Co-location is like Aspirin. It is more effective, in more ways, than anyone would have thought.

Co-location is not just a big meeting. Co-location is cross-disciplinary teams doing their daily work in a single physical location. This may be augmented by virtual collaboration tools, but the core element is close, physical proximity.

Teams that do not co-locate rarely experience break-through performance. This isn’t necessarily obvious to team members who haven’t co-located, but in hindsight, it makes perfect sense.

Why Co-Location Works

Trust

Virtually every commentator states that trust is the most critical element to collaboration—and we agree.  Luckily, co-location is great at building trust.

It is virtually impossible to trust someone you don’t know. The first step to building trust is to develop a relationship and that is most easily done if you spend time with a person. Co-location guarantees it.

It is also hard to trust someone if you don’t know if they are competent. Interacting with people day-to-day is an excellent way to become confident in their competence.

Trust is also built by making and keeping commitments. By increasing the number of interactions, you build up the commitment account. And, it is a little harder to welsh on commitments when you have to see the person every day.

Communication

Co-location increases the quantity and quality of communication. Alex Pentland’s studies at MIT support the observation that teams that communicate more often and more intensely do better.  When you are co-located, the opportunities for communication abound.

Communication quality is also improved.  Although we think that communication is mostly about substance, it is really mostly about context. Pentland’s work on “Honest Signals” as well as other researchers, have shown that body language and context are critical to communication. Think about the times someone has sent you an email you found troubling, offensive, or just ambiguous. Without context the words lacked meaning. And in many instances, it is the interchange, the back-and-forth, that stimulates new ideas. This occurs naturally in face-to-face meetings, but is harder to accomplish virtually.

Latency

One way to think about the process of planning—which in this context includes design as well as all of the planning effort necessary to execute the design—is as a flow of interdependent decisions. Information is the raw material for those decisions, which are themselves the raw material for other decisions. Any time waiting for a response to an information request is a delay—not only to that decision—but to decisions that are dependent on that decision. If you can reduce the delay, i.e., reduce latency, the entire project accelerates.  Co-location reduces latency by placing the key information providers and deciders in close proximity. A single 15 minute conversation and a few hand drawn sketches may accomplish more than 25 emails over 2 weeks.

Creativity

Creativity is enhanced by the collision of ideas. We know that having diverse experience and diverse backgrounds not only results in ideas coming from atypical places, it often spurs better creativity where you might expect it most. Thus, a designer is likely to design better when in discussion with others not in his or her discipline. And those great ideas from unexpected locations—those are great, too. Co-location, built on cross-disciplinary teams, provides the diversity needed for enhanced creativity.

Efficiency

Improving communication, reducing latency and enhancing creativity all lead to better efficiency.  But co-location also enables having the right people doing the right work at the right time.  If the engineer trusts the mechanical contractor, and is able to review work as it is created, s/he can release creating the construction documents to that firm. Or perhaps the mechanical designer will detail directly in the engineer’s model. Moreover, by only doing work that is requested—pulling work—effort that isn’t needed can be simply eliminated. And, because of increased communication and trust, documentation can be streamlined.

Management

IPD projects are jointly managed. But if everyone is doing their work in their own offices, it is very difficult for the Project Management Team (PMT) to really know what is going on. This can lead to drift, where a firm does work that no one really needed, or rework when a firm gets too far in front of others and must modify their work to accommodate later decisions or changes. And if a firm is overrunning a budget, it may not become apparent until several billing cycles. If most of the work is occurring in the co-location facility, the PMT can see what is happening and can do “Management by Wandering Around.”

Cold Fusion? Not quite

Co-location is so effective it begins to sound like cold fusion or a perpetual motion machine. But it can be difficult to implement and may affect individuals disproportionately.

Co-location Cost

It takes time, money and effort to co-locate a team. Often these costs were not included in the budget and so are viewed as “extra” costs. It is true that there are costs involved in co-location, but the issue should be whether the benefits outweigh the costs. When evaluating the cost of co-location, most teams never consider the cost of waste due to miscommunication, poorer collaboration, excess costs of rework, fewer creative solutions and poorer coordination. If cost was the decisive factor, we would have expected some teams to report that they “over co-located.” In our experience, we have had teams report that meetings were not as efficient as they should be, or that co-location could have been better organized, but we haven’t had any report that the costs outweighed the benefits.

Individual Utilization

Another cost relates to manpower utilization in the firms themselves. Designers, for example, are paid based on hours and have only so many hours to sell. In order to be profitable, their working hours must be, to a large percent, billable, i.e., they need to have high utilization.

On a large project, this isn’t difficult because there is enough project work to keep everyone fully utilized. But on a smaller project, this is not the case. The upshot is that some parties, particularly those that bill hourly, are going to feel a pull away from the co-location site and back to their office where they can work on multiple projects and gain higher utilization.

Project management needs to understand the utilization problem and develop a co-location strategy that works with the financial realities of the member firms. There are a number of strategies that can be used, but they need to be tailored to the specific project. If you are having this problem, you should reach out to someone who has structured co-location efforts to help you develop a plan.

Personal Efficiency

Personal efficiency is another objection to co-location. This is often phrased with a statement like “I’m more efficient in my office surrounded by my ….” Just as with cost, this statement contains a germ of truth and an equally larger, or larger fallacy. The efficiency discussed in the statement is a personal efficiency, not a project efficiency. Whether viewed as a queueing theory problem or a Lean flow issue, taking a project resource and isolating it from the project reduces project efficiency. If you want to understand why, I suggest you read “This is Lean” by Niklas Modig and Par Ahlstrom. Moreover, by removing the resource (person), the project also suffers communication and creativity losses.

In practice, the conflict between personal and project efficiency needs to be solved for project efficiency first and then personal efficiency. There isn’t space in this short article to suggest specific solutions, but there are four generic approaches: 1) Schedule blocks of time (office hours) for the person to be present and working at the co-location site. This schedule should coordinate with the others that should interact with the person; 2) Move the co-lo to where the person is. For example, in smaller projects, we have had the co-location site be the architect’s office during design and the contractor’s office during construction. 3) Move the person’s office into the co-lo so they can work on other projects from within the co-location site. 4) Recognize that you may need to “overpay” some parties to be in the co-location site even if their time is not fully absorbed.

Personal Costs

People have lives that may not be consistent with distant workplaces. This isn’t specifically a co-location problem, but it does arise when team members need to relocate away from their families. The toll on them, and their families, can be significant. If the co-location facility is outside of a normal commute range, it may be necessary to adjust hours or days to allow participants to be fully involved. Co-location, if it is to work over an extended time, needs to consider personal needs as well as project needs.

Conclusion

Co-location is one of the most effective IPD tools. It improves engagement, collaboration and creativity and reduces the difficulty in managing an IPD project. Co-location does have costs, and needs to be managed well, but on balance it is always a good investment and can greatly increase the likelihood of break-through performance.

We recognize that not every team can do continuous, full time, co-location. But every team should begin with that premise and then honestly ask what modifications can be made to co-location that least reduce its effectiveness. With this perspective, project management can craft a co-location plan that serves the needs to the individuals, the firms, and the project.