This is a simple case study for organizational network analysis fans out there
This case study came up in my research as I was looking at examples of organizational network analysis driven change management and I thought it would be good to share it here. I found it in an old copy of Rob Cross’ book.
The case itself focuses on conducting organizational network analysis on a $1 billion provider of information technology consulting services who in late 2005 had launched a strategic initiative to change from a region-centric organizational structure to a matrix organization.
An organizational network analysis was conducted for the top 250 executives in order to reveal possible issues in the upcoming change. The idea there is to figure out where resistance to the change might take place and at what place in the leadership network that resistance might take place. Among the many things that were found and that organizational network analysis revealed was that if they removed less than 5% of the top three layers of the organizational leadership, a decrease in the number of revenue producing collaborations took place in the network by roughly 26%. In other words, most of the operational transaction that actually produced revenue for the company was initiated and operated by the top 5% of the company. Now imagine losing that top 5%!!
Had they not conducted the organizational network analysis the restructuring of the organization through the use of traditional methods could have very well eradicated the invisible network, and all the network collaborations that went with it. The chance was they were likely to get rid of some leadership which was essential to driving revenue generation. The traditional methods that I mention are known to most HR professionals. Basically, you look at some criteria that is supposedly relevant to the change objectives, say the highest paid, the least senior, the ones who appear more stagnant and you, plainly said, cut ’em!!!
Having conducted the network study, the company now can use this information to precisely engage in the change while ensuring that the most essential communication and collaboration activities that produced sweet cash for the company stayed intact and unspoiled.
In another case, this one related to culture change, organizational network analysis provided an incredible advantage that allowed leaders to see how their culture is distributed across their division. the study was able to identify the true opinion leaders of each group/division and made the tactical strategy of reaching out to them to get their buy-in pretty damn simple.
In general organizational network analysis provides a way to see cultural beliefs within individuals of the organization,. by looking at where in the network structure they fall. It also allows for some understanding of how those cultural beliefs are communicated and are promulgated to their peer groups, departments, and the overall organization. Statistical analysis doesn’t really do this well, but it misses the main part of a person’s belief structure, which is what people around him/her also believe. We don’t live and work in a vacuum! And, safe to say most of the other models for culture change are at best qualitative and at worst completely made up and ineffective.
Of course, to measure cultural beliefs is to measure what your corporate staff are willing to tell you about their internal beliefs, which may or may not have anything to do with how they plan to act or behave. Sometimes that measurement is not entirely accurate, and in fact many of the surveys that we ask employees to take in the organizational context often come out as both impractical and unreliable when it comes to real insights. This is because they do not feel the need to share with their employer potentially private information such as their personal viewpoints on change initiatives, and organizational culture. Yes fear of retaliation and repercussions are still alive and well in most companies, I’m sad to say. Of course, that becomes an issue when an executive or an organizational leader is attempting to accurately measure the culture of his or her organization because without clear and accurate data one cannot make clear and accurate decisions.
I should mention that this challenge is almost always faced with any social tool/initiative/program that is designed to extract information from any particular human source whether that source is an employee in a company or a random person. There is always an error (sometimes statistical) that is introduced by the strictly human reasons inherent in the process, such as discomfort or distrust of authority, disengagement from the organizational context, unwillingness to share additional value with the organization, and sometimes lack of self-knowledge. That error factor will always be in the mix, so it should not shy away organizational network analysts and consultants from doing a network survey anyway. The issue becomes especially prevalent in organizational cultures were openness is not encouraged and organizational protocol, rules, and regulations are the sole source of individual motivation. Yes, if your company does not have a good and open culture, the chances are organizational network analysis will be even less effective for you than other companies, as long as you rely on survey data to conduct the analysis.
And, while managing by objectives is sometimes seen as the prevalent management method in organizations, often it is not enough to ensure that the organization is collaborating, communicating, and working together. You have a to build a free form, evolving, positive culture from the ground up before you can take it to its maximum potential!
Organizational network analysis offers a sense of the various relationships and how individuals can be connected and that is its real power in the modern firm.It is a more accurate and precise assessment of cultural and organizational dynamics, but it needs a healthy host in order to do its magic!