The Importance of Rational Collaboration in the Digital World
The world is experiencing explosive growth in digital globalization. According to a McKinsey Global Institute report, these rapid flows of data and information, practically nonexistent 15 years ago, now have a greater impact on GDP growth than the centuries-old trade in physical goods.
The world is more connected than ever before, but the nature of these connections has changed radically. Mergers, acquisitions and new types of associations have almost completely taken over our lives. Everyone is collaborating: brands do it among themselves and within their teams; designers and trendsetters; online shopping platforms with designers; and online e-commerce shops even collaborate among themselves.
When I was writing this article, Vladimir Kuzmenko, VP Business Development at NIX United, shared his experiences with me. We discussed how to organize employees’ work processes, problems with collaboration that might not seem obvious at first, and how to avoid and resolve them — the result is this article.
Better Together, or, Why Collaborate?
Collaboration is always about new opportunities. Business by nature cannot stop developing and moving forward. This requires good reserves of both resources and personnel. And one of the few ways to make these necessary leaps forward is to collaborate with other projects or departments within the same company.
With its small-scale solutions and ideas, a small business can be interesting to a large one simply because it is more efficient, faster and more professional in specific areas. By means of collaboration, large businesses are looking to resolve specific issues, designate new business vectors, revive general interest and attract a new audience, while at the same time, shaking up the old one. In B2B, collaboration can help raise brand status relatively quickly. This usually occurs when there is cooperation between two different business segments.
In almost all cases, a revolutionary solution on the market occurs from an association of existing solutions. For example, when the democratically priced H & M launches its capsule collection with the luxury brand Chanel. Or when a suitcase manufacturer works with the Van Gogh Museum, or Xbox releases gamepads designed by Ford.
Business understands the importance of collaboration, that’s why the demand for expertise in the collaborative tools sector is constantly growing; there are new startups, and conferences such as the upcoming Enterprise Connect are being held. Knowledge is developing in this niche.
Despite the incomparably superlative benefits resulting from collaboration, one needs to look at it without rose-colored glasses. In a nutshell, this is expressed in two theses:
- Collaboration as company policy is beneficial if it is introduced meaningfully and in a specific way.
- Collaboration should not become an end in itself
Rational collaboration is a leadership practice that helps to determine when it is beneficial to cooperate, and when it is not; it develops in subordinates the desire and ability to interact when necessary.
To implement rational collaboration, business leaders must complete three steps:
Evaluate opportunities for collaboration. More simply, answer the question: will it have a positive effect? Cooperation is not a value in itself, but a means of achieving a goal; and the goal is high performance. To be rational in relation to this sort of cooperation is to understand when it is not needed.
Identify problems with collaboration. What prevents people from interacting effectively under current conditions?
Develop solutions which will eliminate these problems. Different problems require different types of leverage. The ultimate goal is not to make people interact more often, but to ensure that the right people are interacting and collaborating on the right projects.
Three Advantages of Collaborations
Collaboration affects sales, costs, and asset efficiency — the cumulative effect of all three parameters on return on equity can be significant.
1. Creating New Ideas
The most successful innovations occur when people from different fields get together, generate new ideas as part of their interaction and develop products together. The economic logic is in the combination of resources — products, knowledge, technology, brands, and ideas — in order to create something new from something that already exists. This practice leads to increased innovation at lower cost.
For example, P&G, throughout its history, has used developments in current business areas to develop new niches. In the beginning, the company was engaged in the production of candles and soaps; then their knowledge of using fats and oils allowed them to add peanut butter and chips to their portfolio; working over the long term with vegetable-based raw materials led to ideas on how to use fibers for the production of absorbent materials — and so on.
2. Sales Growth
Another advantage of collaboration is cross-selling, which often involves cross-divisional sales: one division begins to offer goods and services to the customers of another. The economic logic here is that selling a higher quantity of goods to existing consumers is cheaper than seeking out new consumers.
For example, many banks have introduced the practice of gradually expanding the range of services in different areas for their existing clients. Their consultants offer customers different options and inform them about valuable promotions. Then they transfer these contacts to other departments, which subsequently communicate with the consumer. The amount of services-per-client for companies that have mastered this technique can reach up as high as to 5 or 6.
3. Optimizing Business Processes
The third argument in favor of collaborating is based on increasing the effectiveness of the actions performed by employees. Here the economic logic is the ability to reuse available resources. Methods having proven their suitability for one department can be used by others.
For example, the experience of similar initiatives in Asia and Latin America has been widely used to tackle urban poverty in the region of West Africa. As a result, the development of a strategy to improve sanitation, engineering solutions and housing has required less effort and cost.
At What Point Does Collaboration Become the Way Forward?
Here, a logical question arises: How applicable is this for your company? What value are we looking to achieve, and is it worth it? It depends on the specifics of the market, the company’s core businesses and other individual circumstances.
A collaboration project should be launched only if the net value of the interaction is higher than the difference between the profit and the sum of its costs. This profit can be called the collaboration premium.
The collaboration premium = Projected Profit — Opportunity Cost — Collaboration Costs
Opportunity costs are the net cash flow that organizations miss out on by building up internal interaction instead of doing something else.
Collaboration costs are the actual financial costs arising from the above (extra travel, time spent on dialogue, the cost of conflict resolution)
Build Internal Team Relationships
Successful collaborative companies build networks, that is, informal working relationships among people. If the formal organizational structure shows a division of responsibilities, then these networks demonstrate more informal organization — how people work together at any given moment.
The key components of a network are those employees who act as a bridge — those who, using their personal contacts, can unite the many islands of a company and help people establish contact with one another. The more of them there are in a company, the more efficient the network is, and the easier the cooperation.
A business leader striving for rational collaboration should, first of all, understand the advantages of networks. First, they help in identifying opportunities for collaboration. Secondly, networks allow for the use of the value of the found resources in those contexts where it is needed and they then benefit from it.
Some employees tend to communicate primarily with colleagues from their own departments. As a result, a system of separate networks is formed, connected only by separate bridges. To avoid this, it is necessary to apply the first, and what is generally considered the fundamental rule of networks: create the connections you need primarily with other departments within your company.
It is good when contacts are established with people who have different specialities, experience, skills and points of view. The selection criterion for this may be very different, depending on the specifics of the department: from nationality to work methods.
Leaders building powerful networks in a company need to make sure they have enough employees to act as bridges. If there are only a few of them, people with the greatest potential should be identified and they should be given the time required to do the relevant work.
If you and an employee with whom you communicate have many common connections, it is much easier to achieve productive interaction — he or she will be in a better position to help you. Use the tactic of having your own entourage: prepare the ground for cooperation, and enlist the support of people who are meaningful contacts.
Why do you need a software solution for communication/Why do you need a collaboration tool
Business world is all about collaboration, teams are constructed from different organizations and locations in order to gain maximum profit for all sides. However, with more and more collaboration, more problems tend to arise as well and solutions have to be found for them.
- Communication speed directly affects the efficiency of collaboration. That is why misunderstanding, lack of communication, lost opinions/directives/feedback are the major points of failures for all complex industries today. The more complex an industry is, the higher communication and collaboration value is. So if you want your supercar goes with the whole рower, you should build a system which helps you to provide an effective communication.
- Any place, where communication and collaboration don’t function well enough, looks like sand grains inside the excellent mechanism of your business, which does not allow you to achieve the greatest outcome.
- Miscommunication and miscollaboration ‘eat’ time, diminish your team’s effort, reduce the motivation and affect the final results.
How to choose an optimal and effective tool for communication and collaboration in your business?
All the processes should start with an analysis process, and choosing solutions to automate communications and collaborations business analysis is the very first step. You need to understand how much communication and do you have in your business because some part of it could be invisible and unclear. So the plan is:
- To learn communication flows with Business Analyst
- To provide convenient tools for each form of data entry and communications
- To automate what can be automated, let your people think, discuss & create instead of routines
- To analyse what you’ve built regularly, and improve it where you find any kind of delays, regular miscommunications and unclarity
Five Major Types of Enterprise Collaboration Tools and Platforms Used Today:
Workplaces today require more collaboration tools than ever, and there are plenty of options out there to help you and your team collaborate successfully.
- Communication tools (messaging & mailing, calls & video-calls, meetings planners and organizers);
- Collaborative access to docs and information (Office in the cloud, google docs, wikis & knowledge bases, etc);
- Specific data input & processing (medical records in healthcare; scientific data for researchers; logistics tracking systems; bills and accounting and much more)
- Planning & reporting tools (task boards, helpdesks, Jira, MS Project, schedules and calendars, reporting work hours, booking rooms/inventory/hardware, and much more)
- E-learning and LMS — everything related to instant educations which becomes a standard practice for all the tech-related industries (and I believe one day, soon enough, for all of them)
In lots of companies collaboration and business processes function in such a way, when the existing tools cannot solve the communication problems effectively. Companies which develop collaboration tools are trying to sell the solutions, which are supposed to eliminate all your problems. In reality, there is no silver bullet. Each large company is a unique organism. Therefore, their business processes are also unique. You cannot deal with them with standardized instruments and tools. To manage the unique business processes you have to create your own tools or customize the existing solutions to your needs.