Cisco recently announced that it planed to trim its elaborate management structure of boards and councils—its collaboration machine. CEO John Chambers spoke of Cisco’s need to “simplify the way we execute our strategy,” and other commentators have criticized the company’s bureaucratic structure.

Cisco’s decision underscores just how hard it is to get collaboration right. Companies usually fall into one of two traps:

·         UNDER-COLLABORATION. Companies that operate as a collection of silos commit the cardinal sin of underperforming relative to the resources they’ve invested. Money is left on the table because managers are unwilling or unable to cross-sell their products and services, cross-pollinate resources to create new products or share best practices to improve efficiency. Sony, for example, was unable to come up with its version of iTunes a few years ago because divisions within the company competed with one another.

·         OVER-COLLABORATION. This problem occurs when people collaborate on the wrong things or when collaboration efforts get bogged down in endless discussions and consensus decision-making in which no one is clearly accountable. A few years ago, efforts at the oil giant BP to promote collaboration across its many operating businesses were so successful that employees actually over-collaborated. According to former chief information officer, John Leggate: “People always had a good reason for meetings. You’re sharing best practices. You’re having good conversations with like-minded people. But increasingly, we found that people were flying around the world and simply sharing ideas without always having a strong focus on the bottom line.” Perhaps Cisco over-collaborated and thus needed to pull back? Cisco managers will no doubt let us know in due course.

So how do firms find the right balance? It’s all about “disciplined collaboration, as described in Morton’s book Collaboration. This requires managers to rigorously assess the business case for any collaboration effort, spot and tear down behavioral barriers to teamwork, align incentives and promote accountability.

Leaders play a crucial role in getting this right. They not only need to orchestrate the conditions for employees to collaborate on the right things, but they also need to show a strong hand in guiding collaboration efforts.

We can only hope that Cisco knows how to get collaboration right in the future.

--Morten T. Hansen is a management professor at the University of California, Berkeley, School of Information, and at INSEAD. He is the author of Collaboration: How Leaders Avoid the Traps, Create Unity, and Reap Big Results. Herminia Ibarra is a professor of organizational behavior and the Cora Chaired Professor of Leadership and Learning at INSEAD. She is the author of Working Identity: Unconventional Strategies for Reinventing Your Career.