Disciplined Collaboration

1
DisciplinedCollaboration

• Morten T. Hansen
• MIIC March 2, 2009

2
The Apple iPod story
3
iPod introduced in Cupertino, California, in
October 2001
September 11 2001
October 23 2001
4
iPod a combination of existing pieces
Apple as Masterful Collaborator

• External
• 1.8 inch drive (Toshiba)
• Hardware blueprint (PortalPlayer)
• MP3 decoder controller (PortalPlayer)
• Codec (Wolfson
• Lithium battery (Sony)
• Power management (Linear Technology)
• Basic software (Pixo)
• iTune software (Soundjam)
• Interface controller (Texas instrument)

• Internal
• Architecture
• Hardware engineering
• Display
• Design
• User interface
• Scroll wheel

5
iPod a combination of existing pieces
Apple as Masterful Collaborator

• External
• 1.8 inch drive (Toshiba)
• Hardware blueprint (PortalPlayer)
• MP3 decoder controller (PortalPlayer)
• Codec (Wolfson
• Lithium battery (Sony)
• Power management (Linear Technology)
• Basic software (Pixo)
• iTune software (Soundjam)
• Interface controller (Texas instrument)

• Internal
• Architecture
• Hardware engineering
• Display
• Design
• User interface
• Scroll wheel

This was a highly leveraged product from the
technologies we already had in place
Rubinstein, head of hardware at Apple
6
iPod had tight collaboration across three units
inside Apple
Steve Jobs
Rubinstein
Hardware
Software
Design
7
FastTime to market was 8 months!
iPod Team Launched
iPod Introduced
Nov 2001
Xmas
March 2001
8 months from concept to introduction
8
Amazing success iPod/iTunes a 10bn business in
6 years
Growth of iPods sold
.. has become a 10bn business
9
Sonys Connect Story
10
Sony had all the pieces in-house- How hard could
it be?
11
Sony had all the pieces in-house- How hard could
it be?
We can do this in nine months. We got the
product, hardware, software. Executive Philip
Wiser telling Howard Stringer (U.S. head) in 2003
12
Hard!Rivalry among 5 groups in Sony in 2003
Sony Music Japan Own online music
PC Japan Own music player
Sony Music US Own online music
Walkman Japan Own music player
Sony Electronics US Own online music
13
Hard!Rivalry among 5 groups in Sony in 2003
Its impossible to communicate with everybody
when you have that many silos. Howard
Stringer, Sony CEO
Sony has long thrived on a hyper-competitive
culture, where engineers were encouraged to
outdo each other, not working together the
Wall Street Journal
Sony Music Japan Own online music
PC Japan Own music player
Sony Music US Own online music
Walkman Japan Own music player
Sony Electronics US Own online music
14
Connect launched 2004, a flop, takenoff,
re-launched, terminated 2007
A Long, painful decline in Sony audio
Note audio sales includes all audio products
15
Howard Stringer appointed CEO of Sony in June 2005
One of the first steps?
16
Howard Stringer appointed CEO of Sony in June 2005
One of the first steps?
Sony United
17
Bad collaboration is worse than no collaboration
..
Collaboration Traps
18
Trap 1. Wrong organization set-up.
Collaboration efforts run into a wall.

• Example Sony Connect
• Decentralized structure hindering
• collaboration
• Competition among units
• Incentives skewed against working
• across the organization

19
Trap 2. Over-collaboration Collaboration run
amok. Must be good to collaborate..
Example BP People always had a good reason for
meetingYoure sharing best practice. Youre
having good conversations with like-minded
people. But increasingly, we found that people
were flying around the world and simply sharing
ideas without always having a strong focus on the
bottom line.
John Leggate, CIO, British Petroleum
20
Trap 3. Over-shooting potential. Upside of
Collaboration not as high
Example Sony buying Columbia Pictures Idea was
to that Sonys electronics division should
collaborate with film-makers on cross-promotions
etc. - Last Action Hero Movie soundtrack by Sony
Music, joint marketing of TVs, video recorders,
and the film. - But upside was far smaller and
never large.

21
Trap 4. Under-estimating costs of
collaboration. Costs much higher

• Example DNV food case
• For the IT consulting division,
• probably not the best project
• Lots of hassles working across
• business units (costing time and
• money)

22
Trap 5. Getting the organizational problem
wrong. Mis-understanding why people dont
collaborate.

• Leaders mis-understand why employees dont
  collaborate better
• We thought the key problem was difficulty in
  finding knowledge and people in our company, when
  in reality the key problem is peoples
  unwillingness to collaborate.
• IT manager, large U.S. company

23
Trap 6. Implementing the wrong solutions
to organizational problems

• Leaders put in place the wrong solutions because
  they mis-understood the problem
• Because we thought the key problem was search,
  we invested in an elaborate IT and knowledge
  management system to help people find things in
  the company. But the key problem wasnt search.
• IT manager, large U.S. company

24
Getting collaboration right
You must put discipline in collaboration!
Provided you have the discipline
Collaboration can get great results
25
Disciplined Collaboration
ECONOMIC OPPORTUNITY
How much valueand wherefrom collaboration?
BARRIERS TO COLLABORATION
Find them, tear them down
MANAGEMENT LEVERS
Tailor solutions to specific barriers, and
dont overdo
26
ECONOMIC OPPORTUNITY
How much valueand wherefrom collaboration?
27
Executives need to articulate goals of
collaboration in three areas
Better Innovation
Revenue Growth
Improved Operations
28
Better Innovation
Revenue Growth
Improved Operations
Cross-unit product innovation
New businesses by combining
29
Procter Gamble master at innovation through
collaboration
34.99
New study shows whiter teeth can lead to greater
success in work and love P G website, 2007
30
Procter Gamble master at innovation through
collaboration
34.99
bleach expertise
teeth whitening expertise
novel film technology
New study shows whiter teeth can lead to greater
success in work and love P G website, 2007
31
Procter Gamble master at innovation through
collaboration
34.99
bleach expertise
teeth whitening expertise
novel film technology
New study shows whiter teeth can lead to greater
success in work and love P G website, 2007
Fabric Home Division
Oral Care Division
Corp. RD
32
Executives need to articulate goals of
collaboration in three areas
Better Innovation
Revenue Growth
Improved Operations
Cross-selling, Re-package
Customer service by coordinating
33
Wells Fargo best in cross-selling products to
banking customers
Best in U.S. with 5.2 products per consumer
Next goal to go from 5.2 to 8 products per
consumer
Avg. U.S. banking Customer has 16 financial
products
34
Wells Fargo best in cross-selling products to
banking customers
Best in U.S. with 5.2 products per consumer
Next goal to go from 5.2 to 8 products per
consumer
Avg. U.S. banking Customer has 16 financial
products
One Wells Fargo
80 business units
35
Executives need to articulate goals of
collaboration in three areas
Better Innovation
Revenue Growth
Improved Operations
Costs/investments savings by sharing
Better decisions by getting input
36
BP lots of best practice transfers- example
retail in gas stations
BP UK
Best practice transfer
BP Atlanta
Best practice transfer
BP Netherlands
37
BP lots of best practice transfers- example
retail in gas stations
BP UK
Best practice transfer
BP Atlanta
Best practice transfer
Much improved
BP Netherlands
10
-20
-26
Working Capital
Retail Sales
SKUs
38
Summary assess opportunities for collaboration
in three areas
Better Innovation
Revenue Growth
Improved Operations
Cross-unit product innovation
Cross-selling, Re-package
Costs/investments savings by sharing
New businesses by combining
Customer service by coordinating
Better decisions by getting input
39
Assess opportunities One high-tech company
Costs Decisions
Customers
Innovation
Scale
Scale 100very high 1 very low
40
DNV assessment of opportunitylarge gaps
Costs Decisions
Customers
Innovation
41
The Collaboration MatrixDNV example
Provider of competencies/services Provider of competencies/services Provider of competencies/services Provider of competencies/services
Business Unit Maritime Energy Industry IT Global Services
Holder of customer relations Maritime 1. Sell Energys competencies in material and testing, fire and explosion, and asset risk., to Maritime customers (20 million) 2. Sell Industrys leadership systems to Maritimes customers (10m) 3. Sell IT risk management services to Maritime customers (100m).
Holder of customer relations Energy 4. Sell Maritimes Mobile offshore platform classifications to Energy customers. (200m) 5. Sell Industrys integrated leadership systems to Energys customers (10m) 6. Sell IT risk management services to Energys customers (100m)
Holder of customer relations Industry Low 7. Sell Energys competencies in material and testing, fire and explosion, and asset risk, to Industry customers (50m) 8. Sell IT risk management services to Industrys customers (300m)
Holder of customer relations IT Global Services Low 9. Sell Energys technology within risk and reliability To IT customers (10m) Low
42
BARRIERS TO COLLABORATION
Find them, tear them down
43
Four barriers to collaboration
3. Search Cannot find good help
1. Not-invented here Do not want to reach out
4. Transfer Cannot work together wrong
chemistry
2. Hoarding Do not want to help
Ability
Motivation
44
Barrier 1 Not-Invented-Here
Insular culture Interacting inside the group
Not-Invented-Here People are not willing to
reach out to colleagues in other parts of the
company to collaborate with them.
Status gap Dont want to cross status lines
Norm of self-reliance Ought to fix your own
problems
Fear Do not want to reveal problems or poor
performance
Motivation
45
Barrier 2 Hoarding
Competition among units in a company leads to
less cooperation
Hoarding People are unwilling to help and share
what they know
Time famine people do not have time to help and
collaborate
Biased incentives rewards for narrow goals means
people do not help
Fear people think sharing what they know makes
them less powerful
Motivation
46
Barrier 2 Hoarding
Competition among units in a company leads to
less cooperation
Hoarding People are unwilling to help and share
what they know
Too busy people do not have time to help and
collaborate
Biased incentives rewards for narrow goals
Fear people think sharing what they know makes
them less powerful
Motivation
47
Barrier 3 Search
Size Big and complex companies make searching
across it harder
Search People who look for information and
people cannot easily find them.
Spread out geographical distance makes search
difficult
Information overload too much information makes
search harder
Poverty of networks few Horizontal links
undermine search
Ability
48
Barrier 4 Transfer barrier
No common frame dont know how to work together
on a project
Strangers People are unable to transfer
knowledge from one place to another
Tacit knowledge very difficult to transfer
Weak ties strangers do not transfer knowledge
well
Ability
49
Barriers vary by company- Example DNV
Good
Bad
Lowest quartile (lowest barriers) Second lowest quartile Median Second highest quartile Highest quartile (highest barriers)
First Barrier Not Invented Here Scores between 3 and 105 106 159 160 161 200 201 - 300
Second Barrier Hoarding 3 60 61 - 99 100 101 - 140 141 - 300
Third Barrier Search 3 90 91 - 134 135 136 - 180 181 - 300
Fourth Barrier Transfer 3 110 111 167 168 169 210 211 - 300
Implication Barrier not a problem Barrier might cause some problems Barrier might cause problems Barrier a problem Barrier a big problem
169
133
180
194
N107 companies. How to Build Collaborative
Advantage. SMR, 2004
50
Example Large high-tech company
Good
Bad
Lowest quartile (lowest barriers) Second lowest quartile Median Second highest quartile Highest quartile (highest barriers)
First Barrier Not Invented Here Scores between 3 and 105 106 159 160 161 200 201 - 300
Second Barrier Hoarding 3 60 61 - 99 100 101 - 140 141 - 300
Third Barrier Search 3 90 91 - 134 135 136 - 180 181 - 300
Fourth Barrier Transfer 3 110 111 167 168 169 210 211 - 300
Implication Barrier not a problem Barrier might cause some problems Barrier might cause problems Barrier a problem Barrier a big problem
137
72
184
169
N107 companies. How to Build Collaborative
Advantage. SMR, 2004
51
MANAGEMENT LEVERS
Tailor solutions to specific barriers, and
dont overdo
52
Tailor Three Levers
Unification Lever

• Big Common Goal
• Teamwork Value
• Language

53
Tailor Three Levers
Unification Lever
People Lever

• Big Common Goal
• Teamwork Value
• Language

• Collaborative leaders
• Selecting
• promotion, recruiting
• Development

54
Tailor Three Levers
Unification Lever
Network Lever
People Lever

• Big Common Goal
• Teamwork Value
• Language

• Collaborative leaders
• Selecting
• promotion, recruiting
• Development

• Internal Networks
• External Networks
• Knowledge
• Management

55
Summary of Disciplined Collaboration
ECONOMIC OPPORTUNITY
How much valueand wherefrom collaboration?
BARRIERS TO COLLABORATION
Find them, tear them down
MANAGEMENT LEVERS
Tailor solutions to specific barriers, and
dont overdo