Encouraging Knowledge Sharing in Professional Services - Organisational Network Analysis

Slide 1: Encouraging Knowledge Sharing in Professional Services conference 2007 Organisational Network Analysis Chris Fletcher—Director, Knowledge Management Asia Pacific region Deloitte Consulting Avillion Hotel Sydney 12 February 2007

Slide 2: The World is Flat! Globalisation 1.0: circa 1492 - 1800 • Columbus opened up trade between old and new world • Key agents fo change were how much muscle, horse power, wind power, steam power etc each country had and how creatively it was deployed • Nation states and muscle shrank the world from size large to size medium Globalisation 2.0: circa 1800 - 2000 • 1800 – 1900: global integration driven by falling transport costs due to steam engine and railroad • 1900 – 2000: Falling telecom costs due to diffusion of telegraph, telephone, PC, fiberoptics and early www led global integration • Era saw the birth & maturation of the global economy – movement of goods and information across continents created global markets and arbitrage in products and labour • Key agents of change were multinational companies – going global for markets and labour • World shrank from size medium to size small Globalisation 3.0: circa 2000 to today • Forces in G1 were countries globalising, in G2 companies globalising, in G3 the dynamic forces in play are unique – the power of the individual to collaborate and compete globally • A “flat world platform” is enabling, empowering and enjoining individuals and small groups to go global easily and seamlessly • The “flat world platform” is a product of the convergence of the PC, with fiberoptics and the rise of workflow software • more individuals from diverse (and non-western) nations are empowered and competitive •World has shrunk from size small to size tiny with a flattened playing field Source: The World is Flat – A Short History of the 21st Century: Thomas L. Friedman

Slide 3: “The new currency won’t be intellectual capital. It will be social capital –the collective value of whom we know and what we’ll do for each other.” —James Kouzes, co-author of The Leadership Challenge Business Week – February 2006

Slide 4: Social Capital and KM So what is Social Capital? “In sum, it is the value people produce when they work together to achieve mutual goals. It emerges when people build trust, a shared understanding, and a willingness to cooperate in ways that produce something greater than the sum of their parts” Robin Athey – Its 2008: Do You Know Where Your Talent Is? Connecting People for Performance So what does this mean for KM? Copyright © 2006 Deloitte Development LLC. All rights reserved. 4

Slide 5: The impact of Social Capital on KM A change in the KM model……… Older thinking: The acquisition, organisation & aggregation, storage and Content & Collection dissemination of content under organisation wide taxonomies using customised tools and repositories, just in case it might be reusable Newer thinking: Connecting the right people just-in-time, canvassing Context & Connection them to gain their knowledge and advice in the context of a particular business problem or pursuit, synthesizing that knowledge and applying it to the issues at hand Copyright © 2006 Deloitte Development LLC. All rights reserved. 5

Slide 6: Six Degrees of Separation……

Slide 7: Organisational Network Analysis (ONA) is a tool for: • uncovering the “hidden” network – how work REALLY gets done in organisations • understanding the interactions between people • identifying and accelerating knowledge and information flows • improving the efficiency and effectiveness of knowledge flows and networking Source, Rob Cross, The Hidden Power of Social Networks Source: The Hidden Power of Social Networks – Rob Cross / Andrew Parker

Slide 8: Why use ONA? • Is a diagnostic tool – will provide an analysis of the “State of Play” today. • Real benefits of the analysis are apparent in the interventions that take place as a result of the insights learnt • Visual nature of network maps / supporting quantitative analysis facilitate easy identification of issues and facilitation of network building activities • Network analysis facilitates conversations about the business often revealing otherwise hidden insights

Slide 9: What can ONA be used for? A better understanding of relationships and interactions can assist management in Organisational Performance focussing their relationship development, leverage opportunities and embrace knowledge sharing activities - Client Networks - Business Unit efficiency and effectiveness Executives can utilise ONA to understand the extent to which business unit interactions are: - aligned with strategic direction - generating measurable value for the business - enabling better working relationships - facilitating information sharing and expertise Successful innovation is the result of a collaborative effort. ONA can assist in Driving Innovation understanding the degree to which a team is integrating expertise and utilising skills of others in the organisation Successful change on a large scale fundamentally revolves around network Facilitating large scale change or merger integration. ONA can be used before a change initiative to identify key people and it integration can be implemented 6 – 9 months later to assess if there are significant issues leadership needs to address. Alliances and strategic partnerships are becoming more common as a way to utilise Strategic Partnerships cross-organisational initiatives. ONA can highlight effectiveness of these initiatives through information flows, knowledge transfer and decision making The war for talent is now top of mind with executives. ONA can assist in Talent Management understanding the loss of relationships / social capital when key people leave the organisation, as well as the value and effectiveness of talent in the organisation Efficiency of supply chains will often depend upon the flow of information and Supply Chain intermediary relationships. ONA can allow assessment of these networks, provide cost benefit analysis and model $ value of network changes

Slide 10: Key factors for success • Support by leadership • 80% participation rate • Transparency of results • Commitment to act upon the results • Making assumptions is dangerous • Do not underestimate the importance of communications • Follow-up survey in 6 – 9 months time

Slide 11: Two types of people in networks….. Bonders Bridgers Becoming “us” Brokering between “them” • affinity • access • efficiency • resources • trust • innovation • support • impact • community • profit Source: Bruce Hoppe – Connective Associates

Slide 12: What outcomes can be expected? • Visual representations of the network as it is today based upon nominated attributes • Identification of key networks, brokers, and central practitioners • Analytics to assess interactions between network groups • Program of activities to support desired network changes

Slide 13: What is the process for undertaking ONA? Business Case Hypothesis Question formulation Survey Delivery Results Analysis Presentation Getting from “So what” to Action”

Slide 14: What is the process for undertaking ONA? Business Case Why do you want to undertake an Organisational Network Analysis? It could address: • team building • communications and connections across groups • identifying key connectors in an organisation • identifying key decision makers in leadership teams • facilitating efficiency in strategic alliances / partnerships • facilitation successful mergers and acquisitions • understanding network interaction in Communities of Practice • identifying expertise networks • facilitating innovation programs • managing latent talent or knowledge issues

Slide 15: What is the process for undertaking ONA? Hypothesis What is it that you want to know? • what does leadership want to find out? • what specific issues are top of mind with management? • do you have a specific issue / problem that you want to prove/disprove? • do you need to focus on individuals, teams, divisions, other organisations? • can you answer this hypothesis through ONA? Development of a robust hypothesis is crucial to the success on an ONA

Slide 16: What is the process for undertaking ONA? Question Formulation What questions will allow you to prove/disprove your hypothesis? • questions need to be framed around the issue being addressed • how many topics will be covered in the questions? • how many questions will you ask? • what survey vehicle will be used – spreadsheet, internet survey, hard copy etc • have questions been validated Testing the questions on a representative group is a good idea!

Slide 17: Sample Survey

Slide 18: Sample Network Questions  Communication: – How often do you talk with the following people regarding <topic x>? – How much do you typically communicate with each person relative to others in the group?  Information – How frequently have you acquired information necessary to do your work from this person in the past three months? – Please indicate the extent to which each person provides you with information you use to accomplish your work. – From whom do you typically seek work-related information? – To whom do you typically give work-related information?  Problem solving – Whom do you typically turn to for help in thinking through a new or challenging problem at work? – How effective is each person in helping you to think through new or challenging problems at work?  Innovation – Whom are you likely to turn to in order to discuss a new or innovative idea?  Knowledge awareness – I understand this person's knowledge and skills. This does not necessarily mean that I have these skills or am knowledgeable in these domains but that I understand what skills this person has and domains they are knowledgeable in.  Access – When I need information or advice, this person is generally accessible to me within a sufficient amount of time to help me solve my problem.  Engagement – If I ask this person for help, I can feel confident that he or she will actively engage in problem solving with me.  Safety – Please indicate the extent to which you feel personally comfortable asking this person for information or advice on work- related topics. Source: The Hidden Power of Social Networks – Rob Cross / Andrew Parker

Slide 19: What is the process for undertaking ONA? Hi everyone, Survey delivery Following on from the November Fly Home Friday, we would like each of you to take 10 minutes to participate in an exercise to show the networks and information flows that exist within the Consulting practice in Sydney. We will share the results of this analysis with you at Fly home Friday early next year. What is Organisational Network Analysis (ONA)? Whilst organisations have formal structures, work processes and geographical dispersion, people tend to rely heavily on their network of relationships to find information and solve problems - the informal network if you like. ONA is a tool that we can use to depict the informal networks that exist, understand the information linkages between people and how these networks can be enhanced to improve collaboration. How will the survey be distributed to target audience? An informal network can then be visually displayed as per the example in the picture below. In this example, we can see some patterns emerging. These are groups of people who are connected to each other in networks (one group on the LHS and one group on the RHS). We can see that there is a distinct gap between these two groups where there are few connections or information flows. By looking at this situation, we can start to • what form will the survey take? ask questions as to why this state exists, and how greater connections can be achieved. This type of analysis will also allow the identification of people who are information hubs i.e. are central to the information flows of a larger no. of people. • will it be distributed by email, internet or snail mail? For Consulting, emerging patterns will allow us to then see what linkages exist for us, and start discussions as to how these should / could be enhanced. • what will the follow-up procedure be? • who will champion the ONA programme – will they facilitate the introduction of the survey? • will this be the first people will here of ONA – is there a need to introduce and allay any fears that will dilute the response rate? What's in it for you? By participating in this survey, we can build a picture as to the current state of the Consulting network in Sydney. You can: - see how you are networked within the Consulting practice in Sydney - identify any areas where you could have stronger connections - engage in discussions on what activities are required to ensure that your network is enhanced - assist in building a stronger network How do I complete the survey? The survey can be completed by using the link below to activate the survey. Please answer the five questions listed and submit the form. You do not have to rate everyone listed. When will I be able to see the results of this survey? The results of this survey will compiled and provided back to you at Fly Home Friday early in the new year. If you have any questions, please do not hesitate to contact me

Slide 20: What is the process for undertaking ONA? Results Analysis OK – you have your results – an 80% response rate – what now? • need to have decided what analysis program you are going to use i.e. UCINET, InFlow etc • understand that the analysis is more than pictorial – an understanding of network analytics is required • do not make assumptions in interpreting the data you find – work with the organisation to ensure that conclusions can be validated • use the attribute data you have – consider the impact of different network characteristics

Slide 21: Please indicate the extent the listed people provide you with information you use to accomplish you job Sydney Melbourne Brisbane Perth Cross-city density Syd Mel Bris Perth Syd 44.9% 3.3% 3.3% 1.4% Density = 12.9% Mel 3.9% 42.7% 1.3% 3.5% Distance = 2.44 Bris 2.6% 1.6% 44.6% 1.1% Centrality = 29.1% Perth 2.1% 3.5% 1.1% 41.9%

Slide 22: Please indicate the extent the listed people provide you with information you use to accomplish you job Sydney Centrality Melbourne Brisbane Perth Cross-city density Syd Mel Bris Perth Syd 44.9% 3.3% 3.3% 1.4% Density = 12.9% Mel 3.9% 42.7% 1.3% 3.5% Distance = 2.44 Bris 2.6% 1.6% 44.6% 1.1% Centrality = 29.1% Perth 2.1% 3.5% 1.1% 41.9%

Slide 23: Please indicate the extent the listed people provide you with information you use to accomplish you job Sydney Betweeness Melbourne Brisbane Perth Cross-city density Syd Mel Bris Perth Syd 44.9% 3.3% 3.3% 1.4% Density = 12.9% Mel 3.9% 42.7% 1.3% 3.5% Distance = 2.44 Bris 2.6% 1.6% 44.6% 1.1% Centrality = 29.1% Perth 2.1% 3.5% 1.1% 41.9%

Slide 24: Scenario or “what if” analysis

Slide 25: Scenario or “what if” analysis

Slide 26: Each question will provide different patterns Rate your understanding of each person’s areas of expertise Who would you typically turn to for assistance in thinking through a complex business problem

Slide 27: What is the process for undertaking ONA? Getting from “So what” to action Having undertaken your analysis of the results – what now? • do not make assumptions: validate & follow-up key conclusions with project sponsor, especially if you are not part of company culture • conduct some follow-up interviews with identified individuals. Anecdotes can provide insight and direction for further investigation • look to develop follow-on programs to bring participants into the process for developing interventions • ensure that any conclusions drawn address the hypothesis • do not use “jargon” in reports and ensure a base level of understanding of networks before presenting findings

Slide 28: Some ongoing challenges…….. • Senior management “getting it” • ONA is a diagnostic – the real value is in the interventions • Ensuring transparency of results • Overcoming the “fear factor” • Not making assumptions and drawing conclusions without validation • Networks are dynamic – analysis will show the current state of play which WILL change • Organisation culture is important – need to work with client to interpret results

Slide 29: Every manager knows that business runs better when people within an organisation know and trust one another -- deals move faster and more smoothly, teams are more productive, people learn more quickly and perform with more creativity. Strong relationships, most managers will agree, are the grease of an organization. Business gets done without them, but not for long and not very well. How to Invest in Social Capital Laurence Prusak Donald J. Cohen Havard Business Review

Slide 30: A member firm of Deloitte Touche Tohmatsu