Can Team Building Increase ROI?

In their book, Corporate Culture and Performance, Kotter & Heskett offer some amazing statistical claims. First, let me share their book's conclusion. The statistical analysis in the book hypothesizes that organizational culture has a direct influence on economic performance - both positively and negatively across industries.

Kotter & Heskett define corporate cultural styles as:

1. Constructive: These cultures encourage members to interact with each other and approach tasks in ways that help them meet their higher order satisfaction needs. They are typically characterized by the following behaviors: achievement, self-actualizing, humanistic-encouraging and affiliative.

2. Aggressive / Defensive: Cultures operating under these models cause members to believe they must interact with people in ways that will not threaten their own security. They are characterized by the following behaviors: oppositional, power based, competitive and perfectionistic.

Here is their statistical analysis of Culture and Performance*:

DEFENSIVE CULTURE CONSTRUCTIVE CULTURE

REVENUE +166% +682%

STOCK PRICES +74% +901%

NET INCOME +1% +756%

*Increases over an eleven-year period

The evidence presented by Kotter & Heskett certainly leads one to conclude that improving corporate culture can positively affect corporate revenue, stock prices and net income.

The method for changing an aggressive and defensive culture is through focused team building workshops and events. Team building is more effective than training classes because of the difference in the personal experience. A classroom interaction with an instructor for the most part consists of one-way communication. The instructor speaks and attendee listens. In a correctly designed team building workshop the primary interaction is among team members with directions provided by the leader at intervals throughout the event. Attendees gain knowledge about how their behavior affects the team's overall performance. Some team members model appropriate behavior, such as encouragement and affiliation and those individuals who are more power based begin to see the positive results of a different approach.

For example, let's say you wanted to increase collaboration within the company while decreasing internal competition. Our Bicycle Team Building event is structured to look like a competition. Despite outward appearances verbal instructions remind participants the event is not a competition. In fact the participants are told they will be working together as "a team" to build bicycles for charity.

Once they are divided in to smaller groups the power based competitors race to solve clues that earn them parts to the bicycle. They want their group to finish first. However, solving the clues requires collaboration among the groups, thereby creating minor confusion. Those who are willing to work cooperatively with other groups finish ahead of people who refuse to help others by allowing their competitiveness to rule.

At the close of the event, participants offer some of their observations about the group experience. In this discussion they begin to see how affiliative, helpful behavior is validated while internal competition becomes counterproductive.

My ideas presented here suggest that long standing corporate culture can be changed through team building events. By working with an experienced, quality team building group a company can develop plans to make the changes needed to improve the company's culture and, as Kotter & Heskett found, greatly increase the ROI.