Presentation to KM Chicago12 June 2007

Chris Fletcher—Director, Knowledge Management Asia Pacific regionDeloitte Consulting

Organisational Network Analysis

The World is Flat!

Globalisation 1.0: circa 1492 - 1800

Globalisation 2.0: circa 1800 - 2000

Globalisation 3.0: circa 2000 to today

Source: The World is Flat – A Short History of the 21st Century: Thomas L. Friedman

Globalisation 1

Globalisation 2

Globalisation 3

“The new currency won’t be intellectual capital. It will be social capital –the collective value of whom we know and what we’ll do for each other.”

—James Kouzes, co-author of The Leadership Challenge

Business Week – February 2006

4Copyright © 2006 Deloitte Development LLC. All rights reserved.

So what is Social Capital?

“In sum, it is the value people produce when they work together to achieve mutual goals. It emerges when people build trust, a shared understanding, and a willingness to cooperate in ways that produce something greater than the sum of their parts”

Robin Athey – Its 2008: Do You Know Where Your Talent Is? Connecting People for Performance

So what does this mean for KM?

Social Capital and KM

5Copyright © 2006 Deloitte Development LLC. All rights reserved.

Older thinking:

Content & Collection The acquisition, organisation & aggregation, storage and dissemination of content under organisation wide taxonomies using customised tools and repositories, just in case it might be reusable

Newer thinking:

Context & ConnectionConnecting the right people just-in-time, canvassing them to gain their knowledge and advice in the context of a particular business problem or pursuit, synthesizing that knowledge and applying it to the issues at hand

A change in the KM model………

The impact of Social Capital on KM

Six Degrees of Separation……

Organisational Network Analysis (ONA)

is a tool for:

• uncovering the “hidden” network – how work REALLY gets done in organisations

• understanding the interactions between people

• identifying and acceleratingknowledge and information flows

• improving the efficiency andeffectiveness of knowledgeflows and networking

Source, Rob Cross, The Hidden Power of Social Networks

Source: The Hidden Power of Social Networks – Rob Cross / Andrew Parker

Why use ONA?

• Is a diagnostic tool – will provide an analysis of the “State of Play” today.

• Real benefits of the analysis are apparent in the interventions that take place as a result of the insights learnt

• Visual nature of network maps / supporting quantitative analysis facilitate easy identification of issues and facilitation of network building activities

• Network analysis facilitates conversations about the business often revealing otherwise hidden insights

What can ONA be used for?

• Organisational Performance

• Driving Innovation

• Facilitating large scale change or merger integration

• Strategic Partnerships

• Talent Management

• Supply Chain

Key factors for success

• Support by leadership

• 80% participation rate

• Transparency of results

• Commitment to act upon the results

• Making assumptions is dangerous

• Do not underestimate the importance of communications

• Follow-up survey in 6 – 9 months time

Two types of people in networks…..

Bonders Bridgers

Becoming “us”

• affinity• efficiency• trust• support• community

Brokering between “them”

• access• resources• innovation• impact• profit

What outcomes can be expected?

• Visual representations of the network as it is today based upon nominated attributes

• Identification of key networks, brokers, and central practitioners

• Analytics to assess interactions between network groups

• Program of activities to support desired network changes

Business Case

Hypothesis

Question formulation

Survey Delivery

Results Analysis

Presentation

Getting from “So what” to Action”

What is the process for undertaking ONA?

Business Case

Why do you want to undertake an Organisational Network Analysis?

It could address:

• team building• communications and connections across groups• identifying key connectors in an organisation• identifying key decision makers in leadership teams• facilitating efficiency in strategic alliances / partnerships• facilitation successful mergers and acquisitions• understanding network interaction in Communities of Practice• identifying expertise networks• facilitating innovation programs• managing latent talent or knowledge issues

What is the process for undertaking ONA?

What is it that you want to know?

• what does leadership want to find out?• what specific issues are top of mind with management?• do you have a specific issue / problem that you want to prove/disprove?• do you need to focus on individuals, teams, divisions, other organisations?• can you answer this hypothesis through ONA?

Development of a robust hypothesis is crucial to the success on an ONA

Hypothesis

What is the process for undertaking ONA?

What questions will allow you to prove/disprove your hypothesis?

• questions need to be framed around the issue being addressed• how many topics will be covered in the questions?• how many questions will you ask?• what survey vehicle will be used – spreadsheet, internet survey, hard copy etc• have questions been validated

Testing the questions on a representative group is a good idea!

Question Formulation

What is the process for undertaking ONA?

Sample Survey

Sample Network Questions

Communication:– How often do you talk with the following people regarding <topic x>? – How much do you typically communicate with each person relative to others in the group?

Information – How frequently have you acquired information necessary to do your work from this person in the past three months?– Please indicate the extent to which each person provides you with information you use to accomplish your work.– From whom do you typically seek work-related information?– To whom do you typically give work-related information?

Problem solving – Whom do you typically turn to for help in thinking through a new or challenging problem at work?– How effective is each person in helping you to think through new or challenging problems at work?

Innovation – Whom are you likely to turn to in order to discuss a new or innovative idea?

Knowledge awareness– I understand this person's knowledge and skills. This does not necessarily mean that I have these skills or am

knowledgeable in these domains but that I understand what skills this person has and domains they are knowledgeable in.

Access – When I need information or advice, this person is generally accessible to me within a sufficient amount of time to help

me solve my problem. Engagement

– If I ask this person for help, I can feel confident that he or she will actively engage in problem solving with me. Safety

– Please indicate the extent to which you feel personally comfortable asking this person for information or advice on work-related topics.

Source: The Hidden Power of Social Networks – Rob Cross / Andrew Parker

How will the survey be distributed to target audience?

• what form will the survey take?• will it be distributed by email, internet or snail mail?• what will the follow-up procedure be?• who will champion the ONA programme– will they facilitate the introduction of the survey?• will this be the first people will here of ONA – is there a need to introduce and allay any fears that will dilute the response rate?

Survey deliveryHi everyone, Following on from the November Fly Home Friday, we would like each of you to take 10 minutes to participate in an exercise to show the networks and information flows that exist within the Consulting practice in Sydney. We will share the results of this analysis with you at Fly home Friday early next year. What is Organisational Network Analysis (ONA)? Whilst organisations have formal structures, work processes and geographical dispersion, people tend to rely heavily on their network of relationships to find information and solve problems - the informal network if you like. ONA is a tool that we can use to depict the informal networks that exist, understand the information linkages between people and how these networks can be enhanced to improve collaboration. An informal network can then be visually displayed as per the example in the picture below. In this example, we can see some patterns emerging. These are groups of people who are connected to each other in networks (one group on the LHS and one group on the RHS). We can see that there is a distinct gap between these two groups where there are few connections or information flows. By looking at this situation, we can start to ask questions as to why this state exists, and how greater connections can be achieved. This type of analysis will also allow the identification of people who are information hubs i.e. are central to the information flows of a larger no. of people. For Consulting, emerging patterns will allow us to then see what linkages exist for us, and start discussions as to how these should / could be enhanced.

What's in it for you? By participating in this survey, we can build a picture as to the current state of the Consulting network in Sydney. You can: - see how you are networked within the Consulting practice in Sydney - identify any areas where you could have stronger connections - engage in discussions on what activities are required to ensure that your network is enhanced - assist in building a stronger network How do I complete the survey? The survey can be completed by using the link below to activate the survey. Please answer the five questions listed and submit the form. You do not have to rate everyone listed. When will I be able to see the results of this survey? The results of this survey will compiled and provided back to you at Fly Home Friday early in the new year. If you have any questions, please do not hesitate to contact me

What is the process for undertaking ONA?

OK – you have your results – an 80% response rate – what now?

• need to have decided what analysis program you are going to use i.e. UCINET, InFlow etc• understand that the analysis is more than pictorial – an understanding of network analytics is required• do not make assumptions in interpreting the data you find – work with the organisation to ensure that conclusions can be validated• use the attribute data you have – consider the impact of different network characteristics

Results Analysis

What is the process for undertaking ONA?

Each question will provide different patternsRate your understanding of each person’s areas of expertise

Who would you typically turn to for assistance in thinking through a complex business problem

Having undertaken your analysis of the results – what now?

• do not make assumptions: validate & follow-up key conclusions with project sponsor, especially if you are not part of company culture• conduct some follow-up interviews with identified individuals. Anecdotes can provide insight and direction for further investigation• look to develop follow-on programs to bring participants into the process for developing interventions• ensure that any conclusions drawn address the hypothesis• do not use “jargon” in reports and ensure a base level of understanding of networks before presenting findings

Getting from “So what” to action

What is the process for undertaking ONA?

ONA – China example

• Organisation moving into a significant growth phase

• Division looking to reassess structure to cater for growth plans and more effectively share knowledge

• It was felt that there was an intuitive understanding of underlying issues in the organisation – are they correct?

• ONA is a significant milestone in opening up the culture

• Four questions: information, communication, project awareness and problem solving

• 80% response rate (175 people)

• Cultural considerations were guided by local support

• Interviews used to validate analysis and elicit more insight into underlying issues

• Discussion with senior leaders on possible interventions and the way forward taking place this week

• Results to be shared with all staff in two weeks time

Methodology

• Survey emailed out to all division staff by MD, requesting a response to four questions Q1: How often do you typically seek work related information from this person?1 = Very Infrequently 6 = Very Frequently

Q2: How much do you typically communicate with this person relative to others in your group? 1 = Very Infrequently 6 = Very Frequently

Q3: How aware are you of projects undertaken by this person in the last 12 months?1 = Totally unaware 4 = Very aware

Q4: How often do you typically turn to this person for help in thinking through a new or challenging problem at work?1 = Very Infrequently 6 = Very Frequently

• Received responses from 175 out of 218 people – response rate of 80%

• Data entered into a matrix and results analysed in a network analysis programcalled UCINET

Information flows

Network Measures Deloitte Target

Density 2.7% 10%Cohesion 4.2 2.0Centrality 4.7 15

Location

Shanghai (121)

Beijing (81)

Hong Kong (9)

“How often do you typically seek work related information from this person”Responses of: Very Frequently/Frequently

Shanghai Beijing Hong Kong

Shanghai (121)

3.76% 0.83% 0.73%

Beijing (81) 1.47% 5.71% 0.76%

Hong Kong (9)

1.19% 1.14% 20.83%

• Shanghai does not seek much information from Beijing

• Beijing has higher internal information flows

Information flows - Level“How often do you typically seek work related information from this person”Responses of: Very Frequently/Frequently

Level

Snr Exec

Director

Snr Manager

Manager

Deputy Mgr

Consultant

Analyst

Ptr Dirr S Mgr Mgr S Con Con An

Snr Exec (9) 16.7% 14.8% 7.2% 2.6% - - -

Director (6) 1.8% - 1.7% 0.8% 1.4% - -

S Mgr (20) 6.7% 8.3% 6.9% 4.8% 4.0% 3.2% 2.0%

Manager (42) 5.3% 5.2% 4.4% 2.6% 1.9% 1.7% 1.4%

Deputy Mgr (61)

2.2% 5.5% 4.7% 3.3% 2.7% 2.2% 2.5%

Consult (34) 1.3% 4.9% 2.2% 2.4% 2.0% 2.4% 1.4%

Analyst (46) 1.0% 1.8% 3.7% 2.3% 2.2% 2.5% 5.0%

•Snr Exec’s are central in the provision of information to senior staff

• Snr Managers play a key role in linking senior and lower hierarchy practitionersin the provision of information

• Levels below Senior Manager do not readily share information amongst themselves

• Significant number of Deputy Mgrs, Consultants and Analysts are on the periphery

Chart Interpretation:Each cell reflects the percent of ties out of 100% that could exist if everyone were connected to everyone else at that juncture. Table is read from row to column.

Shanghai networkDeputy Mgrs, Consultants and Analysts on the periphery

Level

Snr Exec

Director

Snr Manager

Manager

Deputy Mgr

Consultant

Analyst

Beijing networkDistinct cluster heavily connected by Senior Managers

Cluster not connected torest of Beijing office Level

Snr Exec

Director

Snr Manager

Manager

Deputy Mgr

Consultant

Analyst

Information Flow: Hierarchy Network (Snr Exec – Manager)

Level

Snr Exec

Director

Snr Manager

Manager

Snr Exec, Directors and Senior Managers play a central role inthe network

Information flows - Group

Group

S&O

EA

HCAS

GFSI

TMT

FMT

MFG

E&R

“How often do you typically seek work related information from this person”Responses of: Very Frequently/Frequently

S&O EA HCAS GFSI TMT FMT MFG E&R

S&O (30) 16.7% 0.3% 1.0% 2.3% 2.7% 1.1% 3.3% -

EA (102) 0.7% 5.0% 0.5% 0.7% 0.5% 0.5% - 1.2%

HCAS (16) 1.9% 1.2% 15.0% 0.8% 1.9% 1.7% - -

GFSI (16) 0.8% 0.4% 0.4% 18.7% 0.6% 0.9% - -

TMT (10) - - - 0.6% 23.3% 3.4% - -

FMT (41) 0.2% 0.1% 0.3% 1.2% 0.2% 17.9% - 0.8%

MFG (1) 10.0% 1.0% - - - - - -

E&R (2) - - - - - 1.2% - 50%

FMT have little interaction with outside groups & the majority of practitioners are located in Beijing

EA has fragmented into two sub-groups causing interaction in the group to be lower than expected. Connections between the sub-groups is primarily at the consultant/analyst level. EA interaction with other groups is also low

Brokers are leverage points to enhance collaboration

Actual Target

Density 2.7% 10%

Cohesion 4.1 2

Centrality 4.7 15

“How often do you typically seek work related information from this person”Responses of: Very Frequently/Frequently

Network with top 18 brokers (10% of practice) and peripheral players highlighted

Broker Peripheralplayer

Current Analysis Future state

Network with top 18 brokers (10% of practice) and peripheral players linked together

Actual Target Change

Density 4.3% 10% 59%

Cohesion 3.2 2 28%

Centrality 8.3 15 76%

By linking brokers and peripheral players, there has been a significant improvement in collaboration and information flows around the network

Some ongoing challenges……..

• Senior management “getting it”

• ONA is a diagnostic – the real value is in the interventions

• Ensuring transparency of results

• Overcoming the “fear factor”

• Not making assumptions and drawing conclusions without validation

• Networks are dynamic – analysis will show the current state of play which WILL change

• Organisation culture is important – need to work with client to interpret results

Every manager knows that business runs better when people within an organisation know and trust one another -- deals move faster and more smoothly, teams are more productive, people learn more quickly and perform with more creativity.

Strong relationships, most managers will agree, are the grease of an organization. Business gets done without them, but not for long and not very well.

How to Invest in Social Capital Laurence Prusak Donald J. CohenHavard Business Review

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