Companies that focus on effective employee collaboration and reward company-wide accomplishments increase their revenue by about $16,400 and their profits by about $2,500 per employee annually, according to a study by consultancy CEB.
A corporate culture that rewards employees who collaborate across divisions and units is a significant change from the common corporate practice of valuing individual star performers the most.
Of the employees CEB surveyed for the study, 75% said their companies’ organisational structures and processes highlight individual contributions over accomplishments that involved multiple employees from different parts of the company working together.
When collaboration is managed well, the result is greater than the individual parts, said Jesse Shore, assistant professor of information systems at Boston University’s Questrom School of Business, but group behaviour is a major obstacle. “It’s very easy to want to confirm the direction your group is going, especially where there is a superior who is weighing in with a certain opinion,” Shore said.
Hierarchy, routines, and an individual’s drive to win can also be tricky, he added, as can communications technology such as dashboards and groupware, which make it easy to imagine a world of total transparency and collaboration.
Globalisation, increasing specialisation of knowledge workers, and technologies that have reduced communications costs drive collaboration that companies expect will improve productivity. But productivity gains are likely to top out at 3% to 5% with standard performance management approaches, according to CEB’s analysis.
“One has to know when to use the tool and in what way,” Shore said. Current research is examining which patterns of collaboration suit particular problem-solving scenarios.
To further boost the productivity of employees who are highly networked horizontally in a complex work environment, CEB suggests company leaders consider four recommendations:
Emphasise competitive co-operation in performance management. Show employees that co-operating with peers is in their best interest by changing the way performance is evaluated and monitored.
To evaluate past performance, allow employees to identify and qualify how peers helped them achieve business objectives. The metric signals to employees what types of collaboration create value, helps identify the best collaborators based on peer evaluation, and links pay to the right kind of performance behaviours.
To guide future performance, have managers listen to and talk with direct reports. To ensure conversations are meaningful, consider conducting some type of post-review survey with employees.
To track employee contributions, measure indicators that capture co-operation, such as the number of employees moving across functions or business units, the percentage of project dashboards allowing cross-business access, and the amount of staff hours shared across functional and business unit lines.
Add context to objectives. Employees must be able to prioritise tasks based on organisational importance to make decisions and get work done in a complex business environment. To do this, they need the right kind and the right amount of information.
To avoid information overload, pick two to four key business metrics that best demonstrate progress towards organisational objectives and have teams prioritise daily tasks by using the key metrics. Don’t forget to update and reinforce the metrics over time.
To help front-line employees better understand high-level business objectives, ask them to align their personal goals with organisational priorities that are relevant in their region, business unit, or functional level. Increase ownership and accountability by letting employees identify their opportunities to contribute to organisational objectives.
Empower employees to solve collaboration challenges. The best way to speed up decisions and task execution in highly collaborative environments is to give employees the tools to figure out what’s not working in the collaborative process and fix it.
Employees who agree on the intended outcome of a process or assignment are able to assess whether work activities support the end goal. To focus assessments on what is happening rather than on who is doing something wrong, encourage dialogue and find emerging patterns based on positive and negative outcomes. Then have employees unearth the root cause of each result to analyse why outcomes occur. The analysis should also generate a list of actions employees should continue, stop, or begin doing.
Use non-financial rewards to boost collaboration. Create an environment where collaboration is enjoyable and meaningful to help employees learn from each other. Non-financial rewards tend to boost employees’ motivation to help colleagues, while financial incentives have been shown to increase organisational contributions, such as participation in a cross-functional team or testing software that will help other employees better track client engagements.
Non-financial rewards include mentoring programmes, all-staff meetings where customers recount how employees’ collaboration and extra efforts helped them, and initiatives that encourage employees to share solutions to problems. Collaboration can also become a factor in determining promotions, incorporated into key performance indicators and key tasks to fulfil objectives.
To ensure all learning contributions are rewarded, executives should reduce fear of failure by sharing failed projects on which they collaborated. Companies should establish rules to define failures worth sharing and bolster the rules by recognising employees who took appropriate, innovative risks.
Related CGMA Magazine content:
“How to Foster Collaboration”: To spark collaboration, work on building relationships, breaking down barriers, and leading by example, advises Lynda Gratton, professor of management practice at London Business School.
“ ‘Softer’ Issues of Culture, Engagement Becoming Harder for Companies to Master”: A global survey by Deloitte shows that employee engagement is a rising concern and that organisations seem to be falling behind as they try to re-imagine ways to manage and develop their workforce.
“How to Link Employee Training to Corporate Performance”: Aligning employee skills development to corporate performance targets and establishing quantitative targets makes training programmes more effective, a McKinsey survey suggests. Companies can accomplish this by following three steps.
—Sabine Vollmer (firstname.lastname@example.org) is a CGMA Magazine senior editor.