As the CEO you know the value of independence in your workers, vendors, and others who support your success. But is there a time when independence promote less-than-optimal performance? Let’s look at this possibility through game theory and The Prisoner’s Dilemma along with a possible solution.
We all start life dependent upon our parents and others to feed, clothe, nurture, and teach us. As we mature there is movement towards self-reliance, i.e., independence. Based on self-interests we can take action and control our lives. Teams can be joined for accomplishing tasks that go beyond what we can do as individuals. This sounds sufficient for success but maybe we should look a little closer.
The Prisoner’s Dilemma
When teams are formed based solely on independence a problem arises. Individuals can pull out once their interests are met of if they feel they aren’t getting a big enough “piece of the pie.” This can cascade when other team members see the behavior.
Here’s an example. Imagine a 2-person design team, John and Mary. The best results occur when they work as a team. John is extremely good at designing for performance but needs extra time to design the product to be easily maintained. Mary is just the opposite. Her designs are easily maintained but she has to put in quite a bit of overtime to match John’s performance. Consequently, each can do the entire design alone but lack overall efficiency when it comes to their weak spot. On top of this, John is overly sensitive and Mary is rude.
They both want to be seen as superior. Consequently, they constantly compete with each other. To make things worse, whenever one appears to cooperate the other takes advantage and tries to put in fewer hours. There is no backup for either of them and management is afraid of losing either but will draw the line at flat out refusal to work. The grid below shows the four possibilities in terms of effort-hours expended.
If they both cooperated the total hours would be 60 (blue). With both being non-cooperation yet still working together it shoots up to 100. If either pulls out completely the other has to put in 150 hours. The job ends up taking 100 hours (red) because both will be selfish at the first sign of cooperation by the other.
In game theory this is called The Prisoner’s Dilemma. Both could cooperate and put in fewer hours overall but that would require being empathetic and trusting. Instead, at the first sign of seeing the other cooperate, the one will try to take advantage and be selfish. With them both being selfish the job gets done but at great inefficiency.
A Possible Solution
One approach is asking them to cooperate, pointing out the value to the organization and they could be more productive. That is unrealistic since it expects altruism from two uncooperative people. A more realistic approach and one that works well in a complex situation is a joint evaluation. Their bonuses, profit sharing, etc., rise or fall with team performance. This returns power to the leader. Mary and John can do as they like and they will be rewarded (or not) accordingly. There are risks associated with this approach. However, if current costs are outstripping benefits then it is worth considering.