ROI implies that you put money in at X time and get more money out at Y time. But that is not how it works with collaboration because of three difficult problems. It is trying to solve these problems that has lead me to believe that the ROI for collaboration is fool’s gold.
I have been looking at this issue for almost 20 years now and have identified the following three problems:
1. Defining Collaboration
What constitutes collaboration? I tried to define collaboration and all similar terms (communication, conversation, coordination, cooperation) in light of both commitment and alignment with outcome in 2012 (see diagram of "Collaborative Levels"). Assuming this gives us a reasonable definition for collaboration we can move on to the second problem: how to measure it.
2. Measuring Indirect Value
Since the value of collaboration is often indirect and intangible, there is no good way to my knowledge to measure this. While a correlation can be made between collaboration and things that can be measured (employee turnover, cycle time, quality enhancement), the assignment of collaborative value is somewhat arbitrary.
The best metaphor I have found for looking for the ROI of collaboration is that of an astronomer looking for a black hole. Since black holes absorb light they can’t be seen directly. Astronomers, being the clever guys/gals they are, are able to determine where the black hole is, as well as its strength based on the effect it has on the objects around it. For example, you can measure strength by looking at how fast it can pull things in over a certain distance. You can determine location by triangulating these effects on a number of objects and determining its coordinates. Size can also be measured in much the same way using the data from the first two metrics.
To paraphrase Einstein, “you can’t solve a problem with the same thinking that got you into it!” This required me to throw out the idea of ROI to focus on how I could measure value. But I kept having the same problem when it hit me that I was missing the “context” for collaboration, which provided a framework to determine value to the organization.
Critical business processes provided that value. Instead of trying to sell the general value of collaboration to an organization (which was often a hard sell), I looked at how collaboration made those critical business processes easier. My fifth prediction for collaboration in 2012 included a list of these critical processes that have what I call “Collaborative Leverage.” I define collaborative leverage as "the right tool applied to the right process, at the right time and with the right people.”