Just in time for the new year, here’s a resolution for finance executives and their teams: Make 2016 the year you collaborate more effectively. Why? For convincing evidence of the power of collaboration, look no farther than those Post-it Notes clinging to your desk.
They probably wouldn’t exist if it weren’t for two professionals at 3M who teamed up to create a product that, like the iPhone decades later, fills a need we didn’t know we had. The story goes that, back in the late ’60s, Spencer Silver, a chemist for the multinational giant, developed a kinda-sticky adhesive involving a suspension of cross-linked microspheres. Silver was excited about his invention; his superiors, not so much. They were pushing for the development of stronger and long-lasting adhesive compounds.
So for years Silver waged a solitary struggle with what he came to call his “solution without a problem,” preaching the unique capabilities of his discovery to unreceptive audiences. Then in 1974, colleague Art Fry heard Silver talk about microspheres at a seminar. He got to thinking the substance might make for a better bookmark.
Fry connected with Silver and the two men started brainstorming new and marketable uses for the adhesive. The bookmark evolved into a note that could be pasted and re-pasted without damaging surfaces or sticking too tightly.
The rest is history.
Collaboration certainly doesn’t always lead to game-changing inventions. Yet for companies large and small it remains a key driver of innovation, improved results, and creative solutions. But just as chemists working by themselves in labs may have limited opportunities to collaborate, so too may finance professionals—isolated in their departments and pressured by reporting deadlines—miss chances to partner with colleagues around the organization.
Playing well together pays off
Research has consistently affirmed the benefits of teamwork in a wide array of business settings. One study conducted by IBM found that “extensively collaborative companies” performed better than their peers, while an international study commissioned by Google with the Future Foundation found an 81% positive correlation between collaboration and innovation.
Another recent study, published in the March 2015 issue of Harvard Business Review (HBR), showed a significant correlation between long-term gains and collaboration. Relying on decades worth of research—including data and information from three established law firms and one accounting firm, as well as case studies and interviews—the researchers determined that effective collaboration led to achieving higher margins, inspiring greater client loyalty, and gaining a clear edge over the competition.
The HBR article also readily acknowledged that collaboration—particularly with the pace of business quickening—is easier said than done.
For starters, the results—and financial benefits—of collaboration aren’t always delivered in a quick payoff, but rather accrue over time. Even where collaboration is valued and encouraged, the research featured in HBR found colleagues hard-pressed to spend time and energy on cross-specialty ventures when they could be focusing on their own work instead.
Sound familiar? The challenges faced by the firms in the study likely echo, to some degree, the reality of your organization. Effective collaboration takes time—a rare commodity for today’s finance teams. According to recent research by APQC, regardless of company size, about half of the finance team’s time is focused on transaction processing.
The effort spent ensuring bills are paid and receivables collected leaves limited room for the important work of providing strategic support and tactical insights. But it’s not that finance teams want it that way. In fact, another APQC study of finance executives found that they want their work more “aligned with corporate strategy. They want their teams thinking about the changing customer base and effectively analyzing the risk inherent in company growth strategies.” And that takes collaboration.
So how do you build a collaborative culture in which the finance team works on high-level strategic work rather than Excel templates? While there is no easy answer, the key is to move methodically toward collaboration—one step, one success, at a time—to ignite a cultural shift in which finance becomes viewed as an essential partner.
Next week, in part two of this post, we will offer recommendations on creating the environment, incentives, and especially the time for finance to team up effectively with other departments. As a first step, in the spirit of New Year’s resolutions, take out one of those Post-it Notes, write “collaborate more,” and stick it where you can see it. Looking for opportunities to collaborate and add value can lay the groundwork for later success.