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