The Case for Collaboration

Major technological, economic, and social trends are making collaboration more important than ever for all kinds of organizations. The tricky part, however, is getting it right.

This is part one of a four-part series on organizational collaboration. Part II will post Nov. 16.


November 09, 2009

By Charles Waltner

Cisco Systems' chief executive John Chambers is famous for talking about – and taking advantage of – market transitions. Chambers now believes organizations the world over are facing one of the most profound transitions of modern business history.

"From a business model and leadership perspective, we're seeing a massive shift from management by command-and-control to management by collaboration and teamwork," he said in an interview with the Harvard Business Review last year. "You could almost say this shift is as revolutionary as the assembly line."

Chambers has a few good reasons for his enthusiasm. By taking advantage of collaboration technologies, cultivating collaborative behavior, and developing collaborative management practices, Cisco saved $691 million and increased productivity 4.9 percent in its 2008 fiscal year.

And through its collaborative leadership program, Cisco has quickly organized its resources to take on several multi-billion-dollar market opportunities while launching major initiatives to refine its operations. Cisco estimates it has gained a 900 percent return on its investments in better organizational collaboration.

A Collaborative Imperative

The funny thing about collaboration, however, is that it takes a lot of people working together to make an organization more collaborative. Cisco and other organizations that have undertaken collaboration initiatives have all discovered one exacting fact: It is very difficult.

While technology is the great enabler to how, where and when organizations can collaborate, the trick to greater organizational teamwork rests in more difficult matters: changing the way a company collectively works, acts and even thinks.

But organizations that falter in their collaboration efforts – or pass on the task altogether – could well face even greater challenges, says Morten Hansen, a professor of management at the University of California, Berkeley and author of the book "Collaboration."

"Businesses are confronting a tectonic shift in how work is carried out," Hansen says.

Hansen says five major trends make it risky for any business to punt on collaboration. These include globalization, the increase in specialists, the need for "open innovation" efforts with people outside an organization, and a search for the next wave of productivity increases.

"Businesses are confronting a tectonic shift in how work is carried out."

— Morten Hansen, professor, University of California at Berkeley, and author of the book "Collaboration"

Finally, there's technology, which Hansen describes as "turbo-charging" the other trends. Networking technologies – from virtual workspaces and wikis to blogs and video communications – are helping improve how an organization can collaborate and "connect the dots" between people and information.

"All of these trends put together point to collaboration as the future for work," he says.

But – and this is the big one – collaboration is not necessarily a good thing. Collaboration comes with real costs. Time, money and resources are all needed to bring people and groups closer together, Hansen says.

"People have been sitting in wasteful meetings for decades," Hansen says. "Cisco TelePresence and other virtual communications tools can't help you run more efficient meetings if you don't do collaboration with discipline."

The key, Hansen says, is to carry out "the right kind of collaboration." That means assessing the true costs of collaboration and weighing them against the business benefits.

Getting Collaboration Right

In one study, Hansen looked at 180 teams from an information technology consultancy. Many teams collaborated with people throughout the company to gather information and insights for creating bids on large software implementation projects.

He found that teams comprised of novices in the bidding process benefited from collaborating, but highly experienced teams that collaborated actually performed marginally worse than their historical performance.

Hansen says this is because collaboration interfered with the expertise the experienced teams already had and forced them to waste time with unnecessary interactions.

Though such examples provide a careful warning to any organization interested in improving its collaborative practices, there is clearly much an organization can gain for making the most of new collaborative networking technologies.

Andrew McAfee, a principal research scientist at the MIT Center for Digital Business in Cambridge, Mass., says new Web 2.0 collaborative tools are helping organizations avoid "reinventing the wheel over and over again."

By making it increasingly easy for employees to "narrate their work" through blogs, videos and wikis, these tools are addressing long-standing challenges to organizations, McAfee says.

Such social networking tools offer a complement to existing business applications, such as intranets, enterprise resource planning (ERP) applications and customer relationship management (CRM) software, he adds.

While these technologies have helped with many aspects of operations, they have not been effective at capturing and making available the knowledge and expertise of each employee.

"For many tasks, especially knowledge sharing, we've struggled to find effective tools," he says. "We now have them, thanks to new communications technologies."

McAfee, who coined the term "Enterprise 2.0," defines the new Web 2.0 networking tools as "emergent" applications, because over time good ideas, relevant content, and pointers to people with expertise emerge as people interact through these platforms.

A Starting Point for Collaboration

Though Web 2.0 is helping create more effective and efficient ways to collaborate, technology is just one part of the collaboration equation. Simply deploying technology will lead to a dead end, the experts warn. Success requires a comprehensive approach.

To help its customers address the challenges of implementing effective organizational collaboration, Cisco has created what it calls the Collaboration Framework, a best practices guide for executives interested in developing a more collaborative organization. In the next installment of this series (posting Nov. 16), News@Cisco will discuss key elements from the Collaboration Framework, as well as explain how such efforts have been put into practice at Cisco.

The Cisco Collaboration Framework is based on the company's extensive efforts to develop greater collaboration within the company. It also reflects insights from a diverse group of 14 companies Cisco brought together to explore the best methods for cultivating organizational collaboration. Members of the group, known as the Collaboration Consortium, include Statoil, the RAND Corporation, Wipro, Mahindra Group, Novartis and Media X at Stanford University.

François Joanette, who assisted Cisco in conducting the Collaboration Consortium and is a managing partner at SBT Advisors, says the most important step to better organizational collaboration is to recognize that collaboration must be driven by business needs rather than technology. "Technology is the enabler, but any collaboration efforts must begin and end with the business case," he says. "How will it help increase productivity, reduce costs, or improve quality?"

By far the most difficult part of collaboration is changing the culture of an organization, Joanette says. He adds that organizations must also realize collaboration takes time to evolve – lots of time.

Cisco, for example, is now in the eighth year of its efforts to become a collaborative organization. Certainly, it has made good progress, but everyone from John Chambers on down would agree that the company still has more work to do.

"Collaboration is not a silver bullet, but it is clearly an increasingly important tool to help organizations reach their goals," Joanette says.

Charles Waltner is a freelance writer in Piedmont, Calif.

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