Organizational networks, not hierarchies, define business success today. People share ideas, make decisions and solve problems by forging a network of relationships. But leaders and others in the business often don’t understand how these important connections work, limiting their ability to target, measure and adjust corporate strategies for maximum impact. To be successful business partners, HR professionals must learn how to analyze these organizational networks to maximize the return on human capital.
What Are Organizational Networks?
Aside from formal organizational structures, people create their own networks at work in order to solve problems, make decisions and enlist personal support. It is through these connections that the real work often happens. Progressive HR leaders are applying organizational network analysis (ONA) to gain insights into these powerful interactions.
ONA is a method for mapping, visualizing and analyzing the informal networks of people within organizations. While many organizations have conducted some form of ONA for years, more-sophisticated analyses have become available only recently, thanks to increased computing power and easy-to-use software.
How to Conduct an ONA
The first step in conducting an ONA is to identify your business objective. Do you need to increase collaboration between departments? Do you want to identify emerging leaders?
Next, define the project scope for your analysis. For example, are you targeting the North American division, the marketing function, the entire company or some other group? And what are the relationships of interest—problem-solving relationships, decision-making relationships or other kinds of relationships?
With these decisions made, you can begin collecting network data. This data can be gathered passively (for example, by analyzing historical e-mail traffic) or actively (for example, by asking employees, typically via a Web-based survey, who they communicate with most frequently about different topics).
Once the data are collected, use software to map the network and analyze its characteristics. This will become the basis for findings and recommendations on improving organizational effectiveness.
Here are three ways HR can apply an organizational network analysis:
To identify emerging leaders. Traditionally, emerging leaders in an organization are identified from the top down. Executives select the up-and-comers they believe are best-suited to lead the organization in the future. Often, HR provides historical performance data to aid executives in the identification process.
While executives undoubtedly have an important role to play in identifying emerging leaders, their perspectives can be skewed. Often, senior leaders are several levels removed from an organization’s front lines. In addition, they may be prone to identify only people similar to themselves, a common selection bias.
By contrast, an ONA uses a bottom-up approach. By asking employees who they turn to for help in solving problems, making decisions or increasing their energy, for example, a picture emerges of those associates who are most critical to the organization’s success. Often, at least half of the employees named as having significant levels of influence come as a surprise to senior leaders.
To develop employees. More than ever, leaders’ success depends on their ability to build and maintain strategic relationships. That reality means new leadership competencies are needed. These include the ability to manage in a matrix environment, lead without authority, break down silos and collaborate across functions.
An ONA can provide individual employees with an assessment of their personal networks. It can also analyze dimensions that show how well a leader’s network supports skills such as creativity, influence, execution, positivity and resiliency—key traits that contribute to leaders’ success.
To retain talent. An ONA can serve as an early-warning system for two types of employees at risk of leaving the company: people who have become disengaged and those on the verge of burning out.
The analysis identifies disengaged employees by assessing their relationship with their direct supervisor, their access to personal support at work, and the degree to which they are engaged in the larger network of problem-solving and decision-making.
Research has shown that employees who do not enjoy a strong relationship with their boss, lack personal support and are not plugged into the larger network are much more likely to leave than their peers. In addition, the workers who everyone seeks to connect with can become overwhelmed, increasing their likelihood of leaving. By applying an ONA, HR can intervene in such situations before it’s too late.
Whether your top priority is identifying emerging talent earlier, developing key leadership skills or making sure employees are engaged, insights from an organizational network analysis will radically increase your visibility and help enhance the impact of all your programs.
Stephen Garcia, Ph.D., is a partner at Philosophy IB, a management consulting firm that achieves meaningful and sustainable performance improvements by bringing clients’ strategies to life. He can be reached at firstname.lastname@example.org.
Greg Wallace is sales and marketing director for SYNAPP, a Web-based predictive people analytics solution based on organizational network analysis.He has 20 years of experience in B2B technology marketing. He can be reached at email@example.com.
Case Study: Westwood Professional Services
Westwood Professional Services Inc., a multidiscipline survey and engineering firm based in Eden Prairie, Minn., conducted an organizational network analysis (ONA) of one of its business units following a period of rapid growth.
Business Challenge: Kevin Larabee is vice president of HR for Westwood. In his role, he looks to support the organic relationships that underpin the firm’s creative problem-solving with just enough formal structure to ensure efficiency—and he wanted help. “We believe that if we put smart, creative people together in one room, great ideas happen, successful projects result, and we save our clients time and money,” Larabee says.
How ONA Helped: Larabee and his team deployed a Web-based employee survey to uncover work connections within the business unit and to define the degree to which members of different subteams collaborate. The team then worked to overlay proposed organizational charts on organizational network data to determine where connections between managers and their reports were strong, weak or nonexistent.
Results: As Westwood continues to grow, the company looks to Larabee to make sure the organization’s networks are aligned to achieve its business goals. Based on the ONA, “We immediately undertook targeted team-building and organizational design measures to strengthen our network,” Larabee says.
Copyright 2015. International Association for Human Resource Information Management. Used with permission.