Philosophy IB

Using Social Network Analysis to Improve Organizational Performance

Tuesday, 7 February 2006

Philosophy IB 4/24/2006

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Overview of the Session • • • • • •

Defining Social Networks Social Networks and Organizations Social Network Analysis Methodology Client Case Small-Group Breakout Close

Philosophy IB 4/24/2006

What if… …you could x-ray your organization to learn how work was really getting done… Safarikas Baker McDonald

Jolley

Couch

Schieble

Collins

Atkins

Joyner

Hopkins

Burke

Zhang

Spradley Stern

Philosophy IB 4/24/2006

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Imagine if You Could Use the Information to… 1.

2.

3.

4.

Accelerate Accelerate the the innovation innovation of of new new products products and and services services

Promote Promote top top leadership leadership team team effectiveeffectiveness ness

Improve Improve the the performance performance of of critical critical units units

Execute Execute corporate corporate strategy strategy faster faster

Philosophy IB 4/24/2006

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What is Social Network Analysis (SNA)? • A social network represents the web of relationships between individuals, groups, or organizations • These relationships are important because they affect attitudes, behavior and effectiveness • SNA provides a way to uncover, measure, and analyze these relationships

Philosophy IB 4/24/2006

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Social Network Examples Intra-Departmental “Water Cooler” Network

Organizational Employee Transfer Network

Inter-Departmental Information-sharing Network

Philosophy IB 4/24/2006

Role of Informal Social Networks within Organizations Formal

Informal Safarikas Baker McDonald

Jolley

Couch

Schieble

Collins

Atkins

Joyner

Hopkins

Burke

Zhang

Spradley Stern

Driving new “star” products to market Stage 1

D1

Stage 2

Philosophy IB 4/24/2006

D2

Stage 3

D3

and so on...

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Networks Affect Organizational Effectiveness "Research shows that appropriate connectivity in well-managed networks within organizations can have a substantial impact on performance, learning, and innovation,” (Cross & Parker, 2004)

"Increasingly, it is through these informal networks -- not just through traditional organizational hierarchies -- that information is found and work gets done," (Cross & Prusak, 2005) "Many executives invest considerable resources in restructuring their companies, drawing and redrawing organizational charts only to be disappointed by the results. That's because much of the real work of companies happens despite the formal organization. Often what needs attention is the informal organization, the networks that employees form across functions and divisions to accomplish tasks fast," (Krackhardt & Hanson, 1993)

Now at the top of my list is organizational structure—but not hierarchical factors. Rather, I would like for us to understand more about self-directed groups, cells, and especially networks, the web that holds cells together,” (Burke, 2002) Philosophy IB 4/24/2006

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A Few Business Applications…

n

o

p

q

r

Efficient Efficient and and effective effective results results through through better better collaboration collaboration

Improved Improved leadership leadership performance performance and and teamwork: teamwork:

More, More, better better products products and and services services faster: faster:

Faster Faster and and more more successful successful integration: integration:

Accelerated Accelerated adoption adoption and and less less resistance resistance to to change: change:

Strategic Strategic Projects Projects

•• Cross-boundary Cross-boundary information information sharing sharing •• Engendering Engendering trust trust •• Faster and more Faster and more efficient efficient decisiondecisionmaking making

Leadership Leadership Development Development

Philosophy IB 4/24/2006

•• Optimize Optimize leaders' leaders' personal personal networks networks in/outside in/outside the the organization organization •• Connect Connect leaders leaders to to helpful helpful information information and and resources resources.. •• Identify Identify successors successors for talent for talent management management program program for for increased increased bench bench strength strength

Promoting Promoting Innovation Innovation

•• Expand Expand access access to to new ideas new ideas •• Leverage Leverage expertise expertise across new across new product product development development process process •• Drive Drive innovation innovation with with the the “right “right people” having people” having the the “right “right conversation” conversation”

Mergers Mergers & & Acquisitions Acquisitions

•• Identify Identify and and retain retain key talent key talent •• Identify Identify areas areas of of synergy synergy •• Leverage Leverage critical critical individuals individuals during during integration integration •• Track Track interinterorganizational organizational cooperation cooperation

Managing Managing Change Change

•• Identify Identify and and leverage leverage influential influential change change agents agents •• Connect Connect appropriate appropriate stakeholders stakeholders to to the the change network change network •• Map Map optimal optimal pathways pathways to to cascade cascade information information faster faster

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Typical SNA Methodology

Identify Business Objectives

• Interview managers and key staff to understand specific business problems or opportunities

Philosophy IB 4/24/2006

Conduct SNA

• Define the network • Survey members to identify existing relationships • Use computer modeling tools to illustrate and analyze the network

Design & Implement Interventions

• Identify possible challenges or improvement opportunities • Design and conduct interventions to align the network with business goals

Follow-up

• Map the network again after a period of time to track and evaluate progress

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A Client Case • Goal: – Fortune 500 company wished to increase sales 10% through use of innovative packaging

• Need: – Required Manufacturing and R&D to collaborate on packaging development

• Constraints: – Groups fragmented by functional, geographic and cultural boundaries – Packaging development problems delaying new product launches by 3-12 months

Philosophy IB 4/24/2006

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Initial Interviews "Previously, it was just line extensions. Now they want 10% sales growth from new SKUs, but the process and organization didn’t evolve accordingly."

"There is a lack of proper representation from design: on projects that had compatibility and engineering issues, secondary design people came to the meetings."

"Manufacturing worries about how packages are manufactured. They don’t think about how design can help consumers buy more products."

"The main area for improvement is having adequate resources in design. If I had one resource, I would put it in design to deal with packaging issues."

"Lots of compatibility testing is done but the information is not used…The information is generated but not leveraged."

25%

Frequency

20% 15% 10%

No standardized design process

5% 0 Philosophy IB 4/24/2006

Different group missions and goals

Ill-defined roles and responsibilities

Inadequate crossfunctional communication

Lack of design resources

Initial Social Network • Confirmed and quantified lack of cross-functional communication • Implied unclear roles might stem from people only contacting familiar individuals • Revealed that design expertise was not effectively utilized 35%

Centrality Score

60

Unitilization

50

25%

40

20%

30

15%

20

10%

10

5%

0

R&D Division Manufacturing Division Unconfirmed Ties Confirmed Ties

Philosophy IB 4/24/2006

30%

a Br

0% on nd

vid ha Da eg M

n Ro

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n Do

d al

m Ja

es

ke Ja

C

ol ar

ra Sa

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e an Di

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Utilization

70

Post Social Network 105% increase in cross functional communication Balanced utilization of design resources Informal and formal roles aligned Evolution from routine to customized network architecture 70

35%

Unitilization

Philosophy IB 4/24/2006

0%

M

Di a

Ni n

Ja m

Kr ist en

0 Ja ke

5%

ne

10

Sa ra

10%

a

20

Do na ld

15%

Ca ro l

30

Ro be rt

20%

eg ha n

40

es

25%

Br an do n

R&D Division Manufacturing Division Unconfirmed Ties Confirmed Ties

30%

50

Da vid

Centrality Score

60

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Utilization

• • • •

Business Result

A reduction of at least 45 days in the time required to develop innovative new packaging*

*Quantification derived from project management data and validated by client Philosophy IB 4/24/2006

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Exercise: Identification of SNA Applications Duration: Duration:55minutes minutes Directions: Directions:

1.1. Split Splitinto intogroups groupsofof4-5 4-5people people 2.2. List Listpotential potentialSNA SNAapplications applications 3.3. Be Beprepared preparedtotodescribe describe2-3 2-3that thatyou youfeel feelare areparticularly particularlyrelevant relevant

Consider: Consider: –– –– –– ––

In Inwhich whichcollaboration collaborationacross acrossfunctions, functions,teams, teams,or orgeographies geographiesisisimportant important That Thatentail entailcross-organizational cross-organizationalpartnerships partnershipsor oralliances alliances Where Whereindividuals individualsneed needtotorely relyon onothers others That Thatrequires requiresorganizational organizationalrestructuring restructuring

Philosophy IB 4/24/2006

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Q&A

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For More Information… • Popular Books on Networks

• • • • •

, [email protected] International Network for Social Network Analysis Yahoo! UCINET User Group International Sunbelt Social Network Conferences University of Virginia’s Network Roundtable

Philosophy IB 4/24/2006

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