Company retreats didn’t use to be this crazy

By Stephen Mihm

A VERY FAMILIAR FEATURE of corporate life has crossed over into pop culture this year: the company retreat.

First came Prime Video’s Jury Duty Presents: Company Retreat, an elaborate hoax masquerading as a reality-television series about a fictional company known as Rockin’ Grandma’s Hot Sauce in March. And later this month, horror aficionados can savor Corporate Retreat, a movie featuring a homicidal CEO who takes team building to a whole new level.

How, you might reasonably ask, did this annual ritual become so ubiquitous that it could become fodder for both comedy and horror? The answer lies in the distant past, when a group of management theorists embraced the then-heretical idea that fostering esprit de corps could help the bottom line. Along the way, the concept strayed from its original purpose — and not for the better.

A century ago, management viewed workers as cogs in a larger machine, particularly in the factories that dominated the economy. Companies monitored workers’ every movement, focusing on getting as much labor as possible out of them. They even forbade employees from speaking with one another, fearful that this would be distracting, or worse, lead to unionization. The idea of teamwork was foreign — until an experiment upended conventional wisdom.

In 1923, managers at Western Electric hypothesized that increasing the level of light on the factory floor might be a way to enhance productivity. They pulled six women off the assembly line at their Hawthorne plant, just outside of Chicago, and put them in a special room where they could test the theory. When the managers increased the light level, the workers produced more than they had on the assembly line. Yet when they decreased the light level, the exact same thing happened. Why?

The “Hawthorne Studies,” as these experiments came to be known, baffled the executives at Western Electric. Hoping for answers, the company turned to a psychologist and industrial organization specialist named Elton Mayo, who taught at Harvard Business School. For several years, Mayo and his team interviewed the workers as well as the larger workforce.

While the employees could not account for the rise in productivity, they described the research as enjoyable, particularly because they could talk to one another without interference from management. Mayo concluded that these conditions enabled “the six individuals [to become] a team and the team gave itself wholeheartedly and spontaneously to co-operation.”

In the 1940s, an industrial psychologist named Kurt Lewin began conducting studies at another company that built on this basic idea. The so-called Harwood Studies — named after the factory where they took place — revealed that when managers excluded workers from decision-making, productivity tanked. By contrast, when workers could participate fully in discussions, output soared. Lewin’s work helped normalize the idea that building team spirit could result in better performance.

Executives initially tended to reject the idea that team building should include rank-and-file workers, limiting corporate retreats to management. More research in the 1950s and 1960s would open the door to something a bit more inclusive, paving the way for the concept as we know it today.

Much of the shift came from the changing nature of jobs in the postwar era, particularly the expansion of white-collar work environments where the distinction between management and labor was less clear. At the same time, management theorists began to warm to the idea that supervisors should do more to engage rank-and-file workers.

In 1960, management theorist Douglas McGregor published The Human Side of Enterprise, which demolished what was left of the old-fashioned vision of top-down management. It instead elevated the virtues of group collaborations that transcended traditional corporate hierarchies. All that remained was some kind of real-world imperative to push corporations to consummate McGregor’s vision.

This arrived in the 1970s by way of Japan. Over the course of that decade, the country put American firms on the defensive in key sectors like autos and electronics. As the nation’s business community scrambled to meet the challenge, they tried to figure out Japan’s secret sauce. Many concluded that it grew out of “quality control” groups — clusters of employees of varying ranks who met outside of work to brainstorm on increasing productivity.

American management took the idea and ran with it. Two human resources executives — Jack Zenger and Dale Miller — published an article in Personnel Magazine in 1974 titled “Building Effective Teams.” It laid out one of the first blueprints for an inclusive corporate retreat by recommending that a team of employees, along with a supervisor, move off-site for several days in order to collaborate on problem-solving.

The outing was meant to be fun. Zenger and Miller advised having a group dinner before the first full day of work. A facilitator from outside the company would lead the retreat in icebreaking activities, such as asking sub-groups of employees to draw caricatures of one another. Then they would get down to business, tackling whatever challenge or strategy had led to the retreat in the first place.

In the ensuing years, the corporate retreat (or company retreat) would explode in popularity, with entire firms founded to lead these annual getaways, complete with trust-building exercises, extreme physical challenges, strange culinary adventures, and other activities designed to foster trust (as well as sprained ankles and broken bones).

Corporations that take retreats to such extravagant and bizarre ends are missing the point. As the deeper history of corporate team building suggests, a little bit of time together goes a long way toward fostering cohesion. Rather than dragging employees off to some remote resort to eat tarantulas, managers can simply bring their employees someplace relaxing, giving them coffee and doughnuts, and engage in an honest discussion that gives everyone a chance to be heard. Anything more is overkill.

BLOOMBERG OPINION