Leaders who excel over time utilize organizational networks in distinctive ways to compensate for weaknesses in formal structures, says Rob Cross (U of Virginia) and colleagues who conducted network analyses at more than 100 organizations.
In the journal Organizational Dynamics, Cross et al map out five principles that drive productive organizational networks.
1. Manage the centre
Cross finds that 3 to 5 percent of people in a network account for 20 to 35 percent of the “value-added ties” – collaborations that generate sales, efficiency gains, or key innovations. But these hubsters are often not managed or leveraged intelligently. The lesson for leaders: locate employees at the centre of networks and manage them well.
Specifically look for bottlenecks and hidden stars. For bottlenecks, figure out if they are central because of their position on the org chart or because of their expertise and leadership qualities. If they are central because of their roles, shift decision rights or responsibilities to others. If they are experts or born leaders, identify the strengths that the network is seeking from them and build these capabilities in others.
And hidden stars? “We have found that there is only a 25 to 40 percent overlap between the individuals classified as ‘top talent’ by the organization and those who are revealed in a network analysis to be critical enablers of others.” The researchers suggest acknowledging the contributions of hidden stars with promotions or increased pay.
2. Leverage the periphery
For maximum benefit, focus on two outlier groups: newcomers and high performers who have drifted. For new hires, create initial assignments and encourage behaviors that integrate people into existing networks rapidly. For underutilized high-performers, re-engagement has to be done on a case-by-case basis. “Roughly 30 percent of the employees considered as top talent – those on high performer lists or in the top 20 percent performance category – have migrated to the fringe of the network.”
3. Selectively bridge collaborative silos
The strength of the network idea at a unit level, writes Cross and colleagues, “is that it allows us to see more precisely how to connect not everybody – but only the four, five, or six junctures that can allow the organization to differentiate itself strategically.” To bridge the “white space” created by divisional boundaries, geography, or hierarchies, a network analysis can be commissioned to show unit heads how they are connected across regional and product groups.
4. Develop the ability to surge
Cross says “surging” happens when networks sense opportunities or problems in one pocket of a network and rapidly tap into the expertise of others in the network to coordinate an effective response. Cross: “As new opportunities arise, employees need to know who has relevant expertise that can be helpful; they need to have a sense of who knows what in the network.”
5. Minimize insularity
Effective networks do not stop at “city limits” but extend out to clients and sources of expertise. For example in professional services, Cross writes, understanding touch points with key customers is a critical network view.
How Effective Leaders Drive Results Through Networks, by Rob Cross, Amanda Cowen, Lisa Vertucci, and Robert J. Thomas; Organizational Dynamics, Vol. 38, No. 2, pp. 93-105, 2009