Aligning Collaborative Efforts with Your Strategy

Because collaboration is a means to an end, you have to clearly articulate how collaboration helps the company achieve its strategic goals. To pinpoint specific areas of the company where cross-silo collaboration would provide the most benefit, you can ask questions like, Where do we lack business momentum? Where do we see anti-collaborative behaviors? Where are competitors moving ahead? Where do we see high attrition, low employee engagement, or a lack of progress toward diversity, equity, and inclusion (DEI)? Where are we coming up short in terms of innovation?

Capturing the kinds of business outcomes we laid out in Chapter 1 may come from integrating a specific function, such as risk management, into the rest of the business. Or you may need broader collaboration in a specific process—such as getting sales, operations, legal, and customer service involved in product development—to capture an opportunity.

Diagnosing the Real and Perceived Barriers to Collaboration

Identifying the barriers to collaboration requires a two-pronged approach, using both surveys and structured discussions. Both generate broad-based inputs from across the company, which are needed not only to ensure that you are collecting and interpreting views from a variety of employees but also to build a sense of participation across the entire senior leadership group. Research clearly shows that “having voice” is crucial for helping people feel invested in a change effort.⁵ Together, the prongs give leaders a true understanding of the obstacles—including structural, cultural, and interpersonal issues—that inhibit effective collaboration.

We should offer an upfront caution: because this work relies on qualitative research, some of your colleagues may believe that it is as simple as asking a few questions (as in, “I’m excellent at interviewing candidates; surely this is even easier”). Because we are all exposed to surveys on a near-daily basis, it’s tempting to think that the survey process is easy and obvious. But in fact, conducting qualitative research is a well-developed science, and laypeople commonly make mistakes that can seriously bias a survey’s results. For example, asking a person to provide identifying information (e.g., gender) at the wrong place in a survey may dramatically skew their responses—and may even impede their ability to answer questions correctly.⁶ On the other hand, asking simple, open-ended questions about perceived barriers to collaboration makes it far more likely that you’ll generate compelling and high-quality data. To do this piece right, you need an expert in qualitative research to help you design the survey, then follow up with rigorous methods to code the results.⁷

The second prong of the barriers-identification process involves focus groups and in-depth interviews. Test your understanding of those barriers by arranging a set of one-on-one interviews with selected leaders. Make sure to include thought leaders whenever possible, since the strategic selection of interviewees can help build commitment to the project and provide organizational momentum.

Although every organization is unique, our work within a wide variety of organizations has surfaced a number of typical barriers. These include the following:

• Lack of knowledge of the company’s capabilities and expertise. It’s often hard in organizations to know what capabilities (technology, products, functionality) and expertise (who can do what, and how well) exist.⁸
• Lack of competence trust. To collaborate, you need faith in others’ capabilities—not only technical skills but also broader competencies like client-handling ability and negotiation skills.
• Lack of interpersonal trust. Are people worried their colleagues are going to undermine them? That lack of interpersonal trust—how much faith you place in someone’s character and intentions—may be rooted in previous observations (and therefore possibly well founded) or simply in a lack of familiarity (and therefore not well founded).
• Lack of time or inefficiency of collaboration. The collaborative process can be logistically challenging—for example, due to different time zones and language or cultural barriers, and to the time required to explain the task to someone else. Sometimes companies find specific culprits, such as outdated technology, that make collaboration far too cumbersome. Elsewhere, the real question is not whether people have time to collaborate, but whether they choose to spend it that way. This barrier arises when people think they get more benefit from working in a silo than from collaborating, which leads to our next point.
• Poor incentives and key performance indicators. Sometimes the problem is a misguided incentive system, like the one in a company we advised: “We’re all handed individual sales quotas. There is no team component, and we can’t split the credit. Why would a colleague help me close a deal when they get nothing out of it?” Let’s be clear: Every compensation system has both known trade-offs and unintended consequences. But some systems are more broken than others—especially the ones that rely on formulaic calculations of individual outcomes.⁹
• Lack of collaboration capabilities and confidence. Collaboration is a metacapability: a set of mindsets, behaviors, and abilities that collectively equip someone to engage in effective cross-silo working (see the sidebar). To enhance collaboration, you need to assess your people and develop their underlying skills that add up to a collaborative mindset and approach.

Wherever possible, your surveys should inform and stimulate your in-person inquiries. For example, we often find it helpful to use some of the respondents’ verbatim quotes from the open-ended survey questions to illuminate the barriers discussions in the focus groups and interviews. These examples often spark useful conversations about deeper issues that the respondents didn’t write about in the survey. Direct quotes are also useful for leaders to use when explaining the results of the survey, because they demonstrate that people have been heard.

Discovering and Analyzing Bright Spots

You might be surprised by the places where great collaboration is already happening in your company. Leaders who feel a strong sense of urgency may be tempted to skip this step and “get right to the problems we need to fix.” But capturing these success stories is important for two reasons. First, stories are the backbone of human culture. In organizations, culture is created and spread by sharing real-life examples. Do you celebrate the sales hero who singlehandedly bags a new account? Well, fine—but do you also acknowledge the team that did the research, helped prepare the pitch, and then flawlessly implemented the solution? Turning bright-spot episodes uncovered in the diagnostic into stories that get told and retold allows leaders to shape the culture in collaborative directions—and implicitly defines a set of anti-collaborative behaviors that should be avoided.

Second, stories summarizing specific actions that have worked in your company can be critically important in convincing skeptics not only that collaboration is already delivering returns but also that it can be replicated.

Generating Compelling “Upside” Findings

Despite starting a diagnostic expecting to find untapped potential, most leaders are shocked to find how much money they are leaving on the table.

How do you quantify the upside? Let’s go back to the kind of example we discussed in Chapter 1. In one business, we saw that revenues were 5.7 times higher for clients served by three business lines than by a single one. Those clients served by five business lines generated fees 17.6 times higher than those with just one kind of service, as shown in Figure 3-1.

First, calculate the average revenue generated per customer based on the number of offerings they purchase (as in Figure 3-1). Next, calculate the upside from a realistic shift in your portfolio. Your aim isn’t to serve every client with your full range of services each year, nor necessarily to eliminate low-revenue clients (see sidebar on “chopping the tail”). Instead, how much is it worth if you shift just 10 percent of clients in each category to the next-higher category? The numbers below the bars in Figure 3-2 indicate the business lines bought by each customer; the numbers in the circles show the hypothetical customer profile and revenue if 10 percent of clients in each category move one step to the right. For this company, the incremental revenue of this shift adds up to nearly $43 million.¹⁰

FIGURE 3-1

Revenue impact of smart collaboration

Note, too, that in this example, the vast majority are making a move from one to two products, where the incremental value is relatively low. As you consider where to focus, think about deepening your larger relationships where the relative bump in revenues is highest. Making that kind of move with your customers who already buy multiple services is also more likely to succeed: they already trust and value your company to provide more sophisticated services, and you almost certainly have more buyers inside the client and more insights that will make you a top-choice provider for their highest-level needs.

This top-line shift is typical across the organizations we studied that are collaborating well—that is, doing complex work for clients that results in appropriate levels of increased revenue. Many businesses are missing out on an additional 15 percent of overall revenue by not figuring out how to make this shift.

FIGURE 3-2

Hypothetical new portfolio and upside

The punch line: saying, “We could realize an extra $43 million in revenue by collaborating better,” serves as a compelling argument for collaboration.

Building in the Clients’ Perspective

If you want to alert your company to the importance of collaboration, just talk to your clients. You will hear that they want deeper engagement with their strategic partners, and in most cases, they aren’t getting it today. The “voice of the client” is one of the most powerful ways to drive home the need for collaboration, assess the gaps that exist today, and better understand what might give your business a competitive advantage through more skillful collaboration.

First, a caution: Remember that you aren’t trying to sell anything in these conversations with your customers. You’re trying to answer the question, Where can we add more value to the client by bringing to bear the full breadth of our company’s capabilities?

FIGURE 3-3

Clients’ vs. partners’ assessment of collaboration

Don’t assume your people already know what the clients are looking for or have a good sense of their own performance. In study after study, we’ve seen providers radically overestimate how good they are at delivering their company’s full value to their customers. Figure 3-3 shows one example that came as a rude shock to a Big Four accounting firm: when asked to rate their collaboration “on deal” (during a live project), most partners scored themselves as very good or excellent; for “off-deal” collaboration (times when they kept in touch with clients to check in or add a nugget of insight), partners rated themselves as neutral to good. Clients’ estimates, however, were consistently at least a full point lower. One said, “They never bother to reach out unless there’s a clear piece of work on offer.”

Another pitfall to avoid: don’t repurpose customer interviews that have already been conducted as part of other initiatives. Typical “voice of the client” interviews almost never focus on collaboration. Your goal is to identify and analyze specific situations in which the client was or wasn’t served in a cross-silo way by your business, and whether more holistic opportunities exist.

See Table 3-1 for a sampling of themes to listen for during these kinds of customer interviews.

If you are reluctant to “ask a favor” of your clients, consider this: many appreciate this signal that you want to serve them better. We sometimes help our clients with these conversations, and in our experience, most of these interviews run well past their scheduled time. Why? Because people are excited to engage in a deep conversation about collaboration.

Combined with your internally derived survey and interview insights, these customer conversations should help guide your focus on areas for growth through collaboration.

Setting Priorities

Once the organization has linked the priorities to the business strategy, the specific initiatives need to be prioritized. In our client work, we use a simple two-by-two matrix (Figure 3-4) to facilitate conversations around prioritization.

FIGURE 3-4

Setting collaborative priorities

“Size of the prize” is often expressed in financial terms: increased revenue, cost reduction, error or loss reduction, client retention, and so on. Other opportunities (such as enhanced reputation, client satisfaction, innovation, and progress toward DEI goals) may require different approaches to quantification. Mapping these onto a single two-by-two matrix may require subjective judgments, but the goal is to always link them back to their impact on the business strategy.

Along the x axis, we’re asking and attempting to answer the question, Which of our potential opportunities can we collaborate on most easily? “Easier” opportunities include areas where the company already has the required expertise and resources, complexity is low, similar initiatives have been successfully completed in the past, or the initiatives have a short implementation period. Conversely, initiatives involving engagement from a large number of internal groups or external parties, new skills or expertise, a longer timeframe to execute, or greater uncertainties will fall into the “difficult” box.

Identifying Additional or Alternative Benefits

The preceding six sections summarize the many advantages to the typical business of conducting a “collaboration diagnosis.” But what if your strategic goal for collaboration is not revenues and profits? The good news is that you can still use a modified version of our diagnostic tool to identify compelling benefits for your organization.

For example, you may choose to quantify the benefits of reduced risk (regulatory fines, operational errors, etc.), or the financial and quality-control upsides of improving employee engagement and retention. Hospitals and other health-care providers might choose to focus their analysis on metrics like patient outcomes. Government agencies, nonprofits, and foundations might focus on the time needed to implement new programs and deliver new services. If you go this route, be sure to capture some of the less obvious and direct benefits—for example, an enhanced reputation in the DEI space. In all cases, the goal is to use your hard-won diagnostic data to assess your full potential arising from smart collaboration.