Collaboration was hot topic in Cannes and it's one of the buzzwords currently making the most buzz. But it actually contributes to business performance and the economy, according to a report by Google and Deloitte.
It's worth $46 billion to the economy each year, they claim. That's 3% of the Australian economy – roughly the same value as the entire creative industries which were calculated to contribute $45 billion to GDP in the Government's Creative Industries Innovation Centre report in February. Within that, advertising and marketing were valued at $7.2 billion.
There's an additional $10 billion that could come from more collaborative working that businesses are currently missing out on, said Deloitte Access Economics director John O’Mahony, adding that it's a “conservative estimate”.
Google's agenda is to highlight how its tools, like Gmail, Google Docs and Hangouts can help companies pull off collaborative working better, but even beyond that agenda, the report shows that working together more smartly can help businesses perform better and boost the economy.
There is a direct correlation between organisations that value collaboration and growth and companies that prioritise collaboration are twice as likely to be profitable and outgrow competitors, according to the two, which presented key findings from the Collaborative Economy report which, fittingly the two collaborated.
Deloitte Access Economics director John O’Mahony, said: “By looking at the performance, it's quite believable that there is profitability [from collaboration],”
While working collaboratively might appear to be old-fashioned common sense, it needs to have tools and working cultures in place to make it effective, according to the report.
Half of businesses surveyed don't have a collaboration strategy in place, and Deloitte and Google say the concern is that “business are leaving it to chance” and missing out on productivity, profit and efficiency. Google believes that by putting a monetary value on it will encourage businesses to be more robust around collaboration.
Teh reported suggested working more collaboratively would counter the falling levels of productivity in Australian industry, which has been falling by 0.6% each year since 2007, according to the Productivity Commission, and help drive innovation – which also fell 4.7% across Australian businesses in 2012/13.
Deloitte's methodology included calculating how much of workers' time is spent on different activities, and landing on 10% being spent on collaboration, then factoring in the value of that labour.
For the skeptics, Deloitte also factored in the time and money wasted though poor collaboration and found it was $5.4bn. Deloitte Access Economics’ partner Ric Simes said it's actually a decent rate when you stake the losses against the gains.
“It's a necessary cost as part of collaborative working and has to be seen alongside the value add,” he said.
“If we do more things collaboratively we will become a stronger economy.”
Google Enterprise MD kevin Ackhurst, said: “It's easier said than done, but … Australian businesses need to think more consciously about building collaboration into business strategy.”
Deloitte's O’Mahony said that broadly speaking you could apply the thinking to how much any industry contributes to the economy, to calculate how much collaboration would be worth to that industry, but that the labour costs in each industry vary which make it a difficult equation.
Practical applications in businesses that contributed to the report include Woolworths store managers using social media to communicate with each other about the working day and tactics, News Corp's local papers using the same design layouts for advertising templates rather than each paper repeating the work. Meanwhile Commonwealth Bank has applied the concept of collaborative working to the layout of its new Sydney offices, with not assigned so that its workforce can be more productive when working on different tasks.
Stage two of the report, due out in a few weeks, will show case studies on how Woolworths, Commonwealth Bank and News Corp are applying collaborative working to drive profit and productivity.
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