Collaboration at AutoTech - Case Description

By Stuart Collins, MBA Berkeley Haas School of Business

I wrote this role play exercise for of our MBA Managerial Negotiations course, incorporating ideas from the Game Theory course. Throughout the term, we ran exercises like this with other students as the counter-party to practice putting course skills into practice and expose our personal negotiation biases.

This exercise is written to capture a dynamic many of us encounter working across departments. Unforeseen priorities can randomly and urgently come up - what if that disrupts the plans you counted on with another team?

Format: Two-party negotiation, with 4 rounds. Around 30min exercise

Background of AutoTech

AutoTech, a midsized high-growth technology company, specializes in AI and machine learning-enabled robotics devices. While they have attracted attention for breakthroughs in robotics, the company is only beginning to commercialize products. With a rapid burn rate and board of investor VCs, the effort to ‘do many things at once’ is high: develop new products, grow business and sales, troubleshoot and support products in the field, hire and integrate new employees, etc. The senior leaders make it clear their focus is successful execution on annual goals, and mid-level managers follow suit.?

Because the company mixes hardware and AI software, there are many more types of engineering disciplines in the company than most technology companies solely focused on software or hardware.? With more disciplines and team-to-team dependencies, there are more possible ways for abrupt urgent needs to arise.

AutoTech is experiencing the pains and stresses of fast growth: managers have a high need for new employees, but are generally incentivized to focus on the short-term projects their teams are working on. This has led to many new employees feeling like they are left to figure it out by themselves. Many new employee’s productivity ramps up slowly over 6 months, with mixed satisfaction & engagement survey scores. Attrition of new employees (leaving within 12 months of hire) is concerning, though not a critical problem at present.??

The norm at AutoTech is for managers to create quarterly plans for their teams. These plans include which projects their team will work on that quarter, how many hours of employee time to spend on each project, what consultants or vendors to hire, etc.?

The plans for some teams at AutoTech are ‘rigid’, that is, impractical to change after the start of the quarter.? This is due to long lead times, signing contracts with vendors, hiring decisions, etc. Conversely, some teams can, and do, change their plans mid-quarter as urgent customer problems, timely opportunities, or high-priority needs from another team come up.? Ideally, managers would be aware of all these circumstances during quarterly planning, but that simply isn’t the reality of a multifaceted, high-growth, and fast-paced company like AutoTech.

AutoTech has a performance management system that is intended to incentivize high performers. Every employee has an annual performance review with their manager at the end of the yea, with 3 possible ratings: Does Not Meet Expectations (DNM), Meets Expectations, and Exceeds Expectations. The annual bonus and incremental stock grants are tied to these ratings.? Employees receiving DNM are considered at-risk for termination as well.

A Potentially Valuable Collaboration

It is the beginning of January, and 2 managers are meeting to create the quarterly plan for a collaborative project. Lex, the leader of AutoTech’s Learning team, is meeting with Emery, a senior member of the Engineering SVP’s staff. They are discussing a compelling opportunity: the creation of engineering-focused learning materials, exercises and onboarding courses. Engineering has been hiring rapidly, and a drag on performance from manager’s split attention is becoming noticeable. Managers are onboarding a steady trickle of new team members, all while guiding their teams to execute. It has led to poor new hire satisfaction and overstretched managers.

Creating the materials will require the contribution of both teams.? Learning is the expert in learning design, delivery, measurement and management of any materials that are created.? Without them, any new hire materials written by engineers would be non-standardized, difficult to share across teams, and not form a coherent curriculum. Engineering is the expert in the subject matter that is being taught.? Without their participation, whatever materials the Learning team created would be misinformed, technically inaccurate, and lack buy-in from the target users.

These 2 managers will meet at the start of every quarter this year (January, April, July, October) to plan their collaboration.? Each quarter, a new project related to learning materials is being considered. The resulting value of the project varies based on how much time each team spends on the project. The managers can choose to contribute 0, 1 or 2 days/week of team member time to the project, as detailed in this table:

Importantly, this time has an opportunity cost.? The managers have other projects they could pursue if not committed to this learning project. The value of these alternative projects varies and is individual to the team.

Stages of the Negotiation

Step 1

• Lex and Emery discuss and decide how much each will contribute to the project?
• (Optional) Emery and Lex could agree to make an internal announcement of the project. This makes ‘no progress’ on the project look worse: -1 payoff instead of 0. Neither can make an announcement on their own.

Step 2

A 6-sided dice is rolled, representing urgent mid-quarter needs in engineering:

• [Roll of 1/2] No surprises through the quarter. Payoffs unchanged
• [Roll of 3/4] Moderate Engineering work arises. Payoffs change for Emery to favor reducing their commitment to the learning project
• [Roll of 5/6] Major high-priority needs arise. Payoffs significantly change to incentivize Emery to redirect their commitment to other projects

Step 3

• Emery and Lex can discuss
• Emery can (but is not required to) change their contribution level for the quarter

Step 4

• Each manager records their score for the quarter using the scoring details in the individual information
• The next quarter begins.? Return to Step 1 with the same rules and payoffs.

At the end of 4 quarters, each manager sums their score, and receives a performance rating based on the point they scored through the year. Emery is reviewed by the SVP of engineering and Lex by the CPO. This is a results-based review, and doesn't consider effort expended or goodwill, only results (realized points).??

Performance review based on these scores:

0-15 Does not Meet Expectations

15-24 Meets Expectations

25+ Exceeds Expectations

Collaboration at AutoTech - Instructions for Emery

You are a member of staff of the Senior Vice President (SVP) of Engineering, who then reports directly to the CTO. The work at this growing company has been exhilarating at times and exhausting at times. You’re proud of being given the opportunity to be responsible for the assignment of engineering resources at the company, though you sometimes feel that it’s just the illusion of control as so many unexpected ‘fires’ arise in engineering week to week.? The dance of constant adjustments is a fun problem to work on, and is a great experience for your career.??

Lex from Learning has brought a compelling project proposal for improved new hire materials, and you have personally felt the headaches of having to scramble to fill empty headcount on teams, only to see them ramp slowly for 6 months and then depart.? If successful, this project would have a meaningful impact on AutoTech’s resilience and growth.? You’ve discussed the project with your SVP and have their support, even theri expectation for progress on this topic this year.

In order to outperform and disrupt the larger, slower big technology companies, AutoTech needs to take advantage of their ability to respond nimbly to week-to-week changes. While you have discretion on how your team member’s time is spent, if urgent projects came up elsewhere in engineering, you would be judged harshly by your superiors if you allocated time to a less-important task such as a non-critical learning project. If you reallocate Engineering time in response to these needs, you’ll have your SVP’s full support and understanding about the missed learning project.?

You have a career vision of moving to a leadership role in 1-2 year’s time, and your SVP’s assessment of your performance at managing the resources of the engineering department will be critical for the recommendations needed to land that future job. You like Lex and sympathize with their position, but ultimately your performance is judged by what you deliver for Engineering, not Learning.?

Collaboration at AutoTech - Instructions for Lex

You are the manager for Learning at AutoTech. You’ve worked at AutoTech for 2 years now, and understand how the system works.? Learning projects are a lower priority item. Leaders laud the value of developing and training new employees, but when it comes to choosing between priorities, learning projects often get cut.

One year ago you received a ‘Exceed Expectations’ after assembling an impressive onboarding program that year in collaboration with various engineering teams. The next year, you couldn’t seem to get traction with engineering to work on more advanced learning projects, and felt like you were spinning your wheels much of the year. Your manager noticed too, and you received a DNM rating in this most recent review. What a disappointing turnaround.?

The rating stung, but you learned an important lesson to avoid committing too many resources to collaborative projects when there is a risk the other team may not contribute. Engineering, especially, is fickle. While it’s rarely the fault of your direct counterpart in engineering, mid-quarter priority changes can abruptly be declared by engineering leaders, displacing the time planned for learning projects. You’re then left without a completed project, and without enough time to spin up and pivot to an alternative.??

You need to savvily spend and and protect your limited resources, while still landing enough high-impact projects through the year. You still need to start collaborative projects with engineering since that's where the biggest need for learning materials is, but you’ll need to carefully apportion your team’s time. You have a promising alternative, basic training for new managers, but need to know what resources you have available at the beginning of the quarter to pursue that.