From the Magazine, In Conclusion
Collaboration: Necessary, Not Evil
Despite the effort, collaboration is worth the trouble for better outcomes.
Collaboration can be painful. Most people have had a bad team experience. Perhaps someone needed to work overtime to compensate for a free-riding colleague, or sat in a meeting convinced they could be doing a better, speedier job on their own. Others hesitate to even start a collaborative project, worried that teammates might make mistakes, fail to deliver on time or steal credit for the project’s success.
Is all that trouble really necessary and worthwhile? In short, yes; at least it is when we’re trying to tackle today’s most complex and multidisciplinary issues. From cybersecurity to global warming to innovation, we need subject-matter experts who are deeply immersed in their own disciplines to integrate their unique insights and tackle their companies’ and customers’ toughest issues, challenges that none of them could solve alone.
If you think collaboration is a soft skill, think again. My empirical research analyzes hard data to show that when specialists collaborate across internal boundaries: companies earn higher margins, inspire greater customer loyalty, attract and retain the best talent, and gain a competitive edge. I’ve analyzed millions of data records — a decade of timesheets, personnel files and financial data — spanning dozens of knowledge-based organizations ranging from engineering to software, accounting and health care. Consider the risk of losing a customer when one of your key salespeople departs. Results show that probability drops from 72 percent to 10 percent if the account is served by a pair of co-leaders, rather than a solo account handler.
Another finding: On average, when product development specialists teamed up across three different business units, revenue from their customers was 160 percent higher than the sum of their individual sales in the prior year. Profits climbed even faster. Why? They were able to offer more holistic solutions to more vexing problems, and the owner of those troubles was a higher-up executive with more spending power. Customers valued the integrated, sophisticated answers and were willing to pay. As the CFO of one Fortune 100 company told me, “Margins rise with complexity.”
But delivering integrated solutions means that individual employees need to collaborate across internal silos, which are often reinforced by P&L structures, geography and differing microcultures. The benefits of collaboration might seem obvious, but they tend to accrue slowly. In contrast, people bear the initial risks and costs almost as soon as they start trying to collaborate.
To bridge the gap between initial investments in collaboration and their positive outcomes, play up the learning benefits. Recognize and reinforce them. Working across organizational silos to solve complex problems exposes people to surprising insights about how others facing a similar challenge can see such a different set of root causes and solutions. They can translate those new perspectives to help reframe problems within their own work; the enhanced creativity can save costs, increase efficiency, and generate much-needed adaptation — even in the near term. Developing internal networks also builds employees’ capacity to access information vital for ongoing learning. The relationships developed through collaboration provide familiarity and trust, which underpin knowledge seeking and sharing.
Further, getting employees to collaborate across units makes it easier to spread and leverage technology and other investments, because adoption jumps once people understand how those tools are used elsewhere.
The widely documented benefits of employee engagement translate into tangible financial rewards associated with talent retention and productivity. Further, the benefits from collaboration-induced learning typically flow in faster than external commercial outcomes. If leaders celebrate them, it’s easier for employees to see the value in collaboration.
Small wins help to build collaborative momentum. Also, integrate new hires into existing learning networks within and across organizational boundaries. Develop explicit learning plans for them, and hold at least two incumbent managers accountable to help deliver those team-based plans. Redefine individual performance metrics so that people are rewarded for collaborative success. Finally, use technology as an enabler, but don’t expect it alone to drive collaboration.
Heidi K. Gardner is a distinguished fellow at Harvard Law School’s Center on the Legal Profession, a lecturer on law, faculty chair of the school’s Accelerated Leadership Program, and author of “Smart Collaboration: How Professionals and Their Firms Succeed by Breaking Down Silos.” To comment email editor@CLOmedia.com.