McKinsey on Informal Business Networks
As an economics student, I am very interested in the role of networks in the workplace. I did some searching about how companies can use knowledge of networks to improve their operations, and found an interesting article from the McKinsey Quarterly. The quick gist of the article is that companies who pay attention to how employees interact outside of the formal company structure can increase contact between different segments of the company. This will lead to the creation of more ideas as well as a more coordinated approach in designing products.
McKinsey worked with an office product manufacturer that noticed poor communication across the company. The company had previously tried to make the work space more open by removing hallways and doors, but didn’t see much change. In our course, we talked about how certain individuals can “bridge” different groups of people. The company tried to analyze which employees were in the position of key bridges within the employees and customers, and then organized the office space around them.
Another change that was recommended was the elimination of “bottlenecks” in access to key management personnel. In total, these changes allowed for 13% more connection for employees from different areas, which allowed for more coordination in sales. I think that the style of network and relationship analysis that McKinsey helped produce could be very helpful for any large organization, producing tangible gains in business-oriented groups.
I am interested in how business relationships were analyzed, and whether there is a difference in the role of weak and strong ties in a business. It seemed that the analysis in this paper did not classify relationships into these two piles, but it is possible that most business networks are composed almost entirely of weak ties where the strength doesn’t change the result.
http://www.mckinsey.com/insights/organization/the_role_of_networks_in_organizational_change