1. Disciplined Collaboration
Morten T. Hansen
MIIC March 2013

2. DNV changes
Goals & Strategy Changed vision Set Strategic priorities Set Cross-unit goals Formal organization Re-org: market-facing units Changed top team People Changed leadership principles

3. Sony’s Connect Story

4. Sony had all the pieces in-house - How hard could it be?

5. 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

6. Hard! Rivalry among 5 groups in Sony in 2003PC
Japan
Own music
player
Walkman
Japan
Own music
player
Sony Music
Japan
Own online
music
Sony Music US
Own online
music
Sony
Electronics US
Own online
music

7. Hard! Rivalry among 5 groups in Sony in 2003
“It’s 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 PC
Japan
Own music
player
Walkman
Japan
Own music
player
Sony Music
Japan
Own online
music
Sony Music US
Own online
music
Sony
Electronics US
Own online
music

8. Connect launched 2004, a flop, taken off, re-launched, terminated 2007
A Long, painful decline in Sony audio
Note: audio sales includes all audio products

9. Howard Stringer appointed CEO of Sony in June 2005
One of the first steps?

10. Howard Stringer appointed CEO of Sony in June 2005
One of the first steps?
Sony United

11. Bad collaboration is worse than no collaboration …..
Collaboration Traps

12. 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

13. Trap #2. Over-collaboration: Collaboration run amok.
“Must be good to collaborate…..”
Example: BP
“People always had a good reason for meeting…You’re sharing best practice. You’re 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

14. Trap #3. Over-shooting potential. Upside of Collaboration not as high
Example: Sony buying Columbia Pictures
Idea was to that Sony’s 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. +

15. 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)

16. Trap #5. Getting the organizational problem wrong.
Mis-understanding why people don’t collaborate.
Leaders mis-understand why employees don’t collaborate better
“We thought the key problem was difficulty in finding knowledge and people in our company, when in reality the key problem is people’s unwillingness to collaborate.”
IT manager, large U.S. company

17. 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 wasn’t search.”
IT manager, large U.S. company

18. Getting collaboration right
You must put discipline in collaboration!
…Provided you have the
discipline
Collaboration can get
great results……

19. Disciplined Collaboration
ECONOMIC OPPORTUNITY
How much value—and where—from collaboration?
BARRIERS TO COLLABORATION
Find them, tear them down
MANAGEMENT LEVERS
Tailor solutions to specific barriers, and don’t overdo

20. How much value—and where—from collaboration?
ECONOMIC OPPORTUNITY
How much value—and where—from collaboration?

21. Executives need to articulate goals of collaboration in three areas
Better
Innovation
Revenue
Growth
Improved
Operations

22. Better Innovation Revenue Growth Improved Operations
Cross-unit
product innovation
New businesses
by combining

23. 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

24. Procter & Gamble master at innovation through collaboration
$ 34.99
teeth whitening
expertise
novel film
technology
bleach
expertise
“New study shows whiter teeth can lead to greater success in work and love”
P & G website, 2007

25. Procter & Gamble master at innovation through collaboration
$ 34.99
teeth whitening
expertise
novel film
technology
bleach
expertise
“New study shows whiter teeth can lead to greater success in work and love”
P & G website, 2007
Oral
Care
Division
Corp.
R&D
Fabric &
Home
Division

26. Executives need to articulate goals of collaboration in three areas
Better
Innovation
Revenue
Growth
Improved
Operations
Cross-selling,
Re-package
Customer service
by coordinating

27. 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

28. 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

29. 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

30. BP: lots of best practice transfers - example: retail in gas stations
BP UK
Best practice
transfer
BP Atlanta
Best practice
transfer
BP Netherlands

31. 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
# SKUs
Retail
Sales

32. 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

33. Assess opportunities: One high-tech company
Costs & Decisions
Customers
Innovation
Scale
Scale: 100=very high; 1 = very low

34. DNV assessment of opportunity; large gaps
Costs & Decisions
Customers
Innovation

35. Provider of competencies/services
The Collaboration Matrix: DNV example
Provider of competencies/services
Business Unit
Maritime
Energy
Industry
IT Global Services
Holder of
customer
relations
1. Sell Energy’s competencies in material and testing, fire and explosion, and asset risk., to Maritime customers
(20 million)
2. Sell Industry’s leadership systems to Maritime’s customers
(10m)
3. Sell IT risk management services to Maritime customers
(100m).
4. Sell Maritime’s Mobile offshore platform classifications to Energy customers.
(200m)
5. Sell Industry’s integrated leadership systems to
Energy’s customers
6. Sell IT risk management services to Energy’s customers
(100m)
Low
7. Sell Energy’s competencies in material and testing, fire and explosion, and asset risk, to Industry customers
(50m)
8. Sell IT risk management services to Industry’s customers
(300m)
IT Global
Services
9. Sell Energy’s technology within risk and reliability
To IT customers

36. BARRIERS TO COLLABORATION Find them, tear them down

37. Four barriers to collaboration
#1. Not-invented here
Do not want to reach out
#3. Search
Cannot find good help
# 2. Hoarding
Do not want to help
# 4. Transfer
Cannot work together
“wrong chemistry”
Motivation
Ability

38. Barrier #1: Not-Invented-Here
Insular culture:
Interacting inside the group
Status gap:
Don’t want to cross status lines
Not-Invented-Here:
People are not willing to reach out
to colleagues in other parts
of the company to collaborate
with them.
Norm of self-reliance:
Ought to fix your own problems
Fear: Do not want to reveal
problems or poor performance
Motivation

39. Barrier #2: Hoarding Motivation Competition among units in a
company leads to less cooperation
Time famine: people do not have
time to help and collaborate
Hoarding:
People are unwilling to help
and share what they know
Biased incentives: rewards for narrow
goals means people do not help
Fear: people think sharing what they
know makes them less powerful
Motivation

40. Barrier #2: Hoarding Motivation Competition among units in a
company leads to less cooperation
Too busy: people do not have
time to help and collaborate
Hoarding:
People are unwilling to help
and share what they know
Biased incentives:
rewards for narrow goals
Fear: people think sharing what they
know makes them less powerful
Motivation

41. Barrier #3: Search Ability Size: Big and complex companies
make searching across it harder
Spread out: geographical distance
makes search difficult
Search:
People who look for information
and people cannot easily find
them.
Information overload: too much
information makes search harder
Poverty of networks: few
Horizontal links undermine search
Ability

42. Barrier #4: Transfer barrier
No common frame: don’t 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

43. 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
Second Barrier:
Hoarding
3 – 60
100
Third Barrier:
Search
3 – 90
135
Fourth Barrier:
Transfer
3 – 110
111 – 167
168
169 – 210
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
N=107 companies. “How to Build Collaborative Advantage.” SMR, 2004

44. 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
Second Barrier:
Hoarding
3 – 60
100
Third Barrier:
Search
3 – 90
135
Fourth Barrier:
Transfer
3 – 110
111 – 167
168
169 – 210
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
N=107 companies. “How to Build Collaborative Advantage.” SMR, 2004

45. Tailor solutions to specific barriers, and don’t overdo
MANAGEMENT LEVERS
Tailor solutions to specific barriers, and don’t overdo

46. Tailor Three Levers Unification Lever Big Common Goal Teamwork Value
Language

47. Collaborative leaders
Tailor Three Levers
Unification Lever
People Lever
Big Common Goal
Teamwork Value
Language
Collaborative leaders
Selecting:
promotion, recruiting
Development

48. Collaborative leaders
Tailor Three Levers
Unification Lever
People Lever
Network Lever
Big Common Goal
Teamwork Value
Language
Collaborative leaders
Selecting:
promotion, recruiting
Development
Internal Networks
External Networks
Knowledge
Management

49. Summary of Disciplined Collaboration
ECONOMIC OPPORTUNITY
How much value—and where—from collaboration?
BARRIERS TO COLLABORATION
Find them, tear them down
MANAGEMENT LEVERS
Tailor solutions to specific barriers, and don’t overdo