Energizing Change Through Network Leadership

1. Energizing Change Through Network Leadership Dr. Robin Teigland Stockholm School of Economics robin.teigland@hhs.se www.knowledgenetworking.org www.slideshare.net/eteigland

2. Today’s discussion • Understanding networks • Energizing change through network leadership

3. Today’s discussion • Understanding networks • Background • Some network basics • What about power? • What about performance? • Energizing change through network leadership

4. Everyone is talking about networks Formal Networks Ego Networks Regional Networks Social Networks National Innovation Networks Entrepreneurial Networks Informal Networks Infrastructure Networks Electronic Networks Networks of Practice Networked organization FAS.research

5. A world of rapidly growing knowledge …. > A person’s lifetime in 18th century One week 2008 Fischbowl 2007

6. …that becomes quickly outdated …. 50% knowledge outdated 50% knowledge relevant First year of technical-based education Third year of education

7. Did You Know: Shift Happens http://www.youtube.com/watch?v=pMcfrLYDm2U How are these trends affecting you and your organization? 7

8. Information and knowledge Growth Human absorptive capacity Time Human capacity cannot keep up… Cohen & Levinthal 1989

9. Yet, the world is “shrinking” Just a click away… referrals social media contacts avatars virtual communities local networks business contacts colleagues at other offices local colleagues old colleagues old classmates friends family

10. Six degrees of separation • Everybody is connected to everybody else by no more than six degrees of separation. • “Small World Phenomenon” by sociologist Stanley Milgram, 1967

11. ”No one knows everything, everyone knows something, all knowledge resides in humanity.” networks Adapted from Lévy 1997

12. Today’s discussion • Understanding networks • Background • Some network basics • What about power? • What about performance? • Leadership through leveraging networks

13. Actor • Actors/Nodes • Individuals • Teams, organizations, etc. Tie • Ties/Links • Knowledge, trust, team, sit by, dislike, etc. • Alliance, customer, investment, etc. What is a network? A set of actors connected by ties

14. Swedish hip hop artists ?? Timbuktu Liljeros 2006

15. Networks of firms Nokia Ericsson Nocom TietoEnator Telia Dahlin 2007

16. Informal organization Uncovering networks in an organization R&D organization Formal organization Teigland et al. 2005

17. Time at firm < 1 yr 1-5 yrs 5-10 yrs 10-15 yrs > 15 yrs Individuals within a firm Mattsson 2004

18. Central connectors within one location Stockholm Surprise!! Bottleneck  Teigland 1998

19. Boundary spanners between locations Brussels Transferred from Stockholm San Francisco Stockholm London Madrid Copenhagen Helsinki Teigland 1998

20. Proximal collaboration When people are more than 50 feet apart, the likelihood of them collaborating more than once a week is less than 10%. Allen 1984

21. Communication still occurs within formal silos • US-based MNC with 30 product divisions • 30,328 people for 3 months in 2006 • 114 mln emails (114 mln) • 68 calendar meetings • Where does communication occur? • Vast majority is within business unit and functional boundaries, not across them • Who are the boundary spanners? • Women • Mid- to high-level executives • Sales & Marketing executives Kleinbaum et al 2008

22. Trust & reciprocity are essential for knowledge exchange in networks

23. Alex Jan Anna Mike Lars Pia Al Nils Erik Bill …and most importantly, management cannot mandate social relationships Miguel John Eva Hans Paul

24. Peripheral players between organizations Electronic communities Stockholm Brussels San Francisco London Madrid Copenhagen Helsinki Other firms Teigland 1998

25. Dual loyalties Loyalty Loyalty Professional network Organization Teigland 2003

26. Increasing job turnover Number of jobs in lifetime Estimated time at one organization in Silicon Valley: ~18 months Time CNET 2000

27. Knowledge resides in the minds of individuals Individuals make own choices about knowledge Share openly for the benefit of the organization Protect and use only in work practice Perception that an individual’s value is diminished if share knowledge Knowledge is power Protect and use only in external relationships for own benefit Knowledge leakage Leave the firm and take knowledge with them Individuals make choicesabout how they use their knowledge…

28. ?? Individuals between business firms Interlocking directorates of Sweden’s 110 largest firms, 2000 SEB Ray-Adams & Sandberg 2000

29. “Lika barn leka bäst” People find similar people attractive and develop relations with people like themselves Our networks tend to be homogeneous and not heterogeneous But……. Marsden 1987, Burt 1990

30. What is the relationship between networks and power? Power: Access to and control over resources

31. How does informal power arise? Node 16 gains informal power, weakening the boss Node 15’s power… Krebs 2004

32. How does informal power arise? …and now N16’s informal power is greater than the boss N15’s formal power Krebs 2004

33. Your network position is related to power • Betweenness • Control over what flows in the network • How often are you on the shortest path between 2 individuals? • Closeness • Access to what flows in the network • How quickly can you reach all others in the network? Krebs 2004

34. What is the relationship between networks and performance?

35. Two individuals with the same number of contacts… A B

36. B A …but with very different access to resources

37. Bridging unconnected groups brings advantages • More rapid promotions • Greater career mobility • More adaptable to changing environments Brass, Burt, Podolny & Baron, Sparrowe et al, Gargiulo & Benassi

38. Firm B Virtual community Performance differs based on one’s network High on-time Low creative Firm A High creative High Creative Low on-time Teigland 2003

39. When you hire someone,… …..you “hire” his or her network.

40. The strength of weak ties Network C’s knowledge Network B’s knowledge Network A’s knowledge Network D’s knowledge Granovetter 1973

41. Two divisions within Sundlink (Öresund Bridge) Section 1 Section 2 Stagnant performance over time Improved efficiency over time Schenkel & Teigland 2008

42. More social get-togethers and coffee breaks are not the solution

43. “Managing” networks in your organization Before After 1. Uncover networks 2. Analyze networks 3. Improve connectedness Anklam & Welch 2005

44. Changing the physical layout • Open-space environment led to impromptu meetings and connections necessary for new ideas and innovations • Easy access to key individuals since no closed offices • Increased knowledge flow of customer and supplier needs since awareness of their visits Cross, Parise, Weiss 2006

45. Comparing performance across firms Teigland et al 2000

46. Hewlett-Packard (1990s) • Networking activities recognized and rewarded at individual and unit levels • Management support for informal and formalnetworking activities across internal and external boundaries • Best practice task group • Personal initiatives • Extensivesocialization: personnel rotation, cross-office teams • A visionary organization • Clearly defined mission:”To make technical contributions for the advancement and welfare of humanity” • Supporting core values, e.g., teamwork, helpfulness • Company-wide goal of World’s Best Laboratory Teigland et al 2000

47. Avoid creating insular networks http://www.enronexplorer.com/focus/19185#

48. Sub4 Sub7 Sub1 Sub14 Sub9 Sub3 Sub2 Sub14 Sub10 HQ Sub5 Sub11 Sub13 Sub6 Sub8 Organizational response Linear, process-based organization Integrated collaboration networks

49. What are the benefits of collaboration networks? • Profitable growth through higher efficiency and innovation • Preventing the waste of valuable resources - avoid reinventing the wheel • Ensuring the use of leading-edge technology and thinking across the firm • Increasing customer satisfaction through shorter lead-times and consistent behavior • Creating a competitive cost structure • Facilitating breakthrough and incremental innovations through combination of technologies and ideas from across and outside the firm • An attractive workplace that encourages cross-functional co-operation across the globe • Attracting and retaining key individuals

50. IBM – A company reinventing itself $98 bln in sales 2007 Ca. 355,000 employees New values developed by employees in jam sessions • Dedication to every client's success • Innovation that matters, for our company and for the world • Trust and personal responsibility in all relationships