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Link - Workforce Planning - Handout 3


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Link - Workforce Planning - Handout 3

  1. 1. Organization Network Analysis: Uncovering the Hidden Relationships that Drive Performance, Learning, and Change Strategies and initiatives are fundamentally flawed in most companies because they are built on incomplete information. Mapping informal networks can help companies leverage critical knowledge assets to mobilize change and boost performance. Organization charts identify leaders, departments, Unexpected Discoveries and reporting relationships. Process maps show the Leaders in a global consulting firm discovered flow of work across departments and divisions. But unexpected patterns after mapping their despite our best efforts to document how work organization’s informal networks. They were happens in organizations, there are still fundamental surprised to find that staff within one division had gaps in our understanding. essentially split into two groups based on common interests: technical versus business subject matter This lack of understanding is reflected in results: just experts (Figure 1). The groups failed to collaborate 38% of leaders in one study reported that their and, as a result, the company missed opportunities. change initiatives were completely or mostly successful at improving performance (McKinsey, 2006). There’s clearly something missing. A Hidden Web of Relationships Underneath the organization charts and process maps is a hidden web of relationships that determines who people interact with, how often, and for what purposes. These relationships affect the Figure 1: The Network before Intervention speed of execution, the creativity of problem-solving, Blue circles represent technical experts while red circles and the quality of decision-making. represent subject matter experts. The purple circle represents the one staff member who was informally responsible for connecting the two factions. Lines show connections between individuals. All employees are connected through relationship Image: Adapted from Cross, Borgatti, & Parker, 2002. networks. Employees leverage their relationships to improve processes, solve problems, and complete After becoming aware of the schism, leaders work. In fact, employees are much more likely to go designed interventions in order to bridge the gaps to people for information than they are to go to the between groups. They changed project internet, intranet, or corporate knowledge base assignments, instituted sales goals that integrated (Cross, Parker, Prusak, & Borgatti, 2001). responsibilities from both groups, and created communication venues to keep people in touch. Despite the power of informal networks, most people have little insight into the shape and influence of After nine months, a follow-up network analysis was their networks. Furthermore, leaders are often blind performed. The new network map told a very to how informal relationships influence different story. Rather than revealing factions and organizational performance and productivity. divisions, this map showed a deeply integrated and connected organization (Figure 2). © 2008 Partnering Resources
  2. 2. Their efforts paid off. In 2005, areas engaged in “Pride Builders” posted impressive results: 71% increase in employee satisfaction and a whopping 245% increase in customer satisfaction in comparison with a control group (Reingold & Yang, 2007). Case Study #2: Novartis Novartis has also used networks to boost results. The Swiss pharmaceutical company needed to gain approval, produce, and disseminate new drugs Figure 2: The Network after Intervention quickly and efficiently. Leaders recognized the Blue circles again represent technical experts while red circles importance of networks and developed an represent subject matter experts and lines represent interactions. organization chart with permeable boundaries. They The person represented by the purple circle left the division. encouraged informal networks and trusted Image: Adapted from Cross, Borgatti, & Parker, 2002. relationships through various avenues. The ROI on Network Awareness Because of their efforts, Novartis ranks among the The informal network functions as an organizational broadest pharmaceutical products pipelines in the circulatory system. When the circulatory system isn’t industry. It achieved 7 major drug approvals in 2003 healthy, companies lose opportunities and and launched 11 new medicines in the U.S. from experience performance problems, as did the global 2000 to 2005. In addition, Novartis was voted by consulting organization. When functioning properly, Fortune as one of ten best European companies to informal networks can help information flow, connect work for (Cross, Liedtka, & Weiss, 2005). problem solvers and strategists, and mobilize needed resources for change. In addition, they can: Leaders are just beginning to understand how to identify and leverage networks in organizations. • Improve collaboration across divisions Once they do, they will access a powerful source of • Increase innovation and creativity • Accelerate knowledge transfer organizational energy to accelerate change, grow • Alleviate bottlenecks that impede workflow talent, and improve performance. • Prevent loss of mission-critical information by References identifying, developing, and retaining key staff Cross, R., Borgatti, S.P., & Parker, A. (Winter 2002). “Making • Accelerate adoption of new change initiatives Invisible Work Visible: Using Social Network Analysis to and strategies Support Strategic Collaboration.” California Management Review. Cross, R., Liedtka, J., & Weiss, L. (March 2005). “A Practical The following two case studies demonstrate the Guide to Social Networks.” Harvard Business Review. results that can be achieved when companies grow Cross, R., Parker, A., Prusak, L., & Borgatti, S.P. (2001). and leverage healthy informal networks. “Knowing What We Know: Supporting Knowledge Creation and Sharing in Social Networks.” Organizational Dynamics. McKinsey Quarterly (2006). “Organizing for Successful Change Case Study #1: Bell Canada Management: A McKinsey Global Survey. Available at In 2002, Bell Canada’s new CEO faced a difficult problem: how to bring a 122-year-old company with Reingold, J. & Yang, J.L. (July 18, 2007). “The Hidden Workplace.” Fortune. Available at a deeply-embedded monopolist culture into the 21st century. To address the challenge, he and other About the Author leaders identified people in key network roles and Maya Townsend, founder and principal engaged them in “Pride Builders” meetings. This consultant at Partnering Resources, builds aligned, focused organizations that achieve group created its own community of practice, shared their goals more effectively. For more ideas, identified and tackled cross-functional information, visit or email problems, and accelerated key business processes. © 2008 Partnering Resources