Effective collaboration is essential for creating value. But paradoxically, effective collaboration has always been a challenge for senior managers — how do you get people in the organisation to work together across internal boundaries or collaborate externally with key stakeholders?
The question has taken on urgency in today's fast-changing globalised business environment. To service multinational accounts, it is vital to have seamless collaboration across geographical boundaries. To improve customer satisfaction, collaboration is a must among functions ranging from research and development to distribution. To offer solutions tailored to customers' needs, organisations need collaboration between product and service groups. Last but not least, to promote sustainable living no meaningful solution is possible without transformative collaboration with external partners.
Getting collaboration right promises tremendous benefits — a unified face to customers, faster internal decision-making, reduced costs through shared resources and development of more innovative products. But despite the billions of US dollars spent on initiatives to improve collaboration, few companies are happy with the results.
Time and again, management teams employ the same few strategies to improve internal cooperation. They restructure their organisations and re-engineer their business processes. They create cross-unit incentives. They offer teamwork training. Most such efforts have only limited impact in dismantling silos and fostering collaboration. Many are total failures.
The problem? Most companies focus on symptoms rather than the root cause of failure in cooperation: conflict. The fact is, collaboration cannot be improved until the issue of conflict is resolved. True collaboration embraces conflict. But executives usually underestimate not only the inevitability of conflict but also its importance to the organisation. Disagreements sparked by differences in perspective, skills, access to information and strategic focus within a company actually generate much of the value that can come from collaboration across organisational boundaries.
Clashes between parties are the crucibles in which creative solutions are developed and wise trade-offs among competing goals are made. So instead of trying simply to reduce disagreements, senior executives need to embrace conflict and, just as important, institutionalise ways to manage it.
Managing conflict is absolutely necessary for healthy collaboration. There are a number of straightforward ways that executives can help their people and organisations to do this, and the consultancy McKinsey proposes some solutions:
Role modelling conflict: Since employees watch their managers' behaviour for cues about the organisation's values, managers can signal the acceptability of conflict through "role modelling" by engaging in healthy debate with their seniors. Such role-modelling can signal that conflict is a natural part of collaboration, one that can be managed successfully.
Skills in encouraging and managing healthy conflict successfully can be part of ongoing training programmes to ensure employees don't suffer negative consequences solely for disagreeing or introducing constructive conflict into a conversation.
Company-wide conflict resolution: Without a structured method for dealing with conflict, people usually avoid or work around conflict, thereby forgoing important opportunities to collaborate. A well-defined, well-designed conflict resolution method will reduce transaction costs such as wasted time and the accumulation of ill will that often comes with the struggle to work though differences.
Many conflict resolution methods are available, but to be effective they should offer a clear, step-by-step process for parties to follow. They should also be made an integral part of existing business activities such as account planning, sourcing and R&D budgeting.
Besides fostering internal collaboration, broad-scale, multi-actor, systems-focused external partnerships are equally vital for progress. According to experts polled in the forthcoming GlobeScan/SustainAbility survey "Collaborating for a Sustainable Future 2015", multinational companies will be the key drivers of broad-scale collaborations to advance the sustainable development agenda.
Sustainability experts suggest private sector-led joint initiatives are particularly well equipped to work on improving supply chain labour conditions and issues around waste, while NGO- and government-led collaborations are seen as more effective than corporate-led efforts on issues such as poverty and biodiversity loss. Leading examples of multi-actor initiatives include:
The Sustainability Consortium, which includes diverse participants such as retailers, manufacturers, suppliers, governments, NGOs, researchers and consumers in driving the production and use of more sustainable consumer products and reducing supply chain waste;
Collectively.org, where collaboration among large corporations such as Google, Facebook and McDonald's is aimed at inspiring and facilitating sustainable lifestyles.
Finally, to illustrate the power of smart collaboration, it is useful to learn how industry leader Unilever manages collaboration. Unilever Foundry is a global platform for innovation through collaboration, providing a single entry point for start-ups and others to connect with its 400 brands. It uses a unique Pitch-Pilot-Partner approach that dramatically cuts the time it takes to get a new idea to market, with the average project going from brief to pilot in nine months.
Similarly, Unilever's strategic "Partner to Win" programme, built on five pillars — innovation, sustainability, service, value and capacity — with its 200 most important suppliers, has generated 70% supplier-led innovations, significant cost savings in an integrated value chain including €1.3 billion (48.6 billion baht) worth of capacity investment commitment by suppliers.
Kanishka Ghosh is a supply chain practitioner and regular contributor to The Link. The Link is coordinated by Barry Elliott and Chris Catto-Smith as an interactive forum for industry professionals. We welcome all input, questions, feedback and news at: Barry.Elliott@ABF1Consulting.com cattoc@freshport.asia