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Great article from McKinsey on Collaboration

November 11, 2009 Leave a comment Go to comments

Using technology to improve workforce collaboration

27 October 2009

Knowledge workers fuel innovation and growth, yet the nature of knowledge work remains poorly understood—as do the ways to improve its effectiveness. The heart of what knowledge workers do on the job is collaborate, which in the broadest terms means they interact to solve problems, serve customers, engage with partners, and nurture new ideas. Technology and workflow processes support knowledge worker success and are increasingly sources of comparative differentiation. Those able to use new technologies to reshape how they work are finding significant productivity gains. This article shares our research on how technology can improve the quality and output of knowledge workers.

Knowledge workers are growing in numbers. In some sectors of the economy, such as healthcare providers and education , they account for 75 percent of the workforce; in the United States, their wages total 18 percent of GDP. The nature of collaborative work ranges from high levels of abstract thinking on the part of scientists to building and maintaining professional contacts and information networks to more ground-level problem solving. Think of a buyer for a retail chain whose distributed web of contacts span fashion designers in Tokyo to experts on manufacturing in Brazil.

For companies, knowledge workers are expensive assets—earning a wage premium that ranges from 55 percent to 75 percent over the pay of workers who perform more basic production and transaction tasks. Yet there are wide variations in the performance of knowledge workers, as well as in their access to technologies that could improve it. Our research shows that the performance gap between top and bottom companies in collaboration-intense sectors is nine times that of production- or transaction-intense sectors.1 And that underscores what remains a significant challenge for corporations and national economics alike: how to improve the productivity of this prized and growing corps of workers (Exhibit 1).

Exhibit 1: The increasing importance of collaboration

Unfortunately, the productivity measures for collaboration workers are fuzzy at best. For production workers, productivity is readily measured in terms of units of output; for transaction workers, in operations per hour. But for knowledge workers, what might be thought of as collaboration productivity depends on the quality and quantity of interactions occurring. And it’s from these less-than-perfectly-understood interactions that companies and national economies derive important benefits. Consider the collaborative creative work needed to win an advertising campaign or the high levels of service needed to satisfy public citizens. Or, in a similar vein, the interplay between a company and its customers or partners that results in an innovative product.

Raising the quality of these interactions is largely uncharted territory. Taking a systematic view, however, helps bring some of the key issues into focus. Our research suggests that improvements depend upon getting a better fix on who actually is doing the collaborating within companies, as well as understanding the details of how that interactive work is done. Just as important is deciding how to support interactions with technology—in particular, Web 2.0 tools such as social networks, wikis, and video. There is potential for sizeable gains from even modest improvements. Our survey research shows that at least 20 percent and as much as 50 percent of collaborative activity results in wasted effort. And the sources of this waste—including poorly planned meetings, unproductive travel time, and the rising tide of redundant e-mail communications, just to name a few—are many and growing in knowledge-intense industries.

There are some companies that already are tackling aspects of this collaboration–technology nexus. Cisco Systems, for example, set out to improve interactions between its technology specialist sales teams and enterprise customers. Frequent travel and stepped-up job requirements had resulted in overstretched teams whose effectiveness had become diminished. Cisco tackled the problem by mandating the use of its own video technologies, as well as other collaboration tools. The plan was straightforward: reach more customers and business partners by shifting a large portion of in-person meetings to virtual interactions. Policy and governance changes ensured that technology use became part of daily workflows and not an added task. Over an 18-month period, the initiative saved Cisco more than $100 million in travel and business expenses and reduced the company’s carbon emissions by 24 million metric tons. Internal surveys showed that 78 percent of the targeted employees reported increased productivity and improved lifestyles without diminishing customer or partner satisfaction.

Similarly, P&G has also adopted Web-based technologies to forge better links with partners and customers and to improve the flow of ideas across corporate and regional boundaries. It also set up ideas markets to gather and filter offerings from across the company and signed on with crowd-sourcing network InnoCentive to tap external experts to solve specific problems. In addition, the company used a collaboration strategy to broaden its product offerings and get more of them to market at a faster pace. It set a target of raising the proportion of new products sourced from outside its walls to 50 percent, from 35 percent. Besides the savings P&G realized from nearly a thousand fewer business trips each month, the company met its goals of shorter product cycle times and greater product innovation from external sources.2

But most companies are only beginning to take these paths. That’s because, in many respects, raising the collaboration game differs from traditional ways of boosting productivity. In production and transaction work, technology use is often part of a broader campaign to reduce head counts and costs—steps that are familiar to most managers. In the collaboration setting, technology is used differently. It multiplies interactions and extends the reach of knowledge workers. That allows for the speedier product development found at P&G and improved partner and customer intimacy at Cisco. In general, this is new terrain for most managers.


The interactive graphic that accompanies this article provides a synthesis of our view on how organizations can improve collaboration. It draws upon our work with companies, non-profit organizations as well as our own research and that of outside sources. The graphic’s multilevel approach to improving collaboration is based on the following steps:
1) classify workers by their workflow profile – the daily activities they do to perform their job
2) match new technologies to the workflows to extend collaboration efforts, improve effectiveness, and reduce inefficiencies

click to launch interactive feature

Click the image above to launch the interactive in a new window.

The discussion that follows is both a guide to the interactive and an elaboration on the thinking behind it.

Defining knowledge workers and how they work

As a first step, companies should take a fresh look at their workers, classifying them by how they collaborate. We have identified 12 types of collaboration work (see the interactive exhibit, “Collaboration types and tools”). Each of these is broken down into the day-to-day interactive activities (or workflows) that comprise these work classes. Today most organizations segment their employees by their positions within the corporate hierarchy. They are identified by job titles that, in many cases, obscure the kind of work they actually do. Take the title of manager. Seen through a collaboration lens, this title is often applied to several different collaboration types: in some, a manager builds teams, develops team members’ expertise, sets objectives, and encourages results; in others, a manager is more of an administrator who repeatedly executes processes (such as monitoring the work of others) to a certain standard. Many companies also award the title of manager to the consultant collaboration type – individual contributors who convene or take part in virtual teams to solve problems. Thus, improving collaboration should start with understanding employee workflows to get a more refined view how their work gets done.

At the same time, functional groups—such as sales and marketing, finance, and strategy—within organizations often divide into an array of job classifications that multiply over time. Yet these classifications don’t reflect the interactive aspects of the work. In our experience, jobs within many functional organizations can be grouped into a small number of collaboration types that reflect such interactions. This simplifies the task of improving collaboration. Take the case of one sales organization, where work was splintered into 50 distinct roles. Using interaction requirements as our guide, we found these roles reflected three basic collaboration types: sales people, managers, and administrators. In most sales organizations, each type of sales job is distinct and siloed: employees doing telesales and enterprise sales are given distinct corporate job codes and internal classifications, because they may have somewhat different skill sets. But the process workflows of these jobs are essentially the same—employees receive sales plans or quotas from management, build account plans, and generate and act upon sales leads, etcetera.

Applying technologies

Improving employee collaboration also depends on selecting the technologies that support their interactions. Companies can best do this by 1) understanding the specific requirements of interactive tasks; 2) identifying which tasks create disproportionate value for the organization; and 3) determining the types of inefficiencies and wasted efforts that bog down many interactions.

Requirements. Even within a given group of collaboration workers, the required interactions and technology solutions may vary substantially. For example, collaboration between two individuals working together on an account plan is very different from that of several dozen individuals meeting to coalesce around a sales strategy. Collaboration work, we have found, varies over a dozen such dimensions—including the scope of the collaboration (number of parties involved), which way information is flowing among the participants, whether participants exchange information equally, and whether the interactions stretch across functional or corporate borders. We examine these dimensions when assigning technologies to collaboration workflows.

Value. Not all interactions are created equal. Some organizations will prioritize focus on collaboration types and even specific activities based on their relative contribution to the organization’s objectives. For Cisco, this means a strong focus on partner and customer intimacy. For P&G, it is about increasing access to new ideas and speed to market. Other common objectives for collaboration initiatives include better talent management, business agility, and a reduced carbon footprint. Imagine the economic benefits for organizations able to double the number of inspired employees or triple the volume of new product releases.

Waste. We have documented 10 types of collaboration waste (Exhibit 2). In the case of managers, for example, effective collaboration demands that the manager not only agrees on specific objectives but also that he /she can communicate how to achieve them. Those efforts can be undermined by divergence (for example, sending teams in different, conflicting directions), misunderstanding (for instance, gaps between the message communicated and the resulting execution), and under- or overcommunicating, as well as other types of flawed interactions.

Exhibit 2: Waste in collaboration

Web technologies can diminish the wasted efforts. Take the case of “searching”: inefficiencies arise when a staffer is unclear about which colleague within the organization may be tapped for specific knowledge to solve a problem. One remedy is network mapping, a technology that plots work relationships among individuals, reducing search time by providing insights into the pools of knowledge within the company,

Meanwhile, as more of knowledge workers’ output involves digital content, other forms of waste multiply. Fact checking, annotations, and edits lead to handoffs and serial revisions that we term “interpretation” waste. Similarly, as this digital information often must serve audiences across distribution channels—printed documents, PowerPoint slides, and videos, for example—inefficiencies arise from “translation.” At times content is needlessly reworked or even distorted as it crosses channel boundaries. Collaboration technologies such as Google Docs, Adobe’s Acrobat.com, or Microsoft’s OfficeLive allow for coauthoring and co-editing content documents. Since parties are frequently tackling the same project at the same time, translation and interpretation waste is reduced.

From our research on workflows across a variety of companies we are able to arrive at benchmarks for the most effective way of performing a task. With that knowledge we can identify inefficient practices and select technologies with which to improve them.


Furthering collaboration excellence demands mind-sets and capabilities that are unfamiliar and sometimes even counterintuitive to many business managers. It requires trusting your collaboration workers to arrive at creative solutions rather than enforcing top-down policies. Business managers should allow time and provide forums for collaboration workers to brainstorm solutions to productivity problems. Corporate technology providers will need to provide tools that are flexible enough to enable experimentation, so that usage and adoption are widespread.3

While the broad gains from better workforce collaboration have been apparent for some time, the management approach and tools needed to capture the benefits at the company level have been missing. By using the methodology outlined here, companies can improve productivity among the growing ranks of their knowledge workers.

1 This was measured as the average earnings before income, taxes, depreciation and amortization per employee.

2 Larry Huston and Nabil Sakkab, “Connect and develop: Inside Proctor & Gamble’s new model for innovation,” Harvard Business Review, March 2006, Volume 84, Number 3, pp. 58–66.

3 Michael Chui, Andy Miller, and Roger P. Roberts, Six ways to make Web 2.0 work, September 2009.
Jacques Bughin, Michael Chui, and Andy Miller, How companies are benefiting from Web 2.0, September 2009.

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