Achieving Real ROI with Collaboration

Potential collaborative capability resides everywhere in the "body" of the organization — just like common genes reside in specialized cells and tissues throughout an organism.

You hear a lot about collaboration these days — in the business world especially. It seems nearly everyone wants to know how to collaborate more effectively to achieve greater results in an ever more complex and interdependent world.

Yet, for most companies, two overlapping considerations are important: 1) Whether it makes sense to invest in building your company’s collaborative capability, and, 2) How to explore ROI when deciding whether to invest in becoming more collaborative.

This article looks at those issues by closely exploring the relationship between what we call collaborative capability and the common need companies have to create value. And at the outset let's make clear we are talking about the human side of collaboration, not the technologies of collaboration software. Most people who have jumped heavily into online "collaboration" have discovered that success is only about 10% technology and more like 90% about human behavior, leadership, and change.

Business leaders interested in building collaboration capabilities need to consider four essential questions:

1. What is collaborative capability?
2. Where can you look in your company to see if or how much you have?
3. How can you create lasting value through improved collaboration?
4. How do you get started?

Let’s explore each of these questions separately.

1. What is collaborative capability?
Collaborative capability is the capacity of an organization to execute effective joint work activity among people who share information, influence, and responsibility in working together in a way that creates more value than could be created otherwise. In exploring collaborative capability, then, the focus is on an organization's people, systems, structure, technologies, and culture that support or hinder such joint work activity and shared information, influence, and responsibility.

From the perspective of social responsibility, I would add that "value" in this context means value realized by a broad range of relevant stakeholders, and not just direct contribution to the financial bottom line. For example, effective collaboration can produce an innovative new product that directly results in the value of greater profits. On the other hand, an open, collaborative culture can produce the value of higher employee and customer satisfaction/retention, which may only indirectly increase profits.

2. Where can you look for collaborative capability in your organization?
Perhaps more specifically: Where can you look to see if you have it or how much there may be waiting for you to use?

Potential collaborative capability resides everywhere in the "body" of the organization — just like common genes reside in specialized cells and tissues throughout an organism.

It's best to think systemically and look at your company for potential collaborative capability embedded in:

• Individual employees – open minded attitudes, interpersonal skills, communication and listening skills, openness to people and ideas, commitment to shared values and goals vs. focus only on individual goals and needs,
• Groups or teams – group problem solving abilities, meeting behaviors, effectiveness in taking concerted action, facilitation skills, leaders, and teams who are willing to face truths vs. keeping issues undiscussable,
• Leaders – their core values, styles, and behaviors, ability to build and sustain trust, presence or absence of vision that creates or fosters shared meaning and responsibility, developmental approach to people in the organization, attitudes and skills of collaboration, openness to feedback, approaches to decision making, response to failures as opportunities to learn vs. opportunities to punish, effective sponsorship vs. making people go it alone,
• Systems and structures – performance management systems – reward group accomplishment vs. only individual, communication and information management systems – information as common resource vs. hoarded as power, the physical set-up of work spaces, hierarchical vs. team based structures, technology for sharing information and learning,
• Culture and Values – espoused values and values in action, levels of trust, risk taking, the handling of conflict, heroes, legends and symbols,
• Mission and Vision – does the organization recognize in its mission and vision a wide range of potential stakeholders? Consider value creation for stakeholders beyond financial insiders? Or does it focus on a narrowly defined mission and vision that limits awareness or concern for anything other than profits?
• Management of boundary conditions – people or groups in the organization dealing with external relationships – vendors, potential partners and alliances, communities, governmental relations, etc.

Important: Gauging the capacity of an organization to use collaboration to create greater value requires a leader to examine the whole system to determine what elements of the whole system support and what elements hinder people in working jointly, sharing information, influence and responsibility to get the job done.

About systems thinking: We know from a whole systems understanding of organizations that we have limited ability to change an organizational system by tinkering with just one or two parts. Thus, really increasing the usable collaborative capability of a whole organization requires dealing with multiple parts and levels of the system (primary examples of which are listed above) where that capability resides (or is lacking).

You can't create a more collaborative organization only by training people in certain skills, or only by a leadership offsite envisioning a collaborative set of corporate values, or by just changing the compensation system. A systemic approach strategically designed to influence many variables is needed.

3. How can you create lasting value with collaboration?
Let's turn to the idea of opportunities to realize value from collaboration. Within any given organization in the context of its environment (its market, industry structure, competitors, product/service mix, communities where it functions, etc.) opportunities exist to create value through collaboration.

Of course, opportunities exist to create value through other kinds of work behavior too – e.g. extreme specialization, command and control, stimulating individual heroism, etc. It's most important to identify the significant opportunities where collaboration can produce greater value than other kinds of work behavior, so that the capacity to collaborate can be used in the right activities.

Not all activities of collaboration are equally valuable to an organization. Collaborative activity can be a waste of time if not applied to an opportunity from which greater value can be obtained through collaboration than through other types of work behavior. Collaboration can be costly; don’t throw high cost ways of working at opportunities that don’t deserve it. (The same point was made recently in an interesting Harvard Business Review article: "When Internal Collaboration is Bad for Your Company" by Morten T. Hansen, HBR, April, 2009.)

Companies have many opportunities to create value through collaboration on a regular basis. Here are some generic types: (You can probably think of specific examples from your own experience)

• Special value-creation potential exists for partnering or creation of joint ventures due to possible IP, technology or market sharing.
• Important problems often can be solved best by groups of people who are "front-line," having direct experience with the problems if only they could work together more effectively.
• Increased trust and involvement in decision making can increase employee confidence and commitment and consequently generate greater creative work energy.
• Implementation of strategic changes can be accelerated through a more collaborative approach to developing the strategy for change (increased understanding and buy-in through involvement).
• Creation and implementation of new products or services can be accelerated through reduced cycle time for project teams, cross-functional review, and decision making.
• Creating agility and flexibility to respond to a "white water" market environment.
• Creating value through exchanges of resources or capacities within the organization or between organizations.
• Improvement or redesign of core business processes that cut across units or divisions of an organization to enhance the voice of the customer and reduce cycle times.
• Complementarity of functions provides opportunities for synergy.
• Multiplicities of functions or skills need to be aligned toward pursuit of shared purposes.

Opportunities such as these often lie dormant, waiting to be discovered. A company can only justify the investment of effort and cost to increase the capacity for collaboration when more effective collaboration is matched with, and flows into, opportunities to create greater value. In addition to gauging the collaborative capability of the organization, leaders must therefore assess the range of value opportunities, and some of them will be more obvious than others.

4. How Do You Get Started?
If you aim for ROI on the power of collaboration to create value inside your organization, you will want to focus on five key activities:

Assessment – You will need to observe, interpret and measure collaborative capability throughout the whole system, and understand your existing organizational capacity to collaborate effectively. There is significant scholarship existing in organizational behavior literature that you can bring to bear on your assessment of collaborative capabilities. And at IA, we have special knowledge and experience in the concepts, skills, attitudes and attributes of collaborative capability and assessment approaches developed over 40 years of practical work in the field to help you in this work. For example we helped a mid-sized Eastern U.S. bank evaluate its own internal collaborative capability as part of their strategy to develop a creative and effective social responsibility program which would require them to collaborate more with community institutions in their primary market area.

Opportunity/Needs Analysis – Determine what opportunities to increase value through collaboration exist for your organization, given its strategic intent and its current and expected future environment. The ability to respond to, assess, define and re-frame presenting problems (a strategic and values-based conversation) is critical here.

We often help organizational leaders through this re-framing process to identify the needs and opportunities for increasing and using collaborative capability and help them discover their own optimal balance of collaboration with other forms of value creating behavior. In the case of one major pharmaceuticals firm, we helped the senior leadership identify a significant opportunity to reduce costs across the whole enterprise by simply instilling more effective meeting behaviors for their managers who spend between 30 and 50% of their working time in meetings.

Developmental Design - Assuming that your assessment of capability and opportunities lead to the conclusion that the organization should increase its organizational capacity for collaboration in some way (and I would say that in today’s world this conclusion will be virtually universal) you must then design systemic developmental interventions to increase collaborative capability and get it focused on the right opportunities.

Depending on the situation, such intervention approaches can include standard and customized skills transfer events, learning process design, consulting with leaders to create the approach and collaborative process for opportunity realization, group process consultation, leadership development, adjustment of reward systems, information technology improvements, executive coaching for key leaders, and strategy work. One example of such a comprehensive systemic impact is described in "Theory in Action: Building Collaboration in a County Public Agency" by Jamie Harris and David Straus, Chapter 17, in Creating a Culture of Collaboration, Sandy Shulman, ed., Jossey-Bass Publishers, 2006.

Implementation – This is the follow-through on the developmental plan. To create lasting change implementation should be sponsored by executive leaders of the organization as an important business initiative. As in any change effort, ongoing monitoring effectiveness and continuing transfer and demonstration of the skills that increase collaborative capacity throughout the whole system need to be highlighted. Visible and sustained sponsorship and involvement by senior business leaders become critical success factors.

Evaluation - Evaluate the impact in terms of measurable increases in collaborative capability and measurable value created from increased collaborative behavior. Your ability to know what to measure for will depend on how well you defined the value creation opportunities in the first place.

A Final Word
There is a philosophical case to be made for the value of collaboration – certainly as social animals, most people are happier when their relationships are interactive and more productive. But there’s also a huge business case for collaboration – but any investment in it requires focused thinking and justification.

Especially in the current high level of "buzz" about collaboration in the media and business talk circles, it is worth stepping back to take a strategic approach to assessing your company’s current capabilities and what actual opportunities exist to create greater value through increased collaboration.