Running A Company Quantifying the Value of Workplace Collaboration Posted on October 21, 2016 Written by Droplr In the modern world, teams can take any number of forms. From small startups comprising two founders sitting across a kitchen table from each other, to sprawling enterprises built on remote employees working from everywhere in the world, technology has made it possible for teams to work from anywhere and with anyone. The one thing they all have in common? The need for workplace collaboration. Increasingly, effective workplace collaboration is recognized as one of the cornerstones of successful business operations and the fabric of innovation-driven companies and startups. One study found that companies who invested in better workplace collaboration saw a return of up to 520 percent in terms of improvement in productivity, efficiency, and success. Looking at collaboration more holistically, we can see that it’s immensely valuable in a number of ways. Not only does it improve bottom-dollar metrics by improving efficiency and throughput; a great collaborative culture also creates long-term stability and improves performance in nearly every aspect of a business. Let’s look at some of the biggest ways collaboration adds value and how your company can harness its power. Sheer value of time Poor communication is expensive, if for no other reason than the value of the time that’s wasted in back-and-forth clarification. A company of 100 employees loses $420,000 per year due to poor communication on average. And larger companies can lose more — as much as $62 million per year, according to the same study. This kind of operational inefficiency can not only create drag on an organization but ultimately lead to its death. We’ve all been there: stuck in a confusing string of emails that don’t move things forward. But creating a culture of workplace collaboration diminishes loss of time by creating clearer, more efficient communications throughout a project. Companies that embrace collaboration save time and energy and focus on the work at hand: developing, building, and selling. This value alone is a game changer for many organizations that struggle to work efficiently. Employee retention For most workers, and specifically millennials, salaries and traditional benefits are becoming less of a factor in job satisfaction. Instead, many workers are looking for opportunities to lead and feel valued; they want to have an impact within the organization and in the world. Two of the four pillars for employee engagement identified in a 2014 study are value and purpose. But many companies stifle this by not enabling employees to use their skills and knowledge outside of their defined role. Only 28 percent of millennials feel they are fully utilizing their skills in their position. Nearly two-thirds feel like they have more to offer, but companies are simply leaving it on the table. One way to tap into this huge opportunity — and to increase employee satisfaction and retention — is to create systems and processes that better allow for all employees to exercise their skills in various ways and in concert with employees of various backgrounds. This tells us that creating a culture of workplace collaboration is a fundamental piece of fostering employee growth and retaining talent over the long term. Employee retention and skills growth lead directly to bottom-line metrics by reducing the costs of turnover, training, and knowledge loss. Together, this tells us that collaboration creates huge value by unleashing employee potential and fostering growth within the organization. Improved outcomes Workplace collaboration is the heart and soul of great businesses. In addition to making each employee feel like a valuable member of the team, collaboration simply leads to better outcomes. Having a diverse set of perspectives leads to a richer understanding of the problems your team is trying to solve. And having this fuller picture of the problem leads to a better and more effective solution. Even from the outset of a project, Nielsen found that simply having more people involved produced better concepts, leading to an increase in performance of nearly two fold. In other words, workplace collaboration creates better results. Smarter, faster, stronger solutions come from engaging multiple people with various skills and backgrounds to engage problems. Cross-functional solutions Many times, organizations within a company will feel constrained to solve problems based on their team’s limited perspective and resources. Sales staff may be looking for problems related to prospecting new clients, but the solution may lie in how marketing engages prospects after initial contact. It’s only by looking at both pieces together that the two departments can realize improvements. This kind of holistic, customer-focused thinking relies on a collaborative approach that gets outside of traditional silos and introduces another level of collaboration. One of the biggest benefits of workplace collaboration is encouraging cross-functional or cross-departmental solutions to existing problems. Breaking down these traditional barriers leads to better solutions, just as general inclusion and collaboration does. The Nielsen study cited above found that concepts created by teams with collaborators from four or more business units resulted in 18 percent better performance than those generated by teams with three or fewer functions represented. Innovation Transformative change can come from any level of your organization, but only if you embrace collaboration in a way that allows everyone on your team to feel they have the opportunity to create such a change. As mentioned above, many employees see huge value in having a purpose and value that is larger and more important than their specific job description. In this way, workplace collaboration and connectedness within a company feeds into the satisfaction and value that employees feel, which can unleash innovative ideas and solutions across the organization. Innovation isn’t only quantified in terms of better solutions to existing problems but also in terms of entirely new ideas, concepts, or products. Innovation is the basis for market disruption, and it’s driven, in large part, by creating a culture of collaboration that fosters this kind of thinking and action. Collaboration is the price of innovation. The full value of collaboration Creating a culture of workplace collaboration creates immense value for companies of all types. So much so, in fact, that it’s nearly impossible to measure it in terms of dollars and cents. However, better collaboration clearly leads to thousands of dollars in value through improved communication and employee retention. That’s without even calculating the value of sheer innovation, which is driven largely through collaborative problem solving. Innovative products and ideas can lead to company breakthroughs or even the formation of entirely new companies. All told, the value of collaboration is immense — possibly even infinite. That kind of upside seems like a pretty good investment.