The document discusses how social networks impact organizational performance. It describes John Kotter's dual operating system model and how networks influence the diffusion of new ideas and practices. Research presented found that employees with diverse connections across groups performed best and that social learning networks on investment platforms led to higher returns. The document concludes that networks are critical for innovation and performance within organizations.

1. Social Networks
and
Organisational
Performance
Cai Kjaer
Optimice
www.optimice.com.au
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2. The formal vs informal organisation
If you want to lay blame…
If you want to get work
done…
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3. Kotter’s Dual Operating System
Sources:
• Kotter, John P. "Accelerate! How the most innovative companies capitalize on today’s rapid-fire strategic challenges—and still make their numbers."
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Harvard Business Review Reprint R1211B (2012).
• Graphics from http://www.kotterinternational.com/our-principles/accelerate

4. Kotter’s Dual Operating System
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5. Kotter’s Dual Operating System
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When diffusion
starts with opinion
leaders, the
diffusion occurs
more rapidly.
When diffusion
starts with
randomly selected
people, or those on
the margins, it is
slower.
Valente, Thomas W. Social networks and health: Models, methods, and applications. Oxford University Press, 2010.

7. How fast can we change?
Valente, Thomas W. Social networks and health: Models, methods, and applications. Oxford University Press, 2010.
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8. Peer pressure – Get Fit
•Reward A for getting B fit!
• Social network incentive scheme
worked almost four times more
efficiently than a traditional individual-incentive
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market approach
• Predictive model:
– The number of direct interactions that
targets had with their buddies was an
excellent predictor of how much their
behaviour would change AND maintain
new practices
– Exposure to a behaviour of peers predicts
‘idea flow’ (ie new practices)

9. Networks and employee performance
“A person who has
contacts in
multiple groups,
(…) can be an
advantage in terms
of breadth of
knowledge, early
knowledge, and
opportunities or
strategically
coordinating across
groups.”
Ron Burt, Brokerage & Closure – An Introduction to
Social Capital.
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Team of
‘A-players’
not equal
to success

11. Social Learning and Performance
•Pentland analysed 10m transactions made by 1.6m
users on eToro - a social investment trading
platform.
– eToro tagline “Connect with other trader & investors and
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copy their moves”
•Results published in HBR (Nov 2013):
– Investors who paid attention to the trading strategies of a
wide group of people (without following the herd) achieved
the highest returns:
• Operating alone – suboptimal
• Operating as a herd – suboptimal
• Diverse connections - optimal
Pentland, Alex Sandy. "Beyond the echo chamber." Harvard Business Review 91.11 (2013): 80-+.

12. Social Learning and Performance
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14. Top down vs local decision-making
385 cars
289 cars
460 cars
25%
drop
60%
improvement
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15. Analysing Yammer Networks
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16. Collaborating Sideways in Yammer
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17. Networks and Career Growth
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18. The Interaction Balance
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19. Takeaway & Questions
• Networks are critical for innovation
and organisational performance
• You can see the connections
• You can analyse and measure
them
• Predict what will happen
Cai Kjaer
Email: cai.kjaer@optimice.com.au
www.optimice.com.au
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