Stage 1: Laying the Foundation for Post-Hire Collaboration

Doing your homework before you start the recruitment process will help create the necessary foundation to hire collaborative people and get them integrated deeply and rapidly into your core work. If people push back because they lack the time or energy, point out the obvious: your organization is going to expend enormous resources—direct financial expense, time and effort, and cleanup efforts—whether this new hire flourishes or flames out. Spending the time up front to get this right is another investment you need to make to promote smarter collaboration.

• Clarify the role and build support. Existing employees need to understand how the new joiner’s role is different from what they are already doing, or else they might react defensively rather than collaboratively. Even if you are just filling an empty slot, don’t assume that you can skip this step. New joiners will bring in unique skills, different ways of operating, and fresh perspectives from the outside. Leveraging these insights in collaborative work is not only how you get the most out of a new hire, it’s also how you get them to feel valued and included (and therefore give you a return on your hiring investment).
• Uncover pockets of “churn and burn.” Analyze your company’s hiring data from the last five years, focusing on who pushed for or sponsored the request and how well each of those new hires fared after joining. Your analysis might reveal pockets of high turnover shortly after hiring—churn and burn—which show that something is going wrong. Do experienced hires need support to start collaborating sooner and better?
• Develop a tailored strategic plan before you start the process. Whom do they need to collaborate with across the organization? For example, which customers will they meet, and in what sequence? Who’s going to arrange those introductions and ensure they are pulled into projects? Assign clear responsibilities to those people who will need to support the new hire, and make it clear that this is part of a larger system of accountability.

Stage 2: Recruiting Truly Collaborative Talent

You certainly already have well-established practices for recruiting new hires, but what you are likely missing is the focus on a candidate’s collaborative capacity.

• Fine-tune the screening algorithms. Whether you are using AI-powered résumé screening or automated video interviews, make sure your algorithms are optimized to look for clues on strong collaboration.
• Use structured, behavioral-based interviewing. The best in-person interview practices today involve asking candidates to describe particular situations they have faced, how they handled them, their personal emotional response to the situations, and perhaps what they learned from them. For example, “Can you provide me with an example of when you faced a major challenge?” Follow-up questions might include, “How did you approach it? Whom did you work with and why? Would a broader perspective earlier in the process have helped?”

  Effective interviewing requires training and practice, which many will resist. If so, they should consider this: many of the same probing, listening, analyzing, and empathy skills that are essential for interviewing are the same ones that skilled executives use to uncover and understand complex business issues. Done right, this approach elicits valuable insights into the candidates’ aptitude and attitude toward collaboration.

• Immerse the search firm. If you’re using a search firm, make sure it is well briefed on your demands for collaboration and is prepared to prescreen candidates for this quality. Candidates should be closely questioned about their teamwork experiences, both as leaders and as followers, and they need to understand that they won’t be considered strong applicants unless they have a strong collaborative track record with demonstrable outcomes.
• Use self-selection. Once the candidate is in the chair, describe the company’s expectations for collaboration, with as many specific, successful examples as possible. Be clear about how collaboration will be measured and rewarded, both financially and otherwise. Explain the extent to which the organization values and rewards activities like mentoring, marketing activities, recruiting, volunteer work, and so on. Again, clarity helps weed out non-collaborative candidates through self-selection: a very efficient way to weed.
• Look for the candidate who understands the value of networks. Groundbreaking work by Harvard Business School professor Boris Groysberg showed not only how crucial the network is to the success of someone who is changing employers but also how often professionals (especially men, his research showed) take their network for granted.² Because they failed to appreciate how much support they’d been getting from their colleagues in their old company, they believed they were more independent and “portable” than they actually were. Unfortunately, the failure to grasp the value of peer collaboration meant that many new hires failed to invest enough in building ties with new colleagues once they landed in a new company.

Overall, make non-collaboration a deal-breaker. Don’t compromise “just this one time” to bring in a hotshot who you believe is likely to poison the culture with toxic, me-first behavior. If you want your people to collaborate, don’t hire people who don’t value that process and are hard to work with. To put it succinctly: don’t hire jerks!

Stage 3: Integrating New Hires through Smart Collaboration

Collaboration helps new joiners get integrated and become productive members of the community—and ultimately thrive and stick around. This is no sure thing: one study showed that after professionals in the banking sector switched employers, their average performance fell dramatically and hadn’t reached pre-move levels even five years later.³ Why? One answer is implied in the foregoing discussion: they lost the internal networks that had helped make them so productive in the first place.

The remedy: experienced hires need to get integrated into the organization’s core work, quickly, and this happens most successfully through a structured approach to collaboration. Numerous researchers have reached similar conclusions. Proactive, comprehensive integration increases job satisfaction, expedites individual productivity, and more easily promotes an inclusive culture.⁴ But this is a two-way street: the receiving department and other stakeholders must actively draw the new joiner into their projects, and that newcomer needs to actively seek ways to involve new colleagues in his or her work.

The reality, though, is that many companies are pretty mediocre at this. One large-scale study found that only 12 percent of employees in Fortune 1000 companies strongly agree that their organization does a great job of onboarding new employees.⁵ That’s discouraging, but it also means that fixing the integration process represents the proverbial “low-hanging fruit.” Here are seven specific steps you can take to increase the odds that an experienced hire will engage in smart collaboration soon after joining:

• Help them build competence trust. Even the most careful vetting of candidates’ skills doesn’t guarantee that they will be seen as competent once they join the firm. Why? Those skills need to be brought to bear within a new context, which means the newcomer needs to learn how to effectively operate in the new company—without existing networks, and again, quickly. Meanwhile, their new colleagues have to find scarce time to get to know new joiners and plug them into existing ways of working. For new employees entering a hybrid or remote environment, it’s especially crucial to set clear performance expectations, for the first one hundred days and beyond. Leaders must explain to both the new joiner and their teammates how the individual’s capabilities can propel the group toward higher performance. This clarity helps them demonstrate their abilities, leading others to trust them sooner.
• Help them build interpersonal trust. Let’s face it: we’re human, and we’re quick to perceive threats to our established orders—and to the members of the existing hierarchy, the arrival of a new player on the scene creates just such a threat. New senior hires usually arrive with fanfare swirling around them. After all, a major investment has been made, and leaders want to generate excitement about the new hire both inside and outside the company. But what about the people who are already in place? They may see this turn of events as a door that is closing for them. Given that firms generally pay much more for a hotshot brought in from outside, those hotshots are often “overpaid” relative to peers at the same level. And all of this, especially a perceived injustice, fosters jealousy and undermines interpersonal trust. Whether the new arrival has earned it, he or she very often is digging out of an interpersonal “trust hole.”

  Again, there are no shortcuts, and the incoming hire has to do much of this heavy lifting for himself or herself.⁶ But building interpersonal trust is especially difficult for anyone who is working remotely themselves or has teammates who do. Leaders must help the people build more personal knowledge about one another (personalities, preferences) and the team (norms, expectations). For the leader, start with self-disclosure. Let the team see you as a person with aspirations, concerns, and a personal life. And encourage the team to voluntarily do the same.

• Use “guides” to weave them into strategic relationships. In Stage 1, you should have secured commitments from specific people in the hiring group who are responsible for introducing the newcomer to predetermined accounts or facilitating other strategic contacts—all with an eye toward collaboration in the longer term. Require those guides to report on their progress to the appropriate manager, whose feet you will subsequently hold to the fire as needed. Again, the key is creating a context of specificity and accountability, rather than clinging to the vague hope that people will “do the right thing” by the newcomer. Think about all the other pressing concerns on their plates. Will helping to set up the right collaborative relationships for the newcomer be high on their agendas? Not unless you put it there.
• Define a two-way collaboration plan. Feeling pressure to prove themselves, many newcomers try to go the “solo hero” route. Don’t let that pattern get established; instead, let those newcomers know that they’ll be seen as more valuable if they collaborate successfully. Work immediately with new hires to develop strategic work plans that identify specific opportunities for them to engage with and involve their new colleagues. Again, you and other leaders should facilitate those introductions and make it clear to incumbents that they are expected to participate.
• Define and underscore accountability. For managers who have hired people into their unit, base part of their performance assessment on how successfully they integrate each new joiner. Managers are ultimately accountable for using the tools at their disposal—collaboration plans, internal communications, guides, and data—to ensure their new hires’ success.
• Use technology as an early warning system. Data analytics will help uncover whether new hires are engaged in collaboration and whether it is sufficiently reciprocal. For example, the Australian collaboration-analytics company SWOOP has studied data from Microsoft Teams for almost one hundred thousand teams across thirty-three organizations. SWOOP shows how data from platforms like Teams can be used to assess how broadly a person is integrated into the organization—whether people are answering newcomers’ questions or building on their comments in group forums, replying promptly to their emails, and including them in channels for core projects. The best companies build dashboards where employees can see their personal behaviors and ways to improve their collaboration through platforms like Teams and Yammer. Because reciprocal communication is a strong indicator of collaboration, social connection, trust development, and engagement, seeing measures of those behaviors will also help managers troubleshoot where they need to provide extra support to newcomers.
• Actively manage remote working. For groups that don’t have opportunities to physically coalesce—and engage in all the spontaneous ways of sharing laughter or worries or of learning about a new joiner’s personality and aspirations—leaders need to work to create a sense of team cohesion. When new people join a group or department, it provides a natural time to reset some of the team norms and ways of operating. Connect hearts and minds by uniting around a common goal. A sense of belonging depends on not only the frequency of interactions but also the quality of relationships that these interactions form. More important than co-location, people need to feel included in the group—recognized, engaged, and up to date.⁷ This kind of truly smart collaboration not only helps newcomers thrive, it boosts the morale and performance of the whole team.

To summarize, new joiners face an especially difficult task as they set out to collaborate in a new setting. But as we explained in Chapters 1 and 2, successful collaboration is great for the organization and also great for the individual. For all these reasons, companies need a well-designed plan for helping new colleagues land on their feet, build strong new networks, and collaborate successfully.

Stage 1: Laying the Foundations for Collaboration in the M&A Context

Most companies spend enormous effort planning for a merger or acquisition. But the due diligence phase of M&A transactions still focuses primarily on financial, operational, and legal aspects of the deal. Where most companies fall down is focusing on how their talent will collaborate across legacy companies once combined. We have three prescriptions to help you determine your own organization’s readiness to absorb large numbers of new people and take steps to enhance that readiness:

• Assess your company’s “organizational health.” According to McKinsey research, “Leaders considering a large acquisition should first assess their organization’s own health to better gauge whether or not to take the merger plunge.”⁸ Specifically, are they adept at helping new joiners collaborate quickly and integrate well? And can they do it at the scale M&A would require? Two years after an acquisition, companies with the strongest organizational health showed 22 percent higher total returns to shareholders compared with unhealthy companies.

  Of McKinsey’s nine organizational dimensions that indicate a healthy culture, the one that best predicts successful M&A outcomes is talent management. Why? Because the moment the M&A process starts, you are going to need to select the best, most collaborative people, without bias, from both organizations (Stage 2, in our parlance). If you have a principled process for identifying and selecting the best talent for a role in your own company, then this capability will serve you well as you combine.

• Conduct collaborative due diligence on the target company. How do your potential colleagues think and talk about working across siloes? What’s the evidence that they do so? Do they demonstrate the kind of learning culture that stimulates curiosity and a desire to collaborate with new people? Since smarter collaboration hinges on inclusivity, you need to dig into sources that can help you understand whether diverse employees feel that their differences are embraced and their perspectives are valued.
• Build internal support. Leaders need to engage in extensive communication ahead of time. You are communicating to build buy-in and commitment—not only for the strategic plan that this acquisition represents but for the associated integration plan that will get people collaborating across legacy companies.

Again, do as much foundation-setting as possible up front. In the case of CVS and Aetna, it’s useful to remember that this was a story that played out over time. “It helped enormously that the management teams both on the CVS and Aetna sides knew each other very, very well,” explains chief strategy officer Thomas Moriarty. “Because Aetna had been one of CVS’s top customers—as a buyer of pharmacy services—for about seven years, we had an ongoing working relationship, and so we knew each other’s culture, we knew where the talent was, and we understood the state of play in terms of collaboration.”

They also took advantage of the extended regulatory delay to continue their Stage 1 work of deepening relationships between the organizations. In this preliminary period, regulators allowed only a small group of representatives from both companies to engage in certain kinds of discussions. As that integration team plowed through meeting after meeting with federal regulators and officials in some twenty-eight states, their relationships naturally broadened and deepened. They had to work across functional and company lines to analyze reams of data and answer tough questions. Beyond formal weekly meetings, team leaders at the two companies created open channels of communication—within legal bounds—that helped to forge a sense of joint enterprise.

Federal courts gave their blessing to the deal in September 2019: almost two years after the initial announcement. This was a relatively long interval, which helped the two companies build on pre-existing ties. If you don’t have an established relationship or extended courtship period during which to conduct all the Stage 1 activities, you will need to put a lot more emphasis on due diligence, to understand who you are tying up with, and then you will have to invest to quickly build trusting relationships.

Stage 2: Selecting Truly Collaborative Talent in the M&A Context

A merger or acquisition nearly always includes significant shuffling of people and roles, so use this opportunity to elevate and advance those employees who excel at collaboration. After all, they are the ones who are most likely to promote the kind of cross-silo exploration and value capture that drove you to the combination in the first place.

If both companies have previously implemented the kind of comprehensive performance management system that we describe in Chapter 6 (unlikely!), then managers will have access to a rich set of data to help understand each employee’s collaborative history. Otherwise, some combination of line managers and human resources talent (perhaps including external consultants) will need to derive insights into your people’s problem-solving approaches and emotional intelligence. How do they react to challenges and opportunities? What experience do they have with successful collaboration? Are they open and curious about how the larger organization provides a platform for enhanced customer outcomes (or whatever your company aims to do)? This is also the time for leaders to identify potential gaps in the new organization’s collaborative capacity and start making plans to enhance the underlying capabilities.

Leaders at CVS Health/Aetna took the bold step of naming people to key positions in the combined company well before the merger took place. Although it risked losing the commitment of people who were not named, this courageous move reduced the politics of executives jockeying for positions, and the risk of the knock-on effect of “rival camps” springing up. Of course, this preemptive move didn’t guarantee collaboration, but it certainly set the stage for a more collaborative environment.

Formally setting out the future power structure also empowered a wider range of leaders at the two companies to start planning their own collaboration-enhancing steps, such as selecting their own teams and starting to build familiarity and trust between teams. These Stage 2 actions are especially important in a merger context, when leaders tend to be laser-focused on meeting the financial targets. The “harder stuff” is more or less guaranteed attention; the human side of the deal needs the same level of thought and care.

A final lesson to be drawn from the CVS-Aetna merger concerns the power of explicit statements in shaping expectations about how important collaboration will be in the merged company. The leaders declared, up front, that the business going forward would be different from its premerger incarnations. “Simply stated,” recalls chief strategist Moriarty, “we would move away from a directive management model to a collaborative one.” Leaders spotlighted that change explicitly and used it to describe their vision of the future company. Self-selection now came to bear: those who wanted to work more collaboratively stayed, and those who didn’t voted with their feet.

Stage 3: Making Collaboration Happen in the M&A Context

We should restate a key point from the beginning of the chapter: a major determinant of whether your merger is likely to be successful is whether you can get enough people collaborating deeply and broadly enough within the first year. Let’s face it: numerous studies report post-M&A failure rates at between 70 percent and 90 percent. Even in the most conservative of the published numbers that we could find, one study shows that after five years, 1,829 M&A deals had succeeded and 863 had failed, a failure rate of approximately one-third.⁹ If you don’t like any of those odds, especially given the size of the bet you’re making, you need to push hard on postmerger collaboration.

And this is where having thought about Stages 1, 2, and 3 as part of an inseparable whole will serve you well. By the time the deal is closed and integration has begun, you should already have a set of initiatives on the drawing board that are designed to advance your strategic goals through enhanced collaboration. Based on available resources, what will you address first? Where can you generate the near-term “wins” that will reassure your combined workforce—and not incidentally, your investors—that this merger was a brilliant move?

Stage 3 for CVS was mostly defined by the Covid-19 crisis. Barely six months after regulators approved the merger, the newly merged company had to send more than one hundred thousand employees home to work remotely. It was a major test of the combined company’s operating systems. By all accounts, those systems performed extremely well.

At the same time, the pandemic compelled the newly combined company to put early (and perhaps unexpected) weight on its collaboration model. Karen Lynch, named CVS Health’s new CEO just before the pandemic hit, recalls the challenges of integration in those early days:

We were still in the midst of integration, still learning about each other, still trying to figure out how the people in the combined company could work together—when the pandemic hit, and we had to bring the entire company together in a hurry.

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So we radically accelerated the pace of integration. It probably could have taken five years for people to learn about the other parts of the business. But we just didn’t have that time. So we came up with four guiding principles—keeping our colleagues safe, making sure that our customers were front and center, ensuring business continuity, and consistently looking around the corners—and used that as a framework. And then we brought together all our functional leaders and those whose decisions would affect our customers on a daily basis and talked about what needed to be done. That level of collaboration was make-or-break for us.

Much of this was about what might be called “just-in-time collaboration.” For example, CVS Health decided that it could and should take the lead in Covid-19 testing across the United States, which meant leveraging operations, datasets, physical assets, and the already hardworking IT infrastructure to invent entirely new systems from scratch, at a massive scale.

How and where would tests be administered? How would the nearly two hundred thousand frontline workers running those testing sites in the retail contexts be protected? (Vaccine development had barely started at that point.) How would new vendor relationships be set up in an economy that had largely ground to a halt? Again, from Lynch:

We were very candid about the fact that we didn’t have all the answers, and that no one had all the answers, and that we needed to figure this out together. We stressed that we had to use this as an opportunity for the individuals in the company to learn from each other.

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People at the center began learning more about how our field operations worked. The people on the insurance side began learning about supply-chain concepts for the first time, as we thought aloud about how we could get [personal protective equipment] to our colleagues and customers without disrupting our ongoing drug-supply chain.

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We essentially had a full-scale effort, with the entire company focused on our four overarching goals, and jointly figuring out how to get there. So it was a big effort—a big collaboration.

And as Lynch implies, the collaboration moved quickly. The first Covid-19 testing site opened in the parking lot of a CVS Health store in Shrewsbury, Massachusetts, on March 21, 2020, with testing initially focused on first responders and health-care workers.¹⁰ “We had planned for everything but the pouring rain and the blowing wind,” she recalls. In less than a year and a half, that pilot program had been expanded to include 4,800 test sites in forty-five states, collectively conducting some twenty-nine million tests—which incidentally added up to a billion-dollar business.¹¹

It’s a remarkable story, and it’s only one facet of CVS Health’s efforts to collaborate in the context of a crisis. We will return to that larger subject in Chapter 11.