Tag: collaboration

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Working Together…When Apart

Corporations across the world are making investments in internal communications and networks and virtual teams supported by such infrastructure are on the rise. Teams of people who rarely meet in person face severe collaboration challenges. The biggest challenges are long distance and time zone differences making frequent communication difficult and cultural miscues causing frequent misunderstanding. A recent study of virtual teams of various sizes at big multination companies analyzed why some teams are on the constant danger of breaking up while others are high performers and a virtual hotsop of innovation and energy. A research team at London Business School surveyed more than 1,500 virtual-team members and leaders from 55 teams across 15 European and U.S. multinational companies. BP PLC, Nokia Corp. and Ogilvy & Mather were among the companies where detailed case studies of successful virtual teams were conducted. The findings are published in this WSJ article http://online.wsj.com/public/article/SB118165895540732559.html as 10 golden rules for making virtual teams more productive. Some of the key practices common to successful teams are – online resources where members can learn about one another, choosing a few members who already know each other, cultivate boundary spanners (which appears to be a very T-shaped role), assigning tasks that are challenging, interesting and meaningful to the team and company, and soliciting volunteers (people whose proof of commitment is their willingness to join the team on their own). The article cites examples of Wikipedia and Linux as two successful virtual teams that illustrate the last point,

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Collaboration Required in Pharmaceutical Industry

Pharmaceutical industry is in a state of crisis. That’s the message Ted Torphy, VP from Johnson & Johnson, sent to us in his Berkeley talk.  The reason? A lack of innovation, not in terms of technological ones in R&D, rather, R&D business models innovations.

Developing a new drug is a lengthy and costly process, averaging 11 years and $1bn. And, in addition to big Pharmaceuticals, it involves participations of multiple entities including Academia, Venture Capitals (VCs), Government, and Public Markets. Following graph lists the traditional drug development lifecycle along with its participants (ranked by their contributions) at various stages.

DrugDevProcess

(Just for explanation purposes, Phase I is to test the safety of the drug. Phase II is divided into two sub phases where II a tests if the drug works for the targeted population and II b is to identify the right dose of the drug. And Phase III deals with large scale clinical testing.)

Research suggested that out of $1bn R&D investment, 35-40% went to stages before Phase II b (early-stage development), and the most importantly, success rate jumped up from 1.5% at “Innovation” to 50% when it came to Phase II b. So, in the pharmaceutical world, the stage right before Phase II b is called “Clinical Proof of Concept”, and they want to bring drugs to pass that stage more rapid and economical. To do that, they started to acquire new biotech companies that already have some success in early-stage development instead of investing tremendous resources in their own R&D. This mindset results in the fact that biotech organizations are becoming the source of new products. However, risky nature of this early-stage development together with the requirement of a big lump-sum up-front investment usually turns away interested VCs, which causes an investment gap between basic research and late-stage drug development.

What is the proposed solution? Dr. Torphy recommended “Virtual Integration”. Contrary to “Vertical Integration”, where firms gain top-down controls for everything and “Vertical Disintegration”, where companies outsource to others services/products that are not in line with their core businesses, “Virtual Integration” encourages collaborations or alliances among businesses to share competencies, infrastructure, intellectual capital, risk and rewards.

He argues that this is beneficial to all the stakeholders in the ecosystem. For example, large pharmaceuticals can benefit by expanding pipelines with an external portfolio of product opportunities, minimizing fixed costs and infrastructure while maximizing flexibility. VCs can reduce their capital investments by gaining access to pharmaceuticals’ infrastructure and expertise. Academia, on the other hand, will have the ability to tap into external funding resources.

“Virtual Integration”, in a sense, is Open Innovation, embracing the expertise and resources from partners, suppliers, R&D institutions, etc. But as Dr. Torphy suggested, it is not easy to sell the concept. It requires all the participants to share the same collaboration mindset, to overcome the “Not-Invented-Here” barrier and to create a fluid system to exchange ideas, expertise and resources.

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US China currency wars and strategic collaboration

Business units within large organizations constantly compete and negotiate with each other for resources, this was a constant theme in most of the cases we studied within the collaboration module. Teams within business units either lose or gain as a result of these negotiations and changes in resource allocations. We learnt that organizations that are good in collaboration capably handle such trade-offs within business units and find some optimum that is good for the larger organization as a whole.
A typical scenario is happening at a global level with this whole issue on the value of the Chinese currency. As mentioned in this New York Times article, many US corporations will lose heavily if China heeds to pressure from the US government and appreciates its currency – an appreciated Chinese currency would also mean that US consumers would have to pay higher for many retail items that are imported from China. On the contrary, many corporations who are exporters of goods to China would gain with higher volumes of business if the Chinese currency appreciates. The article discusses similar such contradicting stories among Chinese corporations.
What is most striking, as mentioned in the article, is that both the governments are well aware of the fact that a balanced relation between the US and Chinese currencies is good for global trade. However, from the article, It is clear that both countries are looking for local optimum and not inclined to collaborate, although they know such a collaboration would be positive for the larger organization (or) world trade and ultimately positive for them. The question is why. As we discussed in class, most organizations fail in collaboration because they are unable to find a global optimum that works well for the organization. Maybe the case here is that though the countries know what to do, they don’t know how to accomplish it in a way that doesn’t give strategic advantages to the other.
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Open Collaboration

Organizations come together when it comes to Open Innovation. HP and Dream Works come together to deliver blockbuster movie series – Shrek; Chevron and local governmental agencies come together to build a reciprocal water refinery. These are the successful stories, but of course, there could be far more stories about collaboration failures.

http://online.wsj.com/article/BT-CO-20101006-703277.html

Finally, Microsoft and Motorola, both losing ground in the smartphone  device market,  now hold hands together. But as far as we know, the relationship is not harmonious at all because of the patent infringement. It would be really interesting to see how their effort of cross-organization collaboration eventually succeeds (or fails).

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Fun as a team-building strategy

Not my definition of fun

A day doesn’t go passed without a company branding itself as “fun”. The buzzword is everywhere: It’s a fun work place, our employees have fun, the work is fun. In his editorial at The Economist, Shumpeter states that the benefits of fun as a corporate strategy – brush the image of the company and, more relevant to this course, enhance collaboration through team-building – are illusory.

The reasonable assumption is that if employees have fun in the company, it will set up a positive atmosphere for collaboration, innovation and productivity. A far-less reasonable assumption is to think that management can plan fun out and spread it top-down to the employees. Let’s say 80% of the employees will enjoy wearing cowboy hat (not my definition of fun) as employees do at Twitter. What about the other 20%? They will probably feel miserable having to do so.

Shumpeter points to a real problem: why do managers use artifacts to force fun instead of giving meaning, support and rewards to employees so they would enjoy their work and find it pleasant to collaborate? I don’t agree with the alternative – 60’s work environment. Managers should focus on what they can really do: make the work place enjoyable and collaborative, not fun.