Next generation CIOs change agents for the global virtual workplace

But the convergence of globalization, technologies that enable virtual work, collaborative methods and techniques, and a new tech-savvy generation Millennials of employees is changing

Next-Generation CIOs:

Change Agents for the Global Virtual Workplace

7 Reorganizing Work: A New Hierarchy

10 A New Leadership Role for CIOs

11 Cultural Changes can Empower Teams, Ensure Security

13 The Elusive ROI

The report was based on a survey of senior executives in North America and Western Europe, in-depth interviews with nine senior executives and experts in the industry and other research The author was Jim Nash and the editors were Katherine Dorr Abreu and Debra D’Agostino

The Economist Intelligence Unit would like to thank all those who contributed their time and insight to this project

Executive Summary

For several years, chief information offi cers (CIOs) have

championed business effi ciency Their focus has been largely

on operational goals, such as keeping IT and operations

running smoothly and reducing related costs, while enabling

business processes to support their companies’ strategies for

growth and profi tability But the convergence of globalization,

technologies that enable virtual work, collaborative methods

and techniques, and a new tech-savvy generation

(Millennials) of employees is changing how

business is conducted and structured across

the organization (within teams, departments,

etc.) and how the corporation interacts with

customers and partners

This report examines the role of CIOs in

restructuring how work is conducted throughout

the organization It fi nds that companies leading the movement

toward virtual and collaborative teams — often spurred by

the CIO — are garnering results, particularly with respect to

innovation, talent recruitment and retention, and productivity

Key fi ndings include:

● Some companies are changing their operations to support

new structures based on virtual teams that do not rely

on traditional hierarchies and communication channels

These teams can be powerful operational resources,

particularly when it comes to knowledge-based work Unlike

more traditional structures, these specialty teams reach

across geographic, cultural and organizational barriers

to fi nd the needed resources While not appropriate for

all types of operations, collaborative virtual teams, when

used effectively, combine diverse skills to quickly carry

out complex tasks and address novel market challenges

They also have the potential to foster more productive

relationships with internal and external partners

… collaborative virtual teams, when used effectively, combine diverse skills to quickly carry out complex tasks and address novel market challenges.

● Organizations that have embraced virtual teams garner benefi ts such as increased innovation and competitiveness, but lack appropriate valuation methods to measure the quantitative impact of these structures on the bottom line Still, it is possible to quantify such things as delays resulting from redundant decision reviews prevalent in more conventional work structures It is also possible to measure time lost when clients or suppliers spot problems that would have been avoidable had these stakeholders been involved earlier in the project through virtual collaborative teams

To gain support for their companies’ transition to the new approach, executives need to develop ways to measure return on investment.

● CIOs are in a unique position to infl uence the adoption and effectiveness of virtual teams CIOs are familiar with the people, tools, technologies and techniques needed to create

a corporate culture of virtual teams Particularly within knowledge-based enterprises, they know the processes and policies employed at all levels of the company and the tools that can support them And as members of the C-suite, CIOs are familiar with long-term strategic goals, which is essential

in crafting an enduring new structure This perspective positions them as change agents.

A confl uence of forces, some old, some new, is pushing companies to change how

they work Globalization, powered by new communications tools, has broadened

their reach Technologies such as cloud computing are allowing organizations to

restructure operations At the same time, a new generation of technically savvy

workers is working its way up the ranks, further exposing companies to transformative

technologies like social media For some fi rms, particularly those that operate in

many locations, new ways of organizing work that take advantage of knowledge

sharing can be an effective response to these business shifts

CIOs who combine technological expertise with a broad, strategic view of the business

have an opportunity to lead their organizations’ adoption of new work approaches

They bring technological clout to what is fundamentally a cultural

transformation of the company They can do so because they are

intimately involved in corporate strategy, which gives them a rare

top-to-bottom perspective

Collaborative and virtual teams — more complex, dynamic and

auton omous than traditional corporate team structures — can make

it possible for companies to take advantage of human, physical and

technological resources regardless of where they are located

A global survey of executives in Europe and North America,

conducted by the Economist Intelligence Unit in May 2010 in cooperation with

Cognizant Business Consulting, suggests that companies that are at the forefront

of the transition stand out from their peers in many respects Companies that are

already seeing the benefi ts of this transformation, defi ned as “leaders” in this report,

say they outperform other organizations in innovation, recruitment and retention

of talent, and productivity They tend to be less hierarchical, provide more fl exible

work arrangements, and have established policies and practices that support the

Collaborative Virtual Work Structures: A New Way to do Business

Collaborative teamwork is certainly not a new thing in the

business world, but how teams are used and how they function

is changing In this report, the term incorporates a number of

characteristics Interviewees often use the term “virtual teams”

in describing them, although they involve more than mere

physical dispersion

In this new organization, teams break down rigid structures,

creating environments in which people work in role-based,

cross-departmental, cross-functional and international groups

Knowledge sharing is fundamental to how these teams operate,

and their success hinges on effectively using the expertise of each

member Teams are by their nature fl exible and open to change

While there will always be standard operating procedures, and

the need to show results will always be preeminent, teams must

have a degree of self-management to be successful

This autonomy means organizations can put more energy into

innovation and less into bureaucracy As a result, less – but more

relevant – communication is shared Executives who have played midwife to this change say it boosts productivity, reduces errors and helps retain high-quality talent at all levels

When successfully deployed, these teams combine the strengths

of small start-ups and of large, mature organizations: nimble, entrepreneurially minded teams are sheltered in the midst of big, stable companies They can spot and respond to market developments more rapidly than can conventional large organizations, and they are able to throw more resources at opportunities and errors than small outfi ts can

These teams have elements of social networking Both involve self-organization and groups that are focused on shared interests, and both depend on frictionless, informal communications Custom-made analogues of Facebook, Wikipedia and Twitter, as well as high-defi nition, high-bandwidth telepresence systems, which allow people in different locations to feel as if they are in the same room, weave teams together

CIOs who combine technological expertise with a broad, strategic view

of the business have an opportunity to lead their organization’s adoption of new work approaches.

formation of more virtual and collaborative teams Throughout the report these leaders are compared with companies that expect to garner benefi ts from new work structures either within a year or more, or not at all Those fi rms are classifi ed as “all others” in the charts throughout the report.

The research also shows, however, that there is no single model for such teams, nor

a single best path to implement them How they are deployed refl ects a company’s tolerance for decentralization, shared decision-making, collaborative innovation and change itself Some fi rms create teams at strategic points, straddling marketing and production or research and development and legal, for example Others integrate them deeply into the organization’s fabric

While one might think that the digital generation – the Millennials – would be the main driver for this sort of change in companies, the research shows that they are not playing that role This may refl ect the current economic environment, in which labor is abundant What matters more than age is mindset: Companies are adopting

a variety of tools and collaborative methods because they increase competitiveness, not necessarily to attract or retain a specifi c employee demographic Nevertheless, organizations that are at the forefront of this transition may be better positioned to attract new workers when economic growth tightens labor markets

To implement collaborative virtual teams, organizations must overcome several hurdles, including resistance to change and the risks born of greater openness Executives must be sure that the teams are well coordinated and do not work at cross-purposes And although companies that have embraced these teams say they are integral to their organizations’ operations, they do not have quantifi able measures

of their impact Developing a set of metrics to prove the value of collaborative virtual teams is among the main challenges to their widespread adoption Executives who are able to quantify results will gain credibility to lead their companies’ transformation

About the Survey

A total of 402 respondents in Europe (52% of respondents)

and North America (48%) participated in the survey, which

was conducted by the Economist Intelligence Unit in May 2010

The panel is mainly senior: 45% of respondents hold C-suite

or equivalent positions, and another 29% are senior

presidents, vice-presidents or directors

Respondents represent a wide range of company size

Thirty-eight percent are from small to medium-sized companies,

with less than $500 million in annual revenues Another 19%

represent companies with $500 million to $5 billion in revenues

per year, and the remaining 33% come from companies with

revenues of more than $5 billion

Forty-six percent of respondents have IT functions The survey

sought to explore differences in perspectives between these

and non-IT functions, but found considerable alignment

between the two groups Strategy and business development,

and general management were the other main functional

categories, with 13% in each The remaining 28% fulfi ll a range

of functions

Most of the organizations surveyed have global operations

Respondents’ descriptions of their organizations appear in

Partners with companies in several countries Partners only with companies in the country in which

81 19

75 25

72 28

Source: Economist Intelligence Unit survey, May 2010.

Has a hierarchical organizational structure

Has a flat organizational structure

Chart 1 Leaders are more likely to have

flat structures

How would you describe your organization’s structure and

operations? For each pair, choose the one most applicable

Leaders are those that are already reporting ROI from

collaborative virtual teams.

Reorganizing Work: A New

Hierarchy

Survey results show that new ways of organizing work are gaining traction About

one in six respondents says their organization already has seen positive results

from more virtual and collaborative teams, and another one-fi fth expects to garner

benefi ts within a year Executives interviewed for this report are strong advocates

of these work structures Leslie Jones, CIO of communications giant Motorola, for

example, says collaborative virtual teams are part of the company’s DNA

The practices are particularly appropriate for knowledge-based work Some

companies have implemented them enterprise-wide, sometimes as a result of a major

strategic decision In many cases, however, they are applied in an opportunistic way,

and gain ground gradually within companies Other organizations are not adopting

these work structures

Those already benefi ting from such practices — our “leaders” group in the survey —

have some attributes in common not shared by the remaining respondents The

former are more likely to see innovation and collaboration as important competencies

for their organization They say their company is at the forefront in testing new

collaboration and remote-work technologies And they report that the benefi ts of

greater collaboration — including increased innovation, improved productivity and greater competitiveness — outweigh the risks, such as reduced governance and potential security lapses

(See chart 3 on this page and chart 5 on page 9.)Companies in which top executives demonstrate strong support for the transition to a new work structure are more likely to outperform their peers

in such areas as innovation and productivity, the survey shows The CIO in particular is seen as a potentially galvanizing force: The research suggests that collaborative virtual teams are more likely to take hold where the CIO is engaged in the process and involved in broader strategic concerns

Perhaps because they have been deeply engaged

in the transformation of their organizations, interviewees report positive results after adopting the new structure Indeed, for

U.S.-based consumer products giant Procter & Gamble (P&G), which considers

virtual teams a strategic strength, the structure minimizes delays between discovery,

decision and action CIO and president of global business services Filippo Passerini

says building such teams is more than a way to delegate tasks: It pushes

decision-making authority from middle managers toward groups of project or topic experts

working together, eliminating bureaucratic delays

Early adopters of these work structures tend to have fl atter organizations and less

“siloed” communication channels than more traditional companies, the survey

shows They typically offer a wider range of collaboration and remote-access tools,

including telepresence, instant messaging, site templates, external or custom social

networking environments and cloud computing (See chart 4.)

These characteristics support virtual teams, says Chris Satchell, chief technology

offi cer (CTO) at U.S.-based International Game Technology (IGT), a global developer

of electronic gambling systems (In an unusual setup, the CIO of IGT reports to

Mr Satchell, who thus combines responsibility for technology innovation and IT.)

Chart 3 Leaders value innovation, talent and productivity more highly, and say their organizations outperform their peers

How important are the following attributes to your organization, and how does it compare with its peers?

Rate on a scale from 1 to 5 where 1=extremely important or significantly outperform; 3=average; 5=not at all important

or significantly underperform

Leaders are those that are already reporting ROI from collaborative virtual teams.

Source: Economist Intelligence Unit survey, May 2010.

% respondents who said the attribute was

“extremely important”

% respondents who say their organizations

“significantly outperform” their peers

Innovation

Recruitment of high-quality talent

Retention of high-quality talent

Productivity

Innovation

Recruitment of high-quality talent

Retention of high-quality talent

Productivity

Leaders All others

virtual teams are

more likely to take

hold where the

CIO is engaged in

the process and

involved in broader

strategic concerns.

Because communications generally are not fi ltered or relayed through managers, information can spread more easily Ideas can be added to, dismissed or simply absorbed by the group for future use There are few data-hoarders, and isolated

“gurus” are integrated in teams where they share their specialized knowledge.Such a team might comprise a factory manager, data engineer, marketer, project manager and company attorney, all of whom have expertise in the project at hand Most or all of them can be in separate locations Working together, they address practical issues, eliminate redundancies and catch mistakes more effi ciently than within conventional structures When they span the globe, these teams can effectively work on a project around the clock

In some cases, the benefi ts might not be initially obvious Collaboration is intrinsic

to the hospitality industry, for example, but it tends to be site-specifi c Jeremy Ward, CIO of global luxury hotelier Kempinski AG, says that the company instituted a culture of geographically diverse virtual teams two years ago “We changed the way

Interviews with other executives reveal that Kempinski’s culture-before-technology approach is a common best practice among companies that have adopted collaborative virtual teams Making the transition to this work structure poses challenges for traditionally organized companies, however The CIO can provide the support needed to implement the necessary changes

Source: Economist Intelligence Unit survey, May 2010.

Chart 4 Most companies provide support

for virtual teams, but leaders offer more,

and more advanced, choices

In what ways does your organization support a virtual work

environment? Select all that apply

Leaders are those that are already reporting ROI from

collaborative virtual teams.

(% respondents)

Cloud computing

External social networking access

Presence awareness (Online indication that person is

available to communicate)

Internal/custom networking applications

Providing remote access to e-mail

Providing employees with mobile equipment

(mobile phones, laptops, etc.)

Instant messaging capabilities

Video conferencing

Providing remote access to corporate network and servers

Corporate portal or intranet

Leaders All others

Source: Economist Intelligence Unit survey, May 2010.

Chart 5 All organizations face the same challenges, but leaders are

more confident in their abilities

What are the greatest challenges posed by a more virtual work environment? Select all that apply

Leaders are those that are already reporting ROI from collaborative virtual teams.

(% respondents)

Difficulty in managing diverse tools needed to enable dispersed teams to work together effectively

Risks to governance and control

26

41 42

54 44

55 23

How to Deploy Collaborative Virtual Teams

“If a global perspective isn’t everywhere in the company, you’re

holding yourself back,” says Chris Satchell, chief technology

offi cer of U.S.-based International Game Technology (IGT)

For IGT, which has $2.1 billion in annual sales and facilities

on every continent but Antarctica, that perspective involves

more than knowing overseas sales projections

IGT is turning to global virtual teams in an effort to remain

the world’s biggest maker of casino-based and online

gambling systems Mr Satchell was hired in June 2009 by

new CEO Patti Hart to help end the company’s fi nancial

stagnation Ms Hart had already begun efforts to dismantle

what Mr Satchell says was an outmoded

command-and-control structure

While IGT is still the dominant player in the market, the

global recession has cut its revenue and profi t, and slashed

its share price Seeing an opening, competitors are hungry

to overtake the 25-year-old fi rm As head of product and

information technology, it is Mr Satchell’s job to make sure

IGT is not out-innovated To that end, he is deploying virtual

teams throughout the organization

Before repeating the practice in the whole company, Mr

Satchell debuted the concept in IT “I wanted to make sure

I had my own house in order.” He started with some

small-scale efforts and made sure IT could support the larger move

without a hitch that could derail company-wide deployment

A united C-suite showed everyone the benefi ts of virtual teams Among them are:

● Faster time to market: Everyone needed for a project is involved from the beginning, which minimizes time spent

on briefi ngs at critical decision points

● Less bureaucratic interference: Teams are autonomous

semi-● More innovation: If done right, virtual teams concentrate needed expertise in each group

Relationships are important when building virtual teams

“We’re always pushing employees to understand that people

in other groups have different perspectives They have something you need, and you have something they can use,” says Mr Satchell

Even as virtual teams become more entrenched at IGT, travel remains an important relationship-building tool “It’s

a misconception to think that you can do away with your travel budget,” Mr Satchell says Even high-frequency virtual meetings need to be supported with occasional face-to-face gatherings (though not necessarily involving whole teams)

Today, Mr Satchell says, “we’re getting the pace and focus that we need.” He thinks he is two years away from completing IGT’s transition to mature virtual teams

A New Leadership Role for CIOs

In just a few years, most CIOs and their IT departments have grown from asset managers to strategic enablers, ensuring that IT capabilities are aligned with business needs The next step for CIOs is to become drivers of broad strategic change If they do not, they risk losing clout in their organization “How much competitive advantage can there be to running a different network layout or buying a different server?” asks P&G’s Mr Passerini

Motorola’s Ms Jones agrees Gone are the days when CIOs could prove their strategic value by assembling technology platforms that support business processes “The minute the CIO talks about ‘alignment’ (of IT with business processes), you’ve declared yourself as something alien” to the revenue-generating portion of the organization, she says “We have to be integral to the strategy, not just aligned.”

It is not enough, even, to support a top-down initiative that uses collaborative virtual team tools, because the tools are not the critical component What matters, says Ms Jones, is the organization’s ability to perform well in complex markets through a fl exible and adaptive structure that is supported

by IT CIOs interviewed for this report agree that such an approach is crucial

To make it work, tools, processes and policies that support collaborative virtual teams have to be spread throughout the organization

Can CIOs sell such an idea to the company? They have in the past: At the start

of the PC revolution, fi nance staff began taking their personal computers to the offi ce so they could do their job without having to petition for time on the mainframe Successful CIOs understood what was happening, advocated for policy changes and adapted systems to capitalize on decentralization This new change is much bigger in scope, and will require that CIOs tackle cultural issues that have strategic impact Survey results suggest they have the support to do so: The CIO is broadly viewed by respondents as

a champion for collaborative environments, and also is considered the appropriate executive to implement the structures and tools needed

to make collaborative virtual teams happen Only CEOs ranked higher overall (chosen by 47% of all respondents), which is not surprising as they are ultimately responsible for determining corporate strategy What is unexpected, though, is how high CIOs ranked: They were chosen by 45%

of all respondents (Respondents could choose up to two of nine functions

or groups.) CIOs ranked even higher among companies defi ned as leaders

in the survey: For those fi rms, the CIO outstripped the CEO 49% to 45% (See chart 7.)

CIOs looking for an ally when promoting virtual teams should turn to chief marketing offi cers (CMOs), suggests Clay Shirky, who teaches the Interactive Telecommunications program at New York University and has written extensively about communications trends Traditionally the most outward-focused executive, the CMO has much to gain from greater collaboration with buyers and would-be buyers, and can be a powerful ally in creating collaborative virtual teams It is axiomatic that the best marketing campaigns are conversations

Leading such a change could create greater opportunities for CIOs in the long term, suggests P&G’s Mr Passerini: “The CIO role is beautifully undefi ned This is a unique opportunity to play a more active role in the business.” Tackling cultural change is one way to expand the CIO’s presence

in the organization

Source: Economist Intelligence Unit survey, May 2010.

Chart 6 Leaders test and adopt technologies

that enable virtual teams

Which statement best describes your organization’s approach to

adopting technologies that enable collaboration and remote work?

Leaders are those that are already reporting ROI from collaborative

virtual teams.

(% respondents)

Is at the forefront in testing and adopting new technologies

Only adopts technologies after their effectiveness

has been proved in the market

Only supports basic technologies such as email and conferencing

capabilities

Don’t know/Not applicable

Leaders All others

Source: Economist Intelligence Unit survey, May 2010.

Chart 7 CIO and CEO should lead implementation

of virtual teaming

In your opinion, who within the organization should lead the effort

to implement the structures and tools necessary for a more virtual

work environment? Select up to two.

Leaders are those that are already reporting ROI from collaborative

virtual teams.

(% respondents)

An ad-hoc committee involving CIO, COO, others

Chief operations officer (COO)

Chief executive officer (CEO)

Chief information officer (CIO) or equivalent

Leaders All others

Cultural Changes can Empower

Teams, Ensure Security

Collaborative virtual teams can alter how work is done They create benefi ts, but

also risks and challenges They require organizations to evolve, reshaping teams

and developing processes to meet the needs of the task at hand And they require

executives to coordinate the teams so that the overall goals of the organization are

met

Security — keeping data and innovations safe – is an important concern Survey

respondents who say their fi rms are already garnering benefi ts from using these

new work structures rank security second only to cultural resistance as an obstacle

to creating a more virtual environment in their organizations

Technology in the form of ever evolving applications is not suffi cient to address the

issue of security Companies that deploy collaborative virtual teams must train and

continuously communicate with employees the personal stake each

has in keeping information safe CIOs interviewed for this report

agree that changing behavior is more important than software

As part of its virtual team strategy, Florence, Italy-based GE Oil

& Gas, a unit of U.S.-based General Electric, has created policies

that prohibit employees from releasing proprietary information or

speaking on the company’s behalf without authorization, says CIO

Alan Kocsi So long as they stick to the policies, GE Oil & Gas’ 13,000

employees, spread over 100 countries, can use social networks

including Facebook and YouTube for personal networking The company has “virtual

co-location environments” with similar functionality for business-related networking

between employees as well as with customers and suppliers

Tom Conophy, executive vice president and CIO of UK-based Intercontinental Hotels

Group, also emphasizes training He is building a culture of awareness around

intellectual property within the company, and educating employees is part of the

process Sending an email or posting on a social network exposes the company to

the risk of data leakage, for example Employees must be conscious that sending

Chart 8 Cultural resistance tops list of obstacles for all, but second-tier

concerns are very different

What are the biggest obstacles to creating a more virtual work environment in your

organization? Select up to three

Leaders are those that are already reporting ROI from collaborative virtual teams

RankLeaders All othersCultural resistance to changing traditional work methods 1 1

Concern that data security would have to be weakened in order

to make collaboration possible

Perception that it will lead to a loss of intellectual property 3 11

Cost of implementing collaboration technologies 4 2

Existing rules and tools that are designed to prevent data

leakage

Lack of an effective strategy to support a virtual work

environment

Source: Economist Intelligence Unit survey, May 2010.

Companies that deploy collaborative virtual teams must train and

continuously communicate with employees the personal stake each has

in keeping information safe.

information to a neighboring cubicle could just as easily result in sending it to the rest

of the world “You are publishing when you hit the ‘enter’ key,” says Mr Conophy

A cultural change throughout an organization requires new attitudes It means winning over those who think collaboration is less a business process than strictly

a human resources concern It entails showing that accountability and productivity can be maintained And it involves convincing people to share information rather than hoard it

For collaborative virtual teams to be successful, “there has to be a mind-switch throughout the company,” says Mr Ward As a result, Kempinski’s training program focuses as much on the benefi ts of the new culture as on the responsibilities and tools

Collaborative Virtual Teams Evolve at CERN

Some of the world’s largest collaborative virtual teams work

at CERN, the European Organization for Nuclear Research,

straddling the French-Swiss border The research groups,

involving thousands of scientists and students from dozens

of countries, use a massive particle accelerator to look for the

components of dark matter

Two years ago, talk about success with the kind of collaboration

that typifi es such teams was “hype,” says Dr Helge Meinhard,

who leads the CERN information technology (IT) staff that

supports, among others, an overall team comprised of more

than 2,000 physicists, including 500 students, from 150

institutions in 30 countries This collaboration, known as the

Atlas Experiment, is itself a collection of virtual teams Atlas

is closely linked with other similarly large collaborations, and

communication and knowledge sharing between them are

intense

CERN has strict rules about what information can be

published or openly discussed, and individual institutions can have their own disclosure protocols Yet despite the number

of people, the complexity of the tasks and the informal nature

of scientifi c relationships, Mr Meinhard says virtual teams keep confusion to a minimum

Unlike many endeavors in which scientifi c knowledge is compartmentalized, CERN scientists network extensively and manage their own virtual teams locally This reduces the burden of information overload, says Mr Meinhard For the most part, people get only email relevant to them Team wikis are common and collaboration software is available for groups

Facebook is also used as a collaboration platform, though unoffi cially Some CERN teams recently have started using the social network to communicate and organize That indicates

a greater level of collaboration is needed, Mr Meinhard says, and CERN is looking at how it can provide a similar service

The Elusive ROI

Transforming an organization’s culture is important, but return on investment (ROI)

is ultimately critical Proving that collaborative virtual teams bring tangible benefi ts

is still an elusive task Even respondents who say their organization has already

experienced a measurable return on investment (ROI) from such efforts do not

explain how that return is quantifi ed And while CIOs interviewed for this report say

these teams have had a signifi cant impact on their companies, measurable ROI is

hard to come by

The interviewees posed a common rhetorical question when discussing ROI: How

does one put a fi gure on a mistake that was caught by a team member who would

not have been involved in the process under a traditional structure?

More tangibly, collaborative virtual teams can better distribute workloads among

subject-matter experts and maximize knowledge sharing IGT’s Mr Satchell says his

company would never have the capacity to meet current challenges without virtual

teaming Responding to declining revenues resulting from the economic crisis

and competitors avid to grab market share, IGT faces sobering

challenges (See a description of IGT’s challenges in “How to Deploy

Collaborative Virtual Teams” on page 9.)

Mr Satchell does not merely delegate tasks to his teams Rather,

teams are expected to solve complicated problems through critical

thinking and analysis of sometimes complex conditions or needs

Teams have the authority to make project-related decisions, while

upper management looks after overall strategy The trust is there, Mr Satchell says,

because team members are experts in the task assigned to them and understand

their group’s role What matters is their expertise

According to Steve Brewer, applications development director at FONA International,

a U.S.-based global maker of fl avors used in foods, medicines and other applications,

such teams have made his company “more responsive than our rivals.” Mr Brewer

attributes this responsiveness in part to virtual teams, although similar to his

colleagues, he is reluctant to assign all of the success to it

Chart 9 Leaders are already seeing results

When will changes brought on by greater collaboration and a more virtual work environment result in a

measurable return on investment?

Leaders are those that are already reporting ROI from collaborative virtual teams

How does one put a fi gure on a mistake that was caught by a team member who would not have been involved in the process under a traditional structure?

Ms Jones of Motorola and Mr Satchell of IGT say their CEOs were predisposed toward more collaborative corporate environments, but that is far from universal Conventional hierarchies are familiar to and protective of chief executives To embrace collaborative virtual teams means addressing attitudes about more open knowledge sharing and cooperation If implemented with the proper coordination

to ensure that company goals are met, collaborative virtual teams can provide signifi cant benefi ts, helping organizations anticipate or respond to novel situations, and thus become more competitive

Still, gaining support to deploy such teams more broadly throughout the organization will require proving their value Productivity gains, number of innovations, talent retention and a host of other metrics can be useful tools to evaluate unorthodox techniques in rapidly changing environments However challenging it is to develop metrics to show the benefi ts of such team structures, CIOs who do so will be better able to sell and then defend the new ways of organizing work

Holiday Inn’s Image Improves as Teams Overhaul Brand

Intercontinental Hotel Group (IHG), the world’s largest hotelier

as ranked by number of rooms, has implemented knowledge

sharing by bringing team members together in a dedicated

room for the duration of the project – whether three months

or one year Tom Conophy, executive vice-president and CIO,

is using these teams to achieve a company goal: making IHG’s

technology a key brand differentiator

IHG currently manages 1,100 live IT-related projects around

the world The potential for duplicate work is enormous, so

key projects use Yammer, a private social networking tool for

teams Like many companies deploying collaborative virtual

teams, IHG also supports wikis to document projects and

share information

The teams combine IT employees with anyone else in the

company who can help complete the project “Business people

sit next to engineers and have real-time interaction,” says Bill

Peer, vice president of enterprise architecture and strategy at

IHG Teams have the authority they need to make decisions

that will bring the project in on time and on budget

People can volunteer their services for a team or they can

be chosen by management The approach is popular, despite the various light-hearted nicknames the dedicated space has gotten: the gulag, the war room, the cave “I’ve never had anyone say ‘no’ to a second assignment,” says Mr Peer

Mr Conophy says the teams complete tasks faster than if they had to go through traditional channels to communicate with stakeholders and get decisions from executives He adds that the teams generate more innovation because the principle parties are always together to share and assess ideas The approach was used as part of IHG’s yearlong, $1 billion brand overhaul of Holiday Inn, spotlighted by Brandweek.com’s weekly Buzz Report, which measures brand awareness among consumers The January 2010 report concluded that Holiday Inn’s overall consumer-perception score rose throughout 2009, despite an extremely challenging economic environment It was only one of two top-10 hotel chains to manage that feat; the overall industry’s score declined over the same period

A solid strategy for revamping the brand resulted in this success But teams helped the company achieve its goals, according to Mr Conophy