
Introduction
to Organizational Network Analysis
Over
the past decade or so significant restructuring efforts have resulted
in organizations with fewer hierarchical levels and more permeable functional
and organizational boundaries. While hopefully promoting efficiency
and flexibility, a byproduct of these restructuring efforts is that
coordination and work increasingly occur through informal networks of
relationships rather than through formal reporting structures or prescribed
work processes. These seemingly invisible webs have become central to
performance and strategy execution. Research shows that appropriate
connectivity in networks within organizations can have a substantial
impact on performance, learning, and innovation, and benefits also accrue
from well-connected networks between organizations.
Organizational
network analysis (ONA) can provide an x-ray into the inner workings
of an organization --- a powerful means of making invisible patterns
of information flow and collaboration in strategically important groups
visible. For example, we conducted an ONA of executives in the exploration
and production division of a large petroleum organization. This group
was in the midst of implementing a technology to help transfer knowledge
across drilling initiatives and was also interested in assessing their
ability as a group to create and share knowledge. As can be seen below,
the network analysis revealed a striking contrast between the group's
formal and informal structure.

Three
important points quickly emerged from the ONA:
First, the ONA identified mid-level managers that were critical in terms
of information flow within the group. A particular surprise came from
the very central role that Cole played
in terms of both overall information flow within the group and being
the only point of contact between members of the production division
and the rest of the network. If he were hired away, the efficiency of
this group as a whole would be significantly impacted as people in the
informal network re-established important informational relationships.
Simply categorizing various informational requests that Cole received
and then allocating ownership of these informational or decision domains
to other executives served to both unburden Cole and make the overall
network more responsive and robust.
Second, the ONA helped to identify highly peripheral people that essentially
represented untapped expertise and underutilized resources for the group.
In particular, it became apparent that many of the senior people had
become too removed from the day-to-day operations of this group. For
example, the most senior person (Jones) was one of the most peripheral
in the informal network. This is a common finding. As people move higher
within an organization their work begins to entail more administrative
tasks that makes them both less accessible and less knowledgeable about
the day-to-day work of their subordinates. However, in this case our
debrief session indicated that Jones had become too removed and his
lack of responsiveness frequently held the entire network back when
important decisions needed to be made.
Third, the ONA also demonstrated the extent to which the production
division (the sub-group on the top of the diagram) had become separated
from the overall network. Several months prior to this analysis these
people had been physically moved to a different floor in the building.
Upon reviewing the network diagram, many of the executives realized
that this physical separation had resulted in loss of a lot of the serendipitous
meetings that occurred when they were co-located. Structured meetings
were set up to help avoid operational problems the group had been experiencing
due to this loss of communication between production and the rest of
the network.
This
simple vignette provides a quick overview regarding how ONA can be applied
to important departments or functions within organizations. However,
many strategically important networks do not reside on the formal organization
chart. The following web pages illustrate use of ONA to address various
organizational issues:
1.
Supporting partnerships and alliances
2. Assessing strategy execution
3. Improving strategic decision making in top leadership
networks
4. Integrating networks across core processes
5. Promoting innovation
6. Ensuring integration post-merger or large-scale
change
7. Developing communities of practice
8. Personal networks and leadership development
Conducting a Organizational Network Analysis
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