How Collaboration is Changing Business

Think for a minute about how you used to book your holidays, buy your music, find an address or select insurance - 10 or even 5 years ago? Do you even bother to search for things these days or do you just rely on the recommendations from your network via Facebook, Twitter, Zemanta or even Amazon?
These prolific and radical changes are not limited to social and consumer interactions on the internet. They also impact the nature, shape and conduct of business both internally and externally.
Companies are increasingly working in networks, whether they be loosely coupled or tightly integrated, because of technology and the globalisation that technology has brought with it. Those networks are essentially virtual entities, and this trend will accelerate over the coming years. To be in or join a network, people need insight and connections, as well as appropriate processes capable of supporting various business needs across the virtual entity. That signals fundamental shifts in the way people do business and the underlying business models.
This was one of the issues Leo Apotheker (co-CEO and a member of the Executive Board of SAP AG) and Andrew McAfee discussed during an interview with Charlie Rose earlier this week.
It echoes the message from Pisano & Verganti in their article Which Kind of Collaboration is Right for You? (Harvard Business Review December 2008):
"In an era when great ideas can sprout from any corner of the world and IT has dramatically reduced the cost of accessing them, it's now conventional wisdom that virtually no company should innovate on its own. ... [But] greater choice has made the perennial management challenge of selecting the best options much more difficult. ... [How] open or closed should your firm's network of collaborators be? And who should decide which problems the network will tackle and which solutions will be adopted?"
Those opportunities and challenges are equally applicable within organisations, with changes affecting the way people are now able to work together and the nature and style of management. Everything happens and needs to happen so much faster just so businesses can stay in the same (market) position and not loose ground to competitors. Yet when we look around for examples of successful businesses to emulate, who do we look to? Google? Proctor & Gamble? Toyota? Hubbards? Headshift ;-) ? There are plenty more. And what do they tell us? Well, to quote Eric Schmidt - Google CEO (The Mckinsey Quarterly November 2008):
"There's a lot of evidence that groups make better decisions than individuals. Especially when the groups are selected to be among the smartest and most interesting people. The wisdom of crowds argument is that you can operate a company by consensus, which is, indeed, how Google operates.
One of the things that we've tried very hard to avoid at Google is the sort of divisional structure and the business unit structure that prevents collaboration across units. It's difficult. So, I understand why people want to build business units, and have their presidents. But by doing that you cut down the informal ties that, in an open culture, drive so much collaboration. If people in the organization understand the values of the company, they should be able to self organize to work on the most interesting problems. And if they haven't, or are not able to do that, you haven't talked to them about what's important. You haven't built a shared value culture."

Source: http://www.headshift.com/blog/2009/01/business-will-be-different-in.php