The Culture of Collaboration

Replacing ROI with Return on Collaboration?

Yesterday I had a compelling discussion with Alla Reznik, director of global voice and collaboration for Verizon. Alla is from Russia, and she’s the only U.S.-based marketing professional I know who can provide input on the Russian language edition of The Culture of Collaboration book published by Ecom of Moscow. Alla and I chatted about regional cultural differences in how people collaborate—and differences in how they respond to surveys.

 

It was a timely discussion, because today Verizon and Cisco are releasing a new study tackling return on investment (ROI) for collaboration expenditures. ROI has long frustrated collaboration tools vendors, because of the difficulty in quantifying “soft” benefits such as corporate reputation. The research, conducted by Frost & Sullivan, identifies a model for measuring what it calls return on collaboration (ROC).

 

ROC measures the impact of collaboration on key functional areas. These include research and development, human resources, sales, marketing, investor relations, and public relations. Traditional ROI measures money gained or lost on an investment. In contrast, ROC tracks the amount of “improvement” derived from a financial investment in collaboration. The study identified research and development, sales and marketing as the functional areas with the highest ROC.

 

The study called “Meetings Around the World 2: Charting the Course of Advanced Collaboration” is based on questionnaires completed by 3662 information technology and line-of-business decision makers in 10 countries. Respondents represented enterprises plus small and medium sized businesses. Nearly half the organizations are using unified communications and collaboration tools ranging from enterprise instant messaging to Cisco TelePresence. Among the study’s key findings is that collaboration is more than twice as important as strategic orientation and six times more important than market factors in determining business performance.

 

 

“The world has changed quite a bit since 2006,” according to Alla, who was referring to the 2006 study dubbed “Meetings Around the World 1.” This earlier study determined that collaboration fuels business performance and that collaboration capability is based on technology, culture and structure. The new study indicates that culture and structure are even more important to collaboration than they were in the previous study conducted in 2006.  The point is that collaboration technology makes the most difference in organizations with collaborative cultures and structures. Similarly, the fundamental premise of The Culture of Collaboration book is that maximizing time, talent and tools to create value requires collaborative culture.

 

The main purpose of the study is to convince business decision makers to invest in collaboration tools and technologies.  One conclusion is that a $1 million investment in collaboration tools and technologies will deliver a $4 million dollar “improvement.” However, this result apparently fails to consider whether the organization has adopted a collaborative culture. I would argue that a $1 million investment by an organization with a collaborative culture will produce greater results than the same investment by an organization with a command-and-control, internally-competitive culture. So while the study does highlight the role of culture and structure, more work is necessary in integrating these elements into measuring ROC.

 

The big question for Verizon and Cisco is whether CFO’s, CIO’s and business decision makers will accept ROC. “We’re curious ourselves,” Alla told me. While there’s work to do in proving the value of collaboration, ROC is an important step towards evaluating the return on collaboration investment.

Cleantech Growth Impacting Venture Capital Ecosystem

Two years ago, Ira Ehrenpreis was quick to extend a hand at the IBF Venture Capital Investing Conference in San Francisco. When the general partner of Technology Partners told other VC’s that he invested exclusively in cleantech, they smiled and nodded politely.

 

“We could barely fill break rooms a few years ago. Now we’re filling ballrooms,” Ira told a ballroom audience during his keynote entitled “The Future of Clean-Tech” last Wednesday at this year’s IBF Venture Capital Investing Conference in San Francisco. Ira’s influence among venture capitalists has grown as cleantech has expanded from 1% of the venture capital sector a few years ago to 20% this year.

 

Cleantech was once considered just solar and biofuels. Today it touches on everything from transportation to energy-efficient windows. “There’s been a historic underinvestment in cleantech from venture capitalists, corporate and others,” according to Ira. Driving the growth of cleantech as a sub sector of venture capital is a shift in our collective consciousness. Enterprises are increasingly embracing sustainability and “going green.” In years past, a few companies including Google, GE and Wal-Mart made real commitments and others “greenwashed” their products through disingenuous marketing. Incidentally, this mirrors the current shift from enterprises using collaboration as a buzz word or marketing hype to actually collaborating.

 

The cleantech venture capital ecosystem is far more global than the incubation system for most information technology start-ups. While Silicon Valley is the traditional epicenter of start-ups and VC, different global regions lead in developing particular cleantech technologies. Europe, Ira notes, has been leading in developing solar and wind technologies.

 

As cleantech grows along with global investments in information technology and biotechnology, the collaborative ecosystem that defines venture capital will become more global and less Silicon Valley- focused.

Toyota's Collaborative Leadership Involves "See it for Yourself"

In selecting Akio Toyoda as its next president, Toyota is reaffirming its commitment to collaborative culture and methods. A key tenet of Toyota is genchi genbutsu which means "see it for yourself.” This is related to the leadership method practiced by HP’s David Packard and Bill Hewlett beginning in the 1940’s and later dubbed “management by walking around.” The idea is that to figure out what’s really going on in an organization, a leader needs to get out of the office, go to factories and loading docks and retail outlets, and get his or her hands dirty.

 

That’s exactly what Akio Toyoda did when he visited a Toyota dealership in Ann Arbor, Michigan last summer. He wanted to personally investigate a pickup truck recall. A story by Micheline Maynard on February 15, 2009 in the New York Times says Toyoda made a trip “so secret that Toyota’s public relations staff didn’t know he was here.” While at the dealership, he reportedly got down on his hands and knees to examine the undercarriage of a truck. At the news conference in January announcing his appointment, according to the Times, Toyoda announced he would pop up everywhere as he did in Ann Arbor.

 

Genchi genbutsu or “see it for yourself” fits squarely into collaborative culture and methods. However, it’s not always possible to fly across the world to see what’s happening. That’s where collaborative tools come into play. Through unified communications, we can find one other and connect regardless of level, role or region. We can escalate IM to voice, web conferencing or videoconferencing and spontaneously hash out problems and make decisions. Visual communications is a critical enabler. An ideal solution is telepresence, which makes people feel practically as if they’re sharing the same physical space regardless of distance.  

 

Our research at The Culture of CollaborationÒ Institute has shown that almost all highly-collaborative companies have integrated some form of real-time, interactive video into their operations. As I describe in The Culture of Collaboration book, Toyota uses a custom-designed visual communications system coupled with product lifecycle management and advanced computer-aided design tools that has become essential to its operations. The system links people at design facilities, plants, and at business partner sites and provides a rich virtual environment for developing and producing vehicles.

 

Two other areas involving collaboration that Akio Toyoda will likely re-emphasize:

1)     Making decisions based on long-term goals rather than on short-term developments

2)     Nemawashi or making decisions slowly by consensus

 

While collaborative culture is never about one person, Akio Toyoda is certainly one role model for collaborative leadership.

Innovation Value Institute Enhances Collaboration and Unlocks IT Value

As I stepped into the new “innovation zone” outfitted with leather couches, lounge chairs and café-style tables and stools at Chevron’s headquarters in San Ramon, California yesterday, ideas were flying. The Innovation Value Institute, a consortium focused on enhancing information technology’s role and demonstrating its value, has set up shop for two days at Chevron and yesterday announced its efforts. You can hear the announcement and see slides here. Collaboration is fundamental to IVI in that:

 

1) Competitors are collaborating in the consortium

2) IVI’s framework will enhance collaboration between IT and business units

 

The core consortium includes oil and gas competitors Chevron and BP, competing consulting firms Boston Consulting Group and Ernst & Young, and software companies Microsoft and SAP. Northrop Grumman is also part of the core group as is Intel. In fact, Martin Curley, Intel’s global director of IT innovation, co-directs the Institute, which is housed at the National University of Ireland, Maynooth. Each company is sharing intellectual property, and the partners are all getting more out of the collaboration than the IP that they’re investing. Through the consortium, according to Curley, the members are shifting their thinking and approach from “competitive advantage to collaborative advantage.”

 

IT is evolving from a service to a “business-embedded” role within enterprises. “IT organizations grew up with the service business model… acting as waiters and waitresses. What technology can I serve you today?” notes Natalie Stone, director of business strategy for Northrop Grumman. “We’ve come pretty far, and we’re poised to take the next leap.”

 

That next leap for the consortium members involves developing an IT Capability Maturity Framework (IT-CMF) of 36 interconnected processes—things like service analytics and intelligence, enterprise architecture, and innovation management. The idea is to establish a common language and standards for measuring how IT creates business value.

 

So, how does IVI quantify the value? Ralf Dreischmeier, partner and managing director of the Boston Consulting Group, says the consortium is focused on “50/50/50.” That means increasing IT return-on-investment by fifty percent, reducing time-to-market by fifty percent, and reducing business costs by fifty percent.

 

Consortiums often deliver little more than announcements and joint news releases, because of the lack of collaboration. “Five to ten years ago, this would have been dead,” insists Dreischmeier. “People were much more protectionist, thinking only about their little environment.”  IVI is succeeding because of the premium its members are putting on trust, sharing and innovation. These are three of the Ten Cultural

Elements of Collaboration that I identify In The Culture of Collaboration book.

 

In parallel, businesses can create greater value if there is more trust between IT and business units. “If you don’t have the trust, there’s no way you’re going to make IT better,” acknowledges Chevron CIO Louie Ehrlich. Environment is another element, and Chevron’s “innovation zone” is designed to enhance collaboration and experimentation. “Chevron likes to do things with quality or not at all, but sometimes we need to lighten up and make mistakes,” insists Jack Anderson, Chevron’s innovation specialist, a consortium participant who is also championing collaboration within his company.

 

I’ve blogged and written in my book, spoken and advised organizations about how cultural diversity enhances collaboration, enables broader input and contributes to better decisions and products. Culture may be regional, organizational, functional, or departmental. The IVI includes cultural diversity on all of these levels. “Diverse groups work much better together,” is how Edwina Fitzmaurice, partner with Ernst & Young, sums it up. Fitzmaurice, based in Ireland, has a diverse professional background including stints as CEO of Prudential Europe Management Services and CIO of J. Rothschild International.

 

Many of the consortium members—and many other enterprises and IT vendors—have developed their own frameworks for IT value. Microsoft is no exception. There’s broad agreement, though, that an industry standard framework makes more sense for vendors and enterprises. “We can then talk about our product portfolio in a way that resonates rather than being product-centered,” says Samm DiStasio, senior director for business architecture and optimization in Microsoft’s enterprise and partner group.

 

Ultimately, ITI’s work will be publicly available—but it will never be finished. The nature of a collaborative framework is that it’s dynamic. As business shifts and IT evolves, ITI’s model will also change.

Cisco, Tata and Taj Hotels Bringing Telepresence to Smaller Companies and the Public

As I walked into Cisco’s new public telepresence suites yesterday at the WebEx tower in Santa Clara, California, I was greeted by a video receptionist. “Hi, may I help you?,” the receptionist said. I immediately sensed professional intimacy, because of the quality of the visual experience. “I’m here for a Cisco telepresence session,” I explained. The receptionist then invited me to help myself to the catered breakfast in the outer lobby. I then grabbed a cup of milky, cardamom-spiced Indian coffee, which hinted at the global nature of what was about to happen.

 

Down the corridor were several public telepresence rooms of different sizes. Cisco people including Marthin De Beer, senior vice president of the emerging technology group, were in one room with Peter Quinlan, director of telepresence managed services for Tata Communications. I was in another room with the research director of The Culture of CollaborationÒ Institute plus a few journalists and analysts.

 

Joining from his home in Bangalore, India was Wim Elfrink, Cisco’s chief globalization officer, presumably conducting his last meeting of the day at 11:00 p.m. Bangalore time. In London, Vinod Kumar, chief operating officer of Tata Communications, and his colleagues participated. From Boston, Taj Boston Hotel General Manager David Gibbons joined us from the Taj’s new telepresence public room. From New York, an industry analyst was also connected.  So, our group spanned the globe—six connections in four time zones. However, we felt almost as if we were sitting across the table from each other.

 

Cisco and its partners are challenging the notion that telepresence is an exclusive tool for Fortune 500 executives. “We have found that the largest users of telepresence are the mid-management level in our organization,” says Kumar of Tata Communications, a subsidiary of the $62.5 billion Tata Group. If you’ve been to India, you know that the Tata name is everywhere—on motor vehicles, industrial equipment, and even tea. In recent years,Tata has become a global company.

 

Tata is a highly-strategic relationship for Cisco in that besides its communications business, the Mumbai, India-based conglomerate has holdings in engineering and building, services, chemicals and consumer products. Taj Hotels, a Tata company, is providing public telepresence rooms in Boston, London, Bangalore, Mumbai and other cities throughout India. “Small and medium-sized businesses will be the greatest users,” predicted Gibbons of the Taj Boston Hotel. There will be a hundred public TelePresence (note that Cisco capitalizes the “P” in its trademarked product name) suites globally by late 2009, according to Cisco. Hourly fees currently range from $299 for a 1-2 participant room to $899 for an 18-participant room.

 

Unlike office buildings that typically close nights, weekends and holidays, hotels are open 24/7 every day of the year and provide perhaps the best opportunity to maximize a global business environment through pay-per-use telepresence. It’s a holiday in your city, but you need to connect intimately with colleagues in another region where it’s a regular work day? Hotel-based telepresence addresses that issue.

 

Significant from a technical perspective, Cisco and Tata are providing secure, encrypted conversation through any company’s firewall. “This has not been possible before with any technology,” noted Marthin De Beer of Cisco. Tata Communications delivers converged voice, video and data over Internet protocol (IP). Tata’s strategy is to get companies used to telepresence through public rooms and work on migrating some companies to invest in their own telepresence rooms.

Cisco says it has integrated 300 telepresence systems into its own operations globally. Some senior leaders including De Beer have their own systems, and Wim Elfrink, Cisco’s chief globalization officer, joined yesterday’s telepresence session from his home office in Bangalore, India.

 

While much has been made about videoconferencing and telepresence reducing long-distance travel, these tools can also reduce local travel and commuting. De Beer noted that he saves an hour per day by using telepresence instead of driving to meetings on and around Cisco’s campus. As telepresence becomes more widespread, people will gain the opportunity to work globally while reconnecting with their physical—as opposed to virtual—communities. Telepresence will also allow for better work/life balance and potentially take social responsibility to the next level.

 

After the session, as I said goodbye to the video receptionist, I wondered whether receptionists in Mumbai, Manila and Montego Bay will soon be greeting visitors in corporate lobbies in Memphis, Modesto and Milwaukee. Well, Cisco’s Marthin De Beer, who is based at the company’s headquarters in California, has a video assistant who works from Texas and virtually greets visitors to his office. So, Cisco is clearly practicing what it’s preaching.

Negotiation vs. Collaboration

During a taped television interview last week in New York, I was asked—among other things—about the difference between negotiation and collaboration. In the coming weeks, I’ll have more on the interview, the show and the upcoming air date.

 

I summed up the difference between negotiation and collaboration this way:

Negotiation is “I win, you lose” or “I win bigger than you win.”

Collaboration is “win, win.”

 

Also, negotiation usually involves suspicion and separate agendas. Collaboration requires trust and shared goals.

 

With the increasing interest in collaboration and the race to become—or at least appear—collaborative, there is continued confusion over the meaning of collaboration. In The Culture of Collaboration book, I define collaboration as “working together to create value while sharing virtual or physical space.”

 

To truly collaborate, we must move away from command-and-control, internally-competitive, star-oriented cultures to embrace cultures in which people across the enterprise gain access to the same data and information and provide input into process improvements, market creation, innovation and other key issues and decisions. In a collaborative culture, people feel their input counts regardless of their role in the organization.

 

And there are plenty of misconceptions about collaboration including:

 

Some believe that a strategic alliance is collaboration. Often a strategic alliance is nothing more than a joint news release!

 

Some believe that partnering is collaboration. However, partnerships do not necessarily create value. Partnering can be a prelude to collaboration, but collaboration takes partnering to a new level. In

The Culture of Collaboration book, I use the term global collaborative enterprise (GCE) to describe interdependent companies engaged in shared creation of value, often in real time. That value typically translates into products or services. And there are examples of collaborating competitors creating more value than partners!

 

Business, the media, analysts and others are embracing collaboration as a buzz word. Let’s make sure we go beyond window dressing, understand the real value of collaboration, and unlock that value through the interplay of collaborative culture, tools and environment.

Community Collaboration and Recycling San Francisco Style

San Franciscans toss away at least five bicycles a day. When the mountain bike craze ebbed, that number was higher—at times, twenty bikes a day. And SF Recycling & Disposal, Inc. (aka The Dump) also gets ten to twenty pieces of exercise equipment daily—everything from elliptical machines to NordicTrack skiers. Each day the dump also receives about twenty plants, some of which volunteers transfer into the dump’s garden. 

 

I learned many of these statistics Saturday morning from Deborah Munk, who coordinates art and education programs for the dump. Deborah was conducting a public tour, which included a heavy dose of recycling and trash facts. I learned that China is paying top dollar for recycled paper. Every day, the San Francisco dump ships hundreds of bales of paper to China, which helps fuel the country’s growth.

 

This particular public tour was crowded with artists vying for the dump’s Artist-in-Residence program, which gives artists a stipend, a studio, a show, and access to San Francisco’s waste stream so that  they can get first dibs on materials for sculptures, paintings, videos, and other media. Paul Cesewski, former artist-in-residence, turns recycled bicycles among other items into kinetic art. Nancy Calef, who was taking Saturday’s tour before applying for the program, uses recycled objects ranging from eyeglasses to emery boards in her 3D “Peoplescapes.” Peoplescapes are sculpted characters and applied objects on canvas which juxtapose people in recognizable places and situations weaving together a story about contemporary life.  Calef also recycles canvases for a technique called “plane slashing,” which combines two or more paintings into one.

 

The artists collaborate with the recycling sorters, who look out for requested materials. One artist recently asked for some pens, and a few hours later he received hundreds of them. Those pens are now a sculpture. The artists help promote recycling, and they’re one aspect of how people throughout the dump’s ecosystem work together to create value.

 

San Francisco’s recycling program is a study in collaboration. Seventy percent of the two thousand tons of waste a day that flows into the dump is recycled. Clearly, San Franciscans take the time to sort their refuse into bins color-coded for trash, compost and recyclables. And once the waste arrives, union sorters identify items that can be sold as commodities, reusable stuff and electronic waste. The dump makes some stuff, such as recycled latex paint, available for free. Also, more than eighty thousand homes and two thousand restaurants compost their food scraps. San Franciscans get some of their compost back as free soil a couple of times a year, and wineries nourish their vines with soil made from SF compost.

 

Some dump team members are pressing to take collaboration to the next level. “We’re just scratching the surface,” insists Bob Besso, recycling manager for Norcal Waste Systems, Inc., which runs the dump. Currently, San Franciscans pay $107 a ton to dump waste. SF Recycling & Disposal, Inc. sells much of the recycled waste as commodities. All that exercise equipment becomes scrap metal. Besso believes the dump should designate drop-off areas where specialists could evaluate specific categories of items such as exercise equipment and bicycles, furniture and textiles, clothing and other items. Rather than charge for accepting these reusable items, the dump could take them for free and sell them at a higher price than that of a commodity. Garbage Reincarnation, Inc, a non-profit in Santa Rosa, California has achieved success of this sort. Besso believes the San Francisco dump could become a model for large-scale reincarnation of waste.

 

SFRecycling & Disposal, Inc. comprises an ecosystem of collaborators who are striving to create greater value through innovation, education, and brainstorming. The SF Dump’s approach reminds us that rather than letting new ideas die on the vine, our challenge is to improve ideas through collective input so that we achieve awesome results.

Washington Times Understands The Culture of Collaboration

Many traditional media outlets have difficulty understanding collaboration. Newspapers, magazines and TV networks are typically steeped in star culture and embrace competition. So the notion that collaborative culture is changing business models and the nature of work leaves many reporters and editors scratching their heads.

Last Sunday, however, The Washington Times showed that it’s head and shoulders above most other traditional media outlets when it comes to understanding collaborative culture and the future of business. For a media outlet to capture the essence of collaboration, the reporter and his or her editor need to be on the same page—collaborating, if you will. Clearly, this occurred at The Washington Times. The paper selected James Srodes to review The Culture of Collaboration book. You can read the review here. Srodes, a veteran business writer, is well-suited to understand the value of collaboration. He is the former Washington bureau chief for both Forbes and Financial World magazines.

According to Srodes’ web site, he is also the biographer of Benjamin Franklin, auto industry maverick John DeLorean and Allen Dulles. Dulles served as the director of central intelligence under U.S. Presidents Eisenhower and Kennedy. Currently, the intelligence community is working on adopting a more collaborative culture.

In The Washington Times, Srodes writes:

“Where once there were chains of command, flows of information (and power), central locations and memo buck slips of Talmudic complexity and obtuseness, technology has made it possible for diverse creative and managerial teams operating in locations around the globe to work simultaneously on projects that bring better, cheaper, more effective products on line at an accelerated pace.”

At the end of the review, Srodes notes that the culture of collaboration “may be the most exciting business development since the assembly line.”

Hierarchy Busters Enable Collaboration

Hierarchy is a huge impediment to collaboration. In organizational cultures that emphasize hierarchy, people feel compelled to go through channels. This prevents front-line people from contributing to decisions and also discourages leaders from getting real-time, unfiltered information from the field. Smart organizations encourage collaboration across levels, functions, business units and regions.

I was glad to read in yesterday’s Wall Street Journal that SK Telecom of Korea has taken fundamental steps to reduce the role of hierarchy. Evan Ramstad writes in his "Managing" column headlined “Pulling Rank Gets Harder At One Korean Company” that SK Telecom has replaced the five ranks that employees used to address each other with one rank, manager. You can read the article here (reg. required).

I live in California, where people in business typically call each other by their first names. For somebody to call his or her boss “Director Jones” would seem absurd. But even in Silicon Valley companies with supposedly reduced hierarchies and relaxed environments, trappings of position exist such as triple-sized cubicles. In other regions, hierarchy is more pronounced. People address senior leaders as “Mr. or “Ms.” and they talk of vice presidents in hushed tones as if they might get in trouble for even uttering the names of big shots.

As growth has slowed, SK Telecom has begun encouraging more debate and input from all levels. The idea is to spark more creativity and risk-taking, which are certainly important to collaborating. South Korea’s business culture has traditionally concentrated decision-making with senior executives “to protect their power” as Ramstad notes. Clearly, SK Telecom has realized that, in Bob Dylan’s words, the times they are a-changin’ and that a hierarchical culture was costing the company money.

Other companies should take notice that reducing the role of hierarchy and instilling the culture of collaboration is in vogue—and will create value.

Collaboration Produces First Boeing 787 Dreamliner

On Sunday, Boeing unveiled its first 787 Dreamliner at the company’s final assembly plant in Everett, Washington. With former NBC News anchor Tom Brokaw hosting the festivities, Boeing broadcasted and webcasted the event in nine languages to more than 45 countries. Boeing Commercial Airplanes VP and GM Mike Bair made an important remark for those of us interested in collaboration: "I am so proud of the men and women of Boeing and of our partner employees in the 70 companies that have brought this airplane to the passengers of the world."

Bair’s reference to “partner employees” is significant in that Boeing is moving away from designing and manufacturing planes by itself. Instead the company is becoming a large-scale systems integrator and collaborating with global partners to produce the 787 Dreamliner and other planes. In The Culture of Collaboration book, I describe the 3 levels of collaboration at Boeing and how CIO Scott Griffin and Sergey Kravchenko, president of Boeing Russia, worked together to create a real-time collaborative design environment and the culture to support it. The environment, culture and tools that Griffin and Kravchenko have implemented have helped create a more efficient and profitable business model for Boeing. 

The book uses Boeing as a model for the global collaborative enterprise (GCE), which I define as “a collection of interdependent companies that engage in shared creation of value, often in real time.” The partner employees to which Mike Bair refers are the collaborators who comprise Boeing’s GCE. While more and more companies are collaborating internally, very few are in the same league with Boeing when it comes to collaborating with business partners.