Seeing How Work Really Gets Done
Graphite and diamond are made of exactly the same thing: carbon. Yet graphite is dull, soft, and opaque, while diamond is brilliant, hard, and transparent. The difference isn’t what they’re made of. It’s how their atoms are connected.
Organizations work the same way. Two companies can have similar talent, strategies, and structures and still get very different results. What sets them apart is how their people connect.
That idea was at the center of CLA Managing Partner Steve Garcia’s keynote at the ODF Conference. The talk covered how organizational network analysis (ONA) can help leaders align how work really gets done with the organization’s design and purpose.
Formal vs. Informal Networks
Every organization has two structures. The formal organization, the org chart, reflects how we manage and our theory of how work is done. The informal organization reflects how work actually gets done: the networks employees build across functions and divisions to get things done quickly.
As Harvard Business Review has noted, much of a company’s real work happens despite the formal organization. That makes informal networks one of the most important things a leader can pay attention to.
The data backs this up. In research CLA presented to the Society of Consulting Psychology, a person’s position in the network was the strongest predictor of employee performance. It outweighed personality, experience, cognitive ability, and education.
The problem is that most leaders have no visibility into these networks. As a result, they make decisions with blinders on.
What Is Organizational Network Analysis?
Organizational network analysis is a quantitative method for x-raying your organization. It shows how people actually work together to solve problems, make decisions, and share information.
ONA has deep roots. They go back to Euler’s graph theory in the 1700s and to the Hawthorne studies at Western Electric, which first identified the existence of an “informal organization.” Since then, the field has grown through decades of work in sociology, psychology, and management. Interest has accelerated sharply in recent years. Research on social network analysis in management journals has surged, and major technology companies such as Microsoft and IBM have invested heavily in the field.
Why ONA Matters More Than Ever
The business environment has fundamentally changed. Digital technologies have hyperconnected it, and the pace of change has increased dramatically. New opportunities and threats now appear seemingly overnight. Together, these forces have turned the business environment from something merely complicated into something complex, where cause and effect are much harder to understand and outcomes are much harder to predict.
The organizations that thrive in this environment behave like complex adaptive systems. They are dynamic systems made up of many autonomous parts that follow simple rules and rapidly self-organize as conditions change.
This requires a new enterprise operating model. Command-and-control organizations, with top-down hierarchy, centralized decision-making, and up-front planning, were efficient in stable environments. Adaptive organizations are built for unstable ones. They are organized as horizontal networks aligned around creating value, and they rely on decentralized decision-making and rapid test-and-learn cycles. Adaptive organizations make faster decisions, innovate more, focus more on customers, and have more engaged employees. Over time, they also achieve better market capitalization and total shareholder return.
Because complex adaptive systems are best understood as networks of interactions, ONA is the natural tool for designing and building them.
Seven Ways to Build More Purposeful and Adaptive Organizations with ONA
1. Pinpointing key influencers. Adaptive organizations rely on influencers to win commitment across the enterprise and to report what’s happening on the ground. Senior leaders typically have limited visibility into who the true influencers are. In one engagement, ONA identified 44 key influencers who together reached 77% of the network.
2. Improving cross-functional collaboration. Relationships that bridge functions and silos are critical for solving problems, making decisions, sharing information, and finding resources. ONA shows where those connections are strong, where teams are isolated, and which individuals act as bridges between groups. In one organization, for example, the analysis showed heavy interaction between Supply Chain and Project Management, minimal interaction between Sales and Marketing, and a key project team that was highly isolated.
3. Accelerating decision-making. Adaptive organizations spread decision-making throughout the enterprise. This speeds decisions and improves their quality by drawing on the knowledge of the people closest to customers, competitors, and partners. ONA reveals bottlenecks and how decision-making participation drops off by level. In one organization, 63% of associates weren’t consulted on any important decisions, a clear sign of a top-down culture.
4. Increasing feedback. Adaptive organizations share feedback continuously in every direction: up, down, and across. This gives associates the information they need to adjust how they work in real time. ONA shows where feedback flows and where it doesn’t. In one case, 88% of feedback stayed within the chain of command, and 15% of associates received no feedback at all.
5. Detecting signals in the external environment. Organizations with many diverse external connections spot new opportunities and emerging threats faster. ONA can show which groups have rich external networks, which are insular and prone to “not invented here” thinking, and which rely too heavily on a small number of redundant contacts that can exaggerate certain signals.
6. Fostering diversity and inclusion. ONA shows whether an organization is drawing on the unique capabilities of all its people. In one analysis, the network showed clear separation by gender: men tended to connect with men, and women with women. That insight gave leaders a concrete starting point for building a more connected, inclusive culture.
7. Discovering hidden leaders. By analyzing followership, meaning the trust and respect a person earns from peers and superiors, ONA can surface leaders the organization didn’t know it had. One client increased its leadership bench strength by 30% in a single month.
Building the Connections That Matter
You can’t mandate that people become friends. You can, however, create conditions that dramatically increase the chances that relationships will form. That means putting people in the same physical or virtual space and giving them something in common.
Organizations have a range of options, from easier to harder to implement:
- Implementing peer learning circles
- Using technology such as Ten Thousand Coffees
- Redesigning the physical space
- Establishing cross-functional mentoring
- Creating cross-functional project teams
- Restructuring reporting relationships
The impact can be significant. In one example, peer learning circles increased cross-enterprise collaboration by 495%.
How CLA Approaches ONA
Our ONA engagements follow four stages:
- Configure the study. We scope the research questions and design the survey, socialize the approach with the broader leadership team, and communicate the study’s purpose to respondents.
- Collect the data. We launch a web-based survey, answer respondents’ questions, and track response rates.
- Analyze and visualize the data. We integrate responses, clean the data, and map the networks to generate insights.
- Share results and recommendations. We present what we found and recommend specific improvement opportunities.
A typical study takes about six weeks and uses a survey of roughly ten minutes, with a target response rate of 85% or higher. Survey questions explore the relationships that matter most, such as who people turn to for help with complex problems, who they involve in important decisions, who energizes them, and who gives them insight into the external marketplace.
The Results
Our clients have seen measurable outcomes from ONA:
- A $12B professional services firm increased leadership bench strength by 30% in less than three months.
- A global CPG company improved collaboration among marketing, R&D, and manufacturing by 105%, cutting its new product development cycle by three months.
- A Fortune 500 telecommunications provider expanded its pool of internal data analytics experts by 66%, speeding execution of a new business strategy.
As the Head of Global Medical Affairs at a global pharmaceutical sciences company put it, “I can’t imagine how someone could lead without this data.”
Let’s Talk
Contemporary Leadership Advisors helps organizations see how work really gets done and use that insight to build organizations that are more purposeful and adaptive. To learn how organizational network analysis could help your organization, email us at inquiries@contemporaryleadership.com.