Informal Networks | ENGAGING THE POWER OF HIDDEN INFLUENCERS

Networks 101: What are Informal Networks and Why Should I Care?

Posted on 16/10/2015 by Gideon Mitchell Posted in Uncategorized

It is often said that an organisation’s people are its greatest asset

Part of the value of this asset depends on the way in which the people are connected. The structure of the organisation shows the formal lines of control: who is in charge of each department, who works for whom, the org chart. An organisation’s success depends largely on the right people being in the right positions.

But a more subtle aspect of the connectedness (and this does not show up in a standard org chart) is that in a real organisation people get to know each other. They make relationships based on trust, they learn from each other and they come to rely on one another for aspects of their job. These connections between people are what we call the Informal Networks.

Organisations naturally contain many types of Informal Networks.

For example, an Expert Knowledge Network is the group of people who are regarded by their peers as Experts, and those people who communicate with them because of their expertise.

Why should you care?

Because a lot of the business of an organisation is done through the networks rather than through the formal hierarchy. Brian goes to ask Susan for advice about his new automotive project not because she is his boss but because he knows that Susan is an expert in that area and they get on well. Ali and Dave are not connected by a chain of command, but Ali asks Dave for help sorting out his mentoring problem because Dave is a sensitive communicator who might be able to persuade the HR Director to change Ali’s mentor.

Breaking this down, knowledge and influence flow far more freely through Informal Networks than through the formal hierarchy, leading to greater productivity. Behaviours can also flow through Informal Networks – one person emulating another – and this is a crucial mechanism by which positive behaviours can spread through an organisation in a successful change programme.

Informal Networks are relevant to an enormous range of issues including Change, innovation, communication and succession planning. To be able to manage and work with Informal Networks the starting-point is to map the networks. This is a surprisingly straightforward process.

Every leader of an organisation is aware of the tangible assets on the balance sheet but if they are interested in the value of their greatest asset – their people – they should also know about their organisation’s Informal Networks and how to map them.

Gideon Mitchell

P.S. We are running a workshop in London on 5 November which will give you a fascinating introduction into the applications and benefits of informal network analysis. Click to find out more…

Hands up who wants change imposed on them?

Posted on 10/09/2015 by Gideon Mitchell Posted in Change Management

“People don’t resist change. They resist being changed.” -Peter Senge

Peter Senge, that well-respected management writer, systems scientist and architect of the learning organisation, makes a very good and thoughtful point. Resistance to change comes not from people’s inherent reluctance – though there is always an element of that – but from having change thrust upon them: that’s what people resist. If we understand the logic and imperative for change, and we can see that others are also committed, then our reluctance to ‘being changed’ dilutes and we start to be ‘on board’.

OK. So you’re the chief executive, divisional director or departmental manager who recognises the business imperative to introduce a major change programme to the organisation. Given the appalling and well-documented track record of unsuccessful implementation programmes, how are you going to embark on this exercise?

Firstly, recognise that you can’t do it alone. Of course you will be the prime encourager and driver behind the change, but getting people to accept and change their behaviours – which is ultimately what this is all about – is another matter. You can offer up ideas, visions and instructions through your formal organisational hierarchy, but that doesn’t wash further down the chain of command.

You need to understand that there is a parallel informal organisation that runs alongside the formal hierarchy: the social networks, the colleagues, the people that people go to for advice and guidance. Rarely recognised and often low in the formal organisation, these people are recognised within their networks and wield the greatest influence within their peer groups. And these are the people you need to make your change happen. Bring them into the programme, and see the remarkable impact on the organisation.

To summarise, identify these people, bring them into change programmes and then see how they will influence the informal networks to change behaviours that will ensure the success of whatever programme you’re trying to implement. Yes it’s challenging, but my goodness, it works.

So, returning to Peter Senge’s quote, use influencers to address people’s resistance to ‘being changed’.

Peter Kammerling

P.S. We are running a workshop in London on 5 November which will give you a fascinating introduction into the applications and benefits of informal network analysis. The early-bird price is available until 8 October. Click to find out more…

Collaboration and the need to disagree

Posted on 21/08/2015 by Gideon Mitchell Posted in Collaboration

“Some would argue that our ability to work together was, and is, the key to human survival and advancement.” Susan Wheelan, Creating Effective Teams: A Guide for Members and Leaders, Sage 2005.

Most jobs in the 21st Century are complex and require some form of collaboration and teamwork to achieve innovation, creativity and problem solving. So in practice, when a new team is put together, why do they find it so difficult to collaborate from Day 1? Why does it seem to take time for the new team to become productive?

A factor critical to successful collaboration

Evidence suggests that for collaboration you need several factors, but crucially, an ability to work with differences and to view these as potentially useful information, rather than something to dismiss, convert or attack. Losing the value in differences has potentially high costs. Think of RBS’ acquisition of ABN Amro, subprime lending, X-raying pregnant women long after the link to childhood cancer had been proved (see Margaret Heffernan’s TED talk on Daring to Disagree http://www.youtube.com/watch?v=PY_kd46RfVE) and the Mid Staffordshire NHS Foundation Trust. Robert Francis QC, who chaired the inquiry into the high death rate at Mid Staffordshire, highlighted one of the causes:

“It is now clear that some staff did express concern about the standard of care being provided to patients. The tragedy was that they were ignored and worse still others were discouraged from speaking out.” (Francis, 2013 http://www.midstaffsinquiry.com/pressrelease.html).

Difference is central in Systems-Centered® theory, which proposes that we need differences to develop and transform even though, on the whole, we hate them!

You may recognise these as familiar responses when someone expresses a different view: Yes… but (‘I agree but I think this would be better’); discounting (‘That’s a stupid idea’); attacking the other person (‘What! Are you crazy!?’); trying to convert the other person to your view (‘Don’t you think it would be better if we…?); or more radically, getting rid of people who hold different views, as happened in the top team at RBS during the run up to acquiring ABN Amro. The overall impact is to discourage the speaker from his or her view, to orient to my view (the ‘Right’ view), and to lose the potentially valuable grit in the oyster that is held within the difference of views.

Doing it differently

One of the core Systems-Centered methods – functional sub-grouping – is designed to interrupt these patterns and instead explore the potentially useful information in differences. Functional sub-grouping involves stating clearly when we have a difference, and agreeing to explore one side first, then the other. Systems-centered theory also suggests that, in a climate of similarity, we will discover just tolerable differences in what initially seemed only similar, and some similarities in what appeared to be only different. This process of exploration is more likely to lead to integration and innovative outcomes. (See the short video Susan Gantt and I producedhttp://www.systemscentered.com/en-us/systemscentered.aspx.)
Functional sub-grouping is used in many organisational contexts in the UK, US, Scandinavia, The Netherlands, Japan and in Israel. Marvin Weisbord and Sandra Janoff (Don’t Just Do Something, Stand There! 2007) use it in Future Search and effective meetings trainings. From their experience, it is key to keeping groups and teams working on their tasks:

“[Solomon] Asch showed that as long as each person has an ally, people maintain their independence from [group] pressure. Agazarian went further demonstrating that so long as… every person has a functional ally – someone who carries the same ideas and/or feelings – a group is more likely to keep working. Members will not distract themselves with side trips into rejecting, rescuing, or scapegoating those who take risks. Our minimal job becomes helping people experience functional differences when stereotypes might prevail.”

Far from being signs of weakness, difference and disagreement are crucial to the health and productivity of organisations and teams, as long as we can find ways to work with them.

Rowena Davis

How to make an organisation smarter

Posted on 21/08/2015 by Gideon Mitchell Posted in Leadership, Management, Network intelligence

Most people involved in the selection of exceptional Managers and Leaders will focus on some type of cognitive testing, as IQ is regarded as the critical component in high performance. Certainly, the high number of cognitive ability tests available in the market would seem to support the notion that testing a person’s ability to solve complex and ambiguous problems is important. Most organisations now find themselves navigating an increasingly unknown future, being unable to predict upcoming events, yet their future success is largely pinned on a faith in strategic thinking and IQ.

Recruiters also consider it essential to select for Emotional intelligence. EQ has been popularised by Daniel Goleman and it is now recognised that an effective Manager/Leader needs to have good intrapersonal intelligence – managing their own emotions and managing their own motivation, and interpersonal intelligence – reading the emotions of others and influencing others’ behaviours.

By combining IQ and EQ the organisation can be much surer that it is selecting the very best people in enabling its success.

Yet by only selecting for IQ and EQ, an organisation will be missing essential information about its people. There are three other critical intelligences that feed into organisational effectiveness. These are Learning intelligence (LQ), Values intelligence (VQ) and Network intelligence (NQ).

With the ever increasing pace of change it is now necessary for Leaders to be effective at learning and adapting. Learning can only come from making mistakes. To learn from mistakes takes humility (EQ) but it also takes courage to throw oneself into situations where an individual or organisation can learn – this is about considered risk taking. Marvin Zuckerman first coined the term ‘sensation seeking’ for the trait of having a thirst for adventure and excitement, but recently Professor Chris Jackson has identified sensation seeking as a critical component in a Leader’s ability to learn and adapt to the environment. All of these intelligences are tied together, so having a propensity towards sensation seeking without having a reasonable level of EQ can result in delinquent types of behaviours, however, sensation seeking with high EQ will be a tremendous asset to any organisation.

Certainly the most neglected intelligence is Network intelligence. NQ is a measure of a person’s ability to be connected and have trusted relationships inside and outside the organisation. People with high NQ are likely to be the conduit for the free flow of information around and through the organisation. They have a disproportionate influence within the organisation as others are likely to emulate their behaviours. Take these people out of the organisation and you lose their vital connections. They are operating effectively within the informal network and are essential when an organisation is implementing a change process. We could argue that Network intelligence is related to EQ, however it is something slightly different. Those with high EQ may not necessarily be well connected. Like all the intelligences NQ can be measured and validated and the smart companies are starting to see its impact.

The last intelligence is Values intelligence, VQ. Through the research of Dr Brian Hall and others it seems clear that personal values will largely determine a Leader’s style and impact in the business. Values determine our ways of thinking and how we see the world, which in turn creates our leadership style or philosophy. It also seems that VQ determines one’s level of EQ. Poor self awareness, emotional management and low empathy will be determined by one’s worldview and philosophy of life.

Traditional values are strongly linked with a more command and control mode of leadership, and progressive values correlate to a more facilitative style. This is important because your informal networks, which contain your NQ, need to be nurtured, not formalised. Nurturing and resourcing your informal networks is going to be more natural for a facilitative style of manager compared to a command and control style of manager, who is likely to formalise the networks. Directing the networks will likely result in the weakening of the network’s effectiveness, therefore crippling this intelligence.

All of the types of intelligence we have mentioned are necessary for an organisation to thrive. IQ and EQ are well understood and LQ and VQ have had a light shone on them recently by business gurus. But it is Network intelligence – the only intelligence that is as much a property of the organisation as of the individuals within it – that stands out as being the most neglected. In organisations of all types it is also the intelligence whose improvement would probably boost organisational effectiveness the most.

Mark Hawkswell

Are we promoting the right people as managers?

Posted on 21/08/2015 by Gideon Mitchell Posted in Management, Social Capital

A worldwide survey of organisations carried out by the CMI and published in November 2012 suggests that many employees are being promoted to leadership positions without being the right people for the role, and the result is that businesses are being damaged.

The survey goes on to say that promoting the right people into management roles is not only the right thing to do, but has tangible benefits for the organisation. It increases organisational performance by 23 per cent and people performance by 32 per cent. The survey suggests that one of the underlying causes of misguided promotions is that men are being promoted into roles where more capable women are being overlooked.

Well, that’s controversial enough but there is another even more controversial insight that is bubbling away in the background: an insight that has the potential to transform the HR profession and fundamentally change most work environments for the better.

Over the last decade, the use of social capital analysis (mapping all the important informal networks that exist in organisations) has time-and-again come up with a result that is so profound that those doing the analyses were often reluctant to draw the obvious conclusions. More than half of all managers do not have anything like the personal informal networks needed to do their jobs effectively: their influence networks are often woeful and even their communication networks need to be upgraded significantly.

But that’s not all. The real elephant in the room is that (on average) organisations do have sufficient people at lower levels with both the competencies and personal informal networks to do management jobs better than half of the incumbents!

Social capital analysis is still in its adolescence but the experiences and the numbers are building up: we (and our associates) have analysed the informal networks of more than half a million employees worldwide. So we whisper it gently: over the next few years, many more of the right people will be in the right management jobs.

Neil Farmer

The new CEO 3: authentic leadership

Posted on 21/08/2015 by Gideon Mitchell Posted in Leadership

Once the new CEO has assessed the challenges of the business environment, the strengths and weaknesses of the business and which colleagues to trust, he or she can move on to the biggest challenge of all: how to move beyond traditional change approaches, with high failure rates, and become the key catalyst for consistently effective business change.

The first question to answer on the road to becoming a proactive business change catalyst is: ‘Where do business change ideas come from?’ Certainly some will come from new technologies that create new business opportunities and the new CEO can draw on key innovative individuals within IT. However, most change opportunities come from elsewhere – from other organisations or from natural innovators across the business.

Using a variety of informal network techniques, it is relatively simple for informal network specialists to identify innovative influencers and other local leaders of different types across the organisation. In this case the key individuals that will make up the new CEO’s innovation network will be those who are naturally innovative, influential with colleagues and who take an active interest in new external ideas. There will not be crowds of these people: perhaps 2%-3% of the total employee population in a typical organisation. The mechanics of setting up this network will require cooperation from other senior managers, who may need convincing, but local leader enthusiasm is always very high: light the spark and watch as these (previously unrecognised) individuals thrive and generate more good ideas than existing procedures can cope with. Then change the procedures that are restricting effective change.

The new CEO and many managers will become increasingly comfortable working with key influencers and other local leaders across the organisation. Get your informal network specialists to refine the selection criteria and they will readily identify a slightly larger population (perhaps 5%) of individuals who are the real natural change agents across the business. These will be those key individuals who are strongly influential with colleagues (sideways and downwards, not just upwards) and are by nature change-positive or at least open minded on change. Use them!

The results will change the organisation’s view of business change: poor designs will be recognised early, difficulties will be flexibly overcome, timescales and budgets will increasingly be met. Most important of all, if treated honestly and like intelligent adults, these key influencers will consistently win the hearts and minds of most of their colleagues.

The psychological contract

Experience shows that working effectively with innovative influencers and sector leaders (particularly knowledge leaders and collaborative leaders) requires a level of honesty and transparency that is rarely experienced in traditional top-down change initiatives. These informal leaders are capable and confident people: they are good at their jobs and not impressed by secrecy, deception or spin. They have discretion whether or not to collaborate fully in any business change situation and to change their minds at any point in the process. The ‘psychological contract’ between change sponsors and these key individuals therefore has to be consistently open and honest, even when life becomes difficult.

In practice, this means that change sponsors and their specialist colleagues must never lie or spin to save political face or to avoid potential confrontations. Ensure that change transparency is at a level where all key innovative influencers and other local leaders continuously know what is being considered (not just what has been formally agreed) for all relevant aspect of potential changes. And, because there are no secrets, everyone else knows very rapidly what is going on through (viral) highly effective informal communication networks.

There are few exceptions to this universal honesty and transparency: generally on the specifics of any takeover discussions or redundancies. Even here, high level communications at a strategic level should be openly discussed well in advance.

Inevitably, there will be some hurdles with this near-total transparency approach. The two most common challenges both come from managers:

‘How come a junior member of my staff knew about the possibility of doing this before I did?’ (Because he asked and you did not!)
‘Many directors feel that this is undermining their authority.’ (Directors have the ultimate authority to make strategic – not detailed – decisions when implementing networked leadership. Judge the approach on the results, not on the occasional dented ego.)

Because of these potential sensitivities, it is important to be transparent with managers and directors up front, describing the mind-set changes necessary to achieve high levels of change success, and managing expectations in advance.

Finally, remember that innovative influencers and other local leaders are not ‘yes men (or women)’ – not ‘nodding dogs’. They are the most fertile ground for change in your organisation but they will often not agree with every aspect of initially proposed changes. They are capable of improving key elements of any change initiative: provided all suggestions are judged objectively on their merits and not on who suggested them. This is the final, and very important, part of the psychological contract for effective change implementation.

Neil Farmer

The new CEO 2: ‘Who do I trust?’

Posted on 21/08/2015 by Gideon Mitchell Posted in Leadership

During their first few weeks, a newly appointed CEO will have lots of advice from subordinates keen to make their views heard. Some of these aim only to improve efficiency and the service provided to customers, learning from past mistakes. Many, however, will be defending vested interests, seeking personal advancement or riding favoured hobbyhorses of dubious pedigree. So who should the new CEO trust?

The new CEO can be certain of two things: there will be weaknesses inherited from the past and, as always, significant things will need to change in future. So the most important voices to listen to will be those of the ‘practical innovators’- particularly those who are influential and respected by colleagues. Put the org chart to one side and focus on identifying these key individuals, bearing in mind that unlike the formal leadership structure of a traditional organisation chart, in reality, there is not a single or small group of leaders in organisations but lots of them. Some leaders influence the views and behaviours of many people and some of just one or two. More than 75% of these leaders are probably not in the management hierarchy at all.

Org Chart and network These key people who are also innovative by nature make up only about 3% to 5% of total employees. Their potential is usually latent: sadly under-used, because typically the entire management hierarchy from top to bottom can only identify about a third of them.

So how does the new CEO set about identifying these golden needles in the organisational haystack? The answer is to use experienced consultants specialising in informal networks. There are a small but growing band of these, the best of whom have experience of successful change programmes using informal techniques.

The four steps to identify these key leaders are:

Start with a 100%, preferably online, sample of those in relevant work areas using basic questions, such as: who are the top 5 most innovative colleagues? Who are the top 5 best communicators? Who are the top 5 work knowledge ‘experts’ in your experience? Who are the top 5 most influential people? Who are the best work collaborators across organisational boundaries?
Then use informal network analysis software to home in on the target sector leaders to meet different change situations. For example, the most frequently mentioned individuals across both the innovative and good communicator questions are likely to include most of the change-positive influencers – the organisation’s real change agents. Similarly, mapping the highest-scoring ‘best collaborators’ with the people who influence them is likely to include the key people needed for a major collaborative initiative across organisational boundaries.
Then use a technique known as ‘network walking’ to ‘invert the networks’ and see who the top, say, 10% of sector leaders in each category actually influence, both within and outside their work areas. This is a fine tuning exercise to minimise ‘friend and family’ nominations and to identify these informal leaders in as many areas as possible, including areas with relatively few employees.
This top 10% of relevant influencers and sector leaders are then invited to attend a series of short ‘discussion & analysis’ meetings, where their input is used to identify the top 3% to 5% of colleagues who have the greatest potential to contribute to designing business changes and winning the hearts and minds of colleagues in all relevant areas and levels.

The new CEO now knows who to trust.

Neil Farmer

The new CEO 1: diving below the surface

Posted on 03/07/2015 by Gideon Mitchell Posted in Leadership

Every year, about fifteen new CEOs will be appointed in FTSE 100 organisations. Their confidence on day one may be high but the odds are stacked against them: the typical tenure of a Fortune 500 CEO, according to Fortune magazine, is only three and a half years – less than that of a one-term US president. CEOs in the UK fare slightly better but the facts should still give them sleepless nights.

Scanning the surface
A natural and logical first step for any shiny new CEO is to analyse the future business direction and then carry out some form of capability review across key issues: is the current business model fit for purpose? Is the technology base right to meet future needs? Do we have the right numbers of people with the right skills? Is the culture right? Where are the gaps?

Almost always, the people issues are the most difficult to get to grips with. Traditionally, the end results of capability reviews for people resources are a useful start but are usually inadequate. Where psychometrics are added to the mix, the outcomes often include more heat than light. Historical performance records on individuals add some insights but are often distorted by internal politics and are always backward looking.

Essentially, new CEOs will, sooner or later, ask one very fundamental question: Who do I need to keep and develop to create a core of really good people for the future – and where do we still have significant gaps?

Diving below the surface
The first insight below the surface is that the working world is not always mechanistic and logical. Not just names, competencies and gaps: It’s full of inter-personal networks and local leaders of different types and hidden capabilities.

There is a huge mismatch between the formally-recognised, so-called ‘leaders’ in management hierarchies and the real leaders in organisations. The real leaders come in various forms: those who strongly influence the views and behaviours of colleagues, those who others go to for knowledge and advice, those who collaborate naturally across organisational boundaries, those who energise failing projects. Most of these real leaders are unrecognised, hugely under-used and not in management positions.

In times of change, humans look to these real leaders, their ‘influencers’, rather than their formal managers. Who are the key influencers and where in the business do they influence? Who do people go to when they need different types of technical or business advice or information? Who are the natural collaborators that can be relied on to link groups during big projects? Who keeps the energy levels of teams high through difficult periods? Which formal managers are influential with their staff and have developed effective teams? Which individuals have created informal networks that link different work groups? And of course: Which managers don’t merit a mention in any of the answers to these questions?

CEOs who are appointed internally often assume that they know who the informal leaders are. Externally appointed CEOs recognise that they don’t know but believe that their senior managers do. We worked with one externally appointed CEO, John who had a senior military background. John was a very logical person and he was surprisingly open-minded on new approaches to leadership. But, as more and more local influencers were used in a major transformational initiative that ended up massively increasing efficiency (and staff morale) he kept saying ‘the jury is still out’ on informal leaders. Even as the successes of the change programme grew month after month, he only grudgingly gave up on his career-long belief in formal management practices. To his credit, however, he never stopped us from using these key individuals across a whole range of change activities. John retired at the end of a very successful four years as CEO – he achieved par for the course.

But John could have lasted even longer. Evidence in recent years suggests that new CEOs who see the potential of informal networks can increase their CEO life span substantially.

Neil Farmer