It is important to remember that brokers need greater authority and flexibility to make decisions. After all, an organization benefits little when a broker can see opportunities or threats in the marketplace but cannot act on them in a timely manner. At one online retailer, for example, product managers often acted as brokers among marketing, operations and information technology groups. In order to do their jobs well, these managers needed real-time customer and market feedback concerning new-product ideas, and data on the impact of advertising, discounts and Web site layout on product sales. But focus groups and surveys took weeks to run, and the product managers could not wait for IT to perform an extensive data-mining analysis, most of which would not pertain to their individual products anyway. So, company executives decided to give the product managers the authority to run their own experiments on the company Web site without requiring IT’s approval. And because of their broker positions, the product managers knew to whom to turn for specific help. The result was real-time, cost-effective feedback from customers about product and marketing ideas, resulting in a more effective Web site and ultimately more product sales.

When Peripheral Players Leave

Peripheral employees have the fewest number of ties and reside on the boundaries of a network. They thus tend to be more disengaged (and, consequently, sometimes more dissatisfied) with the organization than others who are better connected. As a result, they are more likely to leave. Furthermore, because they are on the periphery, their knowledge tends to be overlooked when a company implements a retention strategy. This, however, could be a huge mistake. Peripheral players might be tangential to their organization but well connected within external networks. As such, they present the risk of two kinds of information loss: niche expertise and outside knowledge.

Loss of Relevant but Marginalized Perspectives

Peripheral players often have niche expertise that might not be important for daily operations but can often be crucial during a crisis. At one of the companies in our study, for example, a peripheral player supported the accounting and logistics scheduling functions that ran on the organization’s mainframe computer. The person had written technical manuals, but much of what he knew couldn’t be documented; it was based on his vast experience handling crises. This niche expertise helped ensure that computer downtimes lasted no longer than one hour, while coworkers would require an estimated half day or longer for handling similar situations. Another advantage of peripheral players is that they usually aren’t as steeped in existing paradigms of thought as are people who are more centrally connected. As a result, peripheral players are frequently able to combine fresh insights with an understanding of the inner workings of an organization to generate unlikely but valuable innovations. Employees on the periphery also tend to be “early adopters,” so their departure can result in a much more cautious approach toward novel ideas and technologies.

For these reasons, it is important to include peripheral employees in any knowledge-retention strategy. One effective practice is to connect them to a broker. Typically, companies can identify the top 10 or so brokers in a network. Then, for instance, by adding just one connection from each top broker to someone peripheral, an organization can greatly increase the overall connectivity of its network. In one divisional network of 100 people, for example, the addition of simple connections from the top 12 brokers to people on the periphery resulted in a simulated improvement of 25% in cohesion. (Note: Cohesion is a measure of the average distance for information to travel across an entire network. Shorter distances indicate greater cohesion.) Generally speaking, 3% to 5% of a network is composed of these key brokers who are very influential because of their level of network connectivity and credibility in the eyes of their peers. Linking brokers with peripheral players can be mutually rewarding, with the former enjoying the respect of being mentors and the latter benefiting from receiving insights and introductions into the organization that they might not otherwise have had.

To ensure that peripheral employees are not disengaged or disinterested, a company can get them involved in activities that make them feel connected to the organization, while at the same time making others aware of the expertise they possess. One approach is to encourage peripheral players to do webcasts, teleconferences and “lunch and learns” to talk about their work. A company can also encourage peripheral people, especially newcomers, to join a community of practice. That gives them the opportunity to meet people who have similar interests, keeping them engaged (especially if they are not satisfied with their formal work assignments) and connected into the company’s knowledge network.

Loss of Valuable External Ties

Although peripheral people may not be well connected within their own work areas, they can often be active participants in an extensive network outside their immediate group or organization. In fact, peripheral players tend to have, on average, roughly an equivalent number of relationships outside the organization as central employees do. This is particularly true in sales divisions or other groups that have direct interactions with customers. But the external connections don’t necessarily have to be customers. Vendors, academics, independent research centers and colleagues from previous jobs are all sources of important external knowledge. Often, departing employees take such outside contacts with them as they walk out the door. The loss to the organization could include keen insights about markets, technologies and products; a deep understanding of customer requirements; and the relational capital that encourages the external party to keep the best interests of the organization in mind, especially in times of crisis.

External relationships are often a source of new ideas, which can help an organization avoid insular thinking, but only if that knowledge is deployed. At one company, for example, a junior programmer has benefited more from his external sources, including technical blogs and membership in a Linux user group and other forums, than he does from interacting with programmers at his own organization. He has incorporated this outside knowledge into the software he writes, but because he is not well connected internally, the organization as a whole hasn’t been able to leverage the new ideas. Moreover, if the programmer were to leave, this expertise could be lost for good.

Companies can formalize these “hidden” external relationships in a number of ways. At a pharmaceutical company, for instance, a peripheral researcher regularly brings in outside scientists and colleagues to give talks and workshops. The benefits are twofold: Fresh ideas flow into the organization to help with drug discovery, and new connections are formed between employees who attend the workshops and the external scientists. Because there is often a disincentive for employees to share their contacts — salespeople, for one, would rather land an account on their own than split a commission — organizations might need to rethink their reward systems to discourage any “go-it-alone” mentality. A company might, for example, use collaboration-type metrics to appraise the performance of individuals in the sales force. One drug company rewards its scientists who publish papers jointly with both an external partner and another colleague. In addition to monetary bonuses, the researchers benefit from peer recognition and access to an even larger network of scientists. The awards are given by a scientific advisory committee that consists of (or has access to) some of the top scientists in their respective fields around the world.

Clearly, the issue of knowledge loss is not just about specific expertise walking out the door but also about a group’s collective ability to get work done. A network approach allows organizations to identify people, their roles, their relationships and the knowledge they possess in accomplishing their jobs. With that information, organizations can take the actions necessary to keep a potential loss of knowledge from ever becoming a crisis.

At Pfizer Inc., for example, a network approach and various career development and staffing practices help to fill important holes created by potential departures before such people leave. The company assesses both traditional individual knowledge and relational knowledge during certain change situations, including executive transitions and reorganizations in both the sales and drug development groups.12 During its merger with Pharmacia Inc., for example, Pfizer gave top priority to retaining leadership talent and managing relationships, thus easing the integration of the two companies.13 Such proactive measures will increasingly be needed as organizations deal with ever-rising levels of employee turnover.

(Reprint #:47409)

Pages: 1 2 3