During the past decade, executives have grown increasingly aware of the importance of collaboration to increase workforce productivity, improve customer service and even drive innovation. Social media tools and other technologies have been a major factor, revolutionizing how people work together and share information.
But what happens when collaboration extends beyond an organization to other companies, partners, suppliers or even competitors?
That is the larger trend today. More companies are deciding not to go solo when it comes to competing in today’s markets. But how to collaborate beyond one organization’s four walls — and deal with the impacts on business models, leadership, culture, learning and a host of other issues — is a challenge.
Redefining the Business
In one respect, cross-enterprise collaboration is nothing new. Supply chain partnerships have been in place in many industries for a long time. In sectors such as electronics, consumer goods and aeronautics, companies may have more than a hundred partners working across manufacturing and delivery. But in other cases, cooperative business models go well beyond what companies have traditionally meant by supply chain partnerships or even alliances.
Consider the case of Endo Pharmaceuticals in the United States and Orion Corp. in Finland, which are collaborating in the oncology drug market. The companies intend to co-develop products, share development costs and pay each other royalties based on sales in their respective territories.
Cross-enterprise collaborations have the potential to redefine the nature of competition and cooperation. Companies may compete aggressively in one part of the world or business and still cooperate in others.
Different types of companies also can entwine themselves in each other’s value chains. Have a Toshiba laptop in need of repair? UPS will pick it up as always. But now UPS runs Toshiba’s repair business, too, and will have the laptop repaired and back to a customer within a few days. It’s all in the name of efficiency and streamlining turnaround time.
To succeed in this coming era of cross-enterprise collaboration, companies will need to manage relationships across company boundaries as effectively as they do within those boundaries. Success, in other words, involves far more than how contracts are established, marketing is managed and work handoffs are documented. What’s needed is coordinated attention to a range of talent management and human capital strategy issues, including the following:
Conducting workforce planning across multiple companies: One of the stumbling blocks to effective cross-enterprise collaboration has to do with the detailed HR strategy and workforce planning required to anticipate what skills a collaborative business endeavor will need, where people will be needed and which of the participating companies is best positioned to lead from a skills perspective.
Companies within a collaborative endeavor need to work together to project workforce demand, determining how many people are required for each type of job or role, now and in the future. Creating an HR strategy and conducting workforce planning across organizational boundaries is, by and large, unexplored territory, yet it is difficult to imagine successful cross-enterprise collaboration that does not involve coordinated work among a team of HR strategists from the participating organizations. This kind of cross-enterprise HR team would be charged with translating the business strategy into an HR strategy, creating and updating a workforce plan and then operating employee lifecycle management functions — recruitment, development, performance and rewards — that are integrated across the different entities.
Companies at an advantage have addressed similar HR coordination issues through global expansion, such as acquiring companies in new markets or harmonizing HR processes and systems among business units in different locations.
Creating shared learning experiences to support common goals: Another vital ingredient to get multiple enterprises working in sync is a common base of knowledge and skills related to the functions and processes being shared.
Developments in creating enterprise learning programs that can span several organizations show promise to help collaborating enterprises. One area is common training programs for supply chain partners.
For example, consider communications equipment provider Avaya. A division of the company, Avaya Learning, delivers Avaya product and service training not only to its own associates but also to a variety of audiences including business partners and end customers. The training is underpinned by a professional credential program that serves as a roadmap ensuring companies across Avaya’s value chain develop common implementation, maintenance and troubleshooting skill sets. This enables better collaboration and helps stakeholders use and sell Avaya products and services more effectively.
Social media platforms are also important as a way to encourage cross-enterprise learning and collaboration. Social media applications are typically designed to mimic natural human interaction rather than force-fitting people into rigid, policy-centric workflows, and can appeal to more universal learning characteristics so collaboration and learning can occur more effectively across enterprise boundaries.
Technologies that can make that happen, while also ensuring data security and information privacy, will be important to success. One such a technology is electronics retailer Best Buy’s vendor portal, which was created to improve collaboration among the company’s vendors, carriers and its own business groups through a secure, efficient and consistent means to access and exchange information.
Promoting leadership across borders: The challenges that cross-enterprise collaboration presents to many accepted ideas of leadership are varied. In many industries, companies have traditionally advanced people up the corporate ranks based on tenure. Authority is often based on titles, and power-hoarding is common. That kind of leadership does not generally translate well across organizational boundaries. How does a manager effectively lead and manage people who do not ultimately report to him or her?
A new generation of cross-enterprise leaders will need to earn authority based in part on different behaviors, on demonstrating the ability to collaborate and to bring people together to carve out opportunities in a more open environment.
One key will be to develop leaders in different ways, giving them the competencies needed to bring people from multiple organizations together. For example, Lockheed Martin Corp. has created a program called Full Spectrum Leadership. This companywide program, developed with the full sponsorship of the CEO, redefines leadership essentials focusing on five values: shaping the future, building effective relationships, energizing the team, delivering results and modeling personal excellence, integrity and accountability.
With an emphasis on relationship- and team-building, such programs help to develop the executive talent capable of leading multiple organizations toward a common goal.
Bringing cultures together: Leadership, however, can only take a cross-enterprise endeavor so far. Eventually, multiple cultures — often with varying assumptions about “the way things work” — need to work together effectively.
Here, many of the lessons learned during the past decades about post-merger integration can be helpful. After a merger or acquisition, companies may work intensively with integration specialists about culture — analyzing the essential characteristics of the merging companies to find points of both similarity and conflict, and then putting programs in place that can help blend the organizations together in a new, cohesive way.
For example, when Siemens AG’s COM division and Nokia’s Network Business Group merged in 2007 to form Nokia Siemens Networks, the new company needed to bring together the different cultures of the two merging entities. Because Nokia’s heritage was in the device manufacturing business, its culture was less explicitly customer-facing than the culture at Siemens, which provided more holistic, customer-centric services.
In terms of working style, Siemens had been more hierarchical in its structure, so employees needed to adjust to the less formal culture of Nokia Siemens Networks, with open offices and an expectation that interaction with colleagues at all levels would be more informal. The company initiated a comprehensive change program to help address these cultural differences and to establish common attitudes in a new, shared way of working.
Culture change also has been key to the success of GE Healthcare’s “healthymagination” initiative to bring quality care at lower cost to more people throughout the world. Parent company GE has invested $6 billion to launch more than 100 innovations by 2015 to reduce health care costs, increase access and improve the quality of health care delivery.
One of the keys to success from a cultural perspective was developing a more collaborative extended workforce — one capable of teaming with customers, governments and other partners globally to address some of today’s biggest challenges in health care. According to Bob Cancalosi, chief learning officer for GE Healthcare, who has been leading the company’s culture transformation effort, “Innovative product ideas can emanate from every direction. We want our managers quickly funneling great ideas and moving them to action across geographies.”
Part of the culture change effort involved diagnosing the company’s existing culture, focusing on six characteristics of open or “boundaryless” collaboration: teamwork, trust, managing conflict, minimizing political maneuvering, eliminating siloed behavior and openly sharing information across the organization. The diagnosis identified several areas where GE Healthcare could strengthen its collaborative capabilities to take advantage of growth opportunities.
Taking an Expansive Approach
Many of the best examples of cross-enterprise collaboration come from organizations working together to extend their opportunities, not just to defend turf or ward off competition. Banding together will enable many companies to move forward in the expansive way necessary to succeed in today’s and tomorrow’s marketplace.
The winners will move forward to manage their collaborative endeavors in a comprehensive way, focusing on the talent, structures, leadership and culture needed to compete in an increasingly complex marketplace.
Craig Mindrum is a writer and CEO of Mindrum Northstrong, a consultancy specializing in talent, change, leadership and ethics. Yaarit Silverstone is a managing director for human capital and organization effectiveness offerings within Accenture’s talent and organization management consulting group. They can be reached at email@example.com.