks with people both within and outside their immediate areas of work, but will create a sense of "community" by generating greater individual identification with the organization itself. This may lead to increased employee retention rates in the longer term.

The Harvard Business Review (www.hbr.org) recently published a number of articles dealing with varying aspects of human dynamics in the workplace.See "What It Means to Work Here" by Tarmara J. Erickson and Lynda Gratton, Harvard Business Review, March 2007; "Ways to Build Collaborative Teams" by Lynda Gratton and Tamara J. Erickson, Harvard Business Review, November 2007; "Making Relationships Work" by Diane Coutu, Harvard Business Review, December 2007; and "Why Mentoring Matters in a Hypercompetitive World", Harvard Business Review, January 2008. In her article "Making Relationships Work",Harvard Business Review, December 2007, as above. Diane Coutu states that although there's little research on relationships at work, there is increasing information on relationships at home, and the way in which people manage their work relationships is closely linked to the way they manage their personal ones. In an interview with psychologist John M. Gottman of the Relationship Research Institute, Coutu writes that good relationships aren't about clear communication; they're about small moments of attachment and intimacy.Ibid., p. 46. In the work context, this is where creating a feeling of "community" within an organization comes into play.

Building a "community" culture can have a significant impact on the performance of teams within an organization. In the article "Eight Ways to Build Collaborative Teams" by Lynda Gratton and Tamara Erickson,Harvard Business Review, November 2007. the authors surveyed 2,420 people among 15 multinational corporations, including members of 55 teams ranging in size from 4 to 183 people, to study the levers that executives could pull to improve team performance and innovation in collaborative tasks. Large teams which have been brought together to tackle a major initiative at a large firm may be no different in size and diversity of individuals than the entire staff at a small or medium-sized enterprise. So, considering what makes teams operate effectively and cooperatively could be very enlightening for the effective operation of smaller firms.

Of the responses from the 64 per cent who responded to the survey, the authors determined that there are several key factors which hamper collaborative behaviour:Ibid., p. 102.

• the size and complexity of the team: as the size of a team increases beyond 20 members, the tendency to collaborate naturally decreases;
• the way in which the team members participate: cooperation declines as teams become more "virtual", unless the company takes measures to establish a collaborative culture;
• level of diversity of the team members: collaboration is easier and more natural if team members perceive themselves as being alike. Key differences include nationality, age, education level, tenure at the firm, and whether the members know each other only superficially or have never met before; and
• level of education of the team members: apparently, the higher the educational level of the team members, and the greater the proportion of "experts", the more likely the team was to disintegrate into non-productive conflict.

"Although teams that are large, virtual, diverse, and composed of highly educated specialists are increasingly crucial with challenging projects, those same characteristics make it hard for teams to get anything done. … Members of complex teams are less likely—absent other influences—to share knowledge freely, to learn from one another, to shift workloads flexibly to break up unexpected bottlenecks, to help one another complete jobs and meet deadlines, and to share resources", the authors noted.Ibid., p. 102.

Of course, these results in no way imply that employers should be hiring people or forming teams on the basis of potentially discriminatory practices which exclude whole groups of people solely on the basis of their nationality, education, age, or former acquaintance with other members of the firm or team. What the results do say is that to get around these hurdles, firms of all sizes can foster a culture of collaboration that will not only make both individuals and teams more effective and productive, but that can also improve employees' overall work experience. Ultimately, a collaborative work environment may be more effective in attracting new star employees and in retaining existing employees than a pure focus on salary and benefits.

From the survey results, Gratton and Erickson identified four principal areas in which companies can focus their efforts to improve team—and thereby company—performance:

• executive support;
• focused human resources practices;
• choosing the right team leaders; and
• the structure of the team itself.

"Teams do well when executives invest in supporting social relationships, demonstrate collaborative behaviour themselves, and create what we call a "gift culture"—one in which employees experience interactions with leaders and colleagues as something valuable and generously offered, a gift",Ibid., p. 103. the authors concluded. To build and maintain social relationships at work, some very large firms like the Royal Bank of Scotland have invested in designing their office space to create a campus-like setting with indoor atria, shops, restaurants, and recreation and sports areas.Ibid., p. 103. BP p.l.c. builds social networks by moving employees' functions, businesses, and countries as part of their career developmentIbid., p. 104.—much in the same way as permanent staff within Canada's federal government do. Senior executive teams can also model collaborative behaviour by filling in for each other and interacting with each other face-to-face as often as possible. Smaller firms with less expansive budgets could consider having open-plan office space with as few closed offices as possible to minimize distinctions in seniority and business function, and to facilitate social networking. They could also encourage holding face-to-face meetings in informal settings, rather than relying on e-mail correspondence.

What can the Human Resources ("HR") department do to cultivate collaborative behaviour? Surprisingly, reward systems do not have any discernable effect on the productivity and innovation of complex teams, according to Gratton and Erickson. What is more likely to have an impact is training in skills related to collaborative behaviour. PricewaterhouseCoopers, for example, offers training modules that address teamwork, emotional intelligence, networking, holding difficult conversations, coaching, communicating the firm's strategy and shared values, and how to influence people.Ibid., pp. 105 and 106. Either HR or a social committee can also deepen social relationships by sponsoring group events and activities, and developing supportive internal policies and practices.

It's no surprise that the behaviour of team leaders and managers, as well as the structure of the team itself, has a great impact on how the team will work together and how productive and innovative it will be. Gratton and Erickson found that leaders who, in the early stages of a project, were able to demonstrate task-oriented leadership (with a focus on goals, commitments, and responsibilities), and who were then able to focus on relationship development among team members had the most success in developing effective teams.Ibid., p. 107. In terms of team structure, the authors found strong collaboration from the outset of a project when 20 to 40 per cent of the team members already knew or had worked with each other. However, if heritage relationships are not carefully managed, strong subgroups may form and the probability of conflict among subgroups increases.Ibid., pp. 107 to 108. Furthermore, Gratton and Erickson found that clearly defining the role and function of individual team members improved collaboration, although the opposite was true in terms of clearly defining the means to achieve the project's goal—team members are more likely to want to collaborate if the path to achieving the team's goal is left somewhat ambiguous. The trick is to clarify team members' individual roles with so much precision that it keeps friction to a minimum.Ibid., pp. 108 and 109.

Effective work relationships, like personal relationships, thrive on accentuating the positive and creating moments of attachment and intimacy. Developing a corporate culture that employees can identify with to the extent that they feel part of a "community" cannot only improve their overall level of happiness at work, but can also improve their individual performance, facilitate collaboration in teams and the resolution of any conflicts that may arise and affect the likelihood of employees remaining with the company. As businesses are increasingly competing for the best personnel, these are the necessary "soft" policies that may provide that extra edge, regardless of the enterprise's budget, size, or line of business.

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