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This
article originally appeared in the October 1996 issue of
PDBPR
Collocation and Effective Teamwork:
Experts Differ on Whether Physical Proximity is Mission
Critical
We've been surprised to discover that collocation
(sometimes spelled co-location) is a controversial issue among
those thinking about better ways to do product development.
Based on what converting to a work-cell model has taught over
the past decade or so about efficiency and effectiveness, we
would have thought that deciding whether or not it's important
for a product team to sit together in the same work area for
the life of a project would be an easy call. We discovered
that it's an issue with some heat to it when doing the
research on concurrent product development at TN Technologies
(see BPR, February 1996). [Readers of that article may recall
TN Technologies R&D vice president Andrew Makare's
contention that, due to staffing considerations, he thinks
collocation is not completely realistic when there are a small
number of people who are necessarily shared
resources.]
The question came back
to us recently when we read Anne Donnelon's new book, Team
Talk, in which she studies four product development teams to
discover what practices make for effective teamwork. Donnellon
doesn't specifically address collocation, but her research
leads her to conclude that two dimensions -- a strong team
identity and a clear sense of interdependence -- are the key
signals of whether or not a team is real, and she sees a
positive correlation between how real a team is and how well
it works. Based on this, we assumed experts would readily
agree that collocation is a good idea since it fosters social
cohesion.
Looking into it, we
found that experts don't even agree on the definition.
Concurrent product development expert Brad Goldense, president
of Cambridge, MA-based Goldense Group, Inc., says if your
ultimate aim is rapid concurrent product development then
collocation is mission-critical. Goldense defines collocation
as having all members of the core team working within thirty
feet of one another. While Babson College operations
management professor Farshad Rafii acknowledges that
"co-location" (his choice of spelling) can be good, he thinks
it's over-rated, and often not desirable. Rafii defines it as
being "within walking distance" -- which could mean being as
far as the next building.
Benefits of
Collocation
Goldense and Rafii agree
that collocation can have clear benefits. It can alleviate
narrow and self-limiting perceptions that emerge from looking
at problems through a functional lens. It tends to foster team
cohesiveness. It can mean efficient use of manpower: that of
core team members, of support functions, and of the product
manager. It can also speed the work along by facilitating the
process for making the million and one decisions that go into
any development project. That it enhances communication seems
like a no brainer.
Says Goldense,
"Think about it. How do we keep track of what's going on
in our companies? A good part of it is just sitting at our
desks and hearing people's conversations. If I sit in my
functional home base, all the noise I'm going to hear in the
background will be functional noise. But suppose I'm the
engineering manager on a product team and I'm sitting next to
the marketing manager for that team. He's on the phone with a
customer. I hear his half of the conversation; I can imagine
the other part. Or he hears me on the phone with a vendor
talking about specs. Same deal. It's real-time information
learning, no filtering, no interpretation. You develop an
appreciation for each other's
realities."
Adds Raffi, who bases
his conclusions on research in Stalk and Hout's 1990 landmark,
Competing Against Time, "Co-location can simplify and
facilitate the job of the project manager, who might spend 25%
of his or her time moving physically among project
participants spread over several buildings and another 25%
coordinating meetings, often necessitated by the inability of
team members to coordinate their activities informally. It can
also enhance resource efficiency by enabling pooling of
support functions such as Quality Control, drafting, model
shops, and pilot shops for use by multiple
projects."
MIT's Tom Allen,
studying engineers to see how physical proximity affected
communication, found that there was a 25% chance those with
offices next to each other would communicate at least once a
week; this dropped below 10% when they were more than 30 feet
apart; after 90 feet, the odds were the same whether they were
91 feet or several miles apart. A Bell Labs study found that
people on the same corridor tend to collaborate five times as
often as people merely located on the same floor; they found
that collaboration nose dives when people are located on
separate floors. Write organizational effectiveness experts Jessica
Lipnack and Jeffrey Stamps, "Steelcase, Inc., the office
furniture company, uses this research as a design principle.
The '50-foot rule' is the natural size within which
collocation leads to collaboration."
Where's the
Beef?
While acknowledging the
benefits of physical collocation, Rafii thinks its importance
is overrated, it doesn't guarantee better cross-functional
communication or performance, it isn't always feasible or
desirable, and there are higher-leverage ways to get
cross-functional harmony. Putting a cross-functional group of
people together in the context of a strong functional
organization can be expensive and frustrating to manage, he
says, and may well prove futile if other organizational
factors aren't addressed. (Want to generate cross-functional
harmony? Asks Rafii: tie your functional leaders' compensation
to time-to-profitability!)
Rafii believes physical
collocation lends itself to over-reliance on oral
communication, which can lead to careless process discipline
and outright error. He thinks it also can set up a "skunk
works" mindset, with teams risking isolation from the rest of
the organization. Team members can lose track of critical
information, the organization can lose track of the team's
learnings, and--particularly with long development
projects--both individual team members and the organization
can suffer from a "rusting" of functional
skills.
Rafii's biggest
reservation about collocation, however, comes from what he
sees as the rapidly changing global environment. If my company
is based in Boston, and the best design talent for a given
project happens to be in Italy, and manufacturing is in
Singapore, to hang in with a physical collocation strategy
weds me to, at most, a second-best result.
Writes Rafii, in
Business Horizons, "As economic competition and
corporations become more global, collocation is increasingly
infeasible and insufficient. Companies must distribute
elements of their product development organizations around the
globe to understand and anticipate the needs of diverse global
customers and to take advantage of international centers of
excellence."
Virtual
Collocation: How Real Is It?
Like Lipnack
and Stamps, Rafii sees the emergence of "virtual
co-location" as an alternative and, he thinks, more-promising
approach. New information technology, particularly groupware,
can enable a project team of hundreds of geographically
dispersed individuals to keep the action moving around the
clock.
In addition, says Rafii,
the nature of networked information systems tends to force
cross-functional integration: "Networks are inherently
informal and anti-hierarchical, and thus their use tends to
minimize the importance of the formal organizational
structure. Knowledge and the willingness to share it, rather
than position or job title in a chart, become the key
indicators of relevant contribution to a project. These
factors contribute to cross-functional integration by making
functional walls more transparent and by facilitating the
measurement and evaluation of individuals' and units'
contributions to project success."
Continues Rafii, making
a point with which Goldense would likely disagree,
"Although initial physical meetings of project
participants are valuable to establish relationships, virtual
co-location through electronic media can largely supplant the
need for and benefits of extended physical proximity."
While Goldense shares much of Rafii's assessment about the
changing nature of global competition, he says that what Rafii
is calling "virtual co-location" isn't really collocation at
all, but "rapid serial development."
There are clearly
situations where taking this path is a smart strategic choice.
But in most situations, because he sees well-done concurrent
product development getting bad ideas out of the way early and
speeding good ideas along, Goldense says he would hang in with
physical collocation for at least for the first third of a
development project: "You make decisions in the first 30%
of a project that lock in 90% of your life cycle costs.
Closeness really counts at this
point."
How would he handle the
fact that you can't have hundreds of team members sitting
within thirty feet of one another? It's unlikely that they all
need to be part of the action throughout the life of the
project. Many are really supporting functions who need to be
available to multiple teams. He'd identify cross-functional
core teams, have them sit together, and cluster them around a
centralized extended team of support
functions.
What the debate
highlights is that there is no one right way. In a world in
which over half of the products that won this year's Business
Week design awards were created by "virtual" teams, with the
design piece outsourced, whether you call the way such teams
work "virtual collocation" or "rapid serial development"
doesn't much matter: clearly it's a growing trend for how
products get developed.
At the same time, many
of Rafii's concerns about limitations of physical collocation
evaporate with strong, competent project leadership. From the
vantage point of being in conversation with a range of product
team leaders, one thing is clear: most with whom we speak tell
us that, given a choice, they would choose physically
collocated teams.
Key
Learnings:
-
According to recent
research into what makes effective product development
teamwork, a clear team identity and a strong sense of
interdependence came up as the two greatest determiners of
success.
-
Experts agree that
collocation facilitates social cohesion but point out that
by itself it does not guarantee either clear identity or a
strong sense of interdependence.
-
Research shows that
once people sit more than thirty feet apart the odds of
routine collaboration fall off
dramatically.
-
If you can't do
physical collocation for the entire life of a project, you
may want to try it for the first 30%, when decisions are
made that dictate 90% of the life cycle
costs.
-
Growing globalization
and the trend to outsource key functions, like design,
combined with emerging electronic technologies, especially
groupware, mean that physical collocation is not always
possible and may not even be desirable if the best players
you can find are geographically
dispersed.
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