Workplace Issues

Can Collaboration Deliver Success?

Recent research points to a new way of working to bring about economic achievement. Are CFOs ready?
Andrew SawersJanuary 23, 2013

LONDON If the old way of doing business was two-sided rivalry, us-versus-them, win-lose, debit-credit, then about 90% of global decision-makers in business, government, and nongovernmental organizations (NGOs) now say the future depends more on collaboration if we are to see significant global growth within the next five years.

As the five-day World Economic Forum kicks off in Davos, Switzerland, delegates and visionaries from every kind of business and organization will be talking about growth, technology, health care, the role of business: the list goes on. And against that backdrop, new research by Bank of America Merrill Lynch points to the need for business to lead with more inspiring examples of best practice, valuable high-profile partnerships, and a different approach to leadership development.

How Startup CFO Grew Food Company 50% YoY

How Startup CFO Grew Food Company 50% YoY

This case study of JonnyPops’ success highlights the unusual financial and operational strategies that enabled rapid expansion into a crowded and highly competitive frozen treat market. 

BAML’s survey of more than 2,000 decision-makers from around the worldfrom Europe, the BRICs, Japan, Mexico and the United Statesfound that two-thirds had, in the past 12 months, worked closely in collaboration or connection with at least one other organization, while fully 44% said they expected to be collaborating over the next five years more than they are at present.

Sounds good: but what does it mean? Examples cited in the research include:

  • Public-private partnerships to improve educational standards in Brazil;
  • Business partnerships in south Asia, where a leading global food company is partnering with local suppliers and international NGOs to improve not only the environmental sustainability but also the efficiency of their palm-oil supply chain; and
  • Economic regeneration of East London arising out of the collaboration among business, government, and NGOs for the 2012 Olympic and Paralympic Games.

In some cultures, this sort of approach will be thought of as quite normal. In others, it may be regarded as running against the grain. And yet, while 89% of European respondents and 94% of the BRICs and Mexico said collaboration is essential, fully 86% of survey participants in the United States also agreed. Remarkably, there was no difference in the level of support for this approach between the private sector (90%) and the government and NGO field (91%).

What are the benefits of greater collaboration? The report suggests four: acquiring better skills and knowledge, getting greater influence and impact, gaining a higher internal and external reputation, and becoming more efficient and effective.

“Harnessing the power of connections is a force for great good that fuels scientific breakthroughs, remarkable economic achievements, and social progress,” said BAML chief executive officer Brian Moynihan in a statement accompanying the report.

What isn’t addressed by this report — but is certainly worth thinking about — is whether and to what extent the CFO’s role and responsibilities are able to embrace this outreaching way of working. Are management and financial-reporting models able to adequately reflect the goals and responsibilities that arise from greater collaboration? Are budgeting and accountability processes in tune? What new key performance indicators are required, and which of them are nonfinancial? What attitudes need to change within finance and what skills and aptitudes are needed?

Nearly 90% of respondents agreed that a more diverse generation of business leaders is needed in order to drive greater collaboration, and 69% said that increasing the representation of women in senior business leadership roles would be influential in encouraging greater collaboration between organizations.

Will this work? Globally, 80% said there are “seeds for optimism about growth, opportunity, and shared success if we harness the collective power of our global connections and transform it into an effective and productive force for improvement.” That sounds like a challenge for the Davos delegates to embrace — and then afterwards, for every other business leader to consider, too.

Andrew Sawers is editor of CFO European Briefing, a CFO online publication.