The ROI of teamwork: How to quantify the value of better collaboration

It’s hard to argue against the importance of collaboration for any business. After all, a company is essentially a group of people striving to reach collective goals. 

Teamwork stands at the heart of advancing the cause and making progress. 

The cost of poor collaboration and uncoordinated teamwork to your organization is real. One 2019 report estimated that businesses would lose as much as $399 billion to pointless meetings in a single year. In fact, our own 2024 Teamwork Research Report (a survey of some 1,000 knowledge workers across the U.S.) revealed that nearly 3 in 5 employees have actively thought about leaving their current jobs, or applied to new positions, due to bad teamwork. For those who may not be as moved by fractions — that’s almost 60%! 

It’s easy to focus on dollars, but they’re only the beginning. Because what’s hard to measure is the value of a high-performing culture of collaboration. Still, once you start assessing the value of teamwork, you can also approximate the return on investing in collaboration. 

For example, consider some of the findings we uncovered from working with IBM to help scale their Enterprise Design Thinking (EDT) program. The impacts were measurable, according to reports by Forrester:

• Teams cut time in various phases of work, increasing alignment by 75%. ⁽¹⁾
• Cross-functional collaboration streamlined processes, saving $9.2M. ⁽²⁾
• IBM’s Design Thinking practice helped teams fix bugs, cutting defects in half. ⁽³⁾
• Agile development teams saw improved efficiency valued at a total of $3.8M. ⁽⁴⁾

Of course, every organization is different, so any ROI calculation done for one company may play out differently in another. The key is to find the leading indicators that matter most to you and measure them. The very act of beginning to measure the ROI of collaboration brings attention to this process. Over time, ROI measurements will improve as the practice of measuring collaboration improves. The key is to start somewhere.

How to calculate the ROI of teamwork

What follows are a few places to start. You can view the ROI of collaboration on different levels. First, you have to understand what business results will be impacted. There are four categories of top-level outcomes that are most relevant. Within each of those categories, there are business impacts that can be measured through concrete metrics and evidence:

Increased revenue

Improved win rates, reduced client churn, and additional incremental recurring revenue are all outcomes of better collaboration that impact the bottom line.

Decreased costs

Many calculations of the ROI of collaboration focus on cost savings, such as reduced overhead costs, reduced travel costs and time, and savings on human resources. 

Increased velocity

In today’s fast-paced business world, speed is everything. The effects of better collaboration impact things like time to market, deal velocity, and the ability to pivot quickly, as well as improved productivity and quality. 

Improved experiences

On the one hand, you can look at the direct impact of better collaboration on the employee experience, as measured by employee engagement scores, new hire costs, and employee retention (employee experience). On the other, better collaboration also affects customer experiences through higher net promoter scores and satisfaction. 

At the core of these benefits is an improvement to team collaboration. Our investigations over the years (based on conversations with hundreds of people) show six primary variables that teams are looking to improve. The key outcomes that teams are looking for are:

• Engagement: Keeping team members involved in the collaboration and participating
• Alignment: The ability for the group to find agreement and cohesiveness around a shared direction
• Transparency: Visibility into work across the group
• Agility: Being flexible, nimble, and able to pivot with changes as they happen
• Inclusion: The ability to involve a wide range of stakeholders and consider different perspectives and opinions
• Confidence: A safe environment where people are free to speak up and be creative without fear

With the team at the center, these considerations for understanding ‌the ROI of collaboration form concentric rings of causality. 

The benefits emanate from the center. Note that there are degrees of separation between changes at the team level and top-level business outcomes, but the relationships are there nonetheless. 

Finding the true ROI from collaboration in your organization, then, becomes a customized journey through these factors — it’s a “choose your own adventure” rather than a single equation that works in all situations. 

We recommend anchoring ‌ROI calculations to top-level company goals. If there is a company mandate to reduce carbon emissions, how can better collaboration specifically help achieve that? If a business needs to find operational efficiencies, how is it possible to ladder up to that goal from enhanced teamwork? 

With that in mind, there are several examples to offer around common themes that most organizations strive to achieve. 

Hypothetical examples to demonstrate the value of better teamwork 

Reduced time in meetings

Let’s say a leadership team introduces collaboration improvements — an async culture — that reduce their meeting time by 33%. Across several leadership teams, this can add up to real savings, particularly assuming higher-than-average salaries. To understand the faster time to decision-making. 

The calculation might look something like this:

(Average meeting time ÷ 3) * (Number of meetings per [day, week, month, year]) * (Number of people) * (Average hourly salary) = $x in potential savings

But the overall effect of better collaboration for leadership teams may also reduce their time to decision, thereby getting critical information to teams quickly and speeding up execution cycles. Improvements flow downstream all the way to the customer experience — it’s important to also highlight unquantifiable ROI, as well.

Driving more revenue

In another example, you can look at improved revenue outcomes. Say that if your pre-sales teams guide customer discovery conversations better using guided methods and a shared space, then they'll reduce re-work:

• If 50 presales teams can cut the time in sales cycles per customer by even just one hour, that’s 1000s of hours of efficiency over a year, resulting in huge overall savings. 

This is exactly what we saw at SAP. By using guided methods in a shared space during discovery calls, they improved not only the quality of information and engaged customer in new ways, but also the efficiency with which they could move through the cycle. ‍

A Forrester study of their improvements to discovery calls for presales improved efficiency of 9.6%. Over three years in a hybrid work environment, this will provide almost $7.8 million in value to SAP⁽⁵⁾. And, as a result, time to close deals shrunk, and win rates increased. 

The key variables to consider when projecting the ROI of collaboration on revenue increases include average customer deal size, number of deals per year, conversation rate, total number of customers, and similar:

• For instance, if the average deal size is $100,000 and your sales team converts 65% of leads for a total 250 signed deals per year, an even increase in just 1% of conversion (to 66%) due to better collaboration would amount to nearly $40,000 in savings. 

Typically, you’ll also find more subjective benefits, including a better and more differentiated buying experience. As Andrew Marti is a Presales Lead at SAP, told us: “It brings the customer into the discussion and engages them better.”

Faster development and innovation

We’ve seen many product development and design teams increase their overall velocity from improved cross-functional collaboration. By creating teams that are more connected and more aligned, they can increase their output rate by reducing the need for synchronous meetings and minimizing workshop preparation time and length.

There’s also less need for re-work and “do-overs.” A customer recently told us of their product teams stopping and starting and going back to square one in a circuitous manner. In addition to frustration and low morale of team members, project costs and timelines ballooned and extended. Time and money were lost due to misalignment, inefficient decision-making, and overall poor collaboration.

Even small wins, like reducing the time it takes to summarize and synthesize team workshop outcomes, can add to team velocity:

• One design team we worked with, for example, was able to reduce workshop synthesis time by 75% across a team of 40 designers by increasing the amount of async collaboration and working digital-first. 

More importantly, there’s also the likelihood of accelerating time to market, for instance in software development. 

For this ROI calculation, consider the number of releases per year, the average number of hours spent on development per product or feature, the average hourly rate per team, and the time saved with better collaboration: 

• Hypothetically, if better cross-functional collaboration saves 2,000 hours per year per team, there could be savings of $200,000 or more just for that group. 

Subjective benefits include higher levels of trust — something vital for teams to innovate. If there is no trust, there's less participation. People will tend to hold back important ideas and observations, preventing the team from designing the best solutions. 

Teamwork smarter, now

It’s not enough to bring your brightest people together and wing it. And while tools and technology may keep us in touch, they aren't enough to keep us connected. Whether you’re in product, design, engineering, IT, consulting, innovation‌ — ‌or leading a company in the C-suite‌ — ‌when your organization fails to collaborate effectively, your best people not only can’t do their best work, but they leave in search of better experiences. 

The truth is, organizations with teams that know how to collaborate effectively ship faster, innovate more often, and have happier customers. When teams know how to be productive together, organizations realize sustained innovation. 

Now is the time to make collaboration a strategic priority and ask: 

• Who is in charge of collaboration? 
• Who can drive change? 
• Exactly what are the top challenges in collaboration across the organization? 
• How might you incentivize people for good collaboration behaviors and then scale that over time? 
• How much more productive would you be if every team worked together with intention as a matter of course?

Though the state of collaboration may be dire, there's hope‌ — ‌that is, if teams recognize the problem and work together to solve it in a guided process. 

Instead of relying on a wing and a prayer, collaboration can be deployed systematically throughout your organization. 

Get in touch with our Professional Services team to learn more about how Mural can guide you to better, more effective teamwork. 

--

^{1) Forrester, “The Total Economic Impact™ Of MURAL” (Feb 2018)
2) Forrester, “The Total Economic Impact™ Of MURAL” (Feb 2018)
3) Forrester, “The Total Economic Impact™ Of IBM’s Design Thinking Practice” (Feb 2018) 
4) Forrester, “The Total Economic Impact™ Of IBM’s Design Thinking Practice” (Feb 2018)
5) Forrrester, “The Total Economic Impact of MURAL” (May 2022)}