Bersin’s Global Human Capital Trends 2016 report showed us that 92% of business leaders see the need to redesign their organizations. Years of effort and billions of dollars spent on employee engagement and retention, leadership, and culture have not produced significant results. They now see a need to adapt organizations to the way people work.[1]
Formal and Informal Structures
Every business organization has two structures: a hierarchy dictated by functional and financial management, and the way work gets done. The traditional way of viewing business structure by function and budget created organizational “silos,” where functions work independently and compete for resources. The new way of working demands the sharing of both ideas and resources.
While breaking down barriers has been a topic of research and discussion for decades, we made little progress until technology created an always-connected workforce. Rigid organizational structures have been made obsolete by instant communication, business innovation, and the way people work in the modern economy.
Organizational Network Analysis (ONA) gives us the ability to analyze the informal structures in an organization. Analyzing passive data collection of workflows, communications, and social networking, amplified by surveys, you can get an accurate picture of how your enterprise operates.
ONA as a discipline has existed for decades, but until recently the resources required made it beyond the reach of most organizations. Modern data analytics, electronic communications, and the ease of capturing survey data have brought sophisticated analysis into the mainstream. Business can now use automated tools that offer insights into information flows, decision points, and bottlenecks.
Terminology differs throughout the industry, but the structure is much the same wherever you look. Analysis views people as “nodes,” i.e., conduits for information exchange. Connected by “ties,” or relationships, Bersin defines them as one of three types.
- Central Nodes - people connected to everyone – highly engaged and knowledgeable about the organization, they are the “go-to” connections for information.
- Knowledge Brokers - individuals who serve as links between groups. Identifying these people is critical because if they are absent, communication between the groups stops.
- Peripherals - people not connected to the rest of the enterprise. If they are highly skilled “indispensables,” their loss can cripple the organization.[2]
By analyzing the way information flows through your organization, you can
- Identify influencers who can speed up cultural change;
- build communication structures that enable the right communication and avoid investing resources unnecessarily;
- show areas where you need to strengthen communication;
- leverage formal and informal leaders to speed up and reinforce organizational change efforts;
- redefine roles to cut duplication and bottlenecks; and
- inform your succession plan by identifying hidden talent.
HR has a central role in ONA, with a mandate to transform itself from service providers to designers of the employee experience. We are throwing so much at employees we overwhelm them. New designs need to simplify their work so they can think and focus on what is important.
Recommendations
ONA is a must-do for companies who are embarking on organizational change, including implementation of human capital management platforms. The first step in an implementation, integration, or any other technological change is understanding how work gets done and how it supports organizational strategy and culture. If you are designing workflows, you need to know how work flows.
We recommend Organizational Network Analysis as a powerful tool for driving organizational change. It can have a significant impact on the effectiveness of your efforts to create a high-performing culture.
References:
1. “Human Capital Trends 2016: Introduction.” Deloitte University Press. February 29, 2016.
2. “Organizational Network Analysis: Gain insight, drive smart.” Deloitte. Accessed November 19, 2016.
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