The value of Social Network Analysis

When a division of Cigna Corp. wanted to break down its geographic barriers and become a more global organization, its leaders hoped to informally enlist influential employees to assist with change management. But first they had to identify which employees were most connected with others and who did the most to forge relationships across locations. So leaders conducted a social network analysis.

After surveying 200 division managers in 10 countries, they analyzed the results with social network software that handles large amounts of data and illustrates the findings visually. The analysis identified a dozen people as the main "connecting" and "bridging" employees. The big surprise: Half of them were not people who the division leaders thought would be in the group.

Typically, if you ask leaders who their company’s influencers are, 75 percent of the names they provide will be incorrect, says Karen Kocher, Cigna’s chief learning officer, who worked on the analysis. "We had half the people identified correctly, which is pretty good," she says. "There are hidden gems in every organization, at every level. That’s why you need to use scientific survey methodology to identify them."

Discovering who does the most to connect, communicate and collaborate with fellow employees is a seminal outcome of any social network analysis. Also known as organizational network analysis, it is a data-driven methodology supported by software to quantify and illustrate the number and strength of personal connections. Most analyses are based on a survey of employees or managers, but they can also be based on e-mail traffic; increasingly, both methods are used together.

Today’s computer networks, including the Internet and wireless networks, create human-connection grids that are larger than ever. This may be why social network analysis, which has existed for decades, is becoming a more popular way to understand organizations and change.

A New Perspective

Organizational hierarchies are likely to exist as long as organizations do. But companies also have informal networks, which flatten hierarchical structures and diminish the relevance of an official pecking order. The majority of work is so complex that no one person has all the knowledge, experience or skills to handle it. Formally or informally, people collaborate to get work done.

"Network analysis shows what happens in the white space on the organization chart," says Valdis Krebs, founder and chief scientist at Orgnet LLC, a vendor of network analysis software and services based in Cleveland. Krebs, a former HR professional in the automotive and defense industries who has spent more than two decades developing software and methodology for network analysis, adds, "HR is very good with org charts, but the boxes and the lines connecting them aren’t always how things get done."

Greg Pryor, vice president for leadership and talent matters at Juniper Networks Inc., a Silicon Valley-based developer of software and hardware for network equipment, agrees. In the 21st century, he says, the business is the network, and earlier ideas about chain of command and linear work processes are inadequate.

"Our org charts are interesting ways to organize people and work," says Pryor, who has used social network analysis since 2010. "But the organizational network approach is a more realistic way to look at how our work gets done and how our business actually operates."

Based on surveys of its member companies’ employees, conducted in late 2012, the Corporate Executive Board (CEB), a member-based corporate advisory service, found that, compared with three years earlier:

• 67 percent of employees have more interactions with more co-workers.
• 50 percent say they are more dependent on others to get their job done.
• 57 percent report an increase in the number of colleauges they work with in other geographic areas.

"We’ve gone from a siloed workforce to a connected workforce to an interdependent workforce," says Brian Kropp, CEB’s managing director. "However, the organizational structures haven’t aligned with this yet."

Social, or organizational, networks form the hubs where work is accomplished. Who creates the networks? Who remains on the periphery? Those questions can be answered by acquiring a network perspective through social network analysis and software, which creates a picture of who does what and how work flows. Then organizations can better support, develop, recognize, and retain those people and their informal networks.

"Networks remain invisible to or misunderstood by many people in management and leadership roles," Kristen Cullen, a member of the research faculty at the Center for Creative Leadership, wrote in a recent paper titled "Developing Network Perspective." "They are missing a powerful perspective to help them operate effectively in complex, changing times because networks are more responsive and flexible than hierarchical channels."

Rob Cross, an associate professor in the management department of the McIntire School of Commerce at the University of Virginia, has conducted research on social network analysis and is a leading expert in its commercial use. "Social network analysis is a vehicle that lets us take an X-ray of groups you care about to see where communications are taking place that create value or decline value," says Cross, a consultant and investor in Activate Networks Inc., a social network analysis company based in Newton, Mass. The analysis also reveals where the siloes are, he adds.

Many Uses

When Juniper first conducted a network analysis, company leaders wanted to know which employees were involved in serving one of its major customers. Based on a survey of 300 employees named by various managers, the analysis identified more than 900 employees in 12 locations—representing 14 functions and eight levels of management—who were involved in serving the customer, according to Chris Ernst, the company’s vice president for leadership and organizational effectiveness. Five percent of those employees accounted for more than one-fifth of all the connections.

"Knowing who those 5 percent were, and thinking about them in this context, drove different ways for us to recognize their importance to enabling information flow and collaboration so critical to innovation," Ernst says.

Ernst and Pryor say social network analysis has led them to rethink traditional approaches to talent management processes, including recruiting, learning, performance management and compensation. Both executives expect that what they are learning will change these processes in time.

Social network analysis has already affected the Cigna division’s approach to retention. After identifying its hidden gems of "connectors" and "bridgers," Cigna asked respondents what impact there would be on the organization if those people left. The answers "gave us insight into a retention strategy," says Leah Alibozek, learning director at Cigna University. "We kept those people and rewarded them for the informal role they played.

"Leaders tend to lock into their favorites and notice who they want to notice. They miss others who have a big impact," she continues. "Some employees who are top connectors are not effective at managing up and fall off the radar."

CEB’s Kropp says the network perspective is changing the definition of a high-performing employee. "The best employees today are not only good at individual tasks but also at driving the network performance."

Social network analysis is also being applied in areas other than talent management, according to interviews with consultants and HR professionals. Some examples: