Understanding Organizational Networks can be the key to your success

This article first appeared in DNA India on 10th September, 2016.

There is a broad understanding these days of the value that networks which individuals develop in an organizational context can provide to their own growth and development. This often results in goal sheets with specific items under “Relationships and Networks” that individuals need to focus on. However, organizations don’t realize that uncovering and understanding networks existing among their people can have tremendous benefits.

Society in general and organizations in particular can be seen as marketplaces for the flow of ideas and opportunities with the individuals operating in the marketplace in pursuit of their own interests. However, we often see that some individuals tend to do better than others – get the promotions, receive higher bonuses, get picked for better projects. The “human capital” explanation is that this is a result of their greater abilities. “Social capital” however explains this success on the basis of the connections that a person has within the organization. The “better” connected a person is, the better his chances of advancement and success – so says this model!

There are essentially two differing opinions on what it means to be “better” connected. We will look at the first explanation in this post. Let us use the following network as an example:

Organizational Network Analysis
Organizational Network Analysis

The first model, propounded by Coleman suggests that networks in which everyone is connected so that no one can escape the notice of others, are the source of social capital. The chief idea is that such networks are based on trust and as such increase trust between members since any deviant behavior is censured by the group members. In such a network, the person with the densest connections is the clear leader.

In the network given above, the red circle in the left cluster is a clear leader given the centrality of her position in the network. The strong relationships between her contacts are argued to give her “more reliable communication channels” and protect her from exploitation.

The alternative model, propounded by Burt, looks at how information flows through a network. It is well known in sociology and social psychology that information flow within a connected group is faster than between groups, mainly because the connections are typically denser within than between groups. In the figure above, if we consider the blue and red clusters to be different groups, the above statement would seem to most people as stating the obvious!

Burt calls the lack of connections between groups as “holes” in the social structure or structural holes. Thus in such a situation, the person who is able to control the information flowing in between groups, across these holes, gets a competitive advantage. As he says “the structural hole between two groups does not mean that people in the groups are unaware of each other. It only means that people are focused on their activities to such an extent that they do not attend to the activities of the people in the other group”. Structural holes are thus an opportunity to broker the flow of information between the two groups.

Thus anyone who is in a position to regulate this flow of information between the groups stands to gain immense social capital. In the network given above, the large yellow circle and diamond are the ones who control this flow of information between their respective groups.

Research has shown that people who tend to occupy these structural “holes” tend to get better salary raises, have higher performance attributed to them and get better bonuses and promotions. While this is great to know from an individual level, organizations can also use such networks to identify what the key roles and positions are and whether the right people are occupying the right positions. Furthermore, leaders can also identify employees who are a flight risk and act proactively to fill these “holes” or induce key employees to stay.

Identifying these networks is fairly easy and can be done using a short six-question survey. Organizations can look at uncovering these networks as a part of their change management initiatives, thereby identifying key influencers and engaging with them since they can often be the difference between the success and failures of such initiatives.

Ultimately, to quote Meg Jay, “It’s the people we hardly know, and not our closest friends, who will improve our lives most dramatically”. This holds true for both individuals and organizations.

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