To collaborate or not to collaborate that is the question

How do you do more with less? Flatter organization’s save money and offer streamlined efficiencies and but can be challenging when driving productivity. Collaboration offers incremental productivity and business results and the question is, when is it right to collaborate.

In my consulting practice I often get asked that very question. There is plenty of research and evidence as to when it is most efficient and effective to collaborate. Much of it appears to be complex and may be a little academic. This blog sets out to simplify the benefits and situations with regard to disciplined collaboration.

Start with defining the expected outcome

I would like to suggest the starting point is fairly simple. First define what the benefits expected from the collaborative project. Look at internal benefits, for examples such as; increased sales, improved innovation or better business processes. The external benefits might include; new products and services, a smoother running business delivering increased client satisfaction. Additional benefits, which are less tangible such as increased revenues and profitability and might include knowledge sharing and competence building of employees and/or contractors. Although these last two should not be the reason for the collaboration.

Employing disciplined collaboration, as a strategy to improve innovation is likely to be the combining of existing and different functions to produce new products and services. Please note ‘existing’. It’s the redeployment of resources you already have and getting them to work together in a way that produces something that is an improvement to an existing product or service although a killer new product wouldn’t go amiss, would it?

Cross selling is another option, the opportunity for one sales group to sell additional products to a different segment of the company’s customer base. After all we all know it is easier to sell to existing clients or customers than find new ones. If the aim is to have a smoother run operation then improved workflow efficiencies that could save money or something similar could improve customer service and satisfaction, perhaps make it easier to do business with you.

In short the results are cost savings from improved workflow or increased efficiencies and/or increased revenues from improved or new products and services.

A formula or a guiding principle

Back to the question of when it is best to collaborate. Here's a couple of academic's ideas around when to collaborate.

Beyerlien et al** have 10 principles – numbers 1, 5 & 9 talk about focusing on Business Results, Managing complex trade-offs and Disciplined collaboration. M Hansen has a formula*: Collaboration premium = return on project – opportunity costs – collaboration costs.

If you don’t like academic or complicated financial formulas then it might be best to take a more generalized approach. For example it is probably worthwhile collaborating when the the project is complex and requires cross boundary working and expertise and/or commitment to ensure successful implementation. If it is a simple problem that does not require specific expertise - then don't collaborate.

All options make the point that there are costs to collaborate as well as an upside. Most of us are familiar with what opportunity costs might include but perhaps collaboration costs may need some explanation. Simply put it is the hassle that the team has to go through to make it work. The ‘hassle’ might include turf wars, knowledge hoarding, resource allocation and communication and many other interpersonal factors.

Obviously collaboration costs are higher when personnel are not collaboratively competent. And that has not been factored into the equation.

A Case Study

While working in a medium sized enterprise that was struggling to turn round a £1m loss. I brought together leaders and experts from Finance, Distribution, Marketing and Sales - a group of about seven. The sole purpose was to innovate to improve revenues, increase market share and drive increased customer satisfaction. Our goal was to increase revenues by £1m and to increase profitability by 50%. It took us about six weeks to create a new service get it to market. The client perceived they had better value and as a result revenues soared to £1.2m in just over a year and profitability was around 55%. The opportunity costs were fairly minimal in the region of £25,000 covering six one hour meetings and each person spending roughly a week of their time to implement the change in workflow in their department. The collaboration costs were nil because all parties had the collaborative competences required the team was a high performing team by the second meeting.

This case study is a great example of how to combine existing products and resources and improve workflow. The changes were minimal including contract documentation; marketing plans, accounting changes and sales training. In all the change was minimal, simply a different aggregation of existing products and resources. Our client base had become more sophisticated and now the company could respond without major costs. This is what disciplined collaboration can do if applied appropriately.

Minimizing Collaboration Costs

Collaboration costs are dependent to a great extent by the collaborative competence of the team members. The better the skills the better able they are to reduce the collaboration costs. However in my experience there is a often a disconnect between the individual and ultimate goal. For example individuals may guard specific information jealously and or don’t share it freely, or sales people misguidedly protect their customer base. These individuals are making sure they achieve their individual goals rather than the project and the organization’s goals. The other major issue is the failure to handle conflict between team members and/or departments. That kind of failure can be extremely costly. All three of these problems stem from individuals - because they do not have a collaborative mindset. This might be out of fear, competitiveness or simply the organization’s culture. To this end my co-authors and I have created and integrated model to build a collaborative mindset. It starts with looking at the Heart, what is your charter and intentions with regard to collaboration. You can find more information at and

Collaboration costs are dependent to a great extent by the collaborative competence of the team members. The better the skills the better able they are to reduce the collaboration costs. However in my experience there is a often a disconnect between the individual and ultimate goal. For example individuals may guard specific information jealously and or don’t share it freely, or sales people misguidedly protect their customer base. These individuals are making sure they achieve their individual goals rather than the project and the organization’s goals. The other major issue is the failure to handle conflict between team members and/or departments. That kind of failure can be extremely costly. All three of these problems stem from individuals - because they do not have a collaborative mindset. This might be out of fear, competitiveness or simply the organization’s culture. To this end my co-authors and I have created and integrated model to build a collaborative mindset. It starts with looking at the Heart, what is your charter and intentions with regard to collaboration. You can find more information at http://www.wiredleaders.com/Collaboration and http://collaborationbeginswithyou.com/

*Collaboration. How leaders avoid the traps, create unity and reap big results. Morten T Hansen

** Beyond Teams. Building the Collaborative Organization. Michael M Beyerlein et al

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