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Knowledge workers fuel innovation and growth, yet the nature of knowledge work remains poorly understood—as do the ways to improve its effectiveness. The heart of what knowledge workers do on the job is collaborate, which in the broadest terms means they interact to solve problems, serve customers, engage with partners, and nurture new ideas. Technology and workflow processes support knowledge worker success and are increasingly sources of comparative differentiation. Those able to use new technologies to reshape how they work are finding significant productivity gains. This article shares our research on how technology can improve the quality and output of knowledge workers.

Knowledge workers are growing in numbers. In some sectors of the economy, such as healthcare providers and education, they account for 75 percent of the workforce; in the United States, their wages total 18 percent of GDP. The nature of collaborative work ranges from high levels of abstract thinking on the part of scientists to building and maintaining professional contacts and information networks to more ground-level problem solving. Think of a buyer for a retail chain whose distributed web of contacts span resourceful professionals as fashion designers in Tokyo to experts on manufacturing in Brazil.

For companies, knowledge workers are expensive assets — earning a wage premium that ranges from 55 percent to 75 percent over the pay of workers who perform more basic production and transaction tasks. Yet there are wide variations in the performance of knowledge workers, as well as in their access to technologies that could improve it. Our research shows that the performance gap between top and bottom companies in collaboration-intense sectors is nine times that of production- or transaction-intense sectors. And that underscores what remains a significant challenge for corporations and national economics alike: how to improve the productivity of this prized and growing corps of workers.

Unfortunately, the productivity measures for collaboration workers are fuzzy at best. For production workers, productivity is readily measured in terms of units of output; for transaction workers, in operations per hour. But for knowledge workers, what might be thought of as collaboration productivity depends on the quality and quantity of interactions occurring. And it’s from these lessthan- perfectly-understood interactions that companies and national economies derive important benefits. Consider the collaborative creative work needed to win an advertising campaign or the high levels of service needed to satisfy public citizens. Or, in a similar vein, the interplay between a company and its customers or partners that results in an innovative product.

Raising the quality of these interactions is largely uncharted territory. Taking a systematic view, however, helps bring some of the key issues into focus. Our research suggests that improvements depend upon getting a better fix on who actually is doing the collaborating within companies, as well as understanding the details of how that interactive work is done. Just as important is deciding how to support interactions with technology — in particular, Web 2.0 tools such as social networks, wikis, and video. There is potential for sizeable gains from even modest improvements. Our survey research shows that at least 20 percent and as much as 50 percent of collaborative activity results in wasted effort. And the sources of this waste—including poorly planned meetings, unproductive travel time, and the rising tide of redundant e-mail communications, just to name a few—are many and growing in knowledge-intense industries.

There are some companies that already are tackling aspects of this collaboration–technology nexus. A wellknown multinational company selling networking and communications technology, for example, was eager to improve interactions between its technology specialist sales teams and enterprise customers. Frequent travel and stepped-up job requirements had resulted in overstretched teams whose effectiveness had become diminished. The company tackled the problem by mandating the use of its own video technologies, as well as other collaboration tools to reach more customers and business partners by shifting a large portion of inperson meetings to virtual interactions. Policy and governance changes ensured that technology use became part of daily workflows and not an added task. Internal surveys showed that 78 percent of the targeted employees reported increased productivity and improved lifestyles without diminishing customer or partner satisfaction.

But most companies are only beginning to take these paths. That’s because, in many respects, raising the collaboration game differs from traditional ways of boosting productivity. In production and transaction work, technology use is often part of a broader campaign to reduce head counts and costs—steps that are familiar to most managers. In the collaboration setting, technology is used differently. It multiplies interactions and extends the reach of knowledge workers. That allows for the speedier product development found at Proctor & Gamble and improved partner and customer intimacy at Cisco. In general, this is new terrain for most managers.

Adapted from the article written by James Manyika, Kara Sprague and Lareina Yee, published in McKinsey Quarterly, 27 October 2009. http://whatmatters.mckinseydigital.com/internet/using-technology-toimprove- workforce-collaboration