Collaborative Organization

Defined by Robert Logan, also the author of the Sixth Language, in his book Collaborate to Compete.

URL = http://www2.physics.utoronto.ca/~logan/cqchin.doc

What Is a Collaborative Organization?

From http://www2.physics.utoronto.ca/~logan/cqchin.doc:

A collaborative organization is one that has the following characteristics:

1. The values and objectives of employees and management are aligned,

2. A climate of mutual trust and respect exists,

3. The knowledge of all the staff, customers and suppliers is shared and pooled to optimize the organization's operations and opportunities,

4. Decision making is more decentralized than it is in most current organizations and more stakeholders in the organization play a role in defining the direction in which the organization moves, and

5. Hierarchical structures are kept to a minimum. The company is managed democratically by consensus rather than by command and control. (By consensus we do not mean that every member of the organization was in agreement with every decision, but it does mean that all members of the community were heard and their views were taken into account by those responsible in the organization for making decisions.)

Discussion

By Bob Logan in the first chapter of his book Collaborate to Compete.

"Collaboration has far-reaching implications for the enterprise-wide culture of an organization. Collaboration, as contrasted to the more circumscribed concept of teamwork, cuts across organizations, divisions, departments and working groups. It also involves more than just cooperation; it requires the ability and willingness to creatively share ideas and knowledge and to create new knowledge with others. And this is the crux of the problem, because it is hard for individuals to do this when they still believe that "knowledge is power" and they hoard their knowledge."

The Challenge of Collaboration

"In the collaborative organization, the workplace is a community where people trust each other, share similar values and respect each other. Given the realities of today's corporate environment, our definition of collaboration creates a major organizational challenge.

But we are confident that by embracing the paradigm of collaboration companies will experience improved efficiencies and greater profitability. Here's one example of how:

"The Documentum content management system is making it easier for DuPont engineers, designers, contractors and others, both inside and outside the enterprise, to perform their jobs effectively and to collaborate efficiently with one another. The end result is faster time to completion for new plants and other projects, which contributes to competitive market advantage and significantly increased cost savings for the company's bottom line" (www.documentum.com, 2003).

We predict that companies that do not become more collaborative with their managers, employees, customers, suppliers and alliance partners will not survive in the Internet era. We realize that the sophisticated reader has already heard something like this before, when similar claims were made for TQM, BPR and other formulae that turned out to be just another fad. So why do we think this is different? The answer is that the essence of a company is collaboration, as opposed to individuals working on their own. It is interesting that it is only within the past few years that people have begun to recognize the importance of collaboration and how it incorporates the whole spirit of commerce or doing things together." (http://www2.physics.utoronto.ca/~logan/cqchin.doc)

Why the Internet Creates a Natural Environment for Collaboration

"The Internet affects business today in every sector in ways that are only beginning to be understood. The foundational relationships between a business and its customers and suppliers, other businesses and even its competitors, has already evolved through radical changes that weren't even conceivable just a few short years ago. And more significant changes are coming, brought about by the use of the Internet as the new, ubiquitous language medium of two-way communication between any business and its customers and between businesses themselves.

Companies are using the Internet to realize new efficiencies that lower costs, thereby making them more competitive, and to increase their level of customer support, hence increasing the level of their collaboration with their customers. Customers now have the expectation that they should receive immediate answers to questions they have about the supplier's services and products, online information, online support and the facility for online ordering. Some customers would like to participate in the design of the next generation of products or services of their supplier (customer as customizer). Companies are using the Internet to create new business opportunities for themselves by pooling their knowledge and interests with the knowledge and interests of their customers.

The creation of a collaborative culture within an organization makes collaboration between businesses and organizations more feasible. But, because the rapid improvement of the technology is so dazzling, we are often blinded to the critical psychological and organizational cultural issues to which the new media give rise. These are the areas on which we focus our analysis in this book; these are also the areas that lead us to the conclusion that the Internet not only makes collaboration possible, it demands that a company be collaborative to succeed and thrive in the burgeoning Internet world of knowledge-savvy customers." (http://www2.physics.utoronto.ca/~logan/cqchin.doc)

The Obstacles to Collaboration

"Knowledge management systems have been organized to achieve the collaborative goal, but have only met with partial success as documented by Lucier and Torsilieri (2001): "Knowledge management fails to deliver significant results. Across the 108 companies we studied, we found no correlation between systematic management of knowledge and improved bottom-line performance. That is, we found that companies with extensive knowledge management programmes were not more likely to achieve bottom-line performance than companies without extensive knowledge management initiatives." These researchers did find some companies where KM initiatives did pay off. "Buckman Labs captured value by identifying and measuring relationships between investments enabling collaboration and sharing, time spent with customers, rapid problem resolution, sales from new products and overall growth." In other words a focus on collaboration, especially with customers so as to meet their needs, results in KM initiatives having a positive impact on the bottom line.

In terms of technology, it is not all that difficult to set up a knowledge network to facilitate knowledge sharing and knowledge co-creation. The challenge is to get managers, employees, suppliers and customers to actually use these systems. The problem is one of company culture, especially trust and the attitude of employees, often attitudes the employees bring to their organization based on their prior experiences.

Traditionally our education system has emphasized individual accomplishment and learning in a highly competitive environment in which students are graded and ranked. For most students their ability to find satisfactory employment and enjoy financial success depends on their ability to do well in school, which does not necessarily entail deep learning, but rather scoring well on tests and competing successfully with their classmates. Once these former competitors are employed they find themselves in a similar environment of competition. Now they must compete with their co-workers for the prestigious, more important and higher salaried positions within their organization. They quickly discover that personal knowledge and information is power, and that if they wish to advance their careers it is probably better to keep what they know to themselves.

Not only does the competitiveness of the former students add to an environment of mistrust, the organization itself, through its actions, adds to the level of mistrust. This is partly due to the nature of a free market economy in which the organization must think in terms of defending itself from its competitors. This adversarial mind-set adds to the general lack of trust within the organization. Another factor adding to mistrust in the business world is the massive amount of downsizing that has characterized most organizations in recent years, which has contributed to employees' mistrust of their employers. As a result, employees often put their own personal career goals way ahead of the needs of their company. This is reflected in the large staff turnover that many companies experience. The lack of trust operates in both directions. Because of the difficulty in retaining staff, companies create, and then exacerbate, a vicious cycle by not investing enough in their employees' professional development, which would build a greater atmosphere of trust.

The lack of trust, endemic in the culture of most companies, is the single biggest obstacle to creating a collaborative organization. Rodgers and Banerjee, in a white paper written for J.D. Edwards, concur with our judgment: "Although technology shortcomings are a significant hurdle to true collaboration, the biggest medium-term barriers to evolving a collaborative commerce strategy will be cultural and organizational. At an organizational level, successful collaboration is built on the principle of trust." (www.jdedwards.com, 2003)

When a climate of trust is created within an organization, by no means an easy thing to do, the cultural barriers can be overcome. It is for these reasons that the focus of this book is on the human issues of trust and cultural adaptation, and not on the technical issues of the deployment of IT. Technology will not be ignored, but where we do talk about the technology, it is to show how technology can be used to create community, trust, the alignment of personal and corporate values and objectives, and a spirit of collaboration within the organization." (http://www2.physics.utoronto.ca/~logan/cqchin.doc)