In May and June of 2008, Aberdeen surveyed more than 270 organizations regarding the use of workforce collaboration and Web 2.0 tools. Small and mid-sized businesses (SMBs) were represented by approximately 150 different organizations - thanks to participation from SMB HR's readers and members.

We analyzed the data to determine performance against large companies (more than 1,000 employees in headcount) in key performance indicators. We also looked for differentiators that set them apart from their peers.

We used four key performance indicators to distinguish the Best-in-Class (top 20% of aggregate performers) from Industry Average (middle 50%) and Laggard (bottom 30%) organizations with respect to their differing degrees of success implementing workforce collaboration programs. These criteria focused on productivity and efficiency as well as strategic development through various phases of the employment lifecycle:

• Project plan time-to-completion
• Time-to-resolution (e.g., help desk support calls, HR inquiries)
• Employee time-to-productivity
• Cost of training per employee

We learned that SMBs are two-and-a-half times as likely as large companies to achieve Best-in-Class status. Upon close look at the data, it became evident why: SMBs outperformed large companies in all four metrics used to determine our Best-in-Class, as Figure 1 demonstrates.

Figure 1: Year-over-Year Performance in Best-in-Class Metrics

Thus, we decided to take a deeper look into the data to find out the key elements behind this dexterity.

Regardless of company size, the top three pressures driving organizations to focus resources on workforce collaboration are:

• Increased globalization and geographic spread of the enterprise workforce
• Need to respond faster to market changes
• Demand for innovative products and services

Thus, we decided to take a deeper look into the data to find out the key elements behind this dexterity.

Regardless of company size, the top three pressures driving organizations to focus resources on workforce collaboration are:

• Increased globalization and geographic spread of the enterprise workforce
• Need to respond faster to market changes
• Demand for innovative products and services

The data revealed that SMBs are 61% more likely than large companies to be driven by the need to respond faster to market changes. On the other hand, large organizations are 57% more likely than SMBs to be driven by increased globalization and geographic spread of the enterprise workforce. This shows that SMBs are more likely to use collaboration tools (including Web 2.0 technology) to improve responsiveness and agility. Comparatively, large organizations use these tools to create a flat and more connected organization that fosters teamwork across geographic borders.

In terms of high-level strategic actions being pursued in response to the aforementioned pressures, organizations regardless of size share similar strategies that focus on agility and connectivity (Table 1).

Table 1: Top Strategic Actions

When we examined the capabilities and enablers adopted by both groups, it became obvious that technology utilization is not the primary differentiator that increased the likeliness of SMBs to achieve Best-in-Class status. Both groups are similar in adopting collaboration technology with large companies slightly having higher adoption rates than SMBs in most areas (Table 2).

Table 2: Collaboration and Web 2.0 Technology Utilization

The data shows that the performance prowess of SMBs lies in the capabilities that they have implemented internally. In particular, they have adopted three capabilities that are shared by Best-in-Class companies.

The data shows that SMBs are 31% more likely than large organizations to ensure they have support and buy-in from senior leadership before implementing collaboration tools. In this case, their size definitely gives them an advantage over their larger peers. In fact, 40% of SMBs stated that the CEO/COO primarily champions the utilization of collaboration/Web 2.0 tools. In contrast, only 17% of large companies cited the same.

The two other organizational capabilities that SMBs have adopted focus on streamlining communication and easily sharing knowledge.

The data shows that SMBs are 62% more likely than large organizations to enable workers to search for and connect with subject matter experts; and they are 17% more likely than their larger peers to allow multiple units within the business to edit, modify and share content. These two capabilities undoubtedly favor the need for agility and the ability to improve market responsiveness.

Analyzing small and mid-sized businesses vis-à-vis large organizations highlighted two critical findings. First, both groups are primarily driven to investing in collaboration tools by completely distinct pressures. While SMBs aim to use collaboration and knowledge-sharing to improve adaptability to market changes, large organizations are focusing their efforts and investments to facilitate communication among geographically dispersed workforces.

Secondly, there is a clear performance gap between the two groups. This gap is mainly attributed to senior level involvement in championing the utilization of these tools in SMBs and their efforts to create a culture that enables information to travel quickly through the organization, thus improving agility and adaptability. In this regard, large organizations can learn from their smaller peers to increase focus on content and knowledge as opposed to focusing on simply connecting people.

If you're interested in the full report on this topic, download a complimentary copy at Aberdeen's human capital management site -- available until August 29, 2008.

Jayson Saba (jayson.saba@aberdeen.com) is a research associate with the human capital practice in research and management at the Aberdeen Group.