Collaboration between Deloitte & Deloitte Digital

Collaboration between Deloitte & Deloitte Digital

Master Thesis: Msc. Business Administration Track: Entrepreneurship & Innovation By: Tjeerd van der Putten Student no: 10649018 Date: 18th of May 2016 Supervisor: Dhr. dr. Wietze van der Aa Second Supervisor: Dhr. drs. Roel van der Voort Supervisor Deloitte Digital: Dhr. Frank van de Ven

Preface

The past several months I was given the opportunity to take on a real-life issue present at professional service provider Deloitte Digital. The issue involved the topic of intra-organisational collaboration and by the use of in-house research activities and diving into academic literature this final document was composed. Looking back, it has been quite a challenging journey. Without the help I have gotten from several people, I would not have been able to create this master thesis. Therefore, I would like to thank Mark and Jan-Jelle, my dear friends who took the time to look into my thesis together. Next, Wietze van der Aa, my thesis supervisor who, although I had some troubles along the way, always remained positive and dedicated to finish the master thesis with me. Finally, I would like to thank Frank van de Ven, my supervisor from Deloitte Digital for his valuable input, patience and humour. This document is written by me, Tjeerd van der Putten. I declare to take full responsibility for the contents of this document. I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it. The Faculty of Economic and Business is responsible solely for the supervision of completion of the work, not for the contents.

Table of content

Management summary 7 1. Introduction 9 1.1 Background 10 1.2 Problem Definition & Research Objective 13 1.3 Academic Relevance 13 1.4 Practical Relevance 13 1.5 Structure of Thesis 13 2. Literature review 15 2.1 Collaboration 15 2.1.1 Intra-Organisational Collaboration 16 2.2 Factors at Deloitte 17 2.2.1 Organisational Social Network 17 2.2.2 Knowledge Level 19 2.2.3 Competition 20 2.2.4 Design Thinking 21 2.3 Conclusion Literature Review 23 3. Conceptual Model 25 3.1 Explanation Conceptual Model 25 4. Method 29 4.1 Multiple Case Study 29 4.2 Data Collection 29 4.3 Data Analysis 30 5. Results 33 5.1 Intra-Organisational Collaboration 33 5.2 Influencing Factors 36 5.2.1 Organisational Social Network 36

5.2.2 Knowledge Level 39 5.2.3 Competition 40 5.2.4 Design Thinking 42 6. Discussion 45 6.1 Theoretical Implications 45 6.1.1 Knowledge Level 45 6.1.2 Design Thinking 46 6.1.3 Competition 47 6.1.4 Organisational Social Network 47 7. Conclusion & Implications 49 7.1 Conclusions 49 7.2 Practical Relevance & Managerial Implications 50 7.2.1 Recommendation 1 51 7.2.2 Recommendation 2 51 7.2.3 Recommendation 3 52 7.2.4 Recommendation 4 52 7.3 Limitations & Future Research 53 8. Reference List 55 Appendix 59 Appendix A – Internal Research Activities 59 Appendix B – Interview Protocol 60 Appendix C – Concepts 62

Management Summary

Collaboration is an important topic within the business environment. The topic of this master thesis is about a special form of collaboration, namely intra-organisational collaboration as applied within the company Deloitte. To be more specific, the aim of this current study is to discover which factors can enhance the collaboration between Deloitte & Deloitte Digital and which barriers can be identified. Deloitte Digital is the most recent addition to the company and established in order to provide their customers with customized digital solutions. After the lift off, Deloitte Digital witnessed that within Deloitte there is a lot of overlap in service activities. They saw other teams executing consulting services that were more related to Deloitte Digital. Moreover, Deloitte Digital was mainly launched to take on these specific activities and also possesses the required expertise. Teams outside Deloitte Digital are (partly) unaware of the added value that reside within Deloitte Digital resulting in the inability to fully seize (potential) collaborating opportunities. This research exists of a multiple, embedded case study since several different teams within the Deloitte Consulting division are researched. Due to internal research activities, a set of four influencing factors were proposed as possible barriers towards collaborations between Deloitte & Deloitte Digital, being organisational social network, knowledge level, competition and design thinking. These factors and related topics were presented during qualitative interviews with a pre-selected group of fifteen respondents. The outcome of this study showed that all four factors have a certain impact on the collaboration between Deloitte & Deloitte Digital. However, the results indicate that a difference in effect per factor is present. The factors knowledge level and design thinking are more negatively related towards intra-organisational collaboration by the respondents than organisational social network and competition. Therefore, is can be useful for Deloitte Digital to tackle the specific characteristics that are attached to the factors knowledge level and design thinking in order to foster a collaborative environment.

1. Introduction

1.1 Background

Google and Facebook are buying design driven companies (Wired, 2013). This, more or less, illustrates the importance that is being placed on the notion of design in the business environment today. According to Liedtka (2014) a rising number of companies are integrating design at a strategic level and the past five years design thinking received increased attention as a novel problem-solving methodology well suited to tackle complex business issues and simultaneously driving innovation and growth. Researchers acknowledge that design-driven innovation is becoming more and more an effective approach towards service innovation since it makes services user-driven and therefore increases the customer experience (Brown, 2009; Liedtka and Ogilvie, 2011). Moreover, multiple researches foresee better economic performance for companies who practice design thinking at the core of their business (Borja de Mozota, 2003; Dell’Era Marchesi & Verganti 2010). Design thinking is characterized by a certain ‘thought process’ coming from the world of design. It uses a set of design principles such as empathy with (end) users, rapid prototyping, and tolerance of failure in order to tackle complex issues in an orderly and iterative manner (Brown, 2009). More details will be discussed later in this master thesis.

Design Thinking places great emphasis on collaboration between multidisciplinary teams (Liedtka, 2014). Collaboration is researched in detail by many scholars around the world (Hansen, 2004; Lööf, 2009; Shrader, 2001). Hansen (2013) argues that effective collaboration within complex organizational activities is a necessary requirement for success. In addition, he stresses the need for collaboration since it has significant impact on innovation, customers and efficiency. Furthermore, with the high penetration of numerous information and communication technologies (ICT) effective collaboration is now more important than ever (Lin, 2007).

By now, everyone should be well aware about the significant changes advanced technological developments can bring. Business models are turned upside down and complete new industries arise due to the influences of new technologies and disrupting start-ups. Numerous academics and professionals have written about the necessity of companies to become more innovative (Amit, Zott & Pearson, 2012; Liedtka, 2014; Zott, Amit & Massa, 2011). Companies that try to transform accordingly often respond by applying numerous digital applications that automate processes and information, expecting this will make them viable in the digital era. However, solely delivering technology for the sake of technology is not enough to survive. In order to remain relevant, the way companies today arrive at business solutions require innovative approaches that are appealing for both clients and the end-user. Moreover,

the ability of companies to accustom to the digital needs of their customers is a prerequisite in order to be and stay successful.

Design thinking provides a holistic framework focused on developing profound empathy for customers and simultaneously creates tailored solutions that match with the need of the customer (Sarrazin & Yeon, 2015). This, eventually, can create a competitive advantage for companies. As mentioned earlier, collaboration is regarded as a significant source for competitive advantage as well. However, vast literature that combines the topics of design thinking and collaboration is lacking in current literature.

1.2 Problem Definition and Research Objective

Overall, today’s (business) environment is changing due to technological developments and so are the customers’ needs and expectations. Applying design thinking for solving complex business problems is regarded as an effective approach due to the empathic nature of its customer centricity, interdisciplinary collaboration and its ability to provide tailored solutions to a company’s stakeholders (Brown, 2009). This trend towards design thinking did not remain unnoticed for professional service provider Deloitte.

Deloitte is a powerhouse of knowledge and holds numerous capabilities in the field of e.g. audit, tax and strategy. Part of this knowledge, which focuses on providing clients with customized digital solutions, is clustered under Deloitte Digital Global since May 2012. Its goal is to help Deloitte’s clients to connect with their customers, employees and partners in the new digital environment.

In the Netherlands, Deloitte Digital is evolving daily and is showing growth in human capital since its launch in 2013. Within Deloitte Digital there are three cornerstones: Creative, Strategy and Engineering. This research is conducted in collaboration with the Creative section of Deloitte Digital.

Case: Deloitte Digital - Creative

Deloitte Digital is a newly established entity within the Deloitte family. As said, Deloitte Digital came together as a reaction to the changing market- and client needs regarding customized digital solutions. Before continuing, two important issues need to be stated. First, team Creative is a complete new addition to the (traditional) consulting family of Deloitte. Consequently, this means that new types of people with certain (design) skills are attracted to the company. Second, the way of working within Deloitte Digital Creative differs from the standard way of working within Deloitte. This will be discussed in detail later on in this master thesis.

Within Deloitte Digital and, especially within the Creative team, design is seen as the new differentiator in the digital era. Employees in the Creative team all have a background in

design or a related field. They strongly believe in working in diverse teams led by design thinking in order to create a significant impact for their clients. Deloitte Digital Creative regards design thinking now more important than ever and believes it should be the starting point of how organisations today adapt in the era of accelerated growth.

By applying design thinking Deloitte Digital tries to help clients re-imagine their business model in order to fully take advantage of the digital age. Deloitte Digital distinguishes various types of design, being: (1) system/service design; (2) product/UX design; (3) creative/visual design and; (4) functional design. The collective activity of these various types of design practices are referred to as Experience Design (Figure 1) and operate by a view core values. To start, it is essential to look holistically at the broader problem than to focus on a solution. Therefore, to capture the broader essence of the problem/opportunity Deloitte Digital believes in operating in multidisciplinary and adaptable teams who work collaboratively and co-create with clients. At the heart of this is their iterative, human-centred approach to try and understand the users at an emotional level in order to design experiences that they love instead of experiences that are nice to have. This new problem-solving methodology tries to add to Deloitte's overall purpose to “create an impact that matters”. (Deloitte, 2015) This user-centered, outside-in way of working where iterative and agile processes are common ground differs from the standard way of consulting that is characterized by the so called ‘waterfall’ style; a non-iterative top-down activity sequence (Balaji & Murugaiyjan, 2012). Clearly, within Deloitte Digital Creative design thinking is favoured above other ways of working. Deloitte Digital Creative strongly believes in this approach and benefits of working via this methodology. However, this train of thought is not (yet) integrated by other teams within Deloitte.

After the lift off, Deloitte Digital noticed that within Deloitte there is a lot of overlap in service activities. They witnessed that other teams were executing consulting services that were characteristic to Deloitte Digital. Moreover, Deloitte Digital was mainly launched to take on these specific activities and also possesses the required expertise. Right now, teams outside Deloitte Digital are (partly) unaware of the added value that reside within Deloitte Digital. This mainly concerns the added value that resides within the Creative team since this new entity is A-typical within ‘traditional’ consulting. Therefore, together they are unable to fully seize (potential) collaborating opportunities.

Since its beginning Deloitte Digital - Creative aims to provide design thinking with a broad platform in its everyday business. Not only within Deloitte Digital but also across Deloitte it tries to scatter the usefulness of the methodology and to foster collaborations. By using this ‘thought process’ it wants to tackle complex client issues ‘As One’. Deloitte lives by this ‘As One’ mentality and it refers to the total, in-house package and abilities Deloitte has to offer and by internally collaborating and connecting these capabilities, it wants to deliver the best possible solution to its clients (Deloitte, 2015). In order to optimize the collaboration between the several teams, it is essential to know exactly what other teams of Deloitte can expect from Deloitte Digital and vice versa. Therefore, the focus during this research will be on investigating the following issue: Which factors can enhance the collaboration between Deloitte & Deloitte Digital and which barriers can be identified? The project goal that can be derived from this:

Develop recommendations that enables Deloitte Digital to optimise collaborations with other departments.

It is important to mention that the main focus for this research will be on investigating the current situation at Deloitte Digital regarding collaboration with other teams inside Deloitte. This does not entail the whole company Deloitte, but focuses on teams within the discipline Deloitte Consulting. Furthermore, possibilities how to foster a more collaborative environment between Deloitte & Deloitte Digital will be researched. Since this master thesis is in assignment for team Creative, their wish was to get insight in and analyse how service design thinking is currently perceived by colleagues and how it can be integrated into the daily consulting business. To clarify, the terms ‘service design thinking’ and ‘design thinking’ will be used interchangeably but referring to the same ‘thought process’

used for solving business problems as mentioned earlier and will be discussed in more detail later in this master thesis.

1.3 Academic Relevance

Looking at the importance of design thinking within the business environment, the last decade has shown an increase in academic reports on the topic. However, the topic is still in its early stages of research. By conducting research on the topic of (service) design thinking within a large professional service provider, rich data will be obtained that can contribute to the this field of research. Especially, the interplay between design thinking and collaboration is still very limited. Therefore, this research can contribute to this field of literature. Also, by researching the topic of collaboration within a large professional service provider, this could contribute to this field of literature as well.

1.4 Practical Relevance

As mentioned before, Deloitte Digital tries to help its clients, and the customer of its clients, with complex business problems focussing on preparing them for tomorrow’s digital future. In the process of achieving this Deloitte Digital - Creative uses design thinking as a methodology to deliver new digital experiences for their customers. However, in order to establish synergy among the different teams within Deloitte it is particularly relevant for Deloitte Digital to find out more about the effectiveness of their design thinking approach in collaboration with other departments. Moreover, design thinking applied in the business environment is viewed as particularly new and innovative. Therefore, this master thesis can contribute by uncovering up to date knowledge on the topic, both for business and scholars.

1.5 Structure of thesis

This thesis has the following structure. First, the introduction provides a background section, the problem definition and research objective, the academic and practical relevance, and the structure of the thesis. A literature review on collaboration follows the introduction focussing on intra-organisational collaboration and highlights specific factors related to affecting the current collaborations between Deloitte and Deloitte Digital. After the analysis of the literature a conceptual model is presented and the methodologies used for this research are explained. The result section shows the main findings followed by the conclusions of this research. The last part discusses the significance of the outcomes and provides recommendations for Deloitte Digital.

2. Literature review

2.1 Collaboration

For companies today it is difficult to create and maintain a competitive advantage. Collaboration is seen as a differentiator to reach a competitive advantage. According to Bedwell et al. (2012) collaboration can be defined as “an evolving process whereby two or more social entities actively and reciprocally engage in joint activities aimed at achieving at least one shared goal” (p. 130).

Nowadays, collaboration is important due to three major trends: (1) increased competition in the marketplace due to globalization, (2) an increasing customer segmentation asking for customized solutions therefore, a significant integration of knowledge is needed, (3) drastic increase in rate and volume of information available to people (Beyerlein, 2003).

Numerous studies on the topic of collaboration have been conducted. Frost & Sullivan (2006) studied several business performance drivers and their outcome showed that the performance driver ‘collaboration’ has the most impact on a company's success. Miles et al. (2009) highlighted collaboration as a key capability in order to reach competitive advantage and to differentiate from competitors. Hansen (2009) studied the topic of collaboration within multinational companies (MNC’s) extensively and has found evidence that collaboration can lead to better innovation, sales and operations.

Research on the topic of collaboration is dispersed across various units of analysis and conceptualized in many forms, which makes it difficult to provide a comprehensive whole. For this master thesis, conducted within the Dutch Deloitte office, the focus will be on intra-organisational collaboration, focusing on the collaborations that are happening within one organisation (Ellinger, Daugherty and Keller, 2000). As mentioned in the introduction, Deloitte Digital is a rather new team within the Dutch Deloitte office and there is still a lot of ambiguity around this new team. Consequently, this impedes intra-organisational collaboration. When looking at the situation within Deloitte Digital, this shows similarities with research done by Hansen & Nohria (2004) and Hansen (2009) regarding intra-organisational collaboration. For that reason, it seems relevant to briefly discuss some elements of these studies. Hansen & Nohria (2004) researched in detail, which barriers to inter-unit collaboration inside an organisation exist, and how one can tackle these in order to foster a collaborative environment. Consequently, this should lead to value creation in the form as presented in their model (Figure 2) and create value. The framework they use highlights four main barriers regarding collaboration, two barriers emphasize motivational issues towards collaboration and two barriers emphasize the inability to collaborate. Behind each barrier are certain factors that

combined make up for one main barrier to collaboration. For example, the ‘Not-Invented-Here’ barrier exists of four factors why people are unwilling to collaborate. This can be due to the existing ‘norm’ that people should fix their own problem or due to the informal reward system that praises individual input over teamwork (Hansen & Nohria, 2004). Although the research and framework by Hansen & Nohria (2004) shows similarities with the current research at Deloitte, it will not play a central role in further analysis for this master thesis. The idea behind the research and framework of Hansen & Nohria (2004) is similar to this particular research as in this research partly also tries to find an answer to the question of which barriers hinder a collaborative environment between Deloitte and Deloitte Digital. However, the content of this specific master thesis research is different as will be revealed later on. To sum, collaboration is seen as a prerequisite to achieve competitive advantage. Since this master thesis is about collaboration between different teams within Deloitte, the next section focuses on the topic of intra-organisational collaboration. Furthermore, specific factors that can foster/impede this form of collaboration will be discussed. These factors came forward during research activities prior to the interviews and more information about this will be discussed in the coming section.

2.1.1 Intra-organisational collaboration

According to Ellinger et al. (2000) intra-organisational collaboration can be seen as the informal process of working together, sharing ideas, information and resources, and achieving results as a team. At the level of intra-organisational collaboration, two different approaches towards interaction are defined: (1) transaction-based interaction, characterized by teams that are regarded as independent entities simultaneously competing for company resources, and (2)

relational-based interaction, characterized by the commonalities of goals, values, commitments and collaborative behaviour (Kahn & Mentzer, 1998). For now, the focus will be on relational-based interaction.

Many factors are related in fostering a collaborative environment. The next section elaborates on the justification of the chosen factors that possibly influence the intra-organisational collaboration between Deloitte and Deloitte Digital: intra-organisational social networks, knowledge level, competition and design thinking.

2.2 Factors at Deloitte

Before elaborating on these specific factors it is essential to state the reason why exactly these factors will be discussed. The factors organisational social networks, knowledge level, competition and design thinking are an outcome of research activities conducted within Deloitte and prior to the interviews. This research existed out of multiple activities and it started with the analyses of internal documents about the start and structure of Deloitte Digital and reports of previous studies done regarding collaboration within the company. Next, a short internal survey was conducted among a selected group of employees (level manager or up) regarding (collaboration with) Deloitte Digital and its place within the company. Also, various meetings were attended and held with Deloitte & Deloitte Digital employees. From these research activities a significant amount of information was derived from the internal survey that was held among a selected group of respondents. The input from this survey led to a number of important topics and the influencing factors as presented. Further information about the internal survey can be found in Appendix A. Out of these activities the four factors organisational social network, knowledge level, competition and design thinking came forward as possible factors affecting the current intra-organisational collaboration between Deloitte and Deloitte Digital.

By conducting these internal research activities the specific factors were presented and more focus was applied to the overall research. After, literature on the different factors was researched in order to provide a better understanding of each factor and to provide an academic background on the topic. The following section discusses the four factors in more detail.

2.2.1 Organisational social networks

A much-discussed topic in several fields of literature regarding successful collaboration is the subject of organisational social networks. Hansen, Mors & Lovas (2005) describe organisational social networks as established informal relationships within an organisation. This type of social network describes the organisation as an entity where everyday life and the social relations between actors develop over time (Yeung, 2005). According to Cross, Borgatti and Parker

(2002) a strong informal social network provides significant benefits for a company. They argue that strong organisational social networks are crucial for companies who are competing on the basis of knowledge and simultaneously looking for ways to innovate. Furthermore, Hansen (2009) strongly believes that collaborative companies heavily rely on their informal social networks for getting work done.

The basis of these informal social networks can be traced back to the relational view of the firm, where relationships inside a firm are managed by a number of actors through various social encounters (Yeung, 2005). In this relational setting, Cross et al. (2002) argue that the relationships employees have established over time are a better representation of how work is handled than by formal established relationships. The value that arises out of these specific relationships is known as ‘social capital’ and is characterized by the unique fact that no firm nor individual owns it (Coleman, 1988). According to Thompson (2008) social capital is described as the value that people add to the company through their personal relationships and by knowing how, when and with whom to coordinate. These relationships can decrease the cost of the action or, moreover, the action would not have been possible in the first place without the presence of social capital (Coleman, 1988). Members of informal social networks that are able to go beyond their direct circles of contacts are seen as highly valuable individuals. According to Thompson (2008) these persons will not be limited by organisational boundaries and are able to establish ties with people who would otherwise not be connected. Ibarra & Hunter (2007) confirm this notion and argue that leading members of an organisation need to look beyond function and/or business unit. They do, however, mention that more networking per se does not guarantee better collaboration and that a strategic business advantage should always be the leading outcome.

In order to foster effective networking, Hansen (2009) provides six networking guidelines: (1) build outward, not inward; it is essential to build connections to other parts of the company instead of sticking to your own; (2) build diversity, not size; it is essential to include overall diversity into your network; (3) build weak ties, not strong ones; weak ties require less attention and provide more opportunities since one can control a larger amount; (4) use bridges, not familiar faces; encounter weak ties who have operated in other parts of the company and use them as connection; (5) make use of reciprocity; make sure the connection is mutually beneficial; (6) in case of complex knowledge, make use of strong ties.

Overall, it is evident that organisational social networks contribute to collaboration. The value derives from the resulting social capital between individuals. However, organisational social networking needs clear guidelines in order to be effective and foster optimal exchange of knowledge. Knowledge level will be discussed next as a factor that can influence intra-organisational collaboration.

2.2.2 Knowledge level

Companies today are characterized by its knowledge intensive business services. Its ability to disperse this knowledge effectively within the organisation to ensure a high level of knowledged employees is important to stay ahead of competition. Knowledge is described as “information that changes something or somebody either by becoming grounds for action, or by making an individual or an institution capable of different and more effective action” (Drucker, 1990, p.242). Lin (2007) describes that the exchange of knowledge happens on two levels: the individual and the organisational level. Focusing on individual employees, it entails talking to colleagues in order to help them get something done more efficient, whereas for an organisation it is about capturing, organizing, reusing and transferring experienced-based knowledge origin within the company and making it available to others in the business (Lin, 2007). Obviously, the part of ‘making it available to others’ is important, especially, when introducing new significant information to the company as a whole.

A study done by Tsai (2002) highlights that firm-specific knowledge can create significant competitive advantage due to the fact that this knowledge is hard to duplicate. Bock et al. (2005) confirms this by mentioning that company specific knowledge is the basis for its competitive advantage and simultaneously demonstrates the true value of a company. Calantone et al. (2002) emphasize the essence of knowledge exchange due to its ability to enhance innovation performance and reduce redundant learning efforts.

However, making company knowledge available is regarded as a difficult process and various factors that can influence this are mentioned in the literature. First, individual factors related to experiences, values, motivation and beliefs could play a role (Lee & Choi, 2003). According to Wasko & Faraj (2005) a person's intrinsic motivation enables the willingness to exchange knowledge when it is expected that this effort will be worth it and is related to personal benefits. Second, according to Connelly & Kelloway (2003) organisational factors can be of influence as well. Several studies have been conducted that connect factors as reward systems, open leadership climate and top management support to knowledge exchange (Bartol & Srivastava, 2002; Taylor & Wright, 2004; MacNeil 2004). Finally, the factor of technology, information and communication technology (ICT) to be more specific is mentioned to be of influence as well. According to Huysman & Wulf (2006) ICT ensures quick search, access and retrieval of information and simultaneously foster communication and collaboration among employees.

Hansen, Mors & Lovas (2005) elaborate on the relation between several levels of an organisational social network and the different phases of the knowledge exchange process. They distinguish the following levels of a social network: (1) within-team network, (2)

intersubsidiary network, (3) transfer network and distinguish between the phases (1) deciding to seek knowledge, (2) searching for knowledge and, (3) transferring knowledge. Their findings point out that these phases regarding knowledge are to a large extent affected by an actor’s different subsets of social networks in an organization. Consequently, this can lead to increased search and transfer cost when knowledge exchange occurs outside an employee's own team. Hansen et al. (2005) highlight that the degree of competition, relation strength and network size can affect this process significantly.

To sum, it seems that the knowledge level of employees regarding company specific knowledge contributes in fostering effective collaboration. However, as pointed out by Hansen et al. (2005) the role of intra-organisational competition plays a significant role in establishing a collaborative environment. This factor was also highlighted as an outcome during the internal research activities. Therefore, the next section will elaborate on the factor of competition in more detail.

2.2.3 Competition

Birkinshaw & Lingblad (2001) were one of the first to touch upon the topic of intra-organisational competition and argue that this type of competition occurs in almost every organisation. According to Becker-Ritterspach and Dorrenbacher (2009) intra-firm competition in multinational companies is becoming an important topic for the management level. This importance stems from the increasing amount of mergers and acquisitions as a manner for companies to establish growth (Wortmann, 2008).

Birkinshaw & Lingblad (2001) describe intra-organisational competition as the duplication or overlap of activities within the boundaries of the organisation. Generally, this type of competition is often related with the existence of a company's internal market dynamics where competition for the allocation of financial, human and physical resources exists (Luo, 2005). However, Birkinshaw & Lingblad (2001) emphasize that their focus is on the competition between resources, which can have both positive and negative consequences. They argue that managers usually see intra-organisational competition as something negative, relating it to the lack of control and consequently a waste of resources. Furthermore, according to Baruch & Lin (2012) competition can damage the perception of team trustworthiness, eventually impeding effective collaboration.

However, companies can also benefit from intra-organisational competition since the speed to market new products is increased, more strategic options arise as well as an increased market segment coverage (Birkinshaw & Lingblad, 2005; Kalnis, 2004; Sorensen, 2000). Furthermore, companies can reap benefits due to the coexistence of cooperation and competition, also known as ‘coopetition’ (Luo, Slotegraaf & Pan, 2006; Ritala, 2012). For

example, Luo et al. (2006) argue that coopetition has positive impact on both an organisation’s customer and financial performance. However, Luo (2005) places emphasis on the necessity of a number of organisational features needed in order to facilitate coopetition. He argues that e.g. intranet system, reward system and knowledge systems represent essential requirements within a company’s infrastructure that can affect the outcome of coopetition. In short, intra-organisational competition is inevitable within the business environment. Generally, it is seen as something negative but studies reveal it can be beneficial for companies and therefore, critical to be handled seriously by the management. Furthermore, the previous part highlighted several factors that are of influence towards intra-organisational collaboration. The next section will go into detail about the topic of design thinking.

2.2.4 Design thinking

Design thinking refers to a certain problem-solving methodology that uses a design-driven approach towards (service) innovation, nowadays frequently used by an increasing number of companies (Brown, 2009). This thought process should not be confused with product/service design, since this relates to the actual development of a product or service.

Attributes of design thinking

According to Brown (2009) design thinking uses three general phases: (1) Inspiration: a problem or opportunity is carefully investigated; (2) Ideation: generating and testing of ideas and prototypes and; (3) Implementation: the actual instalment of the new innovation. Furthermore, Brown (2009) highlights that design thinking functions within a framework of three intersecting constraints: (1) Feasibility is about the question what can be done; (2) Viability concerns what you can do sustainable within a business and; (3) Desirability focuses on what people want or will come to want.

This approach towards design thinking is acknowledged by Liedtka (2014) and she additionally elaborates on three significant elements regarding today’s view of design thinking that previously were not prominent mentioned in the literature by (design) theorists: co-creation, empathy, and visualization & prototyping. Firstly, co-creation concentrates on the matter of ‘who’ should participate in the design thinking process and she highlights the shift in people involved; from solely (design) experts towards the active involvement of different stakeholders that are (potentially) affected by the innovation. Secondly, the role of empathy, so far, has not been included by earlier theorists in design thinking. However, in today’s view human-centricity is regarded as a core value throughout the entire design thinking process. In order to get to the core of a customer’s problem one needs to be able to connect on an emotional level. Finally, the use of prototyping is inseparable with the current view of design thinking in the business environment. Although, this element is already used and described extensively in multiple fields of research, within design thinking it primarily functions as a real world experimentation and learning tool (Liedtka, 2014).

Nowadays, design thinking is regarded as a certain ‘mindset’ towards solving (business) problems. Therefore, the description used by Texeira et al. (2012) comprehensively captures this ‘new’ methodology since they describe design thinking as an approach towards the innovation of a (new) service co-created between all stakeholders involved that is both systematic and user-centered in nature. In addition, this approach is supported by a set of tools that enables to look holistically at business problems and can unfold deep understanding of customer experiences in order to provide the best service offerings possible.

What differentiates a designer?

The previous section highlighted several views and definitions on the concept on design thinking existing in current literature. To understand the popularity of design thinking is to have a clear view on what differentiates designers from other roles in a company. Designers in multi-disciplinary teams differentiate themselves in three specific ways, by: • Adopting a user-centered perspective • Adopting a holistic, outside-in orientation to problems • Imagining the ‘intended’ system Adopting a user-centered perspective Regardless of the situation or issue, a key characteristic of what discerns a designer from other roles is its continuous reasoning from the perspective of the user (Stompff, 2012). It is in a designer's’ nature to relate every step of the process in creating or recreating a (new) service or product to the eventual impact for the user and the overall user experience. In most cases, the

primary focus is on direct user related issues such as the look and feel, usability and the user interface. But, the designer also touches upon less obvious issues that require deep user insights (Stompff, 2012). Adopting a holistic, outside-in orientation to problems In general, there are two distinctive ways in encountering an issue or problem. First, one can encounter an issue from a rationalistic/scientific stance aiming to zoom-in on the issue at hand, break this up in smaller elements and try to solve them one by one (Saunders et al. 2012). Second, there is the holistic, design attitude towards problems that focusses on the broader issue at hand instead of an in-depth understanding of the specific issue. Moreover, what discerns a designer in his way of working is that they explore multiple ideas for solving a problem instead of solely exploring the problem (Stompff, 2012).

Imagining the ‘intended’ system

A designer discerns himself also due to his skills to translate certain decisions or actions, and the consequences that are inherent to these actions, for the ‘intended’ system and be able to compare this to the current, ‘as is’ situation. Moreover, the ‘intended’ system enables cross-disciplinary teams to better interact and discuss possible solutions for the end-user (Stompff, 2012).

To sum, several perspectives towards design thinking exists today. Although, the topic has received much attention an undisputable and commonly accepted definition is still lacking. However, it is commonly accepted that design thinking represents a new way of thinking applicable in the business environment. Furthermore, it is clear that a design approach differs from other approaches and it is regarded highly effective in solving complex business issues. However, using design thinking in the business environment does not come easy and to accustom properly takes a considerable amount of time.

2.3 Conclusion literature review

When reviewing the literature, a few conclusions can be drawn. First, it seems that, in general, collaboration is a prerequisite in order to obtain a sustainable, competitive advantage (Sullivan & Frost, 2006; Hansen, 2009). Second, a specific form of collaboration, intra-organisational collaboration, can be influenced by various factors as explained by Hansen & Nohria (2004). Third, as a result of internal research activities as explained in Appendix A four factors were proposed that potentially affect current collaborations between Deloitte & Deloitte Digital: organisational social networks, knowledge level, competition and design thinking. Next, an

academic background on each factor is provided and it is argued that all factors can have a positive/negative effect on collaborations within a company. Consequently, the next chapter will present the conceptual framework followed by how this research aims to enrich the understandings regarding intra-organisational collaborations between Deloitte & Deloitte Digital.

3. Conceptual Model

3.1 Explanation of the conceptual model

The research activities together with the literature review as discussed in the previous chapter are utilized in order to create the conceptual model. The concept of (intra-organisational) collaboration is described in detail and an academic background on the factors organisational social networks, knowledge level, competition and design thinking is presented. The following section will go into detail about how the conceptual model for this research is set up. Since emphasis is placed on the four factors organisational social networks, knowledge level, competition and design thinking, it is needed to clearly explain what each concept represents in light of this master thesis. The next section will briefly operationalize the influencing factors. Organisational social networking within Deloitte is considered an important element that is inherent to the work of a consultant. More important is the so called social capital that arises from these informal relations among co-workers. For this master thesis the influencing factor organisational social networking is operationalized as: the value that people add to the company through their personal relationships and by knowing how, when and with whom to coordinate within their company (Thompson, 2008). Knowledge that resides within a company is highly valuable and crucial in order to distinguish from the competition. From the research activities within the company it seemed that knowledge regarding many aspects of Deloitte Digital were not satisfactory. Knowledge is described as “information that changes something or somebody either by becoming grounds for action, or by making an individual or an institution capable of different and more effective action” (Drucker, 1990, p.242). The influencing factor knowledge level is modified in order to fit in this master thesis. Therefore, knowledge is operationalized as: the level of knowledge on Deloitte Digital. Competition within large organisations is inevitable as was described in the previous chapter. This too is the case within Deloitte as pointed out by the internal research activities. Birkinshaw & Lingblad (2001) describe (intra-organisational) competition as the duplication or overlap of activities within the boundaries of the organisation. For this master thesis the influencing factor competition is modified to fit this research and operationalized as: the existing competition between teams within Deloitte and Deloitte Digital. Design thinking is the standard way of working within Deloitte Digital but rather new to the rest of Deloitte. As was pointed out from the research activities, employees seemed unknowing about this type of problem-solving. Texeira et al. (2012) describes design thinking

as an approach towards the innovation of a (new) service co-created between all stakeholders involved that is both systematic and user-centered in nature and supported by a set of tools that enables to look holistically at business problems and can unfold deep understanding of customer experiences in order to provide the best service offerings possible. However, in order to fit this study, the definition is modified and operationalized as: the level of understanding regarding ‘design thinking’. According to the studied literature, each factor can have a positive and/or negative influence on intra-organisational collaboration. Further research into the current situation is necessary to find out which factors are impeding intra-organisational collaboration and what is needed to enhance the situation and eventually create value. The framework by Hansen & Nohria (2004), as discussed in the literature review, places ‘value creation’ in five main categories: (1) Best-practice transfer, (2) Problem solving, (3) Cross-selling, (4) Cross-pollination and (5) Bold ideas. However, for this master thesis ‘value creation’ is operationalized differently and derives from the core reasons why Deloitte Digital is launched as a new entity within Deloitte. Clients today demand new digital services such as mobile, cloud and big data, all services that are part of the digital era companies have to deal with. Deloitte Digital takes up these digital (transformation) challenges and uses a type of problem solving that is innovative, user-centered and most of all delivered fast. So, regarding this master thesis, value creation arises from a new way of problem solving that is different from the standard in consulting and is a better fit with the client’s current needs (Figure 4). Figure 4 represents the change Deloitte needs the make in the way of problem solving and handling client issues if it wants to remain relevant in today’s competitive landscape. From the research activities it seems that Deloitte Digital currently operates as much as possible via these new ways of problem solving represented by the right part of Figure 4. However, other teams within Deloitte are still used to ‘traditional’ techniques when handling client issues that is represented by the left part of Figure 4. They do seem to be aware of the potential of working via these new ways of problem solving but often fall back into habitual processes. As said, in this master thesis value creation is framed as a new way of problem solving and, eventually, this needs to be the new standard during intra-organisational collaboration between Deloitte and Deloitte Digital.

FROM: TO: Waterfall Agile & lean Expert advisory Co-creation Homogenous project teams Multi-disciplinary project teams Digital experience User-centered experience Long linear projects Fast iteration-based projects Closed loop Open source

Figure 4: Standard Consulting vs. Deloitte Digital (Deloitte Digital, 2015)

To sum, the conceptual model illustrates that when Deloitte and Deloitte Digital collaborate this should lead to ‘value creation’ in terms of an enhanced way of problem solving regarding client’s digital (transformation) challenges. However, this collaboration is currently affected due to certain influencing factors that require further examination. The aim of this research is to provide managerial implications/tools that enhances the intra-organisational collaboration between Deloitte and Deloitte Digital. A detailed description on how this research is conducted will be revealed in the next section. Deloitte + New way of problem solving Intra-organisational collaboration Deloitte & Deloitte

Digital

Design Thinking Competition Organisational Social Network

Knowledge Level Influencing factors

4. Method

4.1 Multiple Case Study

The research will be performed in the Netherlands at the company Deloitte, a professional service provider. The research entails a multiple, embedded case study as multiple cases will be researched from different departments of the Deloitte ‘Consulting’ division (Strategy & Operations (S&O), Human Capital (HC), Technology (Tech) etc.). Saunders et al. (2007) define the case study as a research strategy which involves an empirical investigation of a specific contemporary phenomenon within its real life context using multiple sources of evidence. Yin (2003) confirms this by mentioning that the case study is a significant way to uncover real-life phenomena in their current context and since this case study exists of more than one sub-unit of analysis it makes this an embedded case study. Due to the use of multiple cases in this research it not only tries to enhance the generalizability of the outcomes but it simultaneously helps to explore differences within departments and between departments (Yin, 2003). Furthermore, a case study is well-suited for both descriptive and exploratory research, since the case study focuses itself on answering the ‘how’, ‘why’ and ‘what’ questions and is used to get a detailed understanding of the context of the research (Saunders et al., 2007). Multiple methodologies were used in order to triangulate the findings which is an important aspect within case study (Saunders et al, 2007).

4.2 Data collection

As mentioned before, multiple sources were used in order to collect data for this research. Next to the study of academic literature and internal Deloitte documents, a small survey was provided to forty respondents inside Deloitte, all with a professional level of manager or above. Questions in this survey focused on the main topics of this master thesis. The answers of this survey were analysed and helped to identify the influencing factors. However, the primary data collection for this research consisted of using semi-structured interviews that were conducted within a time-frame of approximately one month.

Semi-structured interviews

For collecting qualitative data, semi-structured interviews are an often used research tool due to the flexibility for both researcher and respondent to address multiple important topics and simultaneously work in a structured manner towards the overall research goal (Saunders et al., 2007; Yin, 2003). The setting of the semi-structured interviews has been selected in line with Saunders et al. (2009) to be the best possibility for qualitative data collection in case studies. A

part of the questions has been developed based on existing literature from the theoretical background and a part of the questions has been developed based on the research activities that were discussed before. These research activities highlighted specific topics that function as themes that will be researched in depth during the semi-structured interviews. All the questions during the interviews were open-ended and were drafted after the research activities prior to the interviews had been done (Saunders et al., 2007). The structure of the interview entails four parts and is included in the appendix (Appendix I). First, the interview starts with an introduction about the research to pinpoint the usefulness and obtain the highest cooperation possible. The second part focuses on intra-organisational collaboration between Deloitte and Deloitte Digital followed by part three that zooms in on the influencing factors. In the final part the respondents are thanked for their effort and given the possibility to provide additional information. The majority of the interviews were obtained within the company Deloitte and the employees worked at different teams within the organisation. Furthermore, a few experts have been interviewed as well. In order to secure full anonymity of the research the actual names have been left out. In total, fifteen interviews have been conducted, of which thirteen at Deloitte and two expert interviews. The interviews at Deloitte were divided among different teams within the Deloitte Consulting division, of which four at Deloitte Digital, three at Strategy & Operations, two at Human Capital, two at Internal Services, one at Technology and one at Cyber Security. Of the external respondents, one is a respected lecturer at a technical university in the Netherlands and owns a boutique consulting firm for almost a decade and the other one has years of experience working for a global company that produces technical equipment.

4.3 Data analysis

It is essential to optimize the data collection, therefore each case in Deloitte is selected carefully. The respondents met the criteria of being active within the Deloitte Consulting division, had a professional level of ‘manager’ or above and worked at least twelve months for Deloitte. So, the chosen interviewees were selected beforehand by discipline and experience which is in line with purposive sampling (Saunders et al., 2007). For research with small case study samples this is particularly useful since one selects specific cases that should be useful for the case research. Furthermore, snowball sampling came across in a few cases in order to reach new interviewees that were suggested by respondents during interviews (Saunders et al., 2007). Throughout the process of selecting respondents one key contact provided assistance and obtained permission within the organization. The sample is based on a manager's knowledge about colleagues who collaborate or want to collaborate with Deloitte Digital and face certain organizational challenges. The semi-structured interview guide differed in depth based on the

background of the respondent. The interviews were all in Dutch and the average length was approximately 45 minutes. In Figure 5 an overview of the respondents can be found. Qualitative data is characterised by its richness of information and is therefore well suited for this master thesis since it aims to explore specific subjects as realistic as possible. This study is conducted from a realistic perspective and the collected data socially constructed, therefore being somewhat subjective. Social constructionism is characterized by information dependent on an individual’s cognition and or interpretation of situations that makes qualitative data more complex than quantitative data (Saunders et al. 2012). This complex nature of the qualitative data calls for a specific analysis. To make sense of the data, it is mandatory to bring order in the non-standardized information given by data source by forming categories with different themes. By making use of categories one structures the information given and enables answering the research question (Saunders et al. 2012). To assist in the data analysis, all the interviews have been recorded on an audio-recorder and a summary of the interviews have been written afterwards. Next, the analysis of the data started. Both NVivo and a personal analysis method have been used to filter useful and interesting quote. After, the collected quotes were coded positive or negative and placed in the pre-selected categories. These categories responded with the two main themes as presented in the conceptual model and in the interview questionnaire: intra-organisational collaboration and influencing factors. By handling the data this way, it is possible to provide a clear overview of the current situation at Deloitte Digital. Clarity and good insight in the current situation is essential in order to provide a profound solution and achieve the research goal. Interview ID Team Inside Deloitte Digital Interview #1 Strategy Interview #2 Creative Interview #3 Strategy & Creative Interview #4 Engineering Inside Deloitte Consulting Interview #5 Strategy & Operations Interview #6 Strategy & Operations

Interview #7 Strategy & Operations Interview #8 Human Capital Interview #9 Human Capital Interview #10 Technology Interview #11 Cyber Security Interview #12 Internal Services Interview # 13 Internal Services External Interview #14 Lecturer technical university & owner boutique consulting agency Interview #15 Professional at global company for technical equipment Figure 5: List of interviewees

5. Results

This chapter discusses the interview results. Fifteen interviews are conducted, divided among nine respondents from the Deloitte Consulting division, four respondents active for Deloitte Digital and two external experts. The framework presented in the previous chapter together with the interview protocol are used to structure this chapter (Figure 5 and Appendix B) The core of the interview focuses on the topics ‘intra-organisational collaboration’ and ‘influencing factors’. Both these topics are described in detail prior to this chapter. Next, important elements and/or related issues regarding both are presented. First, insights from respondents active for teams outside Deloitte Digital are presented including supporting quotations. After, insights from respondents within Deloitte Digital are presented including supporting quotations. Each quotation used in this result section illustrates the general conclusion derived from the interviews regarding the core topics. Influencing factors are discussed to determine whether or not the factor has influence and, whether this potential influence has a positive or negative effect on the intra-organisational collaborations. Consequently, the following chapter will discuss the implications of these results. As mentioned before, due to confidentiality reasons all respondents’ names, team names and company names appear anonymous. All respondents’ names will be tagged ‘Respondent #1, Respondent #2, etc.’ All company’ and team names will be tagged ‘Company X, Company Y etc. or Team X, Team Y etc.’.

5.1 Intra-organisational collaboration

In part two of the interview protocol the respondents are asked to reveal their thoughts on the current intra-organisational collaborations in their day-to-day activities and how these are set up. They are asked to elaborate on the collaborations with Deloitte Digital and the experience they have during this process. This is done in order to provide a clear overview of the current state of the intra-organisational collaborations within Deloitte. It should be highlighted that this part of the interview solely focuses on the collaborations between various units within Deloitte. It is not about the interrelationships employees have with one another. To start, all respondents confirm the existence of intra-organisational collaboration during client projects. All thirteen Deloitte employees state that before the kick-off of a new client project, a preliminary cross-functional team that best fits the project is composed. Next, this team is discussed and potentially approved by responsible director and/or partner before proceeding. However, two remarks are made by the respondents: First, in most cases it happens that available positions for a new client project often are primary offered to employees that are well-known individuals to the project lead. Second, when the best person for the job or the

preferred individual is not available, the position is in most cases staffed with someone from the original team to whom the client project is appointed to rather than outside teams. This was mentioned by 77% of the respondents and the majority came from people active outside of Deloitte Digital. Supporting quotations: Respondent #1: ‘We zeggen dat we de beste mensen passend voor een klus dat we die erop willen hebben. Maar dat is niet de realiteit. Je zit vaak met beschikbaarheid van desbetreffende personen, je kunt mensen niet zo maar wegplukken. Daarnaast als wij vanuit team X een digitale strategy opdracht kunnen doen, waarin componenten zitten die beter bij team Y zouden passen, maar goed, wij hebben ook slimme mensen die het kunnen oppakken’. Respondent #7: ‘Tijdens proposals voor mogelijke nieuwe klantopdrachten probeer ik een divers pallet aan vaardigheden, die passend zijn voor de klus, in het projectplan op te nemen. Geregeld komt het voor dat het team cross-functioneel wordt gestaffed.’ Respondent #9: ‘Ik bekijk allereerst de klantvraag. Bijvoorbeeld bedrijf X, tijdens een project genaamd X heette het. Het hangt van het programma van de klant af wat hij/zij wil. Voor dit project ben ik samenwerkingen aangegaan met verschillende teams vanwege de omvang en complexiteit van de klantvraag. Ik kijk wel altijd of iemand affiniteit heeft met de betreffende sector’. The interviews shows supporting evidence intra-organisational collaboration happens on a regular basis within Deloitte. However, the optimal team compositions are not always possible resulting in sub-optimal teams. Part two of the interview protocol also focuses on the current state of intra-organisational collaboration between Deloitte and Deloitte Digital. In this case a few pressing matters come to light. First of all, all four respondents active at Deloitte Digital mentioned that they are requested to participate in projects that are initiated by another teams. Deloitte Digital employees are called in to take on small sized digital components of a running project, usually ‘rush jobs'. Until now, Deloitte Digital was not asked to participate in new client projects from the very beginning. This was discussed by the Deloitte Digital employees in a disappointing and disapproving manner. When Deloitte Digital just started its operations they were often asked to upgrade (parts of) presentations with attractive visuals. This mainly was asked to the Creative team of Deloitte Digital and the respondents implied that these request were not appreciated and made them feel undervalued.

Furthermore, it was repeatedly noted by workers active outside Deloitte Digital that Deloitte Digital employees are distinctly different in type and background than the average consultant working for Deloitte. At first, all these respondents felt it to be a great addition to the overall business. However, a nuance was made 50% of the respondents active outside Deloitte Digital. Since everyone was new to this latest addition, it consequently made collaborating challenging. Respondents from Deloitte Digital also mentioned the fact that up till now there have not been large projects that were completely appointed to Deloitte Digital and fully staffed with Deloitte Digital personal only. This, according to all four respondents of Deloitte Digital, could be very useful in order to demonstrate the its full potential. Supporting quotations: Respondent #2: ‘Mijn persoonlijke ervaring is dat momenteel andere service lines ons betrekken. Wanneer er een project binnen wordt gehaald of reeds loopt, dan wordt iemand van team X of team Y erbij betrokken vanwege een digitaal component en of we dat dan even willen oplossen’. Respondent #3: ‘Daarnaast gemerkt, plat gezien, hoe slides eruit zien van andere afdelingen en als wij er mee aan de slag gaan, wat er dan uit komt, dat helpt om een verhaal op een beeldende wijs over te brengen met meer impact die beter blijft hangen. Dan gebeurt het regelmatig dat er gevraagd wordt vanuit andere teams of wij ook naar hun presentatie willen kijken om die op te fleuren. Maar daarvoor zijn wij niet in het leven geroepen’. Respondent #4: ‘Ik heb het zelf ervaren, ik als profiel, maar ook anderen binnen Deloitte Digital, het zijn hele andere ander mensen met verschillende profielen dan de gemiddelde consultant hier. Dat maakt samenwerken wel moeilijk’. The interviews show evidence that there is still a lot of untapped potential that resides within Deloitte Digital. It seems that Deloitte Digital is approached solely to handle small (digital/visual) elements of total projects. The interviewees also stated that the background differences between the different departments caused further collaboration friction. Employees coming from teams outside Deloitte Digital have a different perspective regarding collaborations with the new entity. All nine acknowledge to be aware of the existence of Deloitte Digital and they all understand the necessity and value of having an in-house ‘digital’ team. But, after the kick-off of Deloitte Digital in the Netherlands, a follow-up with detailed information about the why, how and what of this new team was failed to materialize. They mentioned that the story around Deloitte Digital was pushed mainly to the external world, whereas internally