Organizational Network Analysis

Powering teams to better execute business strategy

Organizational Network Analysis

Posted by Tiffany McDowell, PhD and Don Miller on August 4, 2016.

Companies today are “living organizations” that must constantly adapt to market and industry pressures in order to stay competitive. This mode of continual change means they can no longer operate effectively in formal, rigid frameworks. Most executives recognize this shift—92 percent of surveyed leaders believe that redesigning their organization is either very important or important, and many are moving away from formal, functional structures and redesigning their organizations to be dynamic and team-based. Organizational Network Analysis (ONA) is a tool that can help manage living organizations to keep them agile and responsive to changes in the business environment.

Moving to a team-based structure can help organizations become more flexible, innovative, and responsive to customer’s needs. However, this type of decentralization can be risky if not properly designed. If teams aren’t connected and knowledge isn’t shared effectively across those teams, the organization may find:

  • Pockets of teams performing at various levels
  • Expertise generated in one team that isn’t shared with others
  • Similar work being duplicated across teams

Connecting the dots

When used as part of an organization design effort, ONA can help mitigate these risks by confirming the right types of connections exist to let teams capitalize on the knowledge, skills, and abilities within the organization.

Through a combination of passive data collection (e.g., communication traffic, community sites) and active data collection (targeted engagement and network surveys), ONA looks at the type, frequency, and quality of organizational relationships. Using advanced data analytics coupled with employee perceptions, ONA sheds light on the social roles individuals hold, the connections that exist between individuals, and the strength of those connections.

Understanding the informal flow of information through the organization’s networks gives insights into how to influence them to foster high-performing teams. For example, an organization may make changes to its operating model, reporting relationships, job design, or business processes to better support team-based work.

Case in point

A large, multinational energy and resources company is organized by product line and country. This organizational structure supports the company’s business model, but has drawbacks, most notably the ability to effectively share critical engineering knowledge across geographic and product line divides.

To enable continued growth while maintaining safety and cost controls, the company needed mechanisms to increase the connectedness between countries and product lines—especially challenging because its workforce is often physically in remote locations. Using ONA, executives were able to understand the existing informal networks across teams and then apply that knowledge to organizational design efforts. The design was tailored to create and support a culture of knowledge sharing. This culture was then incentivized through compensation and recognition. Over time, the company has seen reduced project costs, shorter project cycle times, and increased profits.

A valuable piece of the puzzle

Simply knowing that an individual holds a certain social role (e.g., central, peripheral) does not give an organization the full picture, nor does it indicate a specific action an organization should take. Rather, ONA-generated insights should be considered in the context of a business problem the organization is trying to solve. For example, if the organization wants to understand how a newly formed a business unit is integrating, ONA could reveal how many and the type of connections that exist between personnel from each component and use that information to develop targeted recommendations to “thicken” the network.

While ONA has many uses beyond organization design, using it to inform a redesign effort can ultimately pay off in stronger employee engagement, more effective teams, and increased operating efficiency.

Tiffany McDowell, PhD is a principal in the Organization Transformation & Talent Human Capital Practice of Deloitte Consulting LLP and serves as the National leader for Deloitte’s Organization Strategies practice. Tiffany has 16 years of business and consulting experience, delivering operating model, organization design, talent strategies, decision optimization, and change management solutions.
Don Miller is a managing director in the Organization Transformation & Talent Human Capital Practice of Deloitte Consulting LLP. He helps clients solve some of their top business challenges by creating tailored workforce transition, strategic change management, talent, and leadership development solutions.

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