Commercial Excellence: The World Awakens

In recent years, there has been a steady push for increased collaboration. Businesses encourage it both wthin and between functions and with customers and suppliers. A survey by the Financial Times discovered that employers value graduates who have ‘the ability to work in a team, to work with a wide variety of people and to expand their network’. These were, in fact, the three top characteristics.

IACCM has certainly been among those at the forefront of promoting the benefits of collaboration, albeit that this should be undertaken with surrounding structure and discipline. The Association’s research has indicated that collaboration generates better results, especially in the provison of services or delivery of outcome and performance-based contracts. The quality of interactions, the degree of open communications and the level of trust are all impacted by collaborative behaviors. But are there limits?

The dangers of ‘groupthink’

An article in The Economist suggests the need for careful thought over the extent and nature of collaboration. While teamwork and joint working would seem to be fundamental attributes for collaborative working, too much of either may prove counter-productive. For example, it is essential that everyone has a common goal, but too much teamwork can result in ‘groupthink’ – an inability or unwillingness to ask tough questions or take an opposing view. Similarly, benefiting from the ‘wisdom of crowds’ depends on a level of independent thought and anonymity of input, since otherwise ‘participants are reluctant to look foolish by deviating from the majority view’.

Constant communication is another feature of today’s workplace, with email, conference and video calls ensuring that everyone can remain connected. This also needs caution. According to a recent research paper, the best outcomes are achieved when team members are kept informed of each other’s views ‘only intermittently’. (‘How intermittent breaks in interaction improve collective intelligence’ – Proceedings of the National Academy of Sciences 2018).

So to the extent that a purpose of collaboration is to generate ideas or innovation, it is beneficial to encourage individual thinking, supported by mechanisms where those ideas are evaluated and refined. In this context, it is the environment and governance methods that must be collaborative and welcoming. Other research supports this critical role of the environment in which people work: it highlights the importance of sensitivity to others, the exent to which there is equal participation in conversations and the proportion of women in the group (more, apparently, is better).

Leadership and direction

Finally, there is the need to recognize that decisions must be made and that ‘leadership’ is in this sense critical. Researchers at Columbia and Wharton Business Schools found that ‘co-creation’ is less effective than individual leadership and this has been borne out by the research into corporations that introduced co-CEOs. Ultimately, the absence of a clear leader appears to create confusion – and ultimately will lead to collaboration being undermined by frustration.

In conclusion, what this tells us is that simple appeals for collaboration are unlikely to prove effective. Organizations must provide an appropriate management and measurement system that creates a framework and incentives for collaborative working. Shared service centers and relational contracting models are two leading examples of the changes that are needed from a management perspective. The question of the right measurements is more difficult to answer, but it is clear that current functional performance indicators need to change because they tend to driver adversarial behaviors that undermine cooperation. Contention is good, but it must be creative.

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Sysintellects, LLC

CMx ContractExperience provides simple contract management software system with in-built electronic signature and contract management technology solutions to all size companies,