do you trust in collaboration enough to reap the rewards?: written by Michelle Wellsbury

Collaboration vs Co-operation

Like many in the industry, io believes collaboration is critical to the success of projects, particularly in this lower for longer environment.  However, the word collaborate is used frequently, in many contexts, and is often used interchangeably with the word cooperate; consequently, the meaning has become diluted and obscure.

For example, Oil & Gas UK’s Efficiency Task Force was launched at the end of 2015 with the following statement in the accompanying press release:

“We’ve seen examples of how increased collaboration has been successful in the aerospace and automotive industries, so we’re pleased to see green shoots of success from the offshore oil and gas industry. It’s essential now we work to nurture greater cooperation so will be asking those operators who scored particularly highly to work with us on sharing examples of good practice.”[1]

What is the difference?

Definitions

From the Cambridge English Dictionary:

  • Collaboration – two or more people working together to create or achieve the same thing
  • Cooperation – to act or work together for a particular purpose, or to be helpful by doing what someone asks you to do[2]

These give a general idea of the difference; however, further clarity can be gained from the definitions of Jesse Lyn Stoner[3]:Collaboration is working together to create something new in support of a shared vision.  The key points are that it is not through individual effort, something new is created, and that the glue is shared vision.

Cooperation is important in networks where individuals exchange relevant information and resources in support of each other’s goals, rather than a shared goal.  Something new may be achieved as a result, but it arises from the individual, not from a collective team effort.

What makes collaboration so difficult to achieve?

Again, Jesse Lyn Stoner describes this effectively:

“Collaborative working has to be based upon respect, trust and the wise use of power. It does not occur naturally in top-down, control orientated environments. There needs to be an opportunity for people to think together, valuing each other’s perspective and contributions in order for creative new ideas to emerge.”

The key word here is TRUST: companies can cooperate where there isn’t trust by sharing the bare minimum information within the framework of an agreement or contract; it is often a rigid arrangement.  On the contrary, collaboration requires an openness to exchange information and ways of working freely, combined with a respect for the expertise of others to consider and adopt their ideas; this requires flexibility and is borne out of trust.

A recent article on collaboration by Deloitte[4]included the following quote, which further emphasises the importance of trust:

“A lack of trust and misalignment of expectations are the key factors creating roadblocks to successful collaboration in Australia’s oil and gas industry.”

io supporting internal collaboration

Collaboration doesn’t always have to mean working with an external partner. Collaboration often starts within project teams.  It can be surprising how many times teams have believed that everyone is striving toward the same goal only to find that, in fact, different team members are moving toward disparate goals.  It is critical that this is identified at the earliest opportunity in order to save time and cost and ensure a development meets the needs of the various stakeholders or, at the very least, provide the realisation as to why one value driver takes precedence over another.

io has successfully supported a number of clients to gain a better understanding of their value drivers and establish alignment within the team.

io as an integrator

The 21st century supply chain blog identifies three causes of communication breakdown causing poor collaboration[5]:

  1. Data extraction and analysis is happening in silos.
  2. Processes and functions have conflicting goals.
  3. Globally distributed teams. There’s nothing wrong with having teams spread out over vast geographies, but there needs to be effective and continual communication. Without it, decisions are made with little understanding of cross-functional impact.

io often works on behalf of its clients as an integrator, where we apply the io way to break down the silos often present in project teams through the implementation of our holistic and integrated approach; use qualitative and quantitative techniques to identify value drivers, ensuring processes and functions have goal alignment; and leverage digital working along with a decision quality framework to ensure higher quality decisions are made and communicated.

In addition to this, io has also looked to the success of the Building Information Model (BIM) initiative in establishing a collaborative data environment in the construction industry[6].  This approach drives collaboration through a common framework for data, which is contributed to by all contractors throughout the lifecycle of a project.

Collaboration in action

Throughout industry, there are examples showing collaboration between clients and suppliers can lead to reduced cost, process improvements and innovation in products or services.

McKinsey conducted a survey in 2012 and found that when clients could demonstrate systematic efforts of supplier collaboration, their EBIT (Earnings Before Interest and Tax) growth was double that of their peers.[7]  This can be seen by the success of the collaborative BIM initiative, with the UK government stating BIM “greatly assisted the construction cost savings of £840m in 2013/14.”[8]

Consider too the iPhone: a huge part of the success of the iPhone are the countless apps that can be deployed on the mobile platform.  Initially, Apple did not intend to allow third-party developers to produce apps for the iPhone but reversed this decision and in 2008 made a software development kit available, allowing developers access to functions of iOS devices.  This open source collaboration undoubtedly contributed to the success of the iPhone.  It didn’t stop here, the Apple A9 system-on-chip, which first appeared in 2015’s iPhone 6, is designed by Apple but is manufactured by both TSMC and Samsung.

Collaboration also benefits suppliers in a number of ways: they become cost competitive; improve core capabilities; and their business is more stable.  In a 2010 survey of the auto industry[9], McKinsey found the suppliers that gave Toyota and BMW the highest cost reductions also rated the two companies as their best clients.  This is the mutual benefit of long-term collaboration.

The success of collaboration is not limited to industries outside oil & gas: io recently wrote about the success of the alliance model used on the Andrew development[10].  Also, well known in the oil & gas industry is Chevron’s Britannia development, which is a best practice example of improvement in business efficiency[11].

What does io mean by collaboration?

io does not just want to do what is asked of us (anyone can cooperate), we want to truly understand our clients’ goals, align and work with them to achieve those goals.  In the lower for longer environment, collaboration is critical and the evidence is clear that it is beneficial for all parties.  Fully understanding our clients’ value drivers means we can align our own.  By accessing io’s diverse, experienced cross-discipline and cross-industry collaborative approach, the potential for improvisation and innovation is greatly enhanced potentially leading to new approaches or novel solutions.  By collaborating with clients to realise their goals, ultimately io can achieve our own, which is to become a Trusted Advisor.

There is no denying trust can be hard, but trust is key.  Will a lack of trust within the industry ultimately derail the collaboration initiative?

Charles Darwin:

In the long history of humankind (and animal kind, too) those who learned to collaborate and improvise most effectively have prevailed.’[12]

[1] https://oilandgasuk.co.uk/oil-gas-uk-and-deloitte-analysis-suggests-collaboration-in-offshore-industry-increasing/

[2] http://dictionary.cambridge.org/dictionary/english/collaboration

[3] http://seapointcenter.com/cooperation-teamwork-and-collaboration/

[4] https://www2.deloitte.com/au/en/pages/media-releases/articles/time-to-eliminate-barriers-to-collaboration-in-oil-and-gas-150417.html

[5] https://blog.kinaxis.com/2016/11/3-challenges-to-supply-chain-collaboration/

[6] http://iooilandgas.com/have-you-thought-about-getting-digital-with-data/

[7] https://www.mckinsey.com/practice-clients/operations/the-power-of-successful-supplier-collaboration

[8]http://digital-built-britain.com/DigitalBuiltBritainLevel3BuildingInformationModellingStrategicPlan.pdf

[9] https://www.mckinsey.com/practice-clients/operations/the-power-of-successful-supplier-collaboration

[10] http://iooilandgas.com/lessons-from-the-history-books-how-looking-back-can-help-us-moving-forward/

[11] https://oilandgasuk.co.uk/chevron-evolution-of-the-britannia-operating-model-a-case-history-in-business-efficiency/

[12]Darwin, Charles; The Origin of Species (Classics of World Literature) Paperback – 5 Mar 1998; Wordsworth Editions.