Harvest your organization's social and knowledge networks

To make your organization a high capability and consequently high productivity place.

Specialization

On a small project everybody is a jack-of-all-trades. Engineers write code, manage the build system, test the product, and deploy it. Everybody knows everything and the need to communicate is minimized. As the project grows, it becomes increasingly difficult to add new engineers, because the learning curve starts to get steep. Onboarding a new engineer up to speed starts to become more difficult than doing the work yourself. At this point, you need to start to specialize.

By dedicating people or teams to tasks such as building, testing and operations, you will create specialized rather than common knowledge. In order to manage knowledge sharing and creation, you will need to consider designing and implementing the communication architecture for your organization.

Design and implement a communication architecture

Perhaps the most important operational lever on capability is designing and implementing the communication architecture for your organization. The architecture consists of the organizational structure and the process that works on it. If a well-designed communication architecture is absent then information will stop flowing, and your organization will degenerate into a low capability and consequently low productivity place.

All organizational designs are suboptimal. With any design, you will optimize communication between some parts of the organization at the expense of other parts. For example, if you put product management in the engineering organization, you will optimize communication between product managers and engineers at the expense of communication between product managers and marketing. As a result some people will question and challenge it and they will be right. At a company level there is a need to decide whether to organize the entire company around functions (for example, sales, marketing, product management, engineering) or around products and services thus creating independent business units that contain multiple functions.

Think of the organizational design as the communications architecture for your organization.

If you want people to communicate (exchange information), the best way to accomplish that is to make them report to the same manager and have a common organizational goal. The further away people are in the organizational chart, the less they will communicate.

The organizational design is also the architecture for how the company communicates with the outside world. For example, you might want to organize your sales force by product or service to maximize communication with the relevant product groups and maximize the product competency of the sales force. If you do that, then you will do so at the expense of simplicity for customers who buy multiple products or services and will now have to deal with multiple salespeople. Simplicity always means less questions asked and less perplexity for the humans involved.

Here are the basic steps to organizational design:

  1. Figure out what needs to be communicated. Listing the most important knowledge and who needs to have it. For example, knowledge of the product architecture must be understood by engineering, QA, product management, marketing, and sales.
  2. Figure out what needs to be decided. Consider the types of decisions that must be made on a frequent basis like new features selection, architectural decisions and how to resolve support issues. How can you put the maximum number of decisions under the domain of a single manager?
  3. Prioritize the most important communication and decision paths. Is it more important for product managers to understand the product architecture or the market? Is it more important for engineers to understand the customer or the product architecture? Keep in mind that if the situation changes, then you can reorganize. Picking the communication paths to optimize is the same as identifying the ones that you will not. Just because you deprioritized them doesn't mean they are not important.
  4. Optimize the organization for the people doing the work — not for the managers. For that you should not prioritize the ambitions of the people at the top of the organization ahead of the communication paths for the people at the bottom of the organization.

Define processes of knowledge discovery

In an organizational context, communication is critical. As an organization grows, communication becomes its biggest challenge. If there are five people in your organization, you don't need a defined process, because they can just talk to each other. With more people, communication becomes more difficult. Ad hoc, point-to-point communication no longer works. You need something more robust — a process.

The purpose of the process is to ease the flow of information.

A process is a formally structured communication mechanism. Processes govern the meetings, instant messengers, email, and even one-on-one meetings between managers and employees. The span of the process should meet the communication challenge that it facilitates. When communication in an organization spans across organizational boundaries, processes will help ensure that the information exchange happens and that it happens with quality.

The process should be designed by the people who are already doing the work in an ad hoc manner. They know what needs to be communicated and to whom. Initially they could formalize the existing process and make it scalable. Formalize what you are doing to make it easy to onboard new people.

It is much easier to add new people to existing processes than new processes to current people.

Understand the Shadow Organization

"In any human interaction, the required amount of communication is inversely proportional to the level of trust.." ~Ben Horowitz[1]

A growing research considers workplace organization or organizational design to account for differences in companies' performance and productivity[8]. Trust operates at the micro level where it governs interactions between people. Trust is widely recognized for its role as a social lubricant, fostering mutually beneficial exchange and thereby sustaining higher levels of specialization[9].

Studies show that trust has a positive effect on the level of autonomy granted to employees. Autonomy for workers is associated with various advantages for companies, deriving from the division of labor and specialization. Work autonomy is the condition or quality of being self-governing or free from excessive external control. Work autonomy only pays off if this autonomy is accompanied by a certain amount of trust. In contrast, if trust is absent, costs due to shirking are likely to outweigh the benefits of having expert workers that can leverage tacit skills and uncodified knowledge[9].

Without trust, communication is slow. If you trust someone you would not ask them questions. There is no need for explanations of their actions. There is no need to have a meeting to discuss.

The less questions asked the greater the KEDE. The greater KEDE the more software produced per unit time.

On the other hand if you don't trust someone then there will be a lot of questioning. A huge amount of talking, explaining, or reasoning will take place. If the people fundamentally trust one another, then communication will be vastly more efficient than if they don't.

Trust cannot be established with organizational design and processes. Trust needs to be gained. It emerges from peoples interactions that form the social structure of your organization.

Every organization has a social structure that does not resemble its formal structure. You see its shadow as groups of employees that hang out during lunch breaks, or even after work. Shadow organizations are networks of people that know, trust, and help each other. This shadow organization is built bottom up by employees and is very different from the top down hierarchical org chart set by the management.

Top down organizational charts are trees, but bottom up influence charts are network graphs.

Every organization has at least two networks that matter for innovation: a social network of people, and a knowledge network of knowledge elements. In a social network, a “node” is a person and a “tie” refers to a relationship between two persons. In a knowledge network, a “node” is a knowledge element and a “tie” is a combination of two knowledge elements.

A knowledge element is a socially defined category, containing a set of tentative conclusions that the community of a scientific or technological field holds about facts, theories, methods, and procedures surrounding a subject matter[5].

Knowledge elements are often embodied in discrete artifacts such as patents, products, user manuals, technical documentation or scientific publications[4].

While the knowledge network and the social network may be decoupled in the sense that they have unique structural features, they are not independent from each other[3]. People creating the social network are embedded in their organization's knowledge network by possessing specific knowledge elements that reflect their individual knowledge.

Knowledge is a multidimensional, complex structure reflected by the organization's knowledge network and the people's embeddedness in it.

Social networks perform the work of the functional organization, because they are less bureaucratic. There employees trade ideas, give direction, offer help, and spread knowledge. All these social structures hold the key to unleashing untapped human potential in the form of increased productivity.

Among other things, social networks help with retaining talent. Integrating and retaining your key people in the informal social structures of your organization is crucial for speeding up the integration of newcomers and reducing employee turnover. If you can nurture these social network structures, you can make people stay longer and thereby extend the period your employees add value to your company[6].

To work with these seemingly invisible networks and their barriers you need to grasp how they look. One useful tool to diagnose this is Social Network Analysis (SNA). You can find employees who have disproportionate levels of influence relative to their hierarchical position. To do this you can run a survey with three questions[2]:

  1. Who energizes you at work? (nominate 4 or more people)
  2. Who do you go to for help and advice? (nominate 4 or more people)
  3. Who do you go to when a decision needs to be made? (nominate 4 or more people)
After that you count who has the most nominations. Those are the key influencers in your organization. The key influencer group consists of individual contributors that are trusted and well-liked by peers. Next is to connect the nominators to the nominees while keeping the direction. The result will be a directed graph. That graph is the shadow organizational structure of your organization.

Unleash the untapped potential of the social and knowledge networks

Harvesting the potential of your organization's social and knowledge networks takes leadership and discipline. Many leaders have the skills, but very few of them show the discipline.

If want to unleash the untapped potential of the social and knowledge networks of your organization, start with the following four steps:

  1. Understand the shadow structures of your organization, so you know the cliques, tribes, communities, siloes, and key individuals.
  2. Set your targets for how much you want to improve. You can measure progress by increased knowledge discovery efficiency. Define exactly how and when to measure progress, and set the benchmark KEDE value, so you can communicate it. Establish who is responsible for meeting the target condition.
  3. improve connections in the Social Structures. Find out who should be connected to who across organizational tribes, cliques, and communities, both in small groups and on a one on one basis. Give them a common task, time, and the necessary resources, so they can build mutual trust, and awareness of each other's competencies. For new employees, use mentoring and reverse mentoring[7].
  4. Track your progress. For that you should use its knowledge discovery efficiency measured using KEDEHub.

KEDEHub can be used to measure the knowledge discovery efficiency. If KEDE increases then the knowledge network works better. Since the knowledge network is coupled with the social network we can be sure that if the knowledge network works better so does the social network.

Works Cited

1. Horowitz, B. (2014). The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers. HarperBus.

2. Ward H. (2017, The Shadow Organizational Chart—Carta https://carta.com/sg/blog/the-shadow-organizational-chart/

3. Brennecke, J., & Rank, O. (2017). The firm's knowledge network and the transfer of advice among corporate inventors—A multilevel network study. Research Policy, 46(4), 768-783. https://doi.org/10.1016/j.respol.2017.02.002

4. Phelps, C., Heidl, R., Wadhwa, A., (2012). Knowledge, networks, and knowledgenetworks: a review and research agenda . J. Manage. 38, 1115-1166.

5. Wang, C., Rodan, S., Fruin, M., & Xu, X. (2014). Knowledge Networks, Collaboration Networks, and Exploratory Innovation. Academy of Management Journal, 57(2), 484–514. https://doi.org/10.5465/amj.2011.0917

6. Ignoring the social structures of your organization comes at a price. (2019, November 5). Future for Work institute. https://www.futureforwork.com/ignoring-the-social-structures-of-your-organization-comes-at-a-price/

7. Why Reverse Mentoring Works and How to Do It Right. (2019, October 3). Harvard Business Review. https://hbr.org/2019/10/why-reverse-mentoring-works-and-how-to-do-it-right

8. Bloom, N., Lemos, R., Sadun, R., Scur, D., & van Reenen, J. (2014). The New Empirical Economics of Management [CEP Occasional Paper]. Centre for Economic Performance, LSE. https://econpapers.repec.org/paper/cepcepops/41.htm

9. van Hoorn, A. (2017). Social trust, workplace organization, and the comparative advantage of nations. Oxford Economic Papers, 69(4), 897–917. https://doi.org/10.1093/oep/gpw072