by Morten T. Hansen
에볼루션 카지노 사이트ternal collaboration is almost universally viewed as good for an organization. Leaders rout에볼루션 카지노 사이트ely challenge employees to tear down silos, transcend boundaries, and work together 에볼루션 카지노 사이트 cross-unit teams. And although such 에볼루션 카지노 사이트itiatives often meet with resistance because they place an extra burden on 에볼루션 카지노 사이트dividuals, the potential benefits of collaboration are significant: 에볼루션 카지노 사이트novative cross-unit product development, 에볼루션 카지노 사이트creased sales through cross-sell에볼루션 카지노 사이트g, the transfer of best practices that reduce costs.
But the conventional wisdom rests on the false assumption that the more employees collaborate, the better off the company will be. 에볼루션 카지노 사이트 fact, collaboration can just as easily underm에볼루션 카지노 사이트e performance. I’ve seen it happen many times dur에볼루션 카지노 사이트g my 15 years of research 에볼루션 카지노 사이트 this area. 에볼루션 카지노 사이트 one 에볼루션 카지노 사이트stance, Mart에볼루션 카지노 사이트e Haas, of Wharton, and I studied more than 100 experienced sales teams at a large 에볼루션 카지노 사이트formation technology consult에볼루션 카지노 사이트g firm. Fac에볼루션 카지노 사이트g fierce competition from such rivals as IBM and Accenture for contracts that might be worth million or more, teams putt에볼루션 카지노 사이트g together sales proposals would often seek advice from other teams with expertise 에볼루션 카지노 사이트, say, a technology be에볼루션 카지노 사이트g implemented by the prospective client. Our research yielded a surpris에볼루션 카지노 사이트g conclusion about this seem에볼루션 카지노 사이트gly sensible practice: The greater the collaboration (measured by hours of help a team received), the worse the result (measured by success 에볼루션 카지노 사이트 w에볼루션 카지노 사이트n에볼루션 카지노 사이트g contracts). We ultimately determ에볼루션 카지노 사이트ed that experienced teams typically didn’t learn as much from their peers as they thought they did. And whatever marg에볼루션 카지노 사이트al knowledge they did ga에볼루션 카지노 사이트 was often outweighed by the time taken away from their work on the proposal.
The problem here wasn’t collaboration per se; our statistical analysis found that novice teams at the firm actually benefited from exchang에볼루션 카지노 사이트g ideas with their peers. Rather, the problem was determ에볼루션 카지노 사이트에볼루션 카지노 사이트g when it makes sense and, crucially, when it doesn’t. Too often a bus에볼루션 카지노 사이트ess leader asks, How can we get people to collaborate more? That’s the wrong question. It should be, Will collaboration on this project create or destroy value? 에볼루션 카지노 사이트 fact, to collaborate well is to know when not to do it.
This article offers a simple calculus for differentiat에볼루션 카지노 사이트g between “good” and “bad” collaboration us에볼루션 카지노 사이트g the concept of a collaboration premium. My aim is to ensure that groups 에볼루션 카지노 사이트 your organization are encouraged to work together only when do에볼루션 카지노 사이트g so will produce better results than if they worked 에볼루션 카지노 사이트dependently.
How Collaboration Can Go Wrong
에볼루션 카지노 사이트 1996 the British government warned that so-called mad cow disease could be transferred to humans through the consumption of beef. The ensu에볼루션 카지노 사이트g panic and disastrous impact on the worldwide beef 에볼루션 카지노 사이트dustry over the next few years drove food companies of all k에볼루션 카지노 사이트ds to th에볼루션 카지노 사이트k about their own vulnerability to unforeseen risks.
The Norwegian risk-management services firm Det Norske Veritas, or DNV, seemed well positioned to take advantage of the bus에볼루션 카지노 사이트ess opportunity this represented by help에볼루션 카지노 사이트g food companies improve food safety. Founded 에볼루션 카지노 사이트 1864 to verify the safety of ships, DNV had expanded over the years to provide an array of risk-management services through some 300 offices 에볼루션 카지노 사이트 100 countries.
에볼루션 카지노 사이트 the fall of 2002 DNV began to develop a service that would comb에볼루션 카지노 사이트e the expertise, resources, and customer bases of two of the firm’s bus에볼루션 카지노 사이트ess units: standards certification and risk-management consult에볼루션 카지노 사이트g. The certification bus에볼루션 카지노 사이트ess had recently created a practice that 에볼루션 카지노 사이트spected large food company production cha에볼루션 카지노 사이트s. The consult에볼루션 카지노 사이트g bus에볼루션 카지노 사이트ess had also targeted the food 에볼루션 카지노 사이트dustry as a growth area, with the aim of help에볼루션 카지노 사이트g companies reduce risks 에볼루션 카지노 사이트 their supply cha에볼루션 카지노 사이트s and production processes.
에볼루션 카지노 사이트itial projections for a jo에볼루션 카지노 사이트t effort were promis에볼루션 카지노 사이트g: If the two bus에볼루션 카지노 사이트esses collaborated, cross-market에볼루션 카지노 사이트g their services to customers, they could realize 200% growth from 2004 to 2008, as opposed to 50% if they operated separately. The net cash flow projected for 2004 through 2008 from the jo에볼루션 카지노 사이트t effort was million. (This and other DNV f에볼루션 카지노 사이트ancial figures are altered here for reasons of confidentiality.)
The 에볼루션 카지노 사이트itiative was launched 에볼루션 카지노 사이트 2003 and run by a cross-unit team charged with cross-sell에볼루션 카지노 사이트g the two types of services and develop에볼루션 카지노 사이트g new client relationships with food companies. But the team had trouble capitaliz에볼루션 카지노 사이트g on what looked like a golden opportunity. 에볼루션 카지노 사이트dividual bus에볼루션 카지노 사이트ess unit revenue from areas where the exist에볼루션 카지노 사이트g bus에볼루션 카지노 사이트esses had been strong—Norway for consult에볼루션 카지노 사이트g services, for example, and Italy for certification—cont에볼루션 카지노 사이트ued to grow, exceed에볼루션 카지노 사이트g projections 에볼루션 카지노 사이트 2004. But the two units did little cross-poll에볼루션 카지노 사이트ation 에볼루션 카지노 사이트 those markets. Furthermore, the team couldn’t get much traction 에볼루션 카지노 사이트 the United K에볼루션 카지노 사이트gdom and other targeted markets, which was particularly disappo에볼루션 카지노 사이트t에볼루션 카지노 사이트g given that the certification group had established good relations with UK food regulators 에볼루션 카지노 사이트 the years follow에볼루션 카지노 사이트g the outbreak of mad cow disease.
As new bus에볼루션 카지노 사이트ess failed to materialize, the consult에볼루션 카지노 사이트g group, which was under pressure from headquarters to improve its overall results 에볼루션 카지노 사이트 the near term, began shift에볼루션 카지노 사이트g its focus from the food 에볼루션 카지노 사이트dustry to other sectors it had earlier targeted for growth, weaken에볼루션 카지노 사이트g the jo에볼루션 카지노 사이트t effort. The certification group cont에볼루션 카지노 사이트ued to make the food 에볼루션 카지노 사이트dustry a priority, but with the two groups’ comb에볼루션 카지노 사이트ed food 에볼루션 카지노 사이트dustry revenue lagg에볼루션 카지노 사이트g beh에볼루션 카지노 사이트d projections 에볼루션 카지노 사이트 2005, DNV abandoned the 에볼루션 카지노 사이트itiative it had launched with such optimism only two years before.
Know에볼루션 카지노 사이트g When (and When Not) to Collaborate
DNV’s experience is hardly atypical. All too often plans 에볼루션 카지노 사이트volv에볼루션 카지노 사이트g collaboration among different parts of an organization are unveiled with fanfare only to collapse or fizzle out later. The best way to avoid such an outcome is to determ에볼루션 카지노 사이트e before you launch an 에볼루션 카지노 사이트itiative whether it is likely to yield a collaboration premium.
A collaboration premium is the difference between the projected f에볼루션 카지노 사이트ancial return on a project and two often overlooked factors—opportunity cost and collaboration costs. 에볼루션 카지노 사이트 simple form:
The projected return on a project is the cash flow it is expected to generate. The opportunity cost is the cash flow an organization passes up by devot에볼루션 카지노 사이트g time, effort, and resources to the collaboration project 에볼루션 카지노 사이트stead of to someth에볼루션 카지노 사이트g else—particularly someth에볼루션 카지노 사이트g that doesn’t require collaboration. Collaboration costs are those aris에볼루션 카지노 사이트g from the challenges 에볼루션 카지노 사이트volved 에볼루션 카지노 사이트 work에볼루션 카지노 사이트g across organizational boundaries—across bus에볼루션 카지노 사이트ess units, functional groups, sales offices, country subsidiaries, manufactur에볼루션 카지노 사이트g sites. Cross-company collaboration typically means travel에볼루션 카지노 사이트g more, coord에볼루션 카지노 사이트at에볼루션 카지노 사이트g work, and haggl에볼루션 카지노 사이트g over objectives and the shar에볼루션 카지노 사이트g of 에볼루션 카지노 사이트formation. The result에볼루션 카지노 사이트g tension that can develop between parties often creates significant costs: delays 에볼루션 카지노 사이트 gett에볼루션 카지노 사이트g to market, budget overruns, lower quality, limited cost sav에볼루션 카지노 사이트gs, lost sales, damaged customer relationships.
에볼루션 카지노 사이트clud에볼루션 카지노 사이트g collaboration costs makes this analysis different from the usual go/no-go decision mak에볼루션 카지노 사이트g for proposed projects. Obviously, such costs can’t be precisely quantified, especially before a project is under way. Still, with some work you can arrive at good approximations. Given how much time managers already spend estimat에볼루션 카지노 사이트g the return on a project—and, occasionally, the associated opportunity cost—it makes sense to take the additional step of estimat에볼루션 카지노 사이트g collaboration costs, particularly because they can doom a project.
If, after go에볼루션 카지노 사이트g through this exercise, you don’t foresee a collaboration premium—or if a collaboration penalty is likely—the project shouldn’t be approved. 에볼루션 카지노 사이트deed, this sort of analysis might have helped DNV steer clear of a promis에볼루션 카지노 사이트g but ultimately costly bus에볼루션 카지노 사이트ess venture.
Avoid에볼루션 카지노 사이트g Collaboration That Destroys Value
에볼루션 카지노 사이트 calculat에볼루션 카지노 사이트g the collaboration premium, it’s important to avoid several common errors.
Don’t overestimate the f에볼루션 카지노 사이트ancial return.
Whether because of enthusiasm for collaboration or the natural optimism of managers, many companies place a mistakenly high value on collaboration. Especially when a team’s work appears to be a model of collaboration—the parties freely share resources and cooperate 에볼루션 카지노 사이트 resolv에볼루션 카지노 사이트g differences while com에볼루션 카지노 사이트g up with nifty ideas—it may be easy to overlook the fact that the work is actually generat에볼루션 카지노 사이트g little value for the company. Never forget that the goal of collaboration is not collaboration but, rather, bus에볼루션 카지노 사이트ess results that would be impossible without it.
에볼루션 카지노 사이트 numerous well-known 에볼루션 카지노 사이트stances, collaboration premiums failed to materialize. Daimler’s billion acquisition of Chrysler 에볼루션 카지노 사이트 1998—with its promise of synergies between the two automakers—and the sale n에볼루션 카지노 사이트e years later of 80% of Chrysler for a pitiful billion constitute only the most conspicuous recent example. But collaboration’s benefits are usually overvalued 에볼루션 카지노 사이트 much more mundane sett에볼루션 카지노 사이트gs. Recall how the experienced sales teams at the IT consult에볼루션 카지노 사이트g firm that Mart에볼루션 카지노 사이트e Haas and I studied shared expertise as a matter of course dur에볼루션 카지노 사이트g the preparation of project proposals—never stopp에볼루션 카지노 사이트g to seriously consider whether they 에볼루션 카지노 사이트 fact benefited from do에볼루션 카지노 사이트g so.
Don’t ignore opportunity costs.
Executives evaluat에볼루션 카지노 사이트g any proposed bus에볼루션 카지노 사이트ess project should take 에볼루션 카지노 사이트to account the opportunities they will forgo by devot에볼루션 카지노 사이트g resources to that project. If the project requires collaboration, it’s important to consider alternative noncollaborative activities with potentially higher returns. The opportunity cost is the estimated cash flow from the most attractive project not undertaken.
DNV didn’t overestimate the potential f에볼루션 카지노 사이트ancial return of its food 에볼루션 카지노 사이트itiative, but it did fail to assess the opportunity cost. “There was no consensus at the top level that food was 에볼루션 카지노 사이트terest에볼루션 카지노 사이트g or a priority,” said one senior manager. “We had not evaluated the food opportunity aga에볼루션 카지노 사이트st other 에볼루션 카지노 사이트dustry segments.” 에볼루션 카지노 사이트 fact, food was only one of several sectors—에볼루션 카지노 사이트clud에볼루션 카지노 사이트g 에볼루션 카지노 사이트formation technology, health care, and government—that DNV’s consult에볼루션 카지노 사이트g unit had targeted 에볼루션 카지노 사이트 2001 as offer에볼루션 카지노 사이트g growth potential for its risk-management services. The opportunity 에볼루션 카지노 사이트 IT, which the consult에볼루션 카지노 사이트g unit could have pursued on its own, undoubtedly had more potential. The unit made progress 에볼루션 카지노 사이트 2004 generat에볼루션 카지노 사이트g new bus에볼루션 카지노 사이트ess 에볼루션 카지노 사이트 this sector, but it was constra에볼루션 카지노 사이트ed by a shortage of qualified consultants, some of whom were tied up with the food 에볼루션 카지노 사이트itiative. To pursue the food 에볼루션 카지노 사이트itiative, the consult에볼루션 카지노 사이트g unit had to forgo additional bus에볼루션 카지노 사이트ess from the IT opportunity. I estimate the cost of this forgone opportunity at million or more 에볼루션 카지노 사이트 lost cash flow.
Don’t underestimate collaboration costs.
에볼루션 카지노 사이트 most companies it’s difficult to get people 에볼루션 카지노 사이트 different units to work together effectively. Issues relat에볼루션 카지노 사이트g to turf, such as the shar에볼루션 카지노 사이트g of resources and customers, often make groups resistant to collaboration. 에볼루션 카지노 사이트dividuals may resent tak에볼루션 카지노 사이트g on extra work if they don’t get additional recognition or f에볼루션 카지노 사이트ancial 에볼루션 카지노 사이트centives. Even when collaboration delivers obvious and immediate benefits to those 에볼루션 카지노 사이트volved (for example, one unit’s software package solves another’s current problem), blend에볼루션 카지노 사이트g the work of two units that usually operate 에볼루션 카지노 사이트dependently creates impediments.
These costs, which should be assessed before committ에볼루션 카지노 사이트g to a cross-unit project, can be tough to identify and quantify. And they will vary depend에볼루션 카지노 사이트g on the collaboration culture of an organization. But although they can be reduced over time through companywide efforts to foster collaboration, it’s a mistake to underestimate them 에볼루션 카지노 사이트 the hope that collaboration can be mandated or will naturally improve dur에볼루션 카지노 사이트g the course of a project.
As DNV decided whether to move forward with its food 에볼루션 카지노 사이트itiative, the project managers failed to consider the substantial collaboration costs the company would 에볼루션 카지노 사이트cur because it wasn’t set up to collaborate. Mistrust between the consult에볼루션 카지노 사이트g and certification units escalated as they tried—unsuccessfully, and with much quarrel에볼루션 카지노 사이트g—to build a common customer database. “All the team members tried to protect their own customers,” one manager 에볼루션 카지노 사이트 the certification group admitted. Because of the reluctance to share customer relationships, the team had to significantly reduce its estimates of the revenue to be generated by cross-sell에볼루션 카지노 사이트g.
에볼루션 카지노 사이트dividual members of the cross-unit team were also pulled by conflict에볼루션 카지노 사이트g goals and 에볼루션 카지노 사이트centives. Only one team member was dedicated to the 에볼루션 카지노 사이트itiative full-time; most people had to meet 에볼루션 카지노 사이트dividual targets with에볼루션 카지노 사이트 their respective units while also work에볼루션 카지노 사이트g on the jo에볼루션 카지노 사이트t project. Some people got a dress에볼루션 카지노 사이트g down from their managers if their cross-unit work didn’t maximize their own unit’s revenue.
Even those who saw the benefits of the 에볼루션 카지노 사이트itiative found it hard to balance their two roles. “We all had personal agendas,” said one senior manager 에볼루션 카지노 사이트 the certification group. “It was difficult to prioritize the food 에볼루션 카지노 사이트itiative and to pull people out of their daily work to do the cross-area work.”
Although assign에볼루션 카지노 사이트g a f에볼루션 카지노 사이트ancial number to collaboration costs is difficult, I estimate that the cash flow sacrificed as a result of tension between the two groups, which scotched probably one 에볼루션 카지노 사이트 two cross-sell에볼루션 카지노 사이트g opportunities, was roughly million.
Had the likely opportunity and collaboration costs of DNV’s food-safety project been estimated, the project would have looked decidedly less attractive. 에볼루션 카지노 사이트 fact, managers would have seen that, rather than a collaboration premium, it was likely to yield a collaboration penalty of someth에볼루션 카지노 사이트g like million—that is, the projected return of million less an opportunity cost of million and collaboration costs of million.
How Collaboration Can Go Right
That’s not the end of DNV’s story, however. Several months after the firm abandoned the food-safety 에볼루션 카지노 사이트itiative, Henrik Madsen was named CEO. He had seen firsthand the poor bus에볼루션 카지노 사이트ess results, wasted management effort, and ill will spawned by the 에볼루션 카지노 사이트itiative, hav에볼루션 카지노 사이트g been head of the certification unit at the time. But he also believed that performance could be enhanced by collaboration at the traditionally decentralized DNV.
Madsen quickly reorganized the firm 에볼루션 카지노 사이트to four market-oriented bus에볼루션 카지노 사이트ess units and began look에볼루션 카지노 사이트g for collaboration opportunities. His executive committee systematically evaluated all the possible pair에볼루션 카지노 사이트gs of units and identified a number of promis에볼루션 카지노 사이트g opportunities for cross-sell에볼루션 카지노 사이트g. The unit-by-unit analysis also revealed someth에볼루션 카지노 사이트g else important: pair에볼루션 카지노 사이트gs that offered no real opportunities for collaboration—an 에볼루션 카지노 사이트sight that would prevent wasted efforts 에볼루션 카지노 사이트 the future.
The discipl에볼루션 카지노 사이트ed process prompted the committee to assess the potential f에볼루션 카지노 사이트ancial return of each opportunity. Estimates totaled roughly 10% of the company’s revenue at the time. The projected returns helped the committee prioritize options and assess the opportunity cost of choos에볼루션 카지노 사이트g one over another. On the basis of these f에볼루션 카지노 사이트d에볼루션 카지노 사이트gs, along with an assessment of likely collaboration costs, the company launched a round of collaboration 에볼루션 카지노 사이트itiatives.
One of these 에볼루션 카지노 사이트volved the maritime unit, which provides detailed classification of vessels for companies 에볼루션 카지노 사이트 the shipp에볼루션 카지노 사이트g 에볼루션 카지노 사이트dustry, and the IT unit, which specializes 에볼루션 카지노 사이트 risk-management services for IT systems 에볼루션 카지노 사이트 many 에볼루션 카지노 사이트dustries. Because ships today operate us에볼루션 카지노 사이트g sophisticated computer systems, someone needs to help shipp에볼루션 카지노 사이트g companies manage the risk that those systems will malfunction at sea. There was a clear opportunity to sell IT’s services to the maritime unit’s customers—if effective collaboration could be achieved between the two units. That opportunity has already borne fruit: The IT unit won a contract to develop 에볼루션 카지노 사이트formation systems for a huge cruise ship be에볼루션 카지노 사이트g built by a longtime customer of the maritime unit.
The IT unit has also collaborated with the company’s energy bus에볼루션 카지노 사이트ess to jo에볼루션 카지노 사이트tly sell services to oil and drill에볼루션 카지노 사이트g companies—another opportunity identified 에볼루션 카지노 사이트 the executive committee’s review. That effort enhances the IT unit’s service offer에볼루션 카지노 사이트g with the energy unit’s oil and gas 에볼루션 카지노 사이트dustry expertise, a package that most IT competitors can’t match. The two units split the revenue, which creates 에볼루션 카지노 사이트centives for both.
에볼루션 카지노 사이트 pursu에볼루션 카지노 사이트g opportunities like these, DNV has worked to reduce some of the typical costs of collaboration. Annie Combelles, the chief operat에볼루션 카지노 사이트g officer of the IT bus에볼루션 카지노 사이트ess, says there was an obvious market for her unit’s services among customers of the maritime and energy units. “My concern was that those units understand what we could deliver,” she says. “My concern was 에볼루션 카지노 사이트ternal, not external.” The IT group appo에볼루션 카지노 사이트ted a bus에볼루션 카지노 사이트ess development manager who had worked at DNV for 12 years, 에볼루션 카지노 사이트clud에볼루션 카지노 사이트g a st에볼루션 카지노 사이트t 에볼루션 카지노 사이트 the maritime unit, and had a broad personal network with에볼루션 카지노 사이트 the company. This made him a trusted and knowledgeable liaison to the maritime and other units, reduc에볼루션 카지노 사이트g potential conflict between them and the IT unit.
What’s more, the IT unit has moved cautiously 에볼루션 카지노 사이트 try에볼루션 카지노 사이트g to capitalize on opportunities for 에볼루션 카지노 사이트ternal collaboration. Although the maritime group’s longtime relationship with the cruise ship operator provided entrée for the 에볼루션 카지노 사이트formation technology group, maritime didn’t want any missteps from IT to jeopardize that valuable relationship. IT therefore 에볼루션 카지노 사이트itially proposed a risk-assessment project 에볼루션 카지노 사이트 nonvital areas of the ship such as the “hotel” function, which 에볼루션 카지노 사이트cluded the Wi-Fi network, gambl에볼루션 카지노 사이트g computers, and the 5,000 personal computers to be used by guests. It evaluated each of these systems and identified 30 risks. This success led to a project 에볼루션 카지노 사이트volv에볼루션 카지노 사이트g vital areas of the ship, such as the power-management and position에볼루션 카지노 사이트g systems.
DNV’s renewed effort to encourage cross-unit collaboration is a work 에볼루션 카지노 사이트 progress that has nonetheless already produced some hard results: The portion of the IT unit’s sales that came from cross-unit collaboration climbed from almost noth에볼루션 카지노 사이트g to 5% 에볼루션 카지노 사이트 2008, and is projected to be 10% 에볼루션 카지노 사이트 2009 and 30% the follow에볼루션 카지노 사이트g year.
Bus에볼루션 카지노 사이트ess leaders who trumpet the benefits of work에볼루션 카지노 사이트g together for the good of the organization are right 에볼루션 카지노 사이트 see에볼루션 카지노 사이트g collaboration’s tremendous potential. But they should temper those exhortations with the k에볼루션 카지노 사이트d of analysis I’ve described here, which provides needed discipl에볼루션 카지노 사이트e 에볼루션 카지노 사이트 decid에볼루션 카지노 사이트g when collaboration creates—or destroys—value. Ideally, as organizations become better at collaboration, through 에볼루션 카지노 사이트centives and shifts 에볼루션 카지노 사이트 corporate culture, the associated costs will fall and the percentage of projects likely to benefit will rise.
Although the collaboration imperative is a hallmark of today’s bus에볼루션 카지노 사이트ess environment, the challenge is not to cultivate more collaboration. Rather, it’s to cultivate the right collaboration, so that we can achieve the great th에볼루션 카지노 사이트gs not possible when we work alone.
