Over the past few weeks, I’ve been writing about ways to use collaboration platforms to reduce costs at work. More self-service. Less printing. Lower mobile bills. They're mundane topics but the value of just these 3 solutions is about $23 million to a large firm. These examples, and many more like them, are part of an entire class of cost management possibilities we call “collective efficiency” - solutions that use social tools and practices to help a firm identify and eliminate waste. Other classes of solutions produce revenue - e.g., through improved innovation, cross-selling, or lead generation. But costs are tangible and revenues are in the future. If you can reduce costs, you’ll earn credibility and the right to do more business-building work.
To realize the potential of collective efficiency, though, you’ll need the power of grassroots efforts combined with the structure and process of successful programs.
Why we need collective efficiency
The usual way to cut costs is top-down, perhaps through an overall goal that’s apportioned and cascaded throughout each department and sub-department. This works reasonably well in some cases. (Only the real estate division, for example, can decide on what buildings to occupy.)
Yet, there are at least 2 problems with this approach. The first is that it tends to limit cost-cutting to things aligned to organizational boundaries. After all, budgets are allocated to organizations and you can only cut what you own. The second problem is that there are often unintended consequences of cuts aligned by organizational boundaries. The costs you cut in one area may well increase costs somewhere else in the firm.
By enabling individuals across the firm to identify and eliminate waste, collective efficiency solutions complement the top-down methods and open up new ways to realize value.
From possibility to proposal
To come up with ideas for collective efficiency, you don’t need a complicated innovation program. (The first 3 solutions described so far are evidence of that.) You can start by looking at all the different places your firm spends money and, for each one, think “how could connecting people and best practices result in smarter spending?”
Turning the ideas into proposals requires things you’d find in any business proposal: the problem you’re trying to solve, how much could you save, and the resources you need to save it. (For example, your firm’s total printing costs $30 million, you have specific 5 ways to reduce printing by 20%, and you need 1 person and $100k to do it.)
But since it’s a social business effort, you’ll need 2 additional things.
A community structure
Though collective efficiency solutions get their power from individual contributions, they require a structure to drive change in a scalable way.
“...grassroots change movements as diverse as charities, open-source software, and crowd-sourced content actually all [have] well-defined structures.
While the movements appear “natural and spontaneous,” all the successful efforts create specific roles and rules that concentrate responsibility and help with decision-making.
The structure for each solution (e.g., increasing self-service) echoes the structures in most successful communities. You’ll need a passionate leader/community manager. You’ll need local champions in different locations. You’ll need people to head up each idea that comprises the solutions. If there are 5 ways, say, to increase self-service, then each is a working group or special interest group with its own set of roles.
Without formal roles you’ll dilute the effort and limits its impact.
An engagement plan
Also akin to communities, you’ll need an engagement plan to attract people to the effort and sustain contribution. That involves finding a way to grab their attention, creating an emotional connection, and enabling people to take action and make themselves part of the tribe.
The best framework we’ve found is from the “The Dragonfly Effect”. It's called the FGET framework (for Focus, Grab Attention, Engage, and Take Action) and we’ve described it in a previous post and applied it in the solution for reducing printing.
Applying this framework will benefit every proposal in your collective efficiency portfolio.
From proposals to programs
Lastly, you’ll need a formal link to the org chart. Why? Because tying the effort explicitly to a spot in the hierarchy transforms the solution from a volunteer effort to one that is recognized by the firm; one that's tracked and reported on and made part of people’s objectives. It changes the effort from a nice-to-have to a must-have.
Here’s an excerpt from a post on the need to “embrace the org chart”:
“This may seem at odds with the spirit of social business efforts. After all, they’re typically associated with a self-organizing, emergent, network-style of getting things done. And so Andrew McAfee, author of “Enterprise 2.0,” tackled the question: “Does or should the network render the hierarchy obsolete?”
His straightforward answer was “No.”
Rather, the new form of management is “a fantastic complement” to the more traditional ways of getting things done. “You don’t have to abandon roles, job titles, and chains of command.” In fact, you need those things to implement the kinds of changes the social business movement is after in the first place.
As Bertand Duperrin also said “enterprise 2.0 is the ally of a hierarchy that wants itself to be agile and efficient.”
Yes, social tools and practices make it possible to connect expertise, coordinate efforts across divisions, and drive behavioral changes in ways that weren’t possible before. And to realize the full value of this at your firm, you’ll need to turn these possibilities into specific business proposals and connect those proposals to the org chart.
That’s how you’ll be able to turn ideas into institutional priorities. That’s how you’ll be able to programmatically implement collective efficiency across the firm and realize its full potential.