CB Richard Ellis & Tribal Leadership: A Case Study
Abstract
Large top-down commercial real estate companies are often plagued by cultural issues where team-based initiatives are undercut by a dog-eat-dog mentality by the leading sales performers. CB Richard Ellis went through a time where the Ontario, California office was significantly outperforming the rest of the company and through interviewing executives and authorities in leadership and management. I believe the root cause of this transformation was cultural. I discovered that through altering the structure of the relationships within the company using a methodology called Tribal Leadership created a space for authentic partnership and teams to emerge. This is distinct from giving lip service to teams while the employees know this way of speaking is inauthentic and not present in the environment. This paper outlines the root cause of the cultural shift and the results that it produced. These principles can be applied to other companies and be used to implement authentic and sustainable cultural transformations of companies in the future.
Keywords: partnership, authenticity, culture, teams
CB Richard Ellis Case Study
This is a case study on the cultural transformation that went on at CB Richard Ellis (CBRE) starting in the late 1990’s. I specifically focus on the Ontario, California office managed under Scott Kaplan at CBRE as the work done at that office eventually spread throughout much of the company across the United States over the next decade to come and radically transformed the culture.
For some context, CBRE is the largest commercial real estate services and investment firm in the world. The company is based out of Los Angeles, but they have offices all around the world. The specific case study I wanted to document was a “lack of coordination” (Simons, "The Tensions of Organization Design", 2007, p. 4) problem that CBRE was dealing with in the 1990’s and early 2000’s. There was a dynamic going on in the company where you had a lot of hotshot sales people and ego driven people at the company who had a hard time working together and keeping teams together (J. King, personal communication, March 2018).
I wanted to document this business issue that has since been resolved at CBRE, because what happened here is unique and isn’t just your typical consulting project where there are incremental changes that went on at the company. What happened was a total transformation of the underlying cultural fabric of the organization. I hope that this case study can serve as a resource for other organizations to implement the same kinds of breakthrough results at their own companies.
For this case study, I interviewed John King who is considered by many to be the leading authority on transforming organizational culture in the world. John created a body of work called Tribal Leadership. After a ten year study on his work at the University of Southern California (USC), the findings of the research were made into a book which John co-authored along with USC Professor Dave Logan called Tribal Leadership. The book went on to become a New York Times bestseller. However, my commitment to writing this case study was rooted in the fact that these transformational models are still highly underrepresented in academia and most of the stuff coming out of Harvard Business School around culture is just flat out wrong and outdated. My hope is that within the next ten years, these models of thinking become the prevailing standard and that future colleagues of mine can work to improve upon them even more as the current model for organizational culture and strategy is highly ineffective, and I believe academics continue to go down a highly inferior rabbit hole wasting both time and resources to a cause I’m highly passionate about.
John was brought into CBRE in 1999 (J. King, personal communication, March 2018).
As he described, “USC was approached to do a consulting project and provide some consulting stuff for a number of people that were considered to be the top brokers and sales producers in the Southern California area...John Olin was the guy at USC who was in charge of putting something together called CB Richard Ellis University. He was, you might say, the director of learning and he was on the lookout for people who had an interesting, at least in his mind, new ideas that were applicable to the brokerage environment. I was brought along for that. Initially we did a program where we ran an exercise called metaphor, which is about negotiating and trading or something like that, but it also exposes dishonesty. It went well. But right after that, John Olin decided that what he wanted to do was have me give talks and I had something to talk about, which was a model called the cultural map” (J. King, personal communication, March 2018). The cultural map distinguishes the only five ways that people organize in groups. (Logan, 2009). The strategy model taught alongside the cultural map has an effectiveness rate of 80% while the strategy models in academia have only an effectiveness rate of up to 30% (J. King, personal communication, March 2018).
To understand what happened at CBRE, you need to understand the cultural map.
John describes the cultural map and the function behind it. “ The cultural map is a diagram that shows how people group together and how they talk when they are working together. It's designed for groups, [and], it’s designed for looking at culturally how people work together. The backup on that is how they connect or clump up together. What I noticed was that we live in a culture where it's pretty much about your individual effort, and therefore, people are not very good at forming partnerships. When they do form partnerships, they form them in a hierarchical manner, that is to say as a junior to senior in the partnership, which is in my world, is not actually a partnership. Mostly what we're trained to do when we work is we work inside of what is called a zero-sum environment. A zero-sum environment is where somebody wins and somebody loses. The purpose of the cultural map, and the structural map that goes with it, is to show people exactly at which point things tip-and-change to the next level of the zero-sum game, and, then where the zero-sum game becomes bankrupt if you're trying to accomplish something at the level of group, and, at which point there needs to be a mental shift into something called a non-zero-sum positive outcome. In a zero-sum game, there's a winner and there's a loser. I win you lose and we can kind of count it. I win by three points you lose by three points, the sum is zero. In a non-zero-sum game, it’s actually a participation in which we're all in the same game together and we all win together or we all lose together. My purpose was to have people look at this, see how they talked, and how their language actually impacts whether they’re in a zero-sum or non-zero-sum game, and, what level or stage—I called it a stage—of the game that they're playing it—and at which point—if they happened to find themselves in a non-zero-sum game, what level they are there. And what we noticed—I didn't know this going in—what we noticed was when people go from a stage three zero-sum game which most everybody knows how to do it to, and go into a stage four non-zero-sum game, their productivity goes up by a factor of about three times to five times. And so, I became interested in that because I'm interested in productivity. I'm interested in partnership and I'm interested in ‘how does partnership affect productivity’, and, I'm interested in the role that language and structure play in productivity and partnership” (J. King, personal communication, March 2018).
John further describes the five stages of culture that the cultural map outlines. What’s important to note is that the transformation that happened would not have been possible if the people inside of the Ontario office at CBRE were organized at stage 3 on the cultural map (J. King, personal communication, March 2018).
“In ascending order, people are more effective, that’s the first part of this. At stage one, there's only about 3% of the people that are organized at stage one. It’s a kind of a place where criminals are, and, it's an area that we call undermining. People who are in an undermining [relationship to their environment] and alone [in their environment] because it's a very alone sort of thing are at stage one. The next level up is something like— we experience this on a bad day—at stage two. Stage two is ineffective. When I notice that I’m not really being effective at what it is that I'm committed to, one of the things that I notice is that I am not really well connected. In fact, not connected at all to the people around me. I'm kind of there and I'm amongst them. But, I'm not connected to them. So at stage one, one of the things people at stage one say is: ‘life sucks’. At stage two—it's a big change—it’s ‘my life sucks.’ I mean, I could see that your life works. I can see that the things you do work well. I can see it’s a great life. I just don't have an access to participating in it. I’m not connected in a way that I can participate in it effectively, so I'm being ineffective, and ‘my life sucks’...and for the most part, very seldom, do people actually get into the true ‘life sucks’ unless they’re in wartime or [involved in] criminal activities, or, they’re trying to bring down the whole structure. But the truth is, that ‘my life sucks’ is kind of the place where you feel ineffective and then we kind of dramatize it. Stage two is connected by the way, kind of like I say joined at the hip to stage three. Stage two and stage three have a symbiotic relationship. Stage two, is ineffective, or you could say ‘a loser’, at least in this particular point [of view]. They have a point of view that ‘my life sucks.’ Stage three is the winner. Think of sports. The person who is the champion is the stage three and what they say is, ‘I'm great, you're not, and I have the statistics to prove it.’ So they are organized around winning. And if you're organized around winning, in this particular way, it's a zero-sum game. The people that you are winning over are the people who are at stage two. The trick about this is that stage three does not exist without stage two nor does stage two exist without stage three. They live in a comparative world. This is where we form partnerships. But the partnerships are definitely senior and junior. Stage three is senior and stage two is junior. What you have is a relationship where stage three is dominating a stage two and stage two is avoiding the domination. It's a relationship from [stage] three, ‘I’m great, you're not and I have the stats to prove it’, to [stage] two, ‘my life sucks.’ If you think about it just a little bit, you can actually see, when you're being ineffective and then somebody is actually driving you, managing you, dominating you, what comes along with it is a kind of a glee, a sense of I'm better than you. So how we build our self-image quite often, particularly when we're young, is we build ourself at stage three. It is not just a small thing, it's a big thing. If you extrapolate this out to companies, it’s: ‘our company is better than your company’, which is a stage three to stage two sort of saying. ‘General Electric is better than Westinghouse’, or, you can say politically, the United States often represents itself as better than Canada. And so if you’re a Canadian, you’re in a stage two relationship to most Americans and nobody realizes it because it's all sort of in the background. So that’s stages one, two, and three. There is a shift that occurs at stage four. At stage four, there is a realization that if I'm going to do something, I need to actually be generating leadership, effectiveness, or empowerment of other people around me. So what I need to put together is, I need to put together a small group or a team. Often it’s three, four, five, or six people who are all in the same boat, and, we're all—you know—paddling towards the same goal. So at stage four, it becomes ‘we’re great’, and, we begin to look at ourselves socially. For the first time for human beings they look at themselves socially. This is where leadership starts. This is where empowerment starts. This is where interesting results begin to occur. This is the beginning of something. This is a partnership. This is, literally, where people form effective partnerships and whereas Stage 1 was called ‘undermining’, stage two is called ‘ineffective’, stage three is called ‘useful’, it's a useful place, however, stage four is called ‘important’, and, important at the level of stable partnership and inside of a common languaging of ‘we’re great.’
Then, if you've done the work and put yourself solidly at stage four, then opportunities come along. They only come along for groups that are operating at stage four. And usually they're the kind of opportunities that will make history, it will change the game completely. This is what we call a ‘vital stage’ or stage five. At stage five, this is where team really shows up. Because your little group begins to connect up with somebody else's little group and somebody else's little group with somebody else's little group to form a team. And when we form a team, the language around is generally ‘life is great’, and what we're doing is accomplishing off-the-charts sort of results. Most people at stage three think they’re doing stage five. Not accurate. When you get to stage four, and you do the work around building yourself at stage four, you have that stage five opportunity. You actually get to see the remarkable difference between a zero-sum-stage three- ‘I’m great, you’re not’, and, a non-zero-sum-‘life is great’-stage five. But in order to do this, you have to do the work, and you have to do the work with other people. Human beings are social creatures. In fact, they’re ultra social creatures. And so we work best, not when we're alone, we work best when we work effectively with other people. So stage 4 is all about effective stable partnerships, and, in Tribal Leadership, the whole name of the game is getting people stable at stage four so that they are ready for the opportunity when it shows up. And it will for people who have done the work at stage four. It does not show up for people at stage three, and, they end up missing the opportunity and then—I don’t know—be weird about it. It’s about environment. See the thing is at stages one, two, and, three it's all about me, me, me, and, it's only about my survival, and it's all about me winning, you losing, and me getting ahead. However, at stage four, there's a consciousness that: how I win is by making sure that other people win, so, what should become at stage four—and this is the beginning of leadership—you become not someone who is out for yourself, but someone who is out to create an environment for other people to perform well. So, it's about being an ecologist. It’s about being an environmentalist. It’s about really providing an environment. It turns out, generally speaking, if you base your relationships with people properly, which is on merit, it turns out that people are probably pretty good at what they do and don't need a whole lot of managing, but, they might need some leadership. Leadership—being kind of a code word for: a great environment to work in. Google is a great example of it. Because what Google does is hire really smart people and then creates an environment for them to work well together. And as a result, they get off-the-charts kinds of results. This is also happening in our other programs that we see that are the flashy splashy great ones going on. The ones that seem to be passing away are the ones where they are still operating of the old version of ‘I'm great, you’re not.’ Rather than actually having stabilization—it actually presents bullying to say it brutally” (J. King, personal communication, March 2018).
John further described the practical application for these principles he invented: “One of the things that I realized at a certain point in time was that there was a limit to what the individual could actually produce. Then there was something the individual could produce if they were to, in a sense, enslave other people and dominate other people and make other people do it. We call that management. But when I saw—and started looking at extraordinary results at the level of team—when I started that, what I saw was that people had radically shifted their attention from their own survival to the success of the other people they were working with. And when I saw that, I began to look at how do we work together. I asked this question: what's the minimum number of people in a relationship that has it be stable? I've asked that question several thousand times. And the answer that I almost always get is two. But when I ask people where they learned that, for the most part, they don't know. They point to maybe their parents or they point to some sort of something. But the truth is, it’s a myth, and it's a myth that we've been fed by the social sciences: sociology, cultural anthropology, and psychology. We’ve been fed that it's about two [people]. I discovered [that it was a myth] in a way that was very touching to me. I have a friend who had a beautiful talented son who was being scouted to go to Notre Dame University and he was an athlete and a scholar—very stunning young 15-year-old boy—and, I got a call one day—and it turned out that the boy committed suicide. Shot himself in the head. And, it was such a shock to me because this kid had such a life in front of him—that I began to—I couldn’t get my mind around it—so I went to a whiteboard and started drawing out—I knew him fairly well, and so, I started drawing out every significant relationship that the young man had. And when I drew them out, they came out as triangles, and, I began to look at that and consider that the only way that we are truly stable is when we are in some kind of triangulated relationship. I looked physically across the room—and I have a camera on a tripod—and looked at the tripod and I went ‘oh...the fundamental structure for stability is at least three anchor points, not two, and maybe I could think from that.’ So, I looked at this diagram of triangles, and, I saw that what had happened for one reason or another over a course of several months is that every single triangle that this young man was in—as his network of relationships had broken—they had gone away, they had stopped, they had literally dissolved. And here was a young man who was standing alone—but it looked like he had his family—and his friends, and his school, and everything else—I got everything looked cool but it turned out that it was not so. He had shifted from one school to another school, and, when he shifted from one school to another school—his best friend who had been his friend for life and his girlfriend who he loved—decided they were in love, and, they abandoned him. So his mother and father had kind of gone away from [him], his sister kind of gone away from him, his friends—he gone to a new school—his friends were missing, he was at stage two to begin with, and then all of a sudden, the straw that broke the camel's back for him was that his best friend and his girlfriend decided that they were in love. Now people don't take teenagers very seriously in the matter of being in love. They say it's puppy love. But for them, this is love. This is the real deal. He didn't have any way to deal with it. So what he did was he stole his parent's car—you know—hijacked the car and got a couple of buddies, and, went over to his ex-friends house and beat him up. And then the roof fell in on him and everybody around him, including his parents, the boy's parents, and so on like that, just landed on him. And he was forced to shame himself or humiliate himself in front of the family—both families—to the guy who had been the guy who stole his girlfriend. At least that's the way it looked in his life. And he was forced to shake his hand. When he did, the guy whose hand he shook—who was 15-years-old also—smiled because he won. And he literally kind of rubbed it in. Then he went home and he was still in trouble because he’d stolen the car, and he’d lied, and he’d done this and he’d done that, and, then a couple of days later, he was found in his parent's bedroom closet, and, he had blown his brains out. And this was totally shocking. But what it got me to was—that when I drew out the figures on the whiteboard, what I saw was, we are stable when we are in triangulated relationships, and so that became the basis of the way that I look at networking and it became the basis of something that I called triads. Then I saw that when you move from stage three to stage four, if you took a couple of people with you, and you did it in such a way that everybody in the triangle was committed to the success of the other two rather than worrying about their own survival—the thing about it is that the building of a triad is a mutual thing. In other words, it won't just work for me to pick you and some other random guy and then be committed to your success unless I've got you in a non-zero-sum game with me in which you realize that my success is your success and the other person's success is your success. The rule is: the one person in the triad is accountable and responsible for the success of the other two. If you looked at it like a triangle, you would say the vertex is accountable for the success of the opposite leg, and, it requires that all three people in the triad are actually on the same boat. And the reason this is good is because it starts to bring up stuff that we start hearing a whole lot about. But we hear it discussed in an ineffective way. For example, this is where values come in. If I take you and another person, we have to be very clear that our values are aligned with each other, and so, if somebody has significantly different values, this is probably not going to work. This is where generosity comes in. Leadership is a generous space. This is where the idea of having the permission of the others comes in. Leadership is a distinction that operates or is granted by the permission of the people being led. So what you’ve got to have is you’ve got to have an environment in which all can succeed and that what you're there [for], is you're there for the success of the others in the group. Some people are extraordinarily good at this but not very many—maybe 20% of the population—if they wake up to it. So if I took the numbers and I said 3% are at stage one, about 20% is at stage two, roughly 50% are at stage three at any given moment—and it's a very fluid in-and-out thing—stage four is 20%—its an enlightened 20% of people who are interested in the success of something that’s bigger than me—bigger than them. So something that comes in at stage four is something called a noble cause, something that makes it bigger than me, bigger than the three of us, and something that is worthwhile for us spending our time, and our effort, and our money, and our ingenuity on to make happen. This is the—I don't know—the golden egg I suppose or the holy grail of organizational culture thinking. If we can get everybody working, and working happily together in a respectful and honoring way with each other, inside of the same kind of value set, and working on something together that is worth accomplishing together, that's bigger than us, then we have a good chance of putting ourselves at stage four. Otherwise, it just devolves into: ‘I won this round or I lost this round’”(J. King, personal communication, March 2018).
John Olin at CBRE understood these principles from having an understanding of the cultural map. Olin saw the connection between having greater alignment and coordination amongst the different teams at CBRE and how bringing CBRE to a Stage 4 culture would naturally impact that. Olin essentially ran the training and development program at CBRE (J. King, personal communication, March 2018).
However, there needed to be a reason for people to want to work with John King. John Olin was in a “position of power” ("Power Sources: How You Can Tap Them", 2006, p. 2)
To bring John King exposure he was “dependent” ("Power Dynamics of Organizations", 1995, p. 2) on the employees at Ontario office to actually consent to bring John in. John got his opening when one of the top sales people at the Ontario office, Darla Longo, asked her manager, Scott Kaplan, to bring John in so she could fix another employee in the office named Frank (J. King, personal communication, March 2018). Darla, as well as most of her colleagues in the office who listened to the cultural map were a bunch of stage threes who described themselves as stage five. John referred to this as “stage inflation” (J. King, personal communication, March 2018).
At the time, Scott Kaplan was the new managing director of the office which oversaw Darla’s office and Darla was his number one asset and the person that he had to keep happy and the two shared a level of “interdependency” ("Power Dynamics of Organizations", 1995, p. 2) with each other which is one of the “realities of managerial life” ("Power Dynamics of Organizations", 1995, p. 2). Frank was the rival producer to Darla at the time. When I spoke to Scott Kaplan directly about the relationship between Frank and Darla, he said: “they were literally killing each other” (S. Kaplan, personal communication, July 22, 2015). John King described the environment as a “sales ecology that is made up of giants in war” (J. King, personal communication, March 2018).
One of the problems at CBRE before John King started doing work with the company is that they were allocating resources to the wrong places and many of the strengths that CBRE prided themselves on were actually getting in the way of their problems around team alignment and coordination (J. King, personal communication, March 2018). It’s nearly impossible to fix a problem when the underlying cause, in this case culture, was blind to their point of view (J. King, personal communication, March 2018). John King described how the commission of the salespeople at CBRE when he first came into the company followed a Pareto distribution (J. King, personal communication, March 2018) which is when “80 percent of the output from a given situation or system is determined by 20 percent of the input” (Rouse, "What is Pareto principle? - Definition from WhatIs.com", 2013).
Essentially, when people knew of this kind of salary distribution, it created a level of cutthroat competition for salespeople to compete with each other (J. King, personal communication, March 2018). Scott Kaplan actually liked the fact that Darla and Frank were at each other’s throats at the beginning because his mindset was that it created a level of motivation to sell. What he didn’t get was that this kind of competition was getting in the way of sales, not forwarding them (J. King, personal communication, March 2018).
Scott Kaplan shared with me what he learned from his experience working with John over a period of four years. He said, “Before doing this work, revenue was shrinking and we were losing talent. We also had two top producers running a region for CB Richard Ellis who were literally killing each other. We started this work as an 11 million dollar enterprise in 2000 and we were able to through the use of this work design an entirely new culture together and the two top producers went from killing each other to co-existing. We were able to create a winning culture, recruit producers, and went from 11 million to 50 million in just a few years. We started to get so much attention in the company that we became our own region. We went from running an office, to running a region, to running half the country for the firm. I used to take the point of view that there had to be a winner and a loser. John would say things like, ‘what would life be like if you gave up looking good and being right for what works and doesn’t work?’ I also learned the difference between triads and networking principles. I had to be taught what that was like. I could be talking to my business partner who has been with me for a long time and he’ll be working with a client and I’ll say ‘well you need to connect me to that client’ and I’ll have to explain to him why that connection is necessary when he’s already working on a transaction to create that triad. Because of this work, I don’t live a life of transactions and one night stands and I live in the world of relationships and transactions come out of those relationships. There’s John King-isms all throughout me. I’ve had him work with my children, work with my loved ones, and then in business. What’s great about this work in general is that the work you will do applicable for everything. This work has touched our organization and still touches and inspires me to this day. John King who created this work is to me like Phil Jackson. He has a lot of championship rings and he’s coached big egos the Michael Jordans, Dennis Rodman, and Kobe Bryant. Through creating this work -- he has been able to do things with in a way that nobody has been able to in the culture world. John King is Phil” (S. Kaplan, personal communication, July 22, 2015).
While the main underlying problem at CBRE was a lack of coordination and alignment ("Managing Teams", 2006, p. 9) amongst the teams at CBRE. What was behind that was that company resources were being misallocated towards trainings that actually made no difference to the culture which at the time was command-and-control and all about hub and spoke relationships (J. King, personal communication, March 2018). They would spend money on sales trainings once a year and acquisitions to acquire more highly talented sales people. While adding people to the platform was a positive thing for the company, CBRE was doing it under the context of adding more spokes to the hub as opposed to adding more people to get into relationship with one another (J. King, personal communication, March 2018). John King was a major catalyst for that kind of paradigm shift at CBRE. John King described the environment as “dog-eat-dog all the way” (J. King, personal communication, March 2018). From the perspective of the cultural map, if you were in a space of “my life sucks” for too long you’d be thrown out of the organization (J. King, personal communication, March 2018).
The biggest fear CBRE had at the time was that “people who were the rock star producers would get poached by other commercial real estate companies who would come in and buy them, pay them a certain kind of ridiculous guarantee plus a signing bonus to come over to their company and bringing them to their team” (J. King, personal communication, March 2018).
One thing that really worked about the business and is now even more effective because of the shift in culture was their level of support that CBRE gave salespeople through their platform (J. King, personal communication, March 2018). Robert Simons (2007) in “Aligning Span of Attention: The Goal of Organization Design” describes a term called “Span of Support” (2007, p. 9) which “defines the range of support that an individual can anticipate and expect from people affiliated with other organizational units” (2007, p. 9)
At CBRE, every salesperson who had a commercial real estate listing had access to what the CBRE platform where you were connected to other people at CBRE who had expertise in industrial, retail, capital markets, and asset management. This was the way that CBRE kept employees from being poached (J. King, personal communication, March 2018). However, as great of a reputation the platform had in 2000, the platform was being underutilized due to the highly functioning sales people being skeptical about working with others in an organization where people were pitted up against each other.
There’s a concept called “Span of Influence” (Simons, "Aligning Span of Attention", 2007, p. 9) which can be derived from asking the question, “who do I need to interact with and influence to achieve the goals for which I’m accountable” (J. King, personal communication, March 2018). Simons (2007) measures this through one end being just interactions within a given unit of an organization and then on the other end up the spectrum, interactions across units of a given organization (2007, p. 9). What he doesn’t say directly, but what one could infer, is that interactions between different organizations would be an even a greater “span of influence” (Simons, “Aligning Span of Attention”, 2007, p. 9). John King’s cultural map shows that this greater extreme is most effective when an organization is stabilized at stage four (Logan, 2009) which then creates a foundation for employees of an organization to collaborate with others across other organizations at stage five around some kind of greater vision, higher purpose, or noble cause. Dave Logan uses an example when he gave the Tribal Leadership TED Talk (2009) where the Gallup polling organization decided to do the first ever world poll and had people come in from all around the world, not just within the Gallup organization, to help create the project (Logan, 2009).
When John King first came into CBRE, the company was trying to increase the “span of influence” (Simons, "Aligning Span of Attention", 2007, p. 9) amongst the organization. They were dealing with a problem where they had this great platform and management knew it was being underutilized (J. King, personal communication, March 2018). What they didn’t see at the time is that the root of their struggle was that they were trying to take on a stage four strategy within the context of a stage 3 culture. Collaboration amongst units, which happens at stage four and stage five is only ever sustainable within a culture that’s been stabilized at stage four (J. King, personal communication, March 2018). Team building is a function of trying to dominate employees to work together within a stage three culture (J. King, personal communication, March 2018). John King points out that Harvard University has documented team building to be one of the greatest waste of corporate expenses in the United States (J. King, personal communication, March 2018).
John described the problem that CBRE was dealing with in the late 1990’s and early 2000’s: “The company was trying to broaden their reach, and they were trying to get various areas of the company, specialties of the company, people who worked in those specialties into a good business relationship with others. So if you were a retail guy, basically all of your influences were inside retail, inside of your own deal. At the time, the company was trying to show that you will be a better retail guy if you and your client have access to other segments of CBRE such as industrial, capital markets, and asset management” (J. King, personal communication, March 2018). John describes how the culture at CBRE at the time was getting in the way of the company expanding their reach or what Simons would call “span of influence” (Simons, "Aligning Span of Attention", 2007, p. 9).
“People would think in terms of like a social clubs, fraternities, sorority, kind of environment. That's pretty much what the commercial real estate environment is. Every commercial real estate company is basically another fraternity or sorority. So that's kind of how they operate. And it was the people who were running the business at the very top who are trying to get these fraternity minded people into a business kind of point of view and do it in a way that they didn't kill each other. Because people get very individually competitive--and what the company was interested in and what I was interested was answering the question of ‘how do we make the employees competitive at the level of team or group as opposed to a competitive at the level of individual.’ [At the time] CB Richard Ellis was a company that was a cowboy kind of environment that was moving into a more grown up more team-oriented kind of environment” (J. King, personal communication, March 2018).
According to an article published by Harvard Business School Press (2006), there are six “characteristics of effective teams:
Competence--everyone brings something that the team needs;
A clear and compelling goal;
Commitment to the common goal;
A supportive environment;
Alignment” ("Managing Teams", p. 4).
When John King first came into CBRE in 1999, there were many aspects of the “characteristics of effective teams” ("Managing Teams", 2006, p. 4) that were missing. “Competence--everyone brings something that the team needs” ("Managing Teams", 2006, p. 4) was not there. Instead, the teams were “some sort of subset of the dynamic of the strongest or most dynamic on the team...nobody was allowed to be smarter or more entrepreneurial or more effective than the one rock star” (J. King, personal communication, March 2018).
Harvard Business School Press makes the argument that this problem is a function of the leader being the problem (“Managing Teams”, 2006, p. 17), however John King’s cultural map (Logan, 2009) would suggest that the leader being a problem is a function of the culture being a problem for the strategy at hand, in this case, building an effective team which doesn’t happen in a stage three environment (J. King, personal communication, March 2018).
You can see this in the CBRE example that when John finished working in the Ontario office after four years, this dynamic around teams was fixed, and it was a function of the environment in which the teams were in as opposed to traditional team building exercises or teaching people how to manage a team better (J. King, personal communication, March 2018).
Instead of changing the people in an organization, the culture changed the people’s actions naturally. The same drive that had the team leader be an individualist in the old environment, now had them be a strong co-collaborator as that now was the clear action to drive performance. John King points out that when the employees “started making bigger sales, doing bigger deals and they saw that oh maybe this [way of operating] does work” (J. King, personal communication, March 2018).
John also distinguished the power sources as described in “Power Sources: How You Can Tap Them” (2006, p. 3) which allowed for the implementation of this transformation of the competencies of the teams at CBRE. Harvard Business School Press (“Power Sources”, 2006) distinguishes three main sources of power in organizations: positional power, relationship power, and personal power (“Power Sources”, 2006, p. 4). When it came to positional power (“Power Sources”, 2006, p.4), Scott Kaplan was the person in charge of the implementation process and also happened to be the managing director of the office (J. King, personal communication, March 2018).
There was relationship power (“Power Sources”, 2006, p.4) as Scott and John King had an excellent working relationship with each other and Darla Longo and Scott Kaplan had an interdependent relationship ("Power Dynamics of Organizations", 1995, p. 2) with each other even though Scott was technically Darla’s boss at the time. Scott Kaplan also exercised personal power (“Power Sources”, 2006, p. 4) as John King describes, “Scott was a Phi Beta Kapa and had a degree in psychology and he saw that the way that I was talking to them [the team] was psychologically a much stronger model than the one they had prior and it would tie people more closely to CB Richard Ellis rather than having them being vulnerable to being poached by another organization” (J. King, personal communication, March 2018).
Scott was able to be committed to the team through his understanding of the impact of the models John King was teaching. The team trusted Scott for his competencies which allowed him to have more power in his ideas in this realm be heard and given a chance in the first place at CBRE (J. King, personal communication, March 2018).
When John King came into CBRE, the teams had a “clear and compelling goal” (“Managing Teams”, 2006, p. 6) to “make lots of money” (J. King, personal communication, March 2018). By the time John left and had shifted the culture from stage three to stage four, the new goal of the teams were to “build good relationships and make a lot of money” (J. King, personal communication, March 2018) and as King notes, “that’s where CBRE still operates today” (personal communication, March 2018). Within a year and a half of Darla and her team going through John’s training, she went from making on average a million and a half dollars in sales every year to averaging six million in sales (J. King, personal communication, March 2018).
The “Managing Teams” (2006) document also makes the argument for effective teams having a supportive environment (2006, p. 8). John describes how the culture got in the way of the supportive structure that was there between the CBRE platform and the employees when he first came into the company: “The team was a potential supportive environment for everyone, including the person who was the rock star or the rainmaker, but they had a mindset that--particularly the rock stars came out of a mindset where they had a suspicious relationship to CB Richard Ellis. It was the mindset of ‘I'll work with them but I'm not going to talk to my managing director, and I'm not going to use the company, and instead I'm just going to have my business cards and my phone number be from the CB office.’ It went from that to: ‘Oh Wow. It's really in my interest to have a very strong relationship with the managing director and to the company at large because of what the company and what the managing director provides for me.’ The sales professionals went from a hostile relationship to the company and the managing directors to a working business relationship to the company, and they were less than a vacuum by the time I left and were more supported and doing better” (J. King, personal communication, March 2018).
“Team-based work is more likely to be successful if the organization does not conform to a rigid hierarchical structure” (“Managing Teams”, 2006, p. 8). From the time John King went into CBRE until the time John left, teams became much more nonhierarchical, and people were much more independent to think for themselves while still be aligned with the direction that the leader wanted (J. King, personal communication, March 2018).
There was a more natural alignment that took place and less command-and-control within the teams leading to greater effectiveness and higher sales overall (J. King, personal communication, March 2018). In the document “The Tensions of Organization Design”, Robert Simons (2007) writes out a chart that displays “The Stages of Organizational Growth and Crisis” (Simons, R., 2007, p. 4) in which the stages are in ascending order: “Growth Through Creativity, Crisis of Leadership; Growth Through Direction, Crisis of Autonomy; Growth Through Delegation, Crisis of Control; Growth Through Coordination, Crisis of Red Tape; Back to Basics” (Simons, R., 2007, p. 4).
John notes that the major issues facing CBRE before he came in were regarding the company trying to implement greater control and John helped them do that through teaching them models which naturally increased coordination with the employees through transforming the cultural fabric of the company (J. King, personal communication, March 2018).
“Every place I went, it would get people more coordinated, and then they would make more money” (J. King, personal communication, March 2018). John further elaborated on how he was pushing for more coordination while the company was still in a “Crisis of Control” (Simons, R., 2007, p. 4). He notes: “we were right at that juxtaposition where easily the management of CBRE and I could be arguing with each other: them for control me for more coordination. And as a matter of fact, it came to a place where I was fired at one point, and then 18 months later they rehired me” (J. King, personal communication, March 2018).
John lists five ways in which he helped CBRE transition from a “Crisis of Control” (Simons, R., 2007, p. 4) to a space of “Growth Through Coordination” (Simons, R., 2007, p. 4). John notes: “...the first thing I did with people is I mapped wherever they were on the cultural map. Then I mapped where they were on the structural map, and I look to see if they were actually congruent with each other. Then I taught them the concept of triads. Then I worked with each person to teach them how to moving from doing a zero-sum game to doing a non-zero-sum game positive outcome. Then then I just worked with the employees on just being social and pleasant and nice with one another genuinely and getting interested in each other's lives. There were no exercises in which I taught them this. Simply getting people structured into triads and getting them to just spend time with each other and talk to each other within the new cultural framework created this kind of dynamic naturally. And the point where I really drove it home to them and where they really got it for themselves is that they realized they spent more time at CBRE then they did with their husbands and wives and it became like family where you like to come to work. People were really aligned with that. The only people who weren’t were some of the rockstars because they felt at first it diluted their power and some of them left the company, and the new culture weeded them out, and some of them stayed and changed behavior over time” (J. King, personal communication, March 2018).
Having members of a team be aligned with each other is crucial for teams to be effective (“Managing Teams”, 2006, p. 9). John King shared with me that after he came in and helped transform the culture of the Ontario, California office of CBRE that not only did the office move towards “Growth Through Coordination” (Simons, R., 2007, p. 4), but that the alignment of the team became significantly higher, and productivity went up by a factor of roughly 300% (J. King, personal communication, March 2018).
John King ended up spending the first four years on and off working with CBRE at the Ontario, CA office, the Los Angeles, CA office, and the Newport Beach, CA office (J. King, personal communication, March 2018). However, he ended up being passed around throughout the company all over the United States for about a decade as the word got around to different offices about the transformation that took place in California in what was known as the “Kaplan-King era” (J. King, personal communication, March 2018).
As divisions started to have greater coordination with each other in this new “Growth Through Coordination” (Simons, R., 2007, p. 4) stage, sometimes new divisions were created as well such as the Private Client Group (PCG). PCG was created taking actions that were not rooted in the old ways of doing things and would have been impossible with the old cultural ecology of CBRE (J. King, personal communication, March 2018). Glen Esnard, an employee of CBRE, was impacted by John, and through working with John, he started PCG under the CBRE umbrella. (G. Esnard, personal communication, July 16, 2015). He notes: “I started the private client group with CBRE. My official job was to oversee investment sale practice in the western United States. I had a geographic responsibility for everything that went on in the western United States. I built a business plan at the end of 1998 and ran it until 2004. Started doing this [Tribal Leadership[ work at the end of 1999. Through doing this work with John, I built the organization from nothing to over $100 million in revenue four years. What made it more freaky was that the growth was achieved in a sector of the market that most people thought you really couldn’t build a viable solution. I’m glad I didn’t know how little confidence everyone had in the program. It was a fun run” (G. Esnard, personal communication, July 16, 2015).
It has now been 19 years since John first got brought into CBRE in what started at the Ontario office in 1999. Through the work he did of bringing a company that was trying to fix a “Crisis of Control” (Simons, R., “The Tensions of Organization Design”, 2007, p. 4) which led to “Growth Through Coordination” (Simons, R., “The Tensions of Organization Design”, 2007, p. 4) and going from a stage three culture to a culture that is stabilized at stage four as opposed to a company that just improved when they were getting extra support and coaching from John King and Scott Kaplan.
References
Esnard, G. (2015, July 16). Personal Interview.
Kaplan, S. (2015, July 22). Personal Interview.
King, J. (2018, March). Personal Interview.
Logan, D. (2009, March). Tribal Leadership [Video file].
Retrieved from https://www.ted.com/talks/david_logan_on_tribal_leadership
Managing Teams: Forming a Team That Makes a DIfference [PDF]. (2006). Boston: Harvard Business School Press.
Power Dynamics of Organizations [PDF]. (1995, March 22). Harvard Business School.
Power Sources: How You Can Tap Them [PDF]. (2006). Boston: Harvard Business School Press.
Rouse, M. (2013, August). What is Pareto principle? - Definition from WhatIs.com. Retrieved March 23, 2018, from http://whatis.techtarget.com/definition/Pareto-principle
Simons, R. (2007). Aligning Span of Attention [PDF]. Boston: Harvard Business School Press.
Simons, R. (2007). The Tensions of Organization Design [PDF]. Boston: Harvard Business School Press.