Organizational models for collaboration in the new economy.

Technology Drivers and Collaboration

The new economy is a knowledge-based economy without borders, where the race is between companies and locales over how to learn faster and organize more flexibly to take advantage of technology-enabled market opportunities (Kelly, 1998; Best, 2001). Within this new economy, the World Wide Web is ubiquitous. It has transformed geographically separated locales into a "global village" for information sharing, social interaction, and economic exchange. Technology, in particular, ever-expanding digital bandwidth, has resulted in the creation of new-economy forms of intangible, knowledge-based capital, the value of which now exceeds that of the physical capital that once dominated old economies (Castells, 2000; Tapscott, et al., 2000). Whereas old-economy business models emphasized organizationally defined tasks and roles, new-economy business models value self-organizing teams, companies, and industry-based clusters or communities of networked firms and institutions to meet the changing requirements of innovative projects, the boundaries of which transcend the rigidities of old-economy hierarchies. The perspective taken in this article asserts that the careers and work experiences of new-economy workers are interdependent with their involvement in Web-enabled teams, companies, and social and industry communities through which project work is accomplished (see Exhibit 1).

We evidenced a shift from immobile-wired infrastructures to mobile, miniature, and wireless modes of communication, computing, and transacting. Customers demand "any time, any place" solutions of their problems. Such demands have led companies to invest in creating online business processes and services as either substitutes or supplements to brick-and-mortar service offerings (Gulati & Garino, 2000). Moreover, by compressing the time cycles for satisfying customer requirements, companies now face unprecedented organizational challenges in adapting their human resources and organizational practices to the fast-moving business environment. Rigid organizational routines will destroy economic value when market and technological requirements advance (Leonard-Barton, 1995).

Innovative enterprises that employ technology to facilitate independent, project-based collaborations are the hallmark of the new economy (Quinn, et al., 1997). Such collaborations can range from arms-length information sharing to highly interdependent joint cooperation in the creation of new products and services (Best, 2001). Information technology now makes possible a variety of collaborative workspaces for project teams, companies, and industry clusters or networks. In the sections to follow, we examine each of these modes of collaboration and assess the opportunities and challenges for HR managers and their new economy knowledge workers.

Technology, Teams, and Trust

The new economy's performance demands and its technology tools are affecting the way in which project teams are organized. First, in the old economy, companies facing predictably long-term and stable demands for products and services could create work teams of relatively long duration. But new-economy companies face much shorter demand cycles and less-predictable customer requirements. As a result, new-economy companies must be able to create and dissolve teams rapidly in response to rapidly changing requirements. Team members must be prepared to change their team affiliations frequently and effectively and efficiently to collaborate with new team members on new projects. Such short-lived teams challenge more orthodox notions of building group cohesion and commitment over time (Mullen & Copper, 1994).

Second, old-economy companies were typically staffed through stable, long-standing organizational units, so that marketing departments had marketing teams, engineering departments had engineering teams, and project boundaries largely reflected internal organizational arrangements. New-economy companies face complex demands for knowledge creation and knowledge sharing that span traditional organizational boundaries (Sapsed, et al., 2002). Project teams of the new economy can arise anywhere within the company, and project members can be drawn from many separate organizational units and business functions. These inter-department teams are necessary in order to provide the needed depth and breadth of skill and experience for meeting complex business requirements. Indeed, a primary contribution of these team members to project performance may be as gatekeepers of external knowledge sources (Keller, 2001).

Third, old-economy companies typically created teams by co-locating members for face-to-face project work. New-economy companies often must confront project tasks where the requisite skills and expertise are geographically dispersed within far-flung organizational units. Thus, new-economy project teams are often virtual teams whose members collaborate at a distance from each other using groupware software and other virtual collaborative tools. These include shared databases, email, organization intranets, computer conferencing software, and video-mediated communications systems, such as video telephony or video conferencing (Symon, 2000).

Fourth, old-economy companies typically staffed their project teams exclusively with their full-time employees and thus maintained uniform control over team member performance evaluation and compensation arrangements. New-economy companies frequently need to create project teams whose membership includes representatives from supplier companies, customer organizations, and independent contracting third parties. As a result, the project team spans both organizational and physical boundaries. Such inter-firm collaborative teams raise important challenges in aligning disparate performance incentives, work processes, and project priorities (Tapscott, et al., 2000).

Fifth, old-economy companies effectively accomplished their project work through autonomous and independent project teams, which periodically needed to communicate and coordinate their project work with other project teams. This was often accomplished by meetings of project team leaders and supported by the exchange of project progress reports. By contrast, today's new-economy project work requires up-to-the minute ("real time") coordination and collaboration among widely scattered members of interdependent but physically separate project teams. Recent developments in real time collaborative software now allow separate project teams and their members to link a spread sheet cell to any data source, input that source, and make the resulting findings instantly available to everyone connected to the real time, event-driven database (Economist, 2002).

Finally, electronic communications need to complement rather than replace face-to-face communications. Evidence is now accumulating that electronic communications may lack the social cues needed to foster a deeply shared personal understanding of work-relevant values and attitudes among team members (Garton & Wellman, 1995; Nohria & Eccles, 1992). A team collaborating to develop a new product or service may require rich, intense forms of face-to-face communications at the beginning of a project in order to lay the groundwork for subsequent virtual project work (Davenport, 1997). Moreover project teams must develop shared mental models of their task domain and the specific behaviors expected of them in working with other team members (Cooke, et al., 2000) The need for shared understanding among virtually connected team members stretches traditional ideas not only about team performance but also about organizational culture and employee participation. New collaborative software is by itself far from enough.

In sum, the challenges to team-based collaboration are not only technological, but also managerial. Effective collaboration generally requires a greater degree of trust among project participants when their work is computer-mediated, insofar as workers cannot directly observe the actions of their team members and develop team cohesion through normal team-building processes of face-to-face interaction (Zuboff, 1982). The problem is exacerbated within project teams whose members have not previously worked together, insofar as trust must be created swiftly at the onset of the project (Meyerson, et al., 1996). Without trust between team members and their project supervisors, companies and their HR managers are constrained to implement potentially intrusive and time-consuming work monitoring and behavioral control practices that may reduce the self-organizing flexibility and speed of response of project teams (Soderlund, 2000). Moreover, the larger organization structures within which project work occurs is a stra tegic HR challenge, to which we now turn.

Organizational Models for Project Work