Magazine Fall 2010 Research Feature

The Collaborative Organization: How to Make Employee Networks Really Work

The traditional methods for driving operational excellence in global organizations are not enough. The most effective organizations make smart use of employee networks to reduce costs, improve efficiency and spur innovation.

Rob Cross, Peter Gray, Shirley Cunningham, Mark Showers and Robert J. Thomas Reading Time: 22 min 

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Some collaborative networks are clearly superior to others, but employees aren’t given guidance about how to form them.

As information technology becomes increasingly critical within large, global organizations, chief information officers are being held to ever-higher performance standards. A recent survey of 1,400 CIOs illustrates this mandate, with streamlining business processes, reducing enterprise costs and improving work force effectiveness at the top of their agendas.1 But beyond providing efficient operational support, top management increasingly expects the IT department to be a strategic business partner — to forecast the business impact of emerging technologies, lead the development of new IT-enabled products and services, and drive adoption of innovative technologies that differentiate the organization from competitors.

CIOs often try to address these challenges by relying on the same managerial tools they use to pursue operational excellence: establishing well-defined roles, best practice processes and formal accountability structures. However, our research shows that such tools, though valuable, are not enough. The key to delivering both operational excellence and innovation is having networks of informal collaboration. Within IT organizations in large global companies, we have seen that innovative solutions often emerge unexpectedly through informal and unplanned interactions between individuals who see problems from different perspectives. What’s more, successful execution frequently flows from the networks of relationships that help employees handle situations that don’t fit cleanly into established processes and structures. (See “About the Research.”)

CIOs who learn to harness and balance both formal and informal structures can create global IT organizations that are more efficient and innovative than organizations that rely primarily on formal mechanisms. However, even though individual employees may be able to identify local patterns of collaboration, broader configurations of informal collaboration tend to be far less visible to senior leaders. In the face of this reality, we have found that organizational network analysis offers a useful methodology to help executives do two things: assess broader patterns of informal networks among individuals, teams, functions and organizations, and then take targeted steps to align networks with strategic imperatives.

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About the Authors

Rob Cross is an associate professor of management at the University of Virginia’s McIntire School of Commerce and a visiting research professor at Grenoble Ecole de Management. Peter Gray is an associate professor at the McIntire School. Shirley Cunningham is CIO at Monsanto. Mark Showers is CIO at Reinsurance Group of America Inc. Robert J. Thomas is executive director at Accenture’s Institute for High Performance.

References

1. “Making the Difference: The 2008 CIO Agenda,” survey, Gartner Executive Programs, January 2008.

2. R.L. Cross, R.D. Martin and L.M. Weiss, “Mapping the Value of Employee Collaboration,” McKinsey Quarterly 3 (August 2006): 29-41; R. Cross, J. Liedtka and L. Weiss, “A Practical Guide to Social Networks,” Harvard Business Review 83, no. 3 (March 2005): 124-132; and R. Cross and R.J. Thomas, “Driving Results Through Social Networks: How Top Organizations Leverage Networks for Performance and Growth” (San Francisco: Jossey-Bass, 2009).

3. “Creating Enterprise Leverage: The 2007 CIO Agenda,” cited by B. Burton, in “Justifying Emerging Technologies to Business Leaders” (presentation at Gartner Symposium/ITxpo 2007, Sydney, Australia, November 20-23, 2007).

4. “The McKinsey Global Survey of Business Executives, July 2005,” McKinsey Quarterly, July 2005, www.mckinseyquarterly.com/links/22581.

5. R. Cross, T. Laseter, A. Parker and G. Velasquez, “Using Social Network Analysis to Improve Communities of Practice,” California Management Review 49, no. 1 (fall 2006): 32-60.

6. Interestingly, junior employees placed on virtual teams were sought out by their colleagues more frequently than senior employees who were not on a virtual team. Monsanto leadership came to see virtual team membership as an important on-boarding and development vehicle. With recent shifts in IT human resources management away from a recruiting-based “war for talent” and toward a retention-based model that must fast-track high performers and weed out low performers, anything that can effectively decrease time to productivity and help junior employees build and demonstrate their capabilities is likely to be valuable.

7. Energizing ties were based on employees’ response to the question: How do interactions with this person typically affect your energy level? (Response could be positive, neutral or negative.) See R. Cross, W. Barker and A. Parker, “What Creates Energy in Organizations,” MIT Sloan Management Review 44, no. 4 (summer 2003): 51-56.

8. A.B. Hargadon, “Firms as Knowledge Brokers: Lessons in Pursuing Continuous Innovation,” California Management Review 40, no. 3 (spring 1998): 209-227.

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Comments (8)
abhi ji
1. There is some issue with the diagram "Targeted Efforts to Improve Team Connectivity"
I see an undirected edge in a directed graph, which is not valid. 
can anyone explain how it came?

2. How we get 41% and 10%. Which metric is used. Article lack proper explanation to recreate the result for understanding.  

3.  why 2 nodes are left disconnected from main group. What logic is used to determine to connection to other disconnected groups.
rakppm
Congratulation to Winners. I appreciate MIT sincere efforts presenting uncommon wisdom. 

RafatKhan
Matthew Lloren
Great article ! Reinforces what Morten T Hansen's book Collaboration. Love the high performing employee network analysis.
Gregory Thomas, Jr.
I feel this article lacks a little objectivity; for, how can someone who works for a company give an unbiased opinion on the quality of a CIO?
Olugbenga Olaniran Jide
The paradigm highlighted here will help deluge of organisations uncloak great ideas hidden in their employees. No organisation should ever undervalue how much innovation their employees could bring to them in their quest to remain innovative and ambitious but all said, only in the aura of properly harnessing their staff can they benefit from these lofty ideas.
Morris Ramsey
Outstanding article.  In today's highly educated IT workforce, all levels of the organization should be contributing to the organization's success.  If they are not you will never be world class and at best, maybe average.  And as we all know average is only average.
Laurent Blondeau (evidencesx)
Very useful post, I agree. It seems the "unavoidable" things are there now, and companies have to cope with it, and take all opportunities from them. But as "networking" is still considered as "wasting time", underlining spending time with "friends" on social web for example, lots of companies build walls. but we now (and history tells us) that walls are not efficient anymore in a globalization world, wired, ubiquitous, and always-on.
It's a matter of change...
I wrote something that could add a stone to debate, feel free to comment :
http://evidencesx.wordpress.com/2010/05/18/a-matter-of-change

All the best,
RalfLippold
It is amazing, chatting with RobCross about social network analysis back in 2007. At BMW Plant Leipzig, where I worked back then I was amazed how much potential lies in organizations, especially in their people.

During the course of the ramp up of the new plant, I grew a network of personal connects of about 1.000 people. They ranged from production line workers, logistics planners in Munich, former bosses in Regensburg to colleagues in the vehicle distribution in the UK and US. For any problem or question that aroused there was one node in the network, that could lead directly to the apppropriate one.

My best encounters happened when attending workshops where I met colleagues from other parts of the plants, such as a safety workshop or communication. The whole thing since my entereing the firm in spring 2003 felt pretty much like a big "game-like crsis":

we had to achieve a goal (get into production 01.05.2005 with 100% quality)

On its way to it, as you may imagine, happen quite a few things especially as you put new practices and processes into practice quite different from other plants.

How did we achieve it? Our bosses - especially in the early phase, about 2-3 years into the project - set the loose boundaries within which the workforce could find the most effective way to get to the goal.

However the whole construct is like a living system. Living systems are dependent on various conditions. If one of it (water for example or light is shut off from plants, then they inevitably die) is put out or gets stronger controlled, the whole fragile network of human interconnections can quickly get dry.

So it needs "organizational farmers" who have the big park of the plant in their mind and nuture all the connections, people and constraints (towards benefits!) in order to sustainably build up an organization that is drawn together by strong emotional and personal ties of its members :-)

Recently, now also about two years back, I have learned about the work of http://OttoScharmer.com. That has struck me heavily as he mentions the "social field" of organizations (and networks of such combined with community and other stakeholders) that allows the participants to strive to their inner strengths towards the larger whole.

More on a more global view: http://www.livestream.com/worldeconomicforum/video?clipId=pla_a9b566ef-8d93-4e51-9e08-3dd381d24900