The Ultimate Guide to the Collaborative Economy

September 5, 2016

 

The Ultimate Guide to the Collaborative Economy

 

Information technology, globalisation and social media have changed business as we know it. These dynamics create an environment where companies and professionals must become more collaborative to succeed. The “Collaboration Economy” can create new market opportunities and new ways of working, but it can also create uncertainty, especially when it comes to transforming an organisation into one capable of true collaboration.

 

The benefits of collaboration are substantial. Companies that collaborate with employees, customers and partners outperform their peers in a number of different ways, such as revenue growth, operating metrics, customer satisfaction and employee retention.

 

 

The Collaboration Movement

 

The Collaboration Movement

The Collaboration Economy began as a movement in the 1990s as businesses realised the Internet could help enable collaboration. Since then, collaboration has taken on a life of its own as new platforms advance the ways professionals create, share, and consume information and knowledge.

Five dynamics have created a new way of doing business and revolutionised how companies collaborate:

“Video conferencing using GoToMeeting with HDFaces adds an important dimension to our meetings that a phone conversation alone can’t provide.”

 Tyler West,Senior Manager of Information Technology Services, Best Friends Animal Society

 

  1. Business is evolving to be more collaborative and social as companies come to understand the benefits of cooperation. More effective collaboration among employees yields tremendous productivity improvements, while working with customers translates into directly attributable revenue growth. Much of this change stems from the way people create, share and consume information in their personal lives.
  2. The ubiquitous nature of social media creates new expectations among professionals when it comes to the technology they use at work. For example, the exceptional design and user experience of many social media tools has changed what users want from business technology. Market research now shows user experience is the top evaluation criteria for many business technology purchases.
  3. Organisations are becoming leaner and more nimble. Executives are building what might be called more resilient organisations by minimising upfront capital outlays, emphasising time to market cycles and creating flexible workforces. The Internet has made modular, mobile workforces a reality for many companies. This type of workforce is cost effective, highly specialised and available on demand.
  4. Previously scarce technology has become remarkably abundant. Whether it’s software as a service (SaaS), cloud computing, open source or ad-sponsored software, most of the technology a business needs is available at a much lower cost. With hardware, software, bandwidth and storage costing 10 per cent of what it did at the turn of the 21 century, businesses of any size can now take advantage of enterprise-class applications and services to support all major business functions – even during uncertain economic times.
  5. An abundance of technology has created an abundance of information. The volume of business data generated by all the world’s companies is estimated to double every 1.2 years. While some companies struggle to deal with sheer volume of data being generated, many use simple technologies to leverage data and make better business decisions. Bottom line: the proliferation of technology is creating a massive amount of data, which will require companies to adopt more technology.

“GoToMeeting is always live. It’s how we communicate. If someone calls me, I immediately suggest launching a session. It reduces errors, risk and misunderstandings that arise when you’re just talking about something.”

Brian Roderman, Co-founder and Chief Innovation Officer, In2Innovation

 

Collaboration Best Practices

Collaboration Best Practices

While the move toward collaboration creates opportunities and risks for almost every business, it’s critical that companies manage this change effectively. These best practices will help your business collaborate better.

Build a highly distributed, collaborative organisation.

Dynamic markets require companies to change quickly. Companies must be able to take advantage of new market opportunities and respond to market risks in days rather than years. Organisations that are flexible and resilient outperform their peers in rapidly changing markets. And companies that organise themselves in a highly distributed manner tend to be the most resilient and flexible. That’s because these companies can tap into global markets, highly skilled labour pools and specialised groups of partners and suppliers.

Target and test global market opportunities.

Highly distributed organisations can target local and regional markets around the world. That provides companies with larger target markets. In fact, 70 per cent of the world’s purchasing power lies outside of the United States. Geographic limitations have historically made this strategy difficult, but the Internet makes marketing and selling to a broader market remarkably straightforward. Self-service advertising tools and videoconferencing platforms make it possible to target and engage prospective customers no matter their location. Furthermore, many of these tools make it possible to run small tests before deciding to make a full investment in the market.

Build a highly distributed, skilled workforce.

Great employees are critical to a company’s success, particularly in rapidly changing markets. But location often prohibits companies from hiring great people. Over 60 per cent of companies already allow their employees work remotely because a distributed workforce gives them access to a larger pool of global employees, lets employees to work wherever they like and reduces operating costs, among other benefits. In fact, a recent study estimates that U.S. companies can save up to $20,000 per employee by having them work remotely.

Develop a distributed network of partners, suppliers and experts.

Many businesses have already created distributed networks of suppliers and partners. For example, the United States imported about $400 billion in goods from China in 2011. More recently, companies have begun to leverage networks of expertise. From closing the books, to developing a call centre script, to resolving a complex legal issue, the Internet provides companies with deep expertise that was previously not available to most companies.

Invest in technology that enables communication.

The highly distributed organisation is only as good as the technology that enables it. For all the benefits a networked organisation can deliver, the costs associated with enabling effective communication and collaboration across that organisation can be quite high. That’s also why technologies such as video conferencing have become must-have tools for so many businesses.

Manage for a distributed organisation.

A distributed organisation is different than a centralised one. Most management practices are built around centralised organisations where workers are all in the same office and customers are nearby. Managers in distributed workplaces must check in more regularly, establish clear guidelines and expectations, and ensure company leaders are available when needed.

Make collaboration ubiquitous.

Collaboration can boost revenue, customer satisfaction and profitability. It can also improve less-tracked metrics like safety incidents and employee absences. While this used to be a daunting task for many businesses, recent years have seen the advent of easy-to-use technologies and processes.

Embrace various forms of online collaboration.

A variety of collaboration tools make it easier than ever to communicate with customers, partners and employees without having to incur traditional communications and travel expenses. These platforms take their cues from how people traditionally create, share and consume information. Capabilities like video conferencing, real-time chat, shared whiteboards, social commenting and document sharing have helped online collaboration reflect the real world.

“Our virtual organisation depends on GoToMeeting with HDFaces video conferencing to maintain the company culture and promote teamwork. We get tremendous value from video conferencing when we’re demonstrating a new product to our staff because the reactions—positive or negative—are right there on people’s faces. HDFaces has also made it very affordable to incorporate high definition video to any meeting as it’s included in GoToMeeting subscriptions at no additional cost.”

Mike Huska, CTO, Incential Software

Collaborate with employees in a deep, genuine way.

Most executives now understand the business benefits of improved employee engagement. According to a recent McKinsey study, approximately 80 per cent of executives believe employee collaboration is critical to growth. Yet, only 25 per cent of those same executives describe their organisations as effective at employee engagement. To close this gap, businesses should develop a specific business case to guide efforts to improve engagement.

Remember, customer collaboration makes or breaks companies.

Effective customer collaboration leads to better products and happier customers. With recent technology advances, it doesn’t need to involve a lot of time or money. While the benefits are compelling, only 27 per cent of companies see improved customer experience as a result, according to a recent Forrester study.

Create a culture of collaboration.

Collaboration programmes fail when leadership signals that communication inside the organisation is not a real priority. Sometimes this signalling is explicit, but more often than not, it’s implicit. This implicit signalling occurs when leaders repeatedly cancel meetings, stop publishing business updates, erect barriers between groups of employees, hide information that can and should be shared with employees, and shut down mechanisms that allow for multi-directional communication.

Build collaboration programmes to be flexible and scalable.

Internal communications programmes can and should be built to scale across the organisation. With the right technology and processes, a program can scale to a large number of people, geographies, and groups throughout a company. Make sure every employee is able to easily access needed information. Too often, employees will cite the difficulty associated with accessing information as a barrier to effective internal communications.

“Arranging on-site meetings takes time and focus away from the project itself. Instead of spending a full day on a client visit every few weeks, we hold a one-hour collaboration each week. Not only is this a more efficient use of everyone’s time, it allows us to stay in closer communication and address issues right away.”

Brian Roderman, Co-founder and Chief Innovation Officer, In2Innovation

 

Strive to be fast, efficient and nimble

Strive to be fast, efficient and nimble

Efficiency is critical in a challenging economic environment. Companies that operate efficiently realise higher margins than their competitors do. They also increase their chances of surviving disruptive changes because they can adapt more quickly to disruptive changes in the market. Many businesses already recognize this and are leveraging a variety of tactics to become more efficient and nimble.

Build a capital-efficient business.

Many businesses face greater capital constraints in the current economic climate, but they also require much less of it. This is certainly true in information or digital industries, where trends such as cloud computing, online communities and open source are driving costs down significantly. Take game development as an example: In the offline/retail world, it might take $30 million to develop and market a game. In the online world, even wildly popular games require less than $1 million to develop and market. And capital efficiency isn’t merely a digital phenomenon. Even offline businesses require less capital as they source goods and services from all over the world and develop new markets more efficiently.

Tap into labour on demand.

There are now over 9 million temporary workers in the United States alone. While that might not be a comforting fact for many economists, it’s a resource that companies can use to access specialised skills and labour at low costs. Almost every skill required to build and run a business is now available a la carte. Skills range from the engineering resources available on freelance sites to on-demand customer service from business process outsourcing companies.

Leverage an abundance of inexpensive technology.

With hardware, software, bandwidth and storage costing onetenth of what it cost at the start of the 21st century, any business can take advantage of enterprise-class applications and services to support all major business functions. From obvious applications like CRM software to more arcane services like communitypowered customer service, enterprise-class functionality is now available to any business at a low cost.

Engage in lean product development.

It’s now possible to develop and launch products and services in a matter of days or weeks. Amazon EC2, Rackspace Cloud and other cloud-computing offerings make application/service development and hosting easier than ever. And while many of these capital efficiency tips rely on the Internet, there are also developments in the purely offline world that enable small businesses to be more capital efficient. One of the more exciting advances is the emergence of “desktop manufacturing” technologies that allow small businesses to develop three-dimensional prototypes using nothing more than a PC and 3D printers.

“We experimented with the GoToMeeting HDFaces video conferencing capability for an executive team meeting. I expected the remote attendees would need some basic support to get started, but everyone connected without needing assistance. Even more important, attendees were really excited about the quality of the video and how easy it was to use.”

Tyler West, Senior Manager of Information, Technology Services, Best Friends Animal Society

Develop a lean supply chain.

The notion of a lean supply chain is being extended beyond manufacturing to other markets. Companies can now leverage networks of product developers and designers online. These platforms, which embrace online collaboration as a missioncritical element, deliver speed, usability and compelling economics.

Place a premium on applications that deliver a compelling user experience.

Almost every business professional is now a regular user of information technology. This has led to a profound change in business technology as employees recalibrate their expectations of the technology they use at work. With the consumerisation of IT, organisations must be certain to invest in technology available on demand, without lengthy implementation cycles. Companies must also emphasise usability when evaluating new technologies.

This is particularly true in areas such as CRM systems, collaboration, productivity and human resources software where large numbers of employees without specific training use this specialised software on a regular basis.

Recognise that mobility is the future of information creation and consumption.

According to CompTIA, 85 per cent of executives work remotely at least occasionally and 53 per cent work remotely frequently. Reliable access, the proliferation of tablets and app development are making mobility a true and sometimes preferred alternative to working from the office. That means employees and customers must be able to interact with a company’s employees and applications using a mobile device. While large enterprises will spend an estimated $174 billion on mobility in 2017, most companies are better off investing in applications and solutions that natively support mobile end users.

Embrace big data and big information.

Big data (or more generally big information) has the potential to enable better business decisions. The Internet, new forms of collaboration and technology that captures an increasingly large amount of data are exposing data and information to companies at an ever-increasing rate. While the initial wave of information and data can seem overwhelming, the benefits of making decisions based on more information can be significant.

 

Final Thoughts on the Collaboration Economy

To succeed, businesses must become more collaborative in nature both internally with employees and externally with customers and partners. Collaboration can produce remarkable new opportunities for businesses to pursue, but it can also present daunting challenges that require real expertise and new technologies to overcome. Now is the time to capitalise on these new opportunities.

 

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