Prediction: Organizational network analysis will expand from examining current networks to architecting new ones

Posted by Tim Davis, Janet Clarey, and Jeff Mike on December 9, 2019.

Gone are the old “predict-and-control” models of organizational leadership and people management—relics of a time when hierarchy reigned supreme and five-year plans rarely changed. New paradigms such as business ecosystems1 and agile teams are emerging to offer exciting opportunities to spark innovation and growth—but they can also bring paralyzing complexity. For example, while 53 percent of companies with cross-functional teams reported an increase in organizational performance, only 6 percent rated themselves as very effective in managing those teams.2

Fortunately, the new technologies that are disrupting work and the workplace are also enabling new ways of measuring and managing these complex, networked organizations. People analytics solutions, which serve to quantify the activities and attitudes of the workforce, have proliferated the world of work over the past few years—both to help organize the tremendous amounts of data that workforce technologies generate as well as to derive insights from that data. Organizational network analysis (ONA), a subset capability of these people analytics solutions, seeks to quantify the countless relationships between individuals within an organization and describe how information flows among these groups. In fact, 41 percent of currently available people analytics solutions use ONA, with another 19 percent planning to incorporate network analytics as a capability in the near future.3

As organizations adopt ONA to supplement traditional and transaction-based metrics, business leaders, including HR, will drive strategy in new ways. Instead of focusing insights derived from ONA solely on understanding and optimizing current networks, leaders will use these insights to intentionally design new organizational networks—activating expert communities and sparking human interactions. This shift from network mapping to network design will be prevalent in reimagining operating models and facilitating change management.

Shaking Up Operating Models
Traditional operating models are typically plagued by functional boundaries and siloed behavior. These models are often too rigid to keep up with the dynamism and complexity required for nonroutine contexts such as continuous innovation and personalization. In order to create more agile and innovative teams, formal organization charts will be supplemented and overlaid with “network governance.” Borrowing from open-source software development, organizational network governance incorporates informal but intentional social systems (as opposed to bureaucratic structures) to provide adaptability, coordination, and safety in pursuit of community and innovation.4 Network governance offers the context and conditions for interaction, coordination, and exchange—all critical for agile, effective teams—without formal job descriptions, reporting lines, or responsibility matrices that can hinder creativity and flexibility. Business leaders looking to architect the organization of the future will intentionally shift their mindsets from “sticks and boxes” to “nodes and edges” and incorporate network governance into increasingly team-oriented operating models. These shifts confirm that individuals within the organization need to be seen as belonging to multiple teams within the structure. Leaders may start this transition by redesigning work and shaping incentives to foster collaboration and collective outcomes and by prioritizing the interactions that enable these outcomes.

Easing the Pain of Change
Like innovation and personalization, change management is notoriously difficult. Nobody likes change—but this difficulty presents an opportunity. Using ONA, leaders can empower themselves to identify influencers at all levels in the organization and begin to map how emotions, whether resistant or supportive, can spread from person to person in groups experiencing change. Understanding this “emotional contagion” can create opportunities for business leaders to activate and connect these influencers to form coalitions, build consensus, and, ultimately, transform culture. As a result, business leaders will intentionally design and activate networks to govern and direct positive emotional contagions while mitigating negative ones, fostering sustainable business transformation and cultural change.

ONA can grant organizations clarity into how their networks function, allowing leaders to build new dimensions of organizational structure. This intentional architecting will be essential for businesses and their leaders looking to stay ahead of—and benefit from—continuous disruption. High-performing organizations are already building networks to create clarity around design decisions and organizational strategy. For example, 60 percent of high-performing organizations already use network analysis to guide decisions related to enterprise and business-unit design, compared to just 21 percent of low-performing organizations.5

Upcoming Bersin research will dive deep into operating models and networks, including those for HR as a whole and those for talent acquisition and learning organizations. In addition, change management continues to be an important theme for our members and across all our upcoming research. In order to prepare yourself for the coming paradigm changes and to help your organization capture the immense power of intentional network design, educate yourself on ONA and its potential applications. We recommend starting with our primer6 on ONA and its applications, as well as our research on the people analytics solution provider market mentioned earlier.7

Tim Davis is a senior research analyst at Bersin™, Deloitte Consulting LLP.

Janet Clarey is lead advisor, Technology, Analytics & Diversity & Inclusion, at Bersin™, Deloitte Consulting LLP.

Jeff Mike, EdD, is vice president and HR research leader at Bersin™, Deloitte Consulting LLP.

1“Business Ecosystems Come of Age,” Deloitte Review / Eamonn Kelly, 2015, https://www2.deloitte.com/content/dam/insights/us/articles/platform-strategy-new-level-business-trends/DUP_1048-Business-ecosystems-come-of-age_MASTER_FINAL.pdf
22019 Global Human Capital Trends: Leading the social enterprise—Reinvent with a human focus, Deloitte Consulting LLP and Deloitte Insights, 2019.
3People Analytics Solutions research, Bersin, Deloitte Consulting LLP, 2019.
4The Influence of Network Governance Factors on Success in Open Source Software Development Projects, Proceedings from the International Conference on Information Systems/ Glen Sagers,2004.
5High-Impact Organization Design research, Bersin, Deloitte Consulting LLP, 2019.
6Organizational Network Analysis: A Primer, Bersin, Deloitte Consulting LLP / Timothy Davis, Kathi Enderes, PhD, and Jeff Mike, EdD, 2019.
7People Analytics Solutions: Market Capabilities and Differentiators, Bersin, Deloitte Consulting LLP / Kathi Enderes, PhD, and Matthew Shannon, 2019.

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