Editor's note: Research by McKinsey & Company's Organization Practice finds that better collaborative capabilities help companies achieve superior financial performance. These results are supported by academic research, which shows that the ability to collaborate in networks is more important than raw individual talent to innovativeness; it also boosts employees’ overall performance and loyalty. 1

This is the first in a series of posts from McKinsey about healthy collaboration and how managers make it work successfully. 2 In coming months, McKinsey authors will discuss different types of collaboration and the places where it happens, such as knowledge sharing, informal & social networks, talent mobility, and formal communities of collaborative practice. We'll also explore the hypothesis that the proper type of collaboration depends on the type of organization and can take various forms across geographic and vertically integrated groups.

Effective collaboration is essential for creating value. Indeed, it's one of the reasons we create corporations, because organizations are more effective than individuals at allocating resources. But knowing and doing are two different things. As organizations grow, collaboration can suffer—particularly across silos, as people...