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As information technology becomes increasingly critical within large, global organizations, chief information officers are being held to ever-higher performance standards. A recent survey of 1,400 CIOs illustrates this mandate, with streamlining business processes, reducing enterprise costs and improving work force effectiveness at the top of their agendas.1 But beyond providing efficient operational support, top management increasingly expects the IT department to be a strategic business partner — to forecast the business impact of emerging technologies, lead the development of new IT-enabled products and services, and drive adoption of innovative technologies that differentiate the organization from competitors.
CIOs often try to address these challenges by relying on the same managerial tools they use to pursue operational excellence: establishing well-defined roles, best practice processes and formal accountability structures. However, our research shows that such tools, though valuable, are not enough. The key to delivering both operational excellence and innovation is having networks of informal collaboration. Within IT organizations in large global companies, we have seen that innovative solutions often emerge unexpectedly through informal and unplanned interactions between individuals who see problems from different perspectives. What’s more, successful execution frequently flows from the networks of relationships that help employees handle situations that don’t fit cleanly into established processes and structures. (See “About the Research.”)
CIOs who learn to harness and balance both formal and informal structures can create global IT organizations that are more efficient and innovative than organizations that rely primarily on formal mechanisms. However, even though individual employees may be able to identify local patterns of collaboration, broader configurations of informal collaboration tend to be far less visible to senior leaders. In the face of this reality, we have found that organizational network analysis offers a useful methodology to help executives do two things: assess broader patterns of informal networks among individuals, teams, functions and organizations, and then take targeted steps to align networks with strategic imperatives.
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1. “Making the Difference: The 2008 CIO Agenda,” survey, Gartner Executive Programs, January 2008.
2. R.L. Cross, R.D. Martin and L.M. Weiss, “Mapping the Value of Employee Collaboration,” McKinsey Quarterly 3 (August 2006): 29-41; R. Cross, J. Liedtka and L. Weiss, “A Practical Guide to Social Networks,” Harvard Business Review 83, no. 3 (March 2005): 124-132; and R. Cross and R.J. Thomas, “Driving Results Through Social Networks: How Top Organizations Leverage Networks for Performance and Growth” (San Francisco: Jossey-Bass, 2009).
3. “Creating Enterprise Leverage: The 2007 CIO Agenda,” cited by B. Burton, in “Justifying Emerging Technologies to Business Leaders” (presentation at Gartner Symposium/ITxpo 2007, Sydney, Australia, November 20-23, 2007).
4. “The McKinsey Global Survey of Business Executives, July 2005,” McKinsey Quarterly, July 2005, www.mckinseyquarterly.com/links/22581.
5. R. Cross, T. Laseter, A. Parker and G. Velasquez, “Using Social Network Analysis to Improve Communities of Practice,” California Management Review 49, no. 1 (fall 2006): 32-60.
6. Interestingly, junior employees placed on virtual teams were sought out by their colleagues more frequently than senior employees who were not on a virtual team. Monsanto leadership came to see virtual team membership as an important on-boarding and development vehicle. With recent shifts in IT human resources management away from a recruiting-based “war for talent” and toward a retention-based model that must fast-track high performers and weed out low performers, anything that can effectively decrease time to productivity and help junior employees build and demonstrate their capabilities is likely to be valuable.
7. Energizing ties were based on employees’ response to the question: How do interactions with this person typically affect your energy level? (Response could be positive, neutral or negative.) See R. Cross, W. Barker and A. Parker, “What Creates Energy in Organizations,” MIT Sloan Management Review 44, no. 4 (summer 2003): 51-56.
8. A.B. Hargadon, “Firms as Knowledge Brokers: Lessons in Pursuing Continuous Innovation,” California Management Review 40, no. 3 (spring 1998): 209-227.