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C OLLABORATIVE

B USINESS

E XPERIENCE

Position Paper

April 2004

heExCo

Collaborative Business

Collaborative Business perience: Overcoming the llaborative Paradox

Experience Position Paper

© 2004 Capgemini – All rights reserved 2/17

T In today’s business climate, innovation and collaboration may be the only competitive advantages that really matter.

Gone are the days when a company can claim its “highly trained workforce” or “state of the art manufacturing facility” are sustainable advantages. No sooner does a company claim such a temporary victory than a fast follower provides the same capabilities in Eastern Europe, India, or China for half the cost. In this unprecedented, real-time, globally competitive business economy, only companies that can nourish and sustain a constant stream of innovations and execute them flawlessly have a chance for meaningful success.

Inventing new products is not enough. Companies must be ready to innovate the way they run their business – new services, business models, alliance relationships, internal processes, and organizational infrastructure. Innovation is one of the “intangibles” that has a direct effect on that most tangible of measures – stock price. Research has shown that fully 35 percent of portfolio managers’ decisions about where to allocate their investment dollars is based on such intangibles.1

In a market place as complex, dynamic, and unpredictable as this one, however, almost no enterprise possesses the intellectual talent, physical infrastructure, and capital to innovate all areas of the business effectively on its own.2 Much has been written about the dynamics of business innovation, but innovation without collaboration is a recipe for niche-player status at best.

Consider the following:

Outsourcing. Over the past decade, businesses have learned to focus on their core competencies and to outsource the rest. Indeed, this may be one of the most lasting and profound legacies of the tens of billions of euros spent on re-engineering efforts over the past decade. “Focus on what you do best, on the core of your business, and distribute the rest to partners for whom these other functions are what they do best”, was the order of the day. And it worked, in terms of operating efficiencies, lower costs, and clearer, cleaner business models. This approach raised the importance of cross-enterprise communication and coordination. Companies that were able to collaborate effectively with their business partners could reap all the gains of re-engineering. Those that did not learn to collaborate well found that the transaction costs of dealing with their partners easily wiped out many of the gains in efficiency that they hoped to achieve.

Unstable Complexity. All companies need to innovate new products and services, and to innovate quickly in the face of changing customer demands and competitive threats. For the

1 Jonathan Low and Pam Cohen Kalafut, Invisible Advantage: How Intangibles Are Driving Business

Performance (Perseus Publishing, 2002). 2 “Possible exceptions might be General Electric, Microsoft, Intel, or Wal*Mart, but there are too few of these

examples to be generally useful and those that do exist don’t teach us much about how to translate how they do what they do to the rest of the world.” John Parkinson, Capgemini Americas CTO.

Collaborative Business Experience Position Paper


foreseeable future, however, the business environment will be characterized by rapid and fundamentally disruptive changes brought on by technological innovation, unstable market dynamics, and socio-political uncertainty. No one company possesses the technologies and market reach necessary to take new products to market quickly enough to succeed. Companies must possess (or develop) the inclination and the skills to work together and innovate rapidly. The greater the capacity for collaboration, the lower the friction between companies, and the more rapid the response to changing market conditions.3

Simplicity Amid Consistency. Within the walls of the modern enterprise, the need to collaborate effectively has never been greater. Consider, for example, the financial services company whose customers are coming to expect one monthly statement for the bank accounts, credit cards, mortgages, insurance products, and auto loans that company provides. Providing this common statement is no easy task. It requires the vision and the human will to construct the collaborative processes and information technology to bring all this information together. Or consider the maker of consumer electronics whose various brands could dramatically lower costs by designing components on a common platform – how many different kinds of remote control devices does the world need after all?

The Internet. Finally, there is the example of the most disruptive technology of our time, the Internet, developed without central direction or control, and standardized through the collaborative efforts of millions of organizations, companies, and individuals over the past two decades. The Internet is the paradigm for the modern commercial enterprise – distributed, far-reaching, fast, and collaborative to the core.

In large part due to the Internet, collaboration may become ubiquitous in the next generation. While peer production has been commonplace in the academic world for a long time, computers and networks have made participation in collaborative projects possible for the non-professional. NASA Clickworkers is an experiment in which public volunteers “clickworkers” can map craters on Mars. Wikipedia is a collectively written encyclopedia. Linux proved that open source code could not only be written and maintained by many programmers, it has also gained widespread commercial acceptance.

These are just a few of the large collaborative projects that have recently emerged. As networking and computing costs drop, it seems likely that these kinds of information-rich collaborations will become commonplace in the future.4

If collaboration is so essential to organizational survival, much less success, how does a company develop the competencies for in-house and external collaboration such that its ability to collaborate gives it a true market advantage? Like innovation, collaboration must be part of a company’s cultural DNA in order to be truly effective. It must be lived every day. Capgemini has been a pioneer in the practice of collaboration. Here is a bit of what we have learned in our work with thousands of the world’s best companies over the past several decades.

3 Ralph Welborn and Vince Kasten, The Jericho Principle (John Wiley & Sons, 2003). 4 Yochai Benkler, "Coase's Penguin, or, Linux and The Nature of the Firm", Yale Law Journal, Volume 112,

Issue 3 (December 2002): 362+.

Collaborative Busin

efinition and The Art of Collaboration ess Experience Position Paper


Collaboration means, literally, “working together”, work being done by more than one person or group. Work done solely by one person may be effective, but it is not collaborative. The term “collaboration” also has the connotation of willing cooperation and interchange, a spirit of mutual support and synergy. There are coercive and combative forms of working together that could hardly be termed “collaborative”. Conversely, the spirit of cooperation may be present between people who are doing no work together. One might invite one’s friends to dinner but, unless they come early to help with the cooking or stay late to help clean up, that is not collaboration, it’s community.

DWe can define collaboration, then, as the act of working together in the spirit of willing cooperation and interchange to achieve a shared objective.

There are so many ways in which people work together collaboratively that the use of the word easily becomes confusing. For example, an individual may work with one other person and their work can be fully collaborative. People may work together in small teams or in much larger groups of hundreds and thousands. Within an organization, work groups, functions, and departments can be said to collaborate (though often they don’t).

Businesses, too, can collaborate with one customer, supplier or partner, or with many in complex supply chains, large interactive networks, and professional associations. Business collaboration can be horizontal, as when several automotive manufacturers create an eMarketplace to enable them to purchase supplies more cheaply. Businesses collaborate vertically, as when a consumer electronics manufacturer enters into an alliance with a major retailer to gain better access to customers and point-of-sale information.

There are multiple meanings to the word “together” that further complicate our use of the term “collaboration”. People working collaboratively can be together at the same time, in the same place. They can be linked together technologically in ways that allow them to span the globe. They can collaborate across time – time zones, weeks, and even years as in the collaboration required to build a new computer operating model or explore and develop a new field of natural gas.

Ours is an age where networks are becoming more and more important. Metcalf’s Law reveals why. “Discovered” by Robert Metcalf, founder of 3Com Corporation and inventor of the Ethernet protocol, it states that the value or power of a network increases in proportion to the square of the number of nodes on a network. Increased connections lead geometrically to increased value to users. As companies begin to understand the strategic value and power of commercial networks, collaborative skills become more and more important. Point-to-point collaboration is powerful. Network collaboration can be revolutionary.


he Continuum of Collaboration Therstagrequ



e are four stages along a Continuum of Collaboration.5 Each successive e is characterized by an increase in the complexity of the tasks and irements of the parties involved and in the level of shared resources,

information, goals, and technology infrastructure. We will describe the Continuum of Collaboration with examples of business-to-business collaboration, but the Continuum applies to a company’s internal collaboration as well.

T Transactional. The Continuum starts with business as usual, and collaboration is at a minimum. At this stage, commercial relationships are characterized by arm’s length transactions and zero-sum competition for the value derived from working together. The transactions between business partners are market-based; each party in the relationship can be replaced. There is only enough exchange of information to affect the transactions themselves. Access to the Web is often all the technology that the different parties need to make this mode of relationship work.

Many companies that loosely use the term “strategic partners” to refer to their supplier base are, in fact, operating at this bare-bones level of the Continuum. Their “strategy” is nothing more than the effort to wring the lowest price possible out of their suppliers.

Cooperative. Most companies are working closely with at least some suppliers and customers in order to improve costs and response time. Through collaboration, they are able to improve business processes across organizational boundaries, increase sales and new business opportunities, and build greater customer loyalties. There exists the beginning of a win-win relationship between the parties.

To achieve these results, collaborating companies must share information, but there are clear limits to the level of disclosure that is acceptable to each party. For example, while they might share sales forecasts and aggregated sales, they are unlikely to share individual customer sales data or product cost structures. While this is just the beginning of the collaboration continuum, even at this level, savings can be enormous. Arjan van Unnik, a founding member of Shell Oil’s New Way of Working group, estimates that in 2000 online collaboration saved the company at least $237 million: “We only counted clear examples of where we’d earned money or reduced cost by increasing [oil] production or solving problems that are impacting production”.6

5 For further reading on the stages of collaboration, see C. K. Prahalad and Venkatram Ramaswamy, “The

Collaboration Continuum”. Optimize (November 2001); Michael Treacy and David Dobrin, “Make Progress In Small Steps”, Optimize (December 2001); and Dr. Sanjiv Gossain, “Cracking the Collaboration Code”, Journal of Business Strategy (October 25, 2002).

6 Scott Kirsner, “Culture of Collaboration”. Darwin (November 2001).



Level of Task Complexity

Level of shared resources, information, goals and enabling

Each partymay be replaced

Transactional

Beginningof a win-winrelationship

Cooperative

Learn toshare/createknowledge.Intricate

procedural& technical

infrastructures

Shared

Creationof a new

competitivespace

Shared destiny

Co-created

Shared. In this stage, companies rely on the competencies of their partner companies as an essential element to their own success. Companies share new product development or joint account management in order to enhance their ability to create value. Companies outsource functions and tasks to partners that they traditionally did themselves. In this stage of collaboration, partner companies must learn to share and create knowledge, both tacit and explicit. They must establish clearly stated common goals and intricate procedural and technical infrastructures.

Large pharmaceutical companies like GlaxoSmithKline (GSK) frequently have hundreds of alliances. R&D collaboration allows the company to share risks, while also banking on potentially large rewards. In an alliance with Exelixis, Inc., a leading genomics-based drug discovery company, GSK is able to accelerate its own drug discovery activities, while helping Exelixis to grow into a mature drug discovery and development company.7

Co-created. In this stage, companies work together to create a new competitive space. They have a shared destiny based on new insights regarding how to bring value to the marketplace. The idea is to work together as though they were one company in order to achieve their mutually shared goals, to depend on each other for success. University of Michigan business professor C.K. Prahalad aptly states, “Best practices are the table stakes. Next practices are where it is”.8

Examples of this level of collaboration are rare, but they do occur. When Boeing developed the 777, it knew that it had do things differently. In the past, Boeing developed a product, and then sold the product to its customers. However, other manufacturers, such as Airbus and McDonnell Douglas, had already created widebody airplanes. Boeing had to differentiate itself.

7 “Exelixis and GlaxoSmithKline form broad alliance to discover and develop novel therapeutics”, PR

Newswire (October 28, 2002). 8 Tony Kontzer, “Come Together”, Information Week (October 2002).



Boeing invited eight potential kick-off customers (including British Airways, United Airlines, Japan Airlines and Qantas) to participate in a project that was to start with a blank sheet of paper and finish with a detailed airplane design. These firms were competitors so they were hesitant to work together. Boeing employed professional facilitators to encourage the airlines to talk openly and to collaborate on the design. As a result of the airlines working together, the airlines got three things missing from the other widebody planes: a plane that was 25% wider, interior flexibility, and service readiness.

Boeing also designed the planes to require less downtime and maintenance so that the airlines could get more revenue out of a single plane. Altogether, the development of the 777 was a commercial success.9

The revolutionary Apple iPod is one of the most successful consumer electronics products in recent years. The iPod has a earned a 31% market share and 55% revenue among all MP3 players.10 Its remarkably intuitive interface, vast storage capacity, and coherence as a product are well-known. What is less well-known, however, is how collaborative development with companies such as Sony, Toshiba, PortalPlayer, and Pixo allowed Apple to bring this product to market within a six to nine month timeframe. This is co-creation at its finest.11

Businesses today can – and must – master all these forms of collaboration. And they must master the specific collaborative behaviors, processes, and technologies that make the different stages possible.

Business leaders have the full range of collaborative options available to them when they purchase professional services. In all too many cases, however, disappointing past experiences lead them to opt for business as usual. Arm’s length relationships with consultants and IT service providers may seem prudent, but they inhibit the company’s ability to gain full value from their work.

9 Malcolm Wheatley, “Orchestrating the big project: When it comes to managing large-scale, technically

complex developments, US companies have led the way”, Management Today (May 1, 1994): 50. 10 John Markoff, “Apple Introduces a Smaller, Less Expensive iPod”, New York Times (January 7, 2004).

Accessed online. 11 Rob Walker, “The Guts of a New Machine”, New York Times Magazine (November 30, 2003). Accessed

online.

Collaborative Business E

ot So Fast – Not So Easy

In thtriedpres

xperience Position Paper


e past, collaboration hasn’t been tried and found wanting – it has been and found difficult. There are inherent risks and difficulties that can ent insurmountable barriers to individuals and companies that try to

collaborate.

N The risks are real. That is not surprising. There are no business opportunities without corresponding risks and the two are often proportional. The risks increase as businesses move up the Continuum of Collaboration. So do the opportunities to create value.

The most obvious risk is that the collaboration will fail, having fallen victim to basic human nature. For many people, collaboration with those beyond their most immediate social network is an unnatural act. Cultural anthropologists describe millennia of human experience trusting and working effectively with no group larger than the family or, at best, the tribe.

Even on the smallest social scale, that of the family, the human experience is not always one to inspire hope in the promise of natural collaboration. People can be unwilling to ask for help, seek advice, and learn from others. They may be unwilling to help others when asked to do so. They may not possess the skills to work with others easily and effectively.12 Educational systems, especially in Europe, teach individuals to compete with each other for individual recognition and reward rather than to work together for mutual gain. Familiarity may result in collaboration, but it may also “breed contempt”, as the old saying goes, when it is accompanied by a distrust of co-participants’ intentions and competencies.

In spite of these difficulties, however, human society, at least on this most basic level of organization, is fundamentally a study of collaboration and mutual support. Often in spite of ourselves, our survival as a species has always depended on our growing ability to work with larger and larger groups of our fellows.13 It still does.

However, even when the conditions for developing trust and effective cooperation in the family and tribe are present – intimate familiarity, common history and experience, and mutual interest in survival – it is no trivial task to scale them up to the level of the commercial enterprise. Within an organization, the very size of the enterprise can inhibit the personal relationships that make collaboration possible, For example, in one high tech company, a study of new product development projects discovered that engineers working with colleagues from other divisions with whom they had no prior relationship took 20 to 30% longer to complete the projects.14

Other organizational dynamics interfere as well. Perceived risks of collaboration include loss of autonomy, an increase in the role of politics in decision-making, and increased time for decision-making and implementation. Kipling’s famous quote, “He travels fastest who travels alone” accurately captures the assumptions (and the preferences) of many managers when given the choice of collaborating or acting independently.

The intramural competition for status, recognition, and resources can diminish the ability to collaborate, and performance management systems based exclusively on individual

12 Morten Hansen, “Turning the lone star into a real team player”, Financial Times (August 7, 2002): 11-13. 13 See, for example, Matt Ridley, The Origins of Virtue: Human Instincts and the Evolution of Cooperation

(Penguin, 1996) and Robert Axelrod, The Evolution of Cooperation (Basic Books, 1984). 14 Morten Hansen, 13.



performance may exacerbate intramural turf wars. Rigid, hierarchical organizational designs may stifle the horizontal connecting that is the hallmark of collaboration.15 Managers may incur transfer costs as a result of using resources outside their immediate span of control and, more importantly, their budget. Furthermore, the costs of collaboration are often incurred in the here-and-now in the hopes of future gains. Managers may see no benefit in working together, or they may simply lack the skills and resources to do so.16

Establishing collaboration within one’s organization is a necessary pre-condition for establishing trust and coordinating work with outside partners. A CIO looking to share customer relationship information with an external partner must first make peace with his or her own supply chain colleagues, the marketing department, the sales force, the eCommerce team, and whoever else might be involved. Collaboration begins at home.17

Business to business collaboration has additional risks.18 “Business as usual” usually means the zero-sum game of cutthroat competition, in spite of the fact that creating value in today’s business climate requires skill in collaboration. It is simply a tradition that we don’t trust our business partners until we are convinced that this radical act is first safe and then, perhaps, profitable.19

As companies move upward through the Continuum of Collaboration they risk the exposure of trade secrets and proprietary data, and the loss of competitive advantage they contain. They may lose control over their own intellectual property, and suffer the additional loss of the tacit wisdom of any employees who might be recruited away by erstwhile partners. This is a major paradox that companies must manage: knowledge is power, and commercial knowledge is commercial power. But to create value out of that knowledge, you must apply it and, in so doing, you risk losing exclusive control over it. It is the very nature of commercially valuable knowledge to become commoditized and dispersed over time.

Companies also risk impairing their own performance if the partner fails to deliver, a result that is increasingly serious as collaboration increases. Their financial results and their reputation in the marketplace can suffer if their partners prove unreliable.

The barriers and risks to collaboration are often so high that creating a culture of collaboration requires the active intervention of leaders at all levels of the organization. This may be one of the greatest challenges that leaders face today. They must first make peace with the necessity of collaboration for the success of their enterprise. The best way to build a culture of collaboration is to recognize when and how to address issues collaboratively, including within the senior leadership team.20 The inertia against collaboration can be so strong that only a threat to the survival of the company can produce the necessary changes in behavior. As Edgar Schien of Harvard puts it, “Learning only happens when survival anxiety is greater than learning anxiety”.21

As we have seen above, however, collaboration is a survival issue in today’s business climate. Companies collaborate internally and with external partners because they must.

15 Michael Goold and Andrew Campbell, “Do You Have a Well-Designed Organization?”, Harvard Business

Review (March 2002), 117. 16 Michael Goold and Andrew Campbell, “Desperately Seeking Synergy”, Harvard Business Review

(September-October 1998). 17 Lauren Gibbons Paul, “Suspicious Minds”, CIO (January 15, 2003). 18 See “Managing Distributed Risk” in Welborn and Kasten, 101-105. 19 Gibbons Paul. 20 Jon R. Katzenbach, Teams at the Top (McKinsey and Co. 1998). 21 Diane L. Coutu, “The Anxiety of Learning”, Harvard Business Review (March 2002).

Collaborative Business E

reating the Conditions for Collaboration

In sp

xperience Position Paper


ite of the difficulties, companies around the world are successfully increasing their ability to collaborate internally and with external partners. There are four basic building blocks to creating conditions for successful collaborative relationships, including collaborative relationships between the buyers and providers of professional services.

C

Targeting Value. The motive for collaboration lies in the possibility that the parties involved can improve their individual performance by joining together in a common venture. They should be able to identify a compelling common vision of what is possible through working together in the spirit of willing cooperation and interchange. It is important to quantify the value that parties aspire to achieve and to identify clear metrics of achievement. The “size of the prize” will help the parties involved determine where on the Continuum of Collaboration they must play in order to win.

All projects and programs, for example, are born out of the sincere interest of the organization to improve performance. All too often, however, these projects lack well-defined performance targets due to the absence of a solid business case and an inability to adapt to unforeseen or changing circumstances. Buyers of professional services undercut the potential value of what they buy when they choose to operate on the low end of the Collaboration Continuum. Unless buyers tailor contracts in order to link payments to joint performance results, the only “skin in the game” is their own.

Mitigating Risks. Given the inherent complications and risks involved in any collaboration, it is important to carefully and thoroughly identify these risks up front and to develop a plan to mitigate them. The complexity of streamlining operations, variabilizing costs, and leveraging the power of technology to run a more efficient and effective organization is often beyond the experience of the normal company. Not only are the risks of transformation serious, most management teams have little to no direct experience with assessing and mitigating them.



However, what is an unusual and unprecedented level of risk for a client may be business as usual for the right professional service company/partner. Deep program management tools and experience help consultants and IT professionals to deal with risks and barriers both predictable and unexpected. Rigorous delivery methods and certification programs further standardize and bring under control the natural variation of large projects.

Optimizing Capabilities. The next step in creating the conditions for collaboration involves understanding what value and capabilities each party brings to the enterprise and creating a clear understanding of who does what. Collaboration is only possible when the parties involved have a clear picture of what each is contributing.

In today’s fast-changing business and technological climate, no company possesses the full range of expertise and operational capability it needs to succeed. Companies typically turn to outsiders for the leading practices, knowledge, and additional skills that they do not possess. Experienced buyers of professional services, however, have come to realize that simply delegating a solution to their provider may deliver a good initial solution, but may not be in the company’s long-term interest. The most effective projects are those that not only result in a solution, but also enhance the competencies of the client’s people, leaving behind a sustainable advantage when the project ends.

Aligning the Organization. The assumption that collaborative approaches require more time and effort than going it alone is widespread – and dead wrong. It is important to directly address this misunderstanding up front and design collaboration for speed and rapid time-to-value. In particular, companies underestimate the importance of building consensus among all stakeholders and gaining their input early on in a transformation project in order to minimize confusion, error, and resistance in later implementation phases.

Experience shows that the use of collaborative techniques can cut the time it takes to deliver large transformation projects by 20 to 50%.22 The net result of these building blocks is to create an atmosphere of trust. Trust is the essence of collaboration, its foundation and source. Select your potential partners or team members carefully and invest the time to get to know them. Avoid companies and individuals that are not well known for their collaborative approach. Collaboration is an opportunity for all parties to learn from each other, but why be bothered teaching basic cooperative skills and approaches to potential partners who are deeply into the paradigm of business as usual? Look for partners whose approach is collaborative from the start, partners who are committed to doing things with you, not to you.

Chemistry matters. During the trust-building phase of the relationship, there is no substitute for a face-to-face meeting (or meetings) in which you connect many-on-many, not just one-on-one. Two caveats here: First, meetings between very different cultures can be extremely difficult to navigate effectively without significant pre-meeting investment and in-meeting facilitation by someone who understands all the “assumptions” and habits that the parties bring to the meeting.

Second, we may be seeing the evolution of a new kind of collaborative capability in the next generation workforce, who was brought up on MTV, cell phones and online interactive game play. Our children may be learning a new form of collaborative behavior that depends more on reputation and observed behavior than it does on eye contact. Most business managers, however, just aren’t there yet.23

22 Capgemini, “A Message From Rob”, Capgemini Americas eNews (December 5, 2003) 23 Capgemini, ongoing research by the Office of the CTO, Americas Region, contributed by John Parkinson

in a personal communication with the author.


eading Practices in Collaboration

Whesomprod



L n the conditions for collaboration are clearly in place, partners can institute e of the leading practices that we have found to be especially useful in ucing results collaboratively.

On the People Side: • Get Together Face-to-Face. Trust is a central issue in any collaborative

relationship and there is simply no substitute for getting partners/team members in a room together, especially in the early stages of the collaboration. The formula for developing trust is quite simple:

Trust = Intimacy/Risk

Face-to-face meetings are essential to working both sides of the equation. They help partners understand each other’s capabilities and operating styles and lay the groundwork for avoiding trust-busting misunderstandings later on. The more extensive the collaboration, the larger the group that needs to connect in order to develop a sense of common purpose, clear roles and responsibilities, and detailed action plans. At best, co-locate the people who need to collaborate. At the very least, get them together often.

The top several hundred Wal-Mart executives attend a “Saturday Morning Meeting” every week and spend several hours reviewing the previous week and preparing for the next one. In effect, they have 50 annual meetings a year. Saturday Meetings give Wal-Mart extraordinarily fast corporate reaction time, and promote a high degree of coordination between departments.24

As we will see below, video conferencing can substitute for some meetings down the road, but only after groups have formed and coalesced. In today’s economic climate, with cost constraints and the hassles of travel, many managers would like to believe face-to-face working meetings are a luxury. They aren’t. They are the basis for the successful collaborative relationship.

• Educate People (Especially Managers) In Collaboration Methods and Tools. Collaboration means meetings, and poorly designed and run meetings are the greatest time waster in any organization. The basic tools and techniques of conducting productive meetings can be learned, including the behaviors that are most effective for facilitators, meeting recorders, and other key roles.25 Methods for assessing the capabilities of individuals and matching them to necessary tasks simplify the staffing of a collaborative team. Tools like RACI, defining who is Responsible, Accountable, Consulted and Informed, help clarify roles and responsibilities on a project. There are techniques for displaying information clearly to groups.26 Teams need to learn to use the collaborative technologies that will support their work. All these methods and tools can be learned – but they must be first taught and then practiced.

24 Chip Saltsman. Personal communication with the author, (December 19, 2003). 25 An excellent starting point is David Straus, How To Make Collaboration Work (Berrett-Koehler, 2002) 26 Edward Tufte, The Visual Display of Quantitative Information (Graphics Press, 1983); and Michel Greif,

The Visual Factory: Building Participation Through Shared Information (Productivity Press, 1991).



They must also be reinforced by the example of managers who have embraced the need to collaborate. In addition to using these tools themselves, managers can demonstrate their commitment through actions such as inviting internal and external business partners to their own operational meetings. Dave Ulrich and Norm Smallwood have identified six things that managers can share across organizational boundaries: standards, information, expertise, authority, processes, and innovation and design.27 Long experience with collaboration demonstrates that the example of leaders within an organization is much more effective in spreading collaborative behavior than official rewards and sanctions.

• Adjust Internal Performance Metrics to Support Collaboration. Budgets and performance management systems are blunt instruments that can serve to inhibit or promote collaboration within your organization. For managers who are adept at defending their P&L and delivering results at all costs, training in collaborative methods and tools will not be enough to produce behavior change. That will take a change in incentives.

When fostering internal collaboration through knowledge management programs, Thomas Davenport says "...the best way to get knowledge to be transferred is... to reward them for transferring it". Informal incentives such as praise and public acknowledgement can also help to support collaboration.

Ernst & Young is one company that rewards and recognizes employees who contribute to the corporate knowledge base. It is one criterion (contribution to the firm) used in performance reviews28.

Incentives with teeth in them are necessary to show people you are serious, but no company can afford to rely on rewards and sanctions exclusively. It is too expensive. Over the long term, the intrinsic survival value of collaboration will carry the day and recognition will replace specific rewards as the primary motivator.

• Build Distinctive Relationships. From company alliances like those in the pharmaceutical industry to many retail-supplier relationships, external partnerships often involve some form of financial incentive for collaboration. However, like internal employee incentives, these will only assist in promoting a collaborative beginning. Long-term collaboration requires fostering a culture that reinforces the need to manage alliances, partnerships, and other external relationships based on a belief in mutual advantage.29 In the long run, this provides more leverage than incentive, which may be matched or beaten by a competitor.

When asked what it takes to build a distinctive relationship, BP’s Group Chief Executive John Browne replied, “The most important aspect of any relationship is understanding what your partners hope to get out of it and to work hard to help them achieve that goal. It is the key to transforming a contractual relationship into a genuine collaboration”.30 When mutual advantage is recognized, a long-term, distinctive relationship is created.

27 Dave Ulrish and Norm Smallwood, “Close Collaboration”, Executive Excellence (September 1, 2002). 28 Louisa Wah, “Making Knowledge Stick”, Management Review (May 1, 1999): 24+. 29 For more on alliance management, see Danny Ertel, “Alliance Management: A Blueprint for Success”,

Financial Executive (December 1, 2001). 30 “Unleashing the Power of Learning: An Interview with British Petroleum's John Browne”, Harvard Business

Review (October 1, 1997).



• Value Diversity. The true value of diversity in business is in the additive experience it offers to problem-solving and in the habits of openness and adaptation that it engenders in our thinking. It is important to define diversity broadly, not only in terms of gender, cultural or racial diversity, but also in terms of a broad range of experiences, cognitive styles, and points of view. When the right conditions of open exchange and tolerance are created, all of us are smarter than any one of us.

In a global world economy, inter-cultural collaboration is a new challenge. Old cultural habits die hard – and can be amazingly offensive to other cultures. Look for partners who can bring a practiced appreciation of diversity and new ways of approaching old challenges to your relationship. And do all that you can do to ensure that your side of the partnership is prepared to do the same.

On the Process Side: • Start Small and Build Momentum. Given the importance of trust in any on-going

collaborative relationship, it is important to start with manageable collaborative projects and build more ambitious (and therefore riskier) ventures on the back of smaller successes. Pick a project that is likely to have a quick payback for all the parties involved.

Momentum comes both from early successes and from increasing familiarity – it’s a common habit to emulate what makes others successful and the more places you can start with a small success, the faster you get emulation. This is another aspect of Metcalfe’s Law applied to changing human behavior.

• Build Collaboration Into The Process of Work. The differences between individual and collaborative process design are subtle, but important. Individual work designs are seldom tolerant of interruption; collaborative designs need to be. Individual designs often emphasize personal efficiency; collaborative designs must trade individual efficiencies for overall effectiveness. This often requires designs that include the ability to: (a) switch between tasks when one task “stalls” because a collaborator is not available; (b) have “rendezvous” and synchronization points when schedule conflicts can be resolved; (c) constantly monitor overall progress so that priorities can be reset quickly and work reallocated when necessary; and (d) share information and work products before they are “finished” so that overall progress is optimized.

These are challenging process design parameters for those schooled in the traditional practices of work design. Even more challenging is the necessity to manage collaborative work “dynamically”, with constant small adjustments to the process, rather than “statically” via periodic reviews that can result in wrenching changes of direction.

• Design Venues for Collaboration. We have learned a great deal in the past several decades about how to design workplaces for comfort, efficiency, and collaboration. Unfortunately, for reasons of tradition and false economics, companies demonstrate precious little of this learning in the work spaces that they provide for their people.31

31 Matt Taylor, “Creating Urban Landscape” on http://www.Matttaylor.com (accessed on January 10, 2004),

and Witold Rybczynski, Home: A Short History of an Idea (Penguin, 1987).



Environments that are truly collaborative configure to the work rather than force the work to configure to a fixed layout. They provide a balance of privacy and group space, ample tools and technology to avoid conflicts over scarce resources, and the ability to work big in ways that are visible (plenty of white boards!). Knowledge is made visible and available through a visual group memory. Users have control over light, heat, air conditioning, and access to tools and information. Attractive, well-designed, and highly efficient work environments can be created at a fraction of the cost of the typical office.32

On the Technology Side: • Get The Most Out of The Tools You Have. The investments that most

companies have made in personal productivity and connectivity over the past decade are beginning to pay off handsomely. In and of themselves, they are not sufficient to promote collaboration, but they lay the technological foundation for it.

In fact, 85% of the technology needed for effective collaboration resides in telephone, email, and instant messaging. They have the characteristics that knowledge workers expect of collaborative technology: always on and available everywhere. Extending these characteristics to other common personal productivity tools isn’t hard, but until recently has been expensive. Today, however, we have enough low cost technologies (especially broad-band connectivity) that we can make our document-centric tools available in the same way that we have come to expect from email and the phone system.

• Keep It Simple. The technology of collaboration must meet two criteria: it cannot be more work than not collaborating and it must be extremely easy to learn and use. The technology must provision automatically and invisibly. For example, the more passwords a user must enter to gain access to a corporate knowledge base, the less likely he or she is to use it at all. Wherever possible, the infrastructure must do the work for us.

The more collaborative technology replicates the elements of the ideal venue – the face-to-face meeting – the better. Perhaps the most advanced video conferencing technology in use today is offered by InSORS Integrated Communications, Inc.33 Their large video conferencing wall employs multiple cameras and vantage points to create the dynamic of several different locations merging into a single room. Different activities are portrayed simultaneously, a natural function of meetings. Participants share a common set of documents as though they were sharing the same white board. Interactions are recorded and can be quickly located and reviewed so that late-comers and early leavers can stay informed.

• Create Your Corporate Memory Automatically. Collaboration requires an efficient common knowledge base. Smart individuals with wonderfully full hard-drives on their personal computers do not a knowledge management system make.

According to our research, up to 70% of the time teams spend working together is spent figuring out what everybody knows.34 Large sums spent on knowledge

32 Matt Taylor. Interview with the author (December 23, 2003). 33 See http://www.insors.com/index.htm (last accessed on January 10, 2004). 34 John Parkinson describing research for Microsoft. Personal communication with the author, (December

16, 2003).



management systems over the past decade have produced mixed results.35 In some cases this was due to an improper strategy, whether based on the codification of documents or on the identification of individuals who possessed various forms of tacit knowledge.36 In other instances it was due to a failure to understand the limits of technology in the dissemination of useful knowledge.37

The problem with any codification scheme is that it cannot possibly be rich enough to anticipate the personal taxonomies, habits and intuitions of the range of people who will use it. The knowledge management “taxonomy police” cannot anticipate what people will really need, no matter how hard they try, because these needs constantly evolve. New technologies like Microsoft’s Longhorn (the next version of Windows, available around the end of 2005) is being designed to have robust enough search and access functions for knowledge management to actually work as a self-service utility, the only way it could work on a broad scale.

Just don't call it knowledge management. Despite tainted semantics, the management of knowledge is a viable pursuit and crucial to effective collaboration internally and externally. “Research firm IDC forecasts that knowledge-management software sales will reach nearly $6.4 billion by 2006, up from $2.2 billion in 2001. Half of companies in InformationWeek Research's second-quarter Priorities survey list knowledge management as a top technology priority. However, they are toning down the pie-in-the-sky initiatives of yesteryear into simpler, more-focused business strategies, enabled by less-obtrusive technologies that leverage, above all, search and collaboration”.38

• Build Your Technology for Collaboration from the Bottom Up. Don’t try to architect and provision the “perfect” collaborative technology from the top down. While corporations are drawn to this approach because of the promise of economic efficiency and control, no company (yet) has been smart enough to anticipate what collaboration tools people will need and how they will use them.

Instead, take a bottom up, tool-builder approach. Make tools available that connect to each other with some (not necessarily visible) unifying logic. Then watch what people do with those tools. Reinforce and augment those tools and purposes with deeper, richer technology. The best tools are the ones that people actually use, often in ways that transcend their original purpose.

It can be hard for companies to accept that goodness can happen spontaneously, but that is the very essence of collaboration – the confidence, based on experience, that people working together in a spirit of willingness and interchange can create something wonderful together.

35 Erik Berkman, When Bad Things Happen to Good Ideas, Darwin (April 2001). 36 Morten T. Hansen, Nitin Nohria, and Thomas Tierney, “What’s Your Strategy for Managing Knowledge?”,

Harvard Business Review (March-April 1999). 37 John Seely Brown and Paul Duguid, “The Social Life of Information”, Harvard Business School Press

(2000). 38 Tony Kontzer. “The Need To Know -- Knowledge management has gone from pie-in-the-sky promises to

more-realistic applications”, InformationWeek (August 18, 2003): 34.



Beneath these leading practices is one fundamental truth:

Collaboration is not one option among many – it is the business imperative of our time.

For your company to develop its own collaborative capabilities, why not work with a consulting and IT service provider that has the most sophisticated collaboration processes, tools, and practical experience in the entire consulting industry?

Capgemini

Documents

The Collaborative Business Experience: Overcoming the …download.microsoft.com/documents/uk/readylaunch/pdfs/Cap... · 2018-12-05 · No soon er does a co mpany claim such a