Collaboration Drives Engagement—and Engagement Drives Results

What is engagement? It’s your employees’ enthusiasm and sense of connection to their work, and their willingness to commit their physical, cognitive, and emotional energy to it.¹ Engagement stems from a chance to contribute and be valued for those contributions, and from opportunities to learn and grow.²

If you think this is fluffy, think again. A large body of research shows that high engagement not only boosts productivity, revenues and profits, and talent retention but also promotes psychological and physiological benefits.³ (See Figure 2-1 for empirical findings on the impact of engagement on outcomes.)

Unfortunately, engagement in the workforce is generally low across the globe.⁴ Thirty percent of employees worldwide, and 67 percent in the United States, report that they are not engaged.⁵ And the momentum may be in the wrong direction: Recent studies suggest that remote working, so significantly expanded and accelerated during the Covid-19 pandemic, can have an adverse effect on engagement.⁶

FIGURE 2-1

Engagement by the numbers

Gallup research shows a remarkable difference in business outcomes depending on employee engagement.

The seismic shift to remote or hybrid working came as a jolt for many people who never planned to work from home and for managers who preferred to have their teams working closely together in the office. Working remotely can cause people to feel isolated from their colleagues, out of sync with their teams, and out of sight from their managers. Particularly for new joiners or new teams, creating bonds and starting to feel enmeshed in the culture can be far more difficult.

We propose that a fundamental shift toward smarter collaboration will help to turn those numbers around and produce sustainably higher engagement, whether working in person, remotely, or somewhere in between. Smarter collaboration is by its nature inclusive, which makes people understand that their managers and coworkers appreciate their contributions. And as noted earlier, smarter collaboration is also deliberately developmental, meaning that people can learn and grow on the job.

An engaging job is one where you play to your strengths. The Gallup organization has conducted annual studies on engagement involving millions of people on more than one hundred thousand teams across fifty-plus industries. They’ve found that one agree-or-disagree statement is a critical indicator of an employee’s level of engagement: “At work, I have the opportunity to do what I do best every day.”⁷

Smarter collaboration not only allows this, it demands it. It demands that people understand their own strengths and—equally important—admit where they’re not all that brilliant. It demands that people find others who possess complementary strengths, then work effectively with them to tackle important challenges. That’s how everyone gets to play to their strengths, and no one is forced to lean on their weaknesses.

It’s not enough for a person to want to contribute by using their strengths. They need people around them, including their supervisors and colleagues, to understand, appreciate, and draw on those strengths. Gardner’s dissertation research clearly showed this. She worked with more than six hundred people in one hundred project teams over the course of nearly a year.⁸ Her analyses clearly showed that some teams have a serious problem in actually using their members’ knowledge, even when it’s genuine experts who are speaking up and trying to contribute. Those teams, not surprisingly, performed relatively badly—not only in terms of their members’ engagement but also in satisfaction ratings from their clients.

What went wrong on those teams? First, leaders failed to create the kind of environment where collaboration thrives—for example, devoting time for team members to learn about one another’s technical and market knowledge, and especially about how that expertise related to the current client’s specific needs. Second, team members undermined one another’s ability to play to their own strengths. For example, they often mistakenly overrelied on the inputs of higher-status team members rather than listening to people who knew the clients deeply or had other important ideas. Videos of some team meetings showed that up to 65 percent of these missed opportunities were caused by team members (not the leader) talking over, ignoring, or even physically turning their backs on experts who tried to contribute.

These findings highlight a key element of smart collaboration: leaders play a major role in shaping the context (as we explain in depth in Chapter 8), but individual team members have to be constantly vigilant in drawing out and drawing on each other’s strengths.

Let’s look at a case in point. One midsize private equity–backed consumer goods company, BeautyCo, wanted to expand into new customer segments and geographies to achieve its ambitious growth goals. Toward that end, it identified five major initiatives. Meanwhile, the company’s CEO announced that he wanted a new approach to execution planning. Rather than having the executive committee take the lead on building launch plans, they would create and rely on working groups that spanned all levels of the company, including recent joiners.

An outside group trained the teams to conduct a rigorous project launch. Each member really got to know everyone else’s expertise and experience—not just their role but also how their personal background contributed to a deeper customer connection and how what they had learned in prior roles could apply to the new project.⁹ Members also learned to periodically revisit ways to use each other’s strengths as projects evolved or as team members changed.

It worked. One of the projects got to market months ahead of schedule by using an outside technology provider that a younger team member had previously worked with. Another expanded into a new region based on the in-depth knowledge of some team members who grew up there.

Given these successes, the collaborative approach soon spread to other parts of the organization. The concept of allowing people to use their strengths and do what they do best every day was adopted in the language of the company and implemented in little ways every day. Confirmation came in feedback from the employee engagement surveys. As one product manager said, “I like that we ask questions like, ‘Where can you have the most impact on the project?’ ” Unsurprisingly, engagement scores started to rise. (See the related sidebar on engagement.)

BeautyCo’s leaders helped push project teams toward truly smarter collaboration, not only by making sure people had the opportunity to play to their strengths but also by taking a deliberately developmental approach. This is key: smarter collaboration helps boost engagement because it gives people the opportunity to learn and grow. Our surveys of thousands of team members consistently show that they value collaboration in part because it provides them content knowledge, such as market intelligence and a broader understanding of their customer’s business.

Working closely with colleagues also enhances their skills in areas such as problem-solving, leadership, and effective communication. The more that people grow and learn through collaboration, the more they can shape the direction of their work and careers, and the more they can help others around them and gain status for their enhanced knowledge. When people see those outcomes, they put more brainpower and emotional energy into their roles. The more engaged they are, the more they contribute to an organizational culture that encourages curiosity and genuine interest in other points of view. And that, in turn, promotes diversity and inclusion, which we turn to shortly.

Parallel developments in the human-resource field reinforce this kind of progress. For example, leaders no longer need to wait for the annual company-wide survey to understand where engagement is strong and where it isn’t. More and more companies have been moving toward team-level “pulse” surveys—that is, short, frequent check-ins that are usually conducted online. Technology now allows leaders to understand organizational sentiment near real time through the analysis of communications within the company. In particular, chat tools like Microsoft Teams and Slack can be analyzed to understand how team members are feeling, and pick up early warning signs of issues, while still maintaining individual anonymity.

Enhanced Diversity and Inclusion through Collaboration

Uncertain and complex problems are best tackled by a diverse team of complementary talents, organized and led in a way that puts that diversity to effective use. But simply putting diverse people on teams probably won’t help you solve tough problems, and it certainly won’t help a company reach its DEI goals. Teams need to engage in truly smarter collaboration, which means encouraging everyone to contribute as their authentic selves—that is, to draw on their strengths—and creating an environment in which their contributions can be heard, valued, and integrated into the team’s work.

For example, by taking time at the launch of a project to discuss the task goals and how each person’s life experiences and aspirations can best contribute—like the BeautyCo teams learned to do—the team gets the most from its resources. This level of inclusivity helps people achieve their individual professional outcomes like promotions and raises, because they are deeply involved, not token representatives, in the company’s core work. This involvement allows people to learn, get coached, find sponsors, take on stretch assignments, and ultimately progress in their careers. These outcomes create a positive cycle: diverse people who get ahead stick around longer and serve as role models and mentors, bringing more diverse people into the company and up the ranks.

Unfortunately, though, this kind of inclusion has gotten harder with the growth of remote work. The virtual workplace inevitably slows and complicates the development of interpersonal relationships, which even in a normal work environment can be difficult to develop among people with differing backgrounds. Trust, including both interpersonal trust and competence trust, is an essential element of effective collaboration, but it becomes far more difficult to develop and maintain when the social interactions of the traditional work environment are gone.¹⁰

The combination of remote work and the associated erosion of social interactions hits marginalized groups hard, and pushes those groups further toward the periphery. Research on cognitive bias shows that certain kinds of people who are “out of sight” are also likely to be “out of mind”: women, minorities, and others who are on the outer edges of the team are less likely to have access to information or resources and therefore have less influence on the team leader.¹¹

These challenges increase further during periods of high stress, because anxious people tend to turn to others who are most like them in terms of age, gender, ethnicity, socioeconomic status, and personal beliefs. Researchers call this phenomenon homophily, and it is manifested in ways that can be subtle and not so subtle.¹² When a problem bubbles up, who hears about it first, and how? Is there an informal inner circle, and if so, how did it emerge and how representative is it? If there’s a fire to be put out, who gets involved only after the fact, and why?

Smarter collaboration doesn’t eliminate homophily, which seems to be hardwired into the human brain. But by explicitly underscoring the team’s true complementarity of talents, smarter collaboration can make it less likely that a person or group will become marginalized, and this has very positive implications for DEI initiatives. Some companies are starting to use technology to analyze collaboration almost in real time, flagging emerging problems of exclusion before they escalate. For example, analyzing patterns of email or contributions to a digital platform like Microsoft Teams can alert a project manager if nearly all the team conversations become concentrated within a small subset of a team’s members.

Truly inclusive collaboration isn’t easy. Done badly, collaboration can backfire on DEI efforts. We cover these potential issues in Chapter 10. Done wisely—with a strategic and holistic view of actions across the organization—collaboration can advance the DEI cause.

Smarter Collaboration and Well-Being

When we go into a company and start talking about smarter collaboration, we sometimes get challenged by a skeptic in the group who tells us that the workplace isn’t an appropriate setting for touchy-feely stuff. Instead, the skeptic asserts, work should be about delivering hard, quantifiable organizational and commercial benefits.

We have two responses. First, that’s exactly what smarter collaboration is all about: delivering quantifiable benefits to the company and to the people who work there. Second, science tells us that there are real advantages to the mind—and the body—when we work with close colleagues, especially on tasks that we’re all invested in.¹³ The result can be a healthier workforce, which benefits the organization in ways ranging from lower absenteeism and health-care costs to longer tenure and higher productivity.¹⁴

How does this work? The sense of connectedness that grows out of smarter collaboration directly improves personal well-being, in part by lowering the risk of loneliness. Many of the thousands of people who participated in our survey research reported that the most important benefit they derive from working on team-based projects is the opportunity to meet new colleagues and to deepen existing relationships.

Conversely, being left out of collaboration can be both painful and harmful. Brain scans show that when people feel left out—as minimal as being excluded during an online game with “peers” who happen to be robots—their brains react in the same way as when they are stimulated by physical pain.¹⁵ Neuroscientists have also shown that social isolation detrimentally affects the way our brains function, and a growing body of research shows the serious health risks of social isolation and loneliness.¹⁶ In one study, for example, participants were voluntarily exposed to a cold virus. Those who were socially isolated were 45 percent more likely to become ill.¹⁷ Longer term, abundant research shows that loneliness has serious consequences for our bodies, including increasing cortisol and inflammation (which lowers immune response), heart disease, and even cancer.¹⁸

Overall, collaboration helps promote mental and physical well-being and is an essential avenue to a healthy workplace.

Collaboration Makes Your Experienced Hires Successful

Have you ever hired someone with a brilliant track record and a sterling résumé, only to find that they sputter along, fail to deliver the goods—whether the hoped-for goods are faster innovation, increased sales, or otherwise—and leave your company long before they even start making money for you? If so, you’re not alone.

Research around the globe and across industries shows that nearly half of all new hires fail within eighteen months.¹⁹ Companies are generally quite poor at integrating senior hires in a way that makes them more productive. For example, the Wharton School’s Matthew Bidwell—in a study of lateral hiring aptly named “Paying More to Get Less”—looked at six years of personnel data from the US investment-banking branch of a financial services corporation. He found that lateral hires were far more likely than internal workers to leave their job, either because they quit or because they were fired.²⁰

Dismal as this sounds, you probably can’t avoid external hires. Developing and promoting internal talent is essential, but probably insufficient to meet your talent needs in an incredibly fast-moving and competitive market. McKinsey used to have a strict policy of developing its own talent, but that has changed significantly. When it needed to move quickly into the hot area of data and analytics, for example, it chose not to wait a decade to develop the talent internally and instead started aggressively hiring from outside.

By now, you won’t be surprised to hear that our prescription is smarter collaboration—and that this prescription is backed up by research. Our studies, and those of other scholars, show that if experienced hires aren’t engaged in serious collaboration in the first six months or so, they have a radically increased risk of leaving the company soon afterward.²¹ Even harder, the collaboration that needs to happen in that short time must be reciprocal. First, new joiners need to get pulled into the organization’s core work. Those in the department they enter, as well as other stakeholders, need to understand the new joiner’s role and capabilities so that they can proactively draw them into important projects. Second, new hires need to reach out and initiate mission-critical relationships. Then the circle needs to close: tenured employees need to be responsive when the new joiner asks for help on their work. This sounds obvious, but we’ve seen many examples where new joiners were perceived as competitors and deliberately boxed out.

If either of those two directions of collaboration (that is, both incumbents and newbies initiating the joint work) is missing, then experienced hires are at a much higher risk of leaving; if neither happens, they’re almost certain to be gone by their two-year anniversary.

For example, a talented social media executive was hired by a consumer goods company looking to build out its data and analytics capabilities. To give her freedom and agility, her projects were set up independent of the core business and separate from her peers in functions like product development, brand management, and so on. “People liked the idea of data and analytics,” she said, “but nobody actually wanted to engage. I was stranded on an island.” Frustrated and struggling to gain traction, within fifteen months she left to join a competitor. Despite the importance of her initiatives, after her departure those projects were shut down, and the company fell behind its peers.

And it’s important to look at the all-in cost of failures in this realm. Research in labor economics suggests that the cost of each failed external hire is more than double the individual’s annual compensation.²² Many experts suggest that the total cost—including, for example, the opportunity costs of people’s time spent interviewing and onboarding the short-lived new joiner—is even higher.²³ Beyond the financial costs, moreover, losing external hires creates internal disruption, slows the pace of execution, and risks undermining client confidence.

But let’s switch back to the positive side of the ledger. Beyond mere retention, collaboration helps experienced hires generate value sooner. It typically takes three to five years for new joiners to reach the level of performance achieved at their old organization, let alone achieve greatness.²⁴ In research across companies including financial services, software, consumer products, retail, manufacturing, and life sciences, Babson College professor Rob Cross found that new joiners need to gain legitimacy and visibility with their peers before their ideas are even considered.²⁵ Collaboration—direct work with other people on increasingly important, central work of the company—is the way to build this credibility and two-way trust, which is the surest way for the organization to capitalize on newcomers’ fresh ideas and expertise.

Here is another area where technology plays a role. The near-ubiquitous use of communication software allows managers to easily analyze how widely engaged their new hires are—within specific projects and across groups. One health-care company, for example, tracks a whole range of digital interaction patterns across its employees: how often they post requests for help and what proportion of their requests get answered, how often they share knowledge or respond to others’ posts or chats, and so on. By zeroing in on groups of new joiners (rather than specific individuals), they can identify parts of their business where entrants are not sufficiently integrated and alert managers to take action.

In Chapter 5, we also expand on the ways that smarter collaboration enhances the success of even bigger groups of newcomers: people you bring into an organization through a merger or acquisition. Getting employees from the two legacy companies collaborating on the core work sooner is a powerful way not only to achieve the outcomes that drove the merger rationale in the first place but also to create a more compelling, unified culture that helps to retain people in the longer term.

Building a Stronger Alumni Network through Collaboration

Your firm can’t and won’t retain everybody you hire. Maybe that shouldn’t even be your goal. Most cutting-edge companies today embrace the notion of a fluid career path. Rather than viewing departed employees as traitors, these organizations cultivate ongoing relationships with “alumni” who leave to broaden their experiences and develop new skills. While these alumni are elsewhere, they may provide a rich pool of talent to collaborate with. And if these so-called boomerangs return from time on sabbatical, with a startup or even at a competitor, they are likely to bring back fresh ideas for innovation, deep knowledge of how other companies (including customers) operate, new sources of external partnerships, and a renewed energy. But for this to work, organizations need to ensure their people are engaged, both while they are with you and while they are away. Collaboration is the way to achieve both.

Done right, you can also save huge amounts on hiring. As Andrea Legnani, Citi’s global head of alumni relations, recently told us, “Companies can save between $50,000 and $75,000 on each returning alumnus, compared to other external hires. At last count, returners at Citi numbered about twenty thousand—that is, 10 percent of our workforce.” In other words, rehiring alumni saved Citi at least a billion dollars.

And at Citi, according to Legnani, boomerang employees onboard faster: “I like to say that they already know where the bathroom is, which is my shorthand for the fact that they know the system, they know the people, and they already have a network.” For these and other reasons, on average Citi’s boomerangs tend to stay longer, are happier, and perform better than their peers who were hired from the open market.²⁶

Are you wondering if this alumni strategy only works for knowledge-based companies? The answer is no. Consider Sodexo, the global food services and facilities management company. Its US alumni network has nearly nine thousand management-level employees. The program’s strength lies not only in the company’s ability to maintain ties with former colleagues—who often refer other qualified candidates for jobs—but in convincing them to return. About 20 percent of the external hires Sodexo makes each year are former employees. “It is one of the largest candidate pools that we pull from with our external hiring,” says Lisa Inserra, Sodexo’s director of talent acquisition.

But people who’ve left your organization become loyal, beneficial alumni only if you get them fully contributing and networked while you employ them. And that’s where smarter collaboration comes in. Decades of psychological and sociological research show that the higher the number of formal or informal connections that exist among individuals and their colleagues, the more committed those individuals will be to both their job and their employer. Smarter collaboration fosters working relationships that make employees self-identify with the organization—so that they’ll say, for example, “We do it this way,” rather than, “The company does it this way.” Simply stated, the person who feels deeply and meaningfully tied into the organization is more likely to behave as a “friend of the firm” after he or she has left. In that spirit, Deloitte calls its alumni “colleagues for life.”

The companies with the best track records in this area start to build a network affinity before they even recruit candidates. Then they work to enhance commitment among their employees and foster postemployment loyalty in a whole variety of ways. Companies like Citi, Bain, Microsoft, Google, and Coca-Cola have developed a range of diverse channels to keep collaborating with their alumni—as a gig-work labor force, customers, strategic partners, and members of alumni advisory boards.

Even if your alumni don’t return, those strong ties imply that in subsequent years, they can help the organization in myriad ways: as brand boosters, sales advocates, market informants, and sources of recruitment.

No, these benefits are not the result of collaboration alone. But they are definitely among the downstream benefits of it, for both the company and the individuals involved.

Making the Link

Simply bringing great talent in the door isn’t enough—or close to it.

Creating a deep-seated sense of engagement is critically important for the retention of that talent. But as the numbers show, engagement is an elusive goal for most companies. People want to do their best work—they’re eager to do their best work—but in all too many cases they aren’t allowed or encouraged to do so. They want to work on an effective team, and at the same time, they want to be recognized for their individual contributions. They want to learn, and grow, and become even more valuable contributors. They want to be healthy and satisfied in the workplace—and of course, their company wants the same thing.

Smarter collaboration can help on all these fronts. It can also make your company’s DEI initiatives more likely to succeed, and increase your chances of tapping into a satisfied alumni network. But all these benefits accrue only if your company purposefully links collaboration to its strategy: the subject of our next chapter.