Measuring the Value of Collaboration

Late last year, Frost & Sullivan worked with Verizon Business and Microsoft to develop a Collaboration Index. The CI was designed to measure just how collaborative an organization is, and then look at the impact such a measure has on the company’s overall performance. The CI, the result of numerous customer interviews, is based on two components: Collaboration Capability (how well the organization’s culture and technology supports collaboration) and Collaboration Quality (the nature and extent of collaboration).

The research uncovered some very interesting findings. For one thing, a culture of openness proved to be the biggest factor in collaboration quality. A culture of openness is defined by how easy it is to talk to others in the organization; how often groups cooperate; and how accessible employees are to one another, especially outside their business groups. A culture of openness contributed 36% toward collaboration quality, compared to 16% from the use of collaborative technologies.

Also remarkable is the fact that a high CI score clearly translates into business performance. Overall, the research found, 36% of a company’s performance was due to its Collaboration Index, compared to 16% for the company’s strategic orientation, and 7% for market turbulence. Furthermore, collaboration affects financial performance, product quality and innovation, and employee productivity—but it has the most impact on customer satisfaction, where it accounts for 41% of the forces driving that metric.

The study also highlighted regional differences, which do exist when it comes to collaboration. For instance, companies in the US and Europe have significantly higher scores when it comes to “culture of openness,” but companies the Asia-Pacific region are heavier users of real-time communications and other collaborative technologies. Not surprisingly, the US and European companies score higher on the overall Collaboration Index (since culture counts more than technology).

Now, Verizon is launching a Collaboration Calculator to help companies determine just how they rank on the Collaboration Index. The goal is to impact business performance by helping organizations judge how they collaborate internally and with partners and customers. The tool will help companies measure the organization’s overall degree of collaboration on a scale of 0-100; assess how collaboration is impacting business performance; benchmark against vertical markets and regions; and receive recommendations for improvement. Of course, some of those recommendations will likely include technology—especially the services Verizon delivers. But others will focus on the cultural and management practices that can have the strongest impact on performance.