Cross-Functional Collaboration: Discovering Its $ Value and the Genius of Google

Someone recently asked me to name an aspect of talent management that has the potential to largely impact business performance, but that is essentially ignored by most organizations. It was a genius question … most talent management leaders spend hundreds of hours trying to marginally improve existing practices, but few even attempt to identify and execute on new opportunities. My answer is…

A systematic process for improving cross-functional collaboration.

Such a process has the potential to significantly improve organizational performance and innovation and is almost totally absent as a talent management discipline.

Collaboration, the process of working together, routinely occurs within functions and business units without the need for intervention, but rarely occurs across functional or professional borders where it has the potential to deliver the greatest impact.

No One Manages Collaboration

Years of business experience have proven that increasing external collaboration has a tremendous business impact. Deloitte found that 75% of business executives rank collaboration with vendors and partners as a top priority and 70% report that this type of collaboration increases profitability. The same business impact could be demonstrated as a result of enhanced internal collaboration, if talent management were to pay attention to the concept.

Unfortunately, I can’t think of a single major corporation that has a full-time manager and a formal process for identifying and breaking down internal silos and encouraging collaboration. Does your firm have a set of metrics for assessing to what extent related but independent functions are working together smoothly? Three firms have been leaders in HR-driven collaboration. GE under Jack Welch pioneered the concept of a boundaryless organization and Sun designed office layouts and even stairwells to enhance collaboration. However, Google has significantly raised the bar and turned improving cross-functional collaboration into a science and a revenue-generating machine.

How Does Cross-Functional Collaboration Produce Such a Large Economic Impact?

Everyone knows that having functions or individuals operating independently is a bad thing within a long interdependent process like hiring or product development. Because talent management leaders are generally not willing to invest in any formal process unless they can see a direct economic impact, here is a list of reasons why this type of collaboration is so impactful:

Increased innovation levels — learning from the innovative ideas and methods of others and then adapting them to your situation can dramatically increase levels of effective innovation. Even learning about the levels of innovation within other functions may spur internal competition and increase interest in innovation.
Reducing development time — the speed at which an idea is implemented can result in higher “first entry” margins. Unfortunately, resistance or lack of trust within downstream functions can delay the approval and the implementation of even the best plans and ideas. More collaboration and stronger relationships means less resistance and less time spent protecting of one’s turf.
Faster product improvement — increased interactions between product development, manufacturing, sales and customer service employees may result in faster product improvement and increase customer satisfaction.
Increase sales — enhancing collaboration may lead to an increase in the number of sales leads that are provided by employees. The increased collaboration among regular and global employees may result in access to new markets.
More best practice sharing — increased collaboration means more direct sharing of effective business practices and processes (like CRM) that can be adapted to the problems in other functions.
Reducing errors – an increased rate of interaction between individuals who “think differently” may result in more “fresh eyes” assessment. This different perspective can dramatically reduce major errors, increase quality and reduce costs.
Alerts — working closely makes it more likely that you will positively receive and then act on warnings you receive from outside collaborators on problems and opportunities that they have already faced (and that you might face in the near future).
Increased learning — collaboration may increase your overall learning speed. Increased interaction with functional experts in computers, social networking, and finance means that learning will be naturally expanded without the need for formal training. This cross learning may increase organizational agility and the availability of temporary “fill ins.”
Less resistance for rule makers — increased interaction with staff that makes “the rules” may over time work to make those regulations less burdensome. It may also cause your employees to follow the rules as a result of a better understanding of the need for rule makers and rules.
Enhancing the impact of diversity – developing processes that ensure that diverse workers interact with a wider segment of the employee population means that more employees will benefit from diverse perspectives.
Enhanced internal movement – increasing the exposure of star employees to other unrelated functions or different business units will increase their career path opportunities. Learning and working with different units might better prepare them for transfers or promotions in the long term and in the short term. This enrichment might increase their engagement and retention levels.

The Genius of Google

The two most under-recognized management gurus on the planet are in my opinion Google’s founders Sergey Brin and Larry Page. You might know them for management innovations like 20% time, standup meetings, and free food. However, they don’t get much external credit for their most impactful and innovative management practice, which is acting consciously to increase cross-functional collaboration. Unlike most classically trained talent managers, these visionaries treat people management as a direct-revenue-impact function. As a result, Google has used numerous direct and indirect methods and tools for increasing cross-functional collaboration.

Some of the more interesting methods include:

Providing an on-site laundromat and free employee shuttle. While these may seem like rather benign perks, each encourages employees to interact at length with other employees from completely different functions.
Using a “marketplace of ideas” approach to identify and build support for new projects and ideas. (Briefs on new ideas are published internally and employees rank/vote on them and volunteer support or register interest in working on them.)
“100-foot rule” (no employee should be further than 100 feet away from free snacks). Wait times are tracked to ensure that there is enough time to collaborate while in line, but not too much to keep hurried employees at their cubicles.
Work areas and the cafeteria are arranged to encourage interactions with employees from different functions.
Employees are encouraged to design and personalize their own cubicles, in part so that outsiders will stop by and begin to build relationships.

When the firm was smaller, all employees took an annual ski trip in order to collaborate and bond. Other occasional activities at Google including pajama day, martini blow out, picnics, and VIP speaker series encourage employees from different units to interact. By putting its strategic plan on a huge whiteboard in the lobby, it found a unique way to “get everyone on the same page.”

Its strategy and the methods it employs don’t force employees to collaborate; it create unique opportunities for employees to share an experience with former strangers that most Googlers see as fun!

Online Collaboration Must Also Be Part of the Strategy

As Internet and social media usage grow, cross-functional collaboration strategies need to include enhancing opportunities for online interaction. Smart firms are setting up internal Facebook like sites and wikis that are designed to increase cross-functional collaboration. Meetup-like sites and location aware software features should be developed internally and added to your plan (in addition to existing affinity groups) as a method to increase overall social interaction (and eventually collaboration) between employees from different units, contingent workers, and vendors.

Final Thoughts

The growth of social network collaboration by marketing, customer service, and recruiting has reinforced the tremendous economic value and the high ROI that can result from increased collaboration. The time has come for talent management leaders to also recognize that an even greater revenue impact can result from a deliberate data driven effort to increase cross-functional collaboration among employees. The economic value of the increased rate of innovation and the decrease in time-to-market alone make the value of the program something that is hard to dispute.