Organizations continue to implement change initiatives—internal restructurings to improve productivity, joint ventures and mergers to achieve synergies and scale, leadership transitions to ensure continuity—at a frequent pace to compete in today’s dynamic business environment. Unfortunately, while organizations have put more emphasis on the process of change management, such as understanding how the change program will impact various stakeholders and the most effective means to roll-out the program, achieving successful outcomes and enduring change often remains a significant challenge.
One reason is that companies often neglect the social aspect of the change process: the critical relationships among people that can both enable as well as hinder the design and management of the change initiative. Take, for example, a merger between two organizations. Obviously, management from both companies will try to ensure that there is successful integration among people, teams, and divisions. A typical intervention is to align people and groups based on function or job expertise areas. The problem is that alignment based on formal structures and job roles neglects the relationships that employees have with one another to get work accomplished. The end result is usually employees from each company who do not communicate with one another for several reasons: they are unaware of who people are and what they know; they are uncertain of the appropriate manner with which to contact people; and there may be a preconceived notion of the work culture and values that prevent people from each company reaching out to one another other.
As part of research conducted at the University of Virginia Network Roundtable and the Babson College Working Knowledge research centers, we have used organizational network analysis (ONA) in over 100 organizations to study the relationships and connections among people in organizations. ONA helps leaders visualize the degree of connectivity and collaboration among various groups (e.g., divisions, geographic locations, hierarchical positions, expertise areas) in companies. It can help leaders understand the position (e.g., central, broker, peripheral) of people in these networks. A common scenario is to do an ONA assessment with an organization to determine where areas of information silos or bottlenecks exist and to design change interventions to achieve the desired levels of integration and collaboration. Typically six to twelve months after the change initiative, we will conduct a follow-on ONA to assess the impact of the change initiative on the network. Based on our research involving many of these “before-and-after” network assessments, we offer the following insights to help managers design, manage and measure change initiatives:
Analyze the current organizational network as the impetus for change
ONA can be very effective in pinpointing information fragmentation in the work network, which can then be used to design change initiatives. Let’s take the example of an organization with two internal sales groups, each with a certain market expertise (see figure). As can be seen in the “First ONA” picture, there was little communication between the two sales groups.
Furthermore, this diagram sparked frank discussion on whose expertise was not being leveraged and who were information bottlenecks (e.g., “RG”) in the network. This led to a change initiative involving staffing projects with members from both groups, introducing mixed revenue sales goals with managers accountable for selling projects with both kinds of expertise, developing new communication forums such as a project database and making personnel staffing decisions such as transferring bottlenecks to a different group. As can be seen in the “Second ONA” picture, these initiatives had a positive impact as there is much better integration among the two sales groups.
As opposed to relying on a “gut feel” that information silos exist and there is a need for a change, managers can use ONA to provide evidence that problems do in fact exist. We often find the network diagrams will generate much open discussion among leadership and the entire team, which helps create buy-in for the resulting change program.
Assessing organizational networks is a very effective impetus for change since it reveals both structural barriers to information flow, such as functional units or divisions, geographic location and hierarchical role or position in the organization, as well as cultural barriers, including work norms and values. Understanding cultural perceptions are critical since they can reveal how people feel about a change initiative. In one high-tech company that was trying to create an innovation program, young engineers were on the periphery of the network (i.e., not well connected to others), while highly-tenured senior managers were central in the network. While this may imply a hierarchical organizational structure, identifying peoples’ perception of the work culture (asked in the ONA assessment) on the network diagram revealed a very interesting story. Most of the young engineers perceived the culture as being very closed and bureaucratic, and that employees in the company were promoted by have a good relationship with their direct managers. Therefore, in their eyes, there was little incentive for engineers to collaborate with each other. Meanwhile, senior managers had the opposite perception of the culture, namely that it was open to change, collaborative and innovative. Most likely they remembered the organization as it had been years earlier and have since held onto this perception. Therefore, an understanding of this fundamental difference in perception was critical in ensuring the innovation program had any chance of succeeding.
Manage the change initiative by leveraging people’s position in the network
While the motivation and design of the change initiative can be well intentioned, often the actual implementation of the initiative remains a challenge. Companies recognize the importance of leadership in the change process as well getting everyone affected by the initiative on-board. However, people who are responsible for the program are often selected based on their title or location in the company, but they may not be the right person to lead the effort. We find that effective “change champions” can be identified by their position in the organizational network. In particular, employees who hold broker positions in the network make for ideal candidates as change carriers. Brokers are employees that may not have the most connections with other employees, but they bridge or connect different subgroups in the network. This is critical for any change initiative that affects multiple groups, especially if these groups have different work practices, values and cultures.
In one consulting services organization, there was an initiative to develop innovative client solutions in a timelier manner. The existing network diagram showed silos among the research, business development, and client-facing solutions groups. Furthermore, interviews revealed that information moved in a sequential manner from research, to business development, to solutions and vice-versa. The main reasons for the silos were that each group had different expertise and work practices, and each group perceived (often incorrectly) that the other groups didn’t have the capability to collaborate on initiatives. This was exacerbated by the fact that few people were aware of employees in the other groups. However, there were two individuals that were positioned as brokers in the network. Both had worked in the organization for a long while, and both had worked in each of the three groups at some point in their career. Therefore, they made ideal candidates to lead the change initiative since they had connections in each of the three groups, were well regarded by most everyone (even though they didn’t carry the highest job titles) and understood the work practices of each group.
Finally, it important to understand the network profile of leaders and successful employees in an organization, as this is especially useful with leadership transition programs. We can analyze the network of the successor, and compare this network with the network of the incumbent leader. This allows us to find gaps in the successor’s network, which often times is inadequate since it consists of employees from their previous work area and provides access to expertise pertinent to their old position but not their new position. For example, a successor in a financial services organization was able to leverage the incumbent leader’s personal network through strategic introductions initiated by the incumbent before he left, and the end result was a successful transition into her new leadership position.
As change programs become more prevalent, it is important for organizations to achieve higher success rates than what they are experiencing now. Leveraging organizational networks in both the design and implementation of change projects is one way to accomplish this.