Driving Business Value with Enterprise Collaboration – Part 2: How Collaboration Adds Value

In part 1 of this series we explored how the changing workforce, and the work we are performing, is driving the need for improved enterprise collaboration.  In this article, we will explore how collaboration adds value to a business.    As I stated in the series overview, these articles will pull content from many different sources, so I hope it acts as a concise reference for you to speak about collaboration in terms of a way to add value to your business.

Within this article, I will:

  • Provide a definition for internal collaboration
  • Discuss how collaboration adds value
  • Identify how to achieve strategic benefits with collaboration
  • Identify the different types of collaboration
  • Help you identify where your company is within the collaboration life-cycle

Collaboration Defined

From the book, “Collaboration: How leaders avoid the traps, create unity, and reap big results”, by Morten T. Hansen:

Collaboration is the act of people working together to accomplish a common goal.  Collaboration is much more than communication.  It is the way that all the people in an enterprise function together.  Better collaboration means better business operations.  By improving the capabilities with improved, disciplined collaboration, companies can increase the scale and capacity of their business processes and develop new ways of doing business.

Companywide collaboration takes place when people from different units work together in cross-unit teams on a common task to provide significant help to each other.  It can be joint work between units or a one-way collaboration, as when one unit provides advice to another.  In all cases, collaboration needs to involve people: if all is going on is shipping data back and forth between units, that’s not collaboration.

The key ingredients to effective companywide collaboration are:

  • Properly selecting where to collaborate (driven by leadership),
  • Employees’ willingness to collaborate, and
  • The proper technology to support their efforts

Understanding the changing nature of the workforce, and the type of work they perform, is critical for utilizing SharePoint properly in a companywide collaboration initiative.  Companywide collaboration is about making communities of people more effective in marrying tacit knowledge with transactional data, to make better, timelier decisions.

Hansen continues…

The essential question about collaboration is not, how do leaders get people to collaborate more?  That question presumes that more collaboration is necessarily a good thing, but it isn’t.  Rather, the essential question is, What is the difference between good and bad collaboration?  How do we cultivate collaboration in the right way so that we achieve the great things that are not possible when we are divided?

When building out your solutions in SharePoint, it is critical you have an advanced understanding of the type of interactions people are performing, and utilizing the proper tool for the job.  Paul Culmsee discusses this topic in detail with his Facets of Collaboration series.

How Collaboration Adds Value

In complex organization activities, effective collaboration is often a necessary requirement for success.  Hansen points out several collaboration traps:

  • Collaborating in Hostile Territory
  • Overcollaborating
  • Overshooting the Potential Value
  • Underestimating the Costs
  • Misdiagnosing the Problem
  • Implementing the Wrong Solution

All these traps lead to bad collaboration – collaboration characterized by high friction and a poor focus on results.  Leaders don’t fall into these traps because they are not smart.  Smart leaders fall into them because they don’t have a framework that helps them clearly see the difference between good and bad collaboration.

We will talk about creating a framework for collaboration in part 3 of the series. 

Collaboration adds value to an organization by empowering their employees to deliver solutions that support the corporate strategy.  From the report entitled, Making Collaboration a Reality: Insights from the Collaboration Consortium, Year One by the Collaboration Consortium:

The greatest payoff from an investment in collaboration comes from where people and content intersect, whether in real time, asynchronously, or both.  Collaboration drives the greatest value where there is a high concentration of:

  • Interaction – for example, in-person meetings, phone conversations, or project teams;
  • Expertise – an exchange of tacit knowledge of expertise, such as an executive, knowledge worker, or specialist might have; and
  • Information – as found in databases, working documents, and archives

Those junctures where interactions and the exchange of expertise and information are frequent, urgent, and complex are called ‘collaboration impact zones’.  Collaboration impact zones help an organization focus on the right areas of collaboration to ensure that the financial return on collaboration is greater than the associated opportunity and collaboration costs.

Collaboration impact zones can be focused either on internal operations, or on external operations, i.e., processes through which an organization connects externally with customers and through which collaboration can have a positive impact on sales, customer experience, and the value of the brand.

Companywide collaboration adds value to a company because it provides a way for your company to create unique, integrated activities.  The stronger the linking of the activities, the more likely your company can create a sustainable competitive advantage.

From the article, “The Next Revolution in Interactions” from the McKinsey Quarterly 2005 November Number 4:

In the world of tacit work, it’s less likely that companies will succeed in adopting best practices quite so readily.  Capabilities founded on talented people who make smarter decisions about how to deploy tangible and intangible assets can’t be coded in software and process diagrams and then disseminated throughout a sector.

The Different Types of Collaboration

Again, this series of articles is focusing on collaboration within the company.  There are two types of collaboration within the company.  From the book, “Collaboration: How leaders avoid the traps, create unity, and reap big results”:

  • Companywide collaboration – collaboration across organizational units.  For governments, the equivalent is collaboration across governmental departments, agencies, and branches of government.  For nonprofits, it’s collaboration across geographical offices and departments.
  • Teamwork – refers to local teams of 5-10 people within a business unit, division or department.

Companywide collaboration focuses on how to get people residing in different units throughout the company to work together.

As an example, at one of my clients their collaboration activities were team based in scope.  Individual department sites (team sites) were built.  Individuals within each department stored files, tracked tasks, and utilized wikis and blogs as ways to share tacit information, but the focus was only for their team.  Permission models were narrow in scope, so only their department could see the information.  They were practicing teamwork, not companywide collaboration.  Individual processes were improved, but no strategic benefits were resulting from the work of the individual departments.

Achieving Strategic Benefits with Collaboration

Creating a framework for companywide collaboration is the first step to gaining business value from collaboration.  This means practicing disciplined collaboration.  This does not mean that companywide collaboration is the only type of collaboration going on within your company.  It means you have a few top priority areas where companywide collaboration is being implemented, managed, and measured.

From the book, “Collaboration: How leaders avoid the traps, create unity, and reap big results”:

The idea of disciplined collaboration can be summed up in one phrase: the leadership practice of properly assessing when to collaborate (and when not to) and instilling in people both the willingness and the ability to collaborate when required.  To accomplish disciplined collaboration, leaders follow three steps:

  • Step 1: Evaluate opportunities for collaboration
  • Step 2: Sport barriers to collaboration
  • Step 3: Tailor solutions to tear down the barriers

Hansen provides an excellent case study of good and bad collaboration in the beginning of his book.  He looked at the creation of the iPod and how Apple won the market, and how Sony lost the market with their Connect product.

Jon Rubinstein, Apple’s senior vice president of hardware explained, “This was a highly leveraged product from the technologies we already had in place.”  According to The Perfect Thing, Steven Levy’s book on the iPod, the team had to integrate all the pieces from outside Apple and work across several units inside the company.  This included Rubinstein’s hardware division, Jeff Robbin’s iTunes division, and Apple’s vaunted industrial design unit, headed by design wizard Jonathan Ive.  Resolving complicated issues required many interactions between the hardware and software teams.

Jeff Robbin recalled, “It was just an incredible team project.  There were no boundaries.  The software guys, the hardware guys, the firmware guys, everybody worked together.  It was a pretty amazing experience.”

The iPod project started in February 2001, and was ready by October 2001.  Hansen provides the following data on the two companies:

  • Apples’ annual sales of the iTunes and iPod went from zero in October 2001 to $10.8 billion in 2007.
  • Sony’s portable music players took a dive in the U.S., leading to declining sales in its audio division.  In part because of this, Sony’s stock price declined 20% from 2002 to 2006
  • Apples’ share price went from $11 at the beginning of 2002 to $84 at the end of 2006

Obviously, collaboration was only part of why the iPod was a success, but it did play an important role.  The framework for companywide collaboration was put in place by leadership, and team members were able to work in a dynamic manner to drive innovation and gain substantial business benefit.

Collaboration Life Cycle

Becoming a collaboration enterprise is an evolutionary process.  As I discussed in my article entitled “Crossing The Collaboration Chasm”,   The Collaboration Consortium identified three stages an organization goes through in regards to embracing collaboration. These three stages are part of the collaboration evolution curve.

How do you know the phase of collaboration you are in?  To get to the performance phase, you need to (from Collaboration: How leaders avoid the traps, create unity, and reap big results):

  • Understand the case for collaboration – to appreciate how collaboration can increase performance.
  • Evaluate the upside for the company – to consider the potential for the organization overall
  • Understand when to say no to a collaboration project – to articulate a decision rule for when to go ahead, and when not to, at the project level.

The way to accomplish these bullet points is to conduct a collaboration readiness assessment – which is a way of gathering information from key stakeholders within the organization to see how they feel collaboration can benefit the company, and which areas they feel collaboration can have the greatest impact.

  • Sign #1 you are in the investigative phase of collaboration – you haven’t performed a collaboration readiness assessment (we will discuss this in the next article).
  • Sign #2 you are in the investigative phase of collaboration – you haven’t documented the processes you have improved with the solutions built in SharePoint, nor documented ROI.  I outlined this exercise in my article entitled, “A Process to Showcase SharePoint’s Value to Your Organization”.
  • Sign #3 you are in the investigative phase of collaboration – you work isolated requests from users in your organization to build a site, a wiki, a blog, etc.  These are ad-hoc requests that improve day-to-day tasks or activities of smaller teams of people.  These are not strategic processes driven by management, and funded accordingly.  These activities provide value to the company – but are not of strategic importance and do not deliver companywide benefits.

In the next article, I will examine what it takes to align an organization for a companywide collaboration initiative.


4 thoughts on “Driving Business Value with Enterprise Collaboration – Part 2: How Collaboration Adds Value

  1. Pingback: The Softer Side of SharePoint – What’s Your SharePoint Business Model? « Ben McMann's Weblog

  2. Pingback: Driving Business Value with Enterprise Collaboration – Part 4: Implementing the Framework « Ben McMann's Weblog

  3. Pingback: Driving Business Value with Enterprise Collaboration – Part 3: Setting the Direction for Companywide Collaboration « Ben McMann's Weblog

  4. Pingback: Driving Business Value with Enterprise Collaboration – The Series Overview « Ben McMann's Weblog

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