Energizing Change Through Network Leadership

Energizing Change Through Network Leadership Dr. Robin Teigland Stockholm School of Economics [email_address] www.knowledgenetworking.org www.slideshare.net/eteigland 1-

Understanding networks Energizing change through network leadership Today’s discussion

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

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

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

… that becomes quickly outdated …. 50% knowledge relevant 50% knowledge outdated First year of technical-based education Third year of education

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

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

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

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

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

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

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

Swedish hip hop artists Liljeros 2006 ?? Timbuktu

Networks of firms Dahlin 2007 Nocom Ericsson Telia Nokia TietoEnator

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

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

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

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

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

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

Trust & reciprocity are essential for knowledge exchange in networks

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

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

Dual loyalties Loyalty Loyalty Organization Professional network Teigland 2003

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

Individuals make choices about how they use their knowledge… 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 between business firms SEB Ray-Adams & Sandberg 2000 Interlocking directorates of Sweden’s 110 largest firms, 2000 ??

But……. “ 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 Marsden 1987, Burt 1990

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

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

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

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

What is the relationship between networks and performance?

Two individuals with the same number of contacts… B A

… but with very different access to resources B A

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

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

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

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

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

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

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

Changing the physical layout Cross, Parise, Weiss 2006 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

Comparing performance across firms Teigland et al 2000

Hewlett-Packard (1990s) Networking activities recognized and rewarded at individual and unit levels Management support for informal and formal networking activities across internal and external boundaries Best practice task group Personal initiatives Extensive socialization : 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

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

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

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 What are the benefits of collaboration networks?

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

“ Leading by values is very different …..It is empowering .. Rather than burden our people with excessive controls, we are trusting them to make decisions and to act based on values... In today's world, where everyone is so interconnected and interdependent …. If we're going to solve the biggest, thorniest and most widespread problems in business and society, we have to innovate in ways that truly matter. And we have to do all this by taking personal responsibility for all of our relationships - with clients, colleagues, partners, investors and the public at large. This is IBM's mission as an enterprise, and a goal toward which we hope to work with many others, in our industry and beyond. Samuel Palmisano, IBM Chairman, President, and CEO

IBM’s Atlas shows the social network of a topic and how to get to someone Poole 2008

Myths and reality checks about networks I already know what is going on in my network Those who think they know their network the best are usually the ones who know the least We can’t do much to help informal networks Informal networks can be “managed” through changing the organizational context To build networks, you have to communicate more Networks can be strategically developed Adapted from Cross et al. 2002

So, what does this mean for you? An actor’s position in a social network, i.e., social capital, determines in part the actor’s opportunities and constraints Casper & Murray 2002 German biotech scientists

High performers leverage networks (in top 20% of organization’s HR ratings) Structural – Position themselves at key points in the network and leverage networks to get things done Relational – Invest in relationships that extend expertise and help to avoid learning biases and career traps Behavioral – Understand and cultivate the value of networks and focus on building high quality relationships, not just big networks Cross, Parise, & Weiss 2006

What is Network Leadership? Changing the order of things… By inspiring others to see the possibilities and enabling them to act on them… While having only a blank business card “ There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things.” - Machiavelli

Leading through networks Overcome forces for stability through developing a shared interest in your vision Gain access to resources through strategically building your networks Leverage diversity to develop the best solutions Foster relationships through building trust and communication Continuously scan the environment for drivers of change

Overcoming the forces for stability Forces for stability Forces for change The status quo Burnes 2004, Fiorina 2007 Change is almost always resisted People are comfortable, afraid of the unknown People with power and influence want to keep it that way!

How to overcome the forces for stability? Create a vision of what can be different Engage people through participation and find their “passion” Create enough energy to overcome the forces for stability Develop a sense of urgency Benchmark within and outside industry Find/develop a “red hot” burning issue Revise existing or develop new standards Income, profitability, effectiveness, efficiency, customer satisfaction Adapted from Kotter 1996

Higher performers create energy in their interactions with others Those who energize others are higher performers while those who drain energy are lower performers Get higher commitment from others Motivate others so get resources they need Help others learn How do they do this? Create a compelling vision – see the possibilities and not the roadblocks Enable others to contribute meaningfully to achieving the vision – allowing them to shape the road Are trustworthy – honest and not driven by a hidden agenda Cross, Baker, & Parker 2003

How can you leverage the vision of others? Icon Medialab Teigland 2003 Management’s vision Programmers’ vision Vision Best global company Best function Values Professionalism Creative problem solving Responsibility Creating new solutions

Do you know who the informal key opinion makers are in the organization? Teigland 2003 How can you engage these people?

Two individuals with the same number of contact but with very different access to resources B A

Structural holes Advantages of position in information networks Bill Burt 1992, Baker 2003 Dept 3 Dept 4 Dept 1 Dept 2 Barb

Build relationships with people at all hierarchical levels Look for complementary skills while maintaining a balance! Cross, Parise, & Weiss 2006 Higher: Help with making decisions, acquiring resources, developing political awareness, explaining organizational activities beyond local setting Equal: Help brainstorm and provide specific help, support, and needed information Lower: Provide best sources of technical information and expertise

Diversity can be a source of low performance, but also high performance ! DiStefano 2003

Diversity presents additional challenges to achieving high performance Surface diversity Ethnic background, age, gender Structural diversity ( difficult to see ) Different training/educational and occupational backgrounds Learning histories, i.e., own patterns of information acquisition and use Perspectives on analyzing and solving problems Example: Basic researcher vs politician vs salesperson Ruuska & Teigland 2008

What are individual’s different motivations? Government To improve public services Greater public good Electorate Business To realize profits Market opportunities Shareholders University “ To publish or perish” Quest for knowledge Global academic community THP

How can you turn conflict into creative conflict ? ? Teigland & Ruuska 2009

High team performance comes from ongoing processes of positive and negative feedback Other Speaking about other Self Speaking about oneself or own group Advocacy Arguing for own position High Perf. Pos/Neg: 5.6 Medium Perf. Pos/Neg: 1.9 Low Perf. Pos/Neg: 0.4 Losada & Heaphy 2004 Inquiry Exploring other’s viewpoint Positive – Support, encouragement, appreciation Negative – Disapproval, sarcasm, cynicism

Communicate, communicate, communicate Communicate continuously Use at least two communication channels for important messages Link “big picture” with “little picture” Balance and respect all individuals’ interests But listen as well!

Foster trust to build relationships Coleman 2006 Practices and discipline build trust, not who you are in the formal organization

Create trust through open, balanced communication Provide open forum for discussion between all interested individuals, e.g., virtual project space Ruuska & Teigland 2008

Accessibility and attention matter more than physical closeness “ The frequent interactions with people you have here [at headquarters] are often attributed to trust. And over distance you have a complete void there. So you are missing one of your fundamental tools. Somehow you’ve got to overcome that. And that’s where the one-on-one calls come in…” What can you do with your interaction to make it more personal?

Avoid creation of an “inner circle” when working in teams Ensure information equity Avoid informing local team members before distant ones Make information open to all Link “big picture” with “little picture” Pay attention to those who are distant Avoid giving more attention to those individuals who are closer geographically or organizationally Aim to have weekly / bi-weekly one-on-one chats with all team members where concerns can be raised and feedback given Provide access to other connections in your network Don’t assume anything - silence does not mean people agree/disagree, care/don’t care. Constantly check in and get involvement More difficult in network organizations!!!

Develop a rhythm in meeting frequency Rhythm determined by frequency and type (eg face-to-face, phone) of meetings Time between “heartbeats” depends on task (interdependence, complexity, schedule) Face-to-face meetings pump oxygen and blood into the life of the team and its relationships between members - heartbeats Face-to-face meetings do not need to coincide with major decision points! Rhythm is more important. Adapted from Maznevski 2001

Heartbeat evidence Meets face-to-face every six months Meets by formal telephone conference every two months 1 3 13 9 7 5 11 Maznevski 2001 Month 1 3 13 9 7 5 11 Month No established rhythm of face-to-face meetings No rhythm of contact using rich media Ineffective team Effective team

PESTEL – Leveraging external pressures for innovation Johnson & Scholes 1997 Political Environmental Technical Legal Social Economic Organization

1. What factors are affecting the organization? 2. Which of these are the most important at the present time? 3. Which of these are the most important in the next few years? Political Global, regional, and national political development (administration, political parties) Taxation policy Foreign trade regulations Labor market politics Government stability Socio-cultural Population demographics Income distribution Social mobility Lifestyle changes Attitudes to work and leisure Attitudes to consumerism Levels of education Changes in values/attitudes Education conditions Work environment conditions Health conditions Environmental Ecology Pollution conditions ” Green” energy Energy conservation Waste handling Economic Business cycles GNP trends Interest rates & Exchange rates Money supply Inflation Unemployment Wage level Private consumption and disposable income Public finances Energy availability and cost Technological Government spending on research Government and industry focus of technological effort New discoveries/development Speed of technology transfer Rates of obsolescence New patents and products Legal Development in price and competitive legislation Labour market legislation Product safety and approvals

External networks are growing in importance! Other people around the world Other employes around the world Other employees in your country Co-Workers Friends Large portion of new ideas and formal collaboration relationships come from external contacts You Alex Eyal Your manager Rami’s manager Hila Yaron Yuval Eduardo Ed Muriel Peter Frequent e-mails Infrequent e-mails Web 2.0 Collaboration

Problem solutions - The Goldcorp Challenge

Promote an open innovation attitude Not all the smart people work for us. We need to work with smart people inside and outside the company. The smart people in our field work for us. If you create the most and the best ideas in the industry, you will win. If you make the best use of internal and external ideas, you will win. Closed attitude Open attitude Chesborough 2003

Develop participation in a variety of networks Strong ties Weak ties Outside organization Inside organization SOCNET

Start your own external network Swedish International Business School Alumni Network (SIBSAN) Stanford GSB Alumni Club Nobel Laureates Government Ministers Stanford

Go meet someone different or far away Robin and Steve Mahaley from Duke CE in Second Life

Operational networks of high performers Higher level networks provide “big picture” information, help with decision making, and access to resources External peer networks provide new ideas for process or product innovations as well as new insights Subordinates provide technical information and expertise Internal peer networks provide brainstorming, advice, and support External and internal clients ensure satisfied and profitable relationships Adapted from Cross, Martin, Weiss 2006, Teigland 2003

Develop three forms of networking Ibarra & Hunter, HBR Jan 2007 Operational Personal Strategic Purpose Getting work done efficiently Enhancing personal and professional development Developing and achieving future priorities Members Mostly internal contacts and focused on current demands Mostly external contacts and focused on current and future interests Both internal and external contacts and focused on future Network attributes Depth through building strong working relationships Breadth through reaching out to contacts who can refer you to others Leverage through creating inside-outside links

Build relationships before you need them,…. … … while making sure you create value and foster trust.

People understand the game We do have certain individuals who …blast out FYI emails…… I think a lot of it is positioning within the organization….. I would say that 99% of those emails/articles are irrelevant…. are deleted. If I find something interesting …… I would send it to relevant people, but I certainly wouldn’t send it to everyone. Whelan, Teigland, & Donnellan 2008 R&D Scientist

The positive spiral of social networks tschaut’s photos Contribution Reciprocity Accumulation Value

“ At the core of the 21st century company is the question of participation. At the heart of participation is the mind and spirit of the knowledge worker....” John Seely Brown & Estee Solomon Gray, “The People are the Company” Fast Company Issue 01, October 1995 http://www.fastcompany.com/online/01/people.html

Leading and learning Leadership and learning are indispensable to each other.” - John F. Kennedy Leadership, teaching, and learning are inextricably interlinked. - Jack Welch

“ The rate at which individuals and organizations learn may become the only sustainable competitive advantage, especially in knowledge-intensive industries.” Ray Stata, Chairman Analog Devices

Thanks and see you in world! Karinda Rhode aka Robin Teigland [email_address] www.knowledgenetworking.org www.slideshare.net/eteigland

Sources and acknowledgements Books Barabási, Linked: The New Science of Networks . Perseus, 2002 Burt, Structural Holes, 1992 Castells, The Rise of the Network Society . Blackwell, 2000 Cross & Parker, The Hidden Power of Social Networks . Harvard Business School, 2004 Gladwell, The Tipping Point . Abacus, 2001 Scott, Social Network Analysis . Sage, 2000 Teigland, Knowledge Networking , SSE, 2003 Teten & Allen, The Virtual Handshake . American Management Assoc., 2007 Homepages Wayne Baker, webuser.bus.umich.edu/wayneb/ Stephen Bird, people.bu.edu/sbird Steve Borgatti, www.socialnetworkanalysis.com Rob Cross, www.robcross.org International Network for Social Network Analysis http://www.insna.org/ David Krackhardt, www.andrew.cmu.edu/user/krack/index.shtml Valdis Krebs, www.orgnet.com Fredrik Liljeros, www.sociology.su.se/home/Liljeros/index.html Steve Mahaley, www.dukece.com James Moody, www.soc.duke.edu/~jmoody77/presentations/index.htm Giancarlo Oriani, www.informalorg.eu (In Italian) Barry Wellman, www.chass.utoronto.ca/~wellman/

Sources and acknowledgements (cont’d) Articles and Research Papers Cross, Baker, & Parker, “What creates energy in organizations?”, Sloan Management Review , Summer 2003. Cross, Parise, & Weiss, “Driving Strategic Change with a Network Perspective”, Network Roundtable working paper, 2006. Kleinbaum, Stuart, Tushman, Communication (and Coordination?) in a Modern, Complex Organization, HBS working paper, http://www.hbs.edu/research/pdf/09-004.pdf Ibarra & Hunter, “How Leaders Create and Use Networks”, HBR, 2007. Coleman, D. Virtual Team Spaces, 2006. Connaughton, SL & Daly, JA, “Leading from Afar: Strategies for Effectively Leading Virtual Teams” in Virtual Collaborative Teams: Process, Technologies, & Practice (S. H. Godar & S. P. Ferris, Eds.). Lipnack, J. & Stamps, Virtual Teams: Reaching Across Space, Time, and Organizations with Technology . John Wiley & Sons, Inc.: New York, 1997. Maznevski, M. High performance from global virtual teams, 2001. Ruuska, I. & Teigland, R. 2009 (Forthcoming). “Ensuring Project Success through Collective Competence and Conflict Management in Public-private Partnerships: A Case Study of a Swedish Triple Helix e-government Initiative”. International Journal of Project Management . Schermerhorn, Jr., J., Management , 2004.

Energizing Change Through Network Leadership

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