Who would you like to sit near at work?

Sounds a simple enough question, but likely to provoke a mix of emotions that strikes at the heart of the social and business dichotomy. On one hand we like to sit with people that we can get on with; people that potentially share our interests, both inside and outside of work. But also they might be people that are different enough from us to challenge and stretch us without descending into acrimony. On the other hand we might put our ‘business’ hat on and consider our current role. As a technical specialist we might want to sit near other like specialists to share our learnings and experiences and deepen our capabilities. As a line manager I may consider whether I would like to sit with my boss and be more visible and aligned with the strategic directions of the organisation, or alternatively be with my team, to be a ‘hands on’ manager. As a client facing person I would similarly be considering whether it is best to sit near my customers or my service providers. As a senior executive I would also have to consider which stakeholders I would benefit most in being near. Even the idea of individuals being allocated a ‘seat’ is becoming outdated. Hot desking was established to enable facilities to be shared by staff not requiring a permanent location. A recent workplace study conducted of its CBD premises by one large organisation found that staff only spent 63% of their time at the office and of that time, were away from their desk 47% of the time, with the rest of the time being mobile between other workspaces and meeting rooms. The average occupancy was just over 30% overall. Facilities managers are now looking to design workspaces that can accommodate more modern and productive activity based work practices, while at the same time, making more economic use of the spaces provided.

 SNAW1In reality, when it comes to where we sit and co-locate with at work, most of us do not get asked. The task of assigning workspaces is left to line management and facilities staff. By default, workspaces will often be aligned with the formal organisation chart, making the assumption that the formal structure also reflects the preferred work patterns. This assumption is becoming highly questionable as workplaces become increasingly interdependent. Workspace allocation can become a highly emotive issue. It’s not just about the corner offices. It can be impossible to meet everyone’s expectations, yet its important that organisations maximise the opportunity that co-location offers. Despite the facility offered by modern communications technology, physical co-location is still by far the best means for sharing knowledge and maximizing productivity.  So how can we converge the duplicity of personal co-working preferences, natural team collaboration patterns with physical workplace design, to achieve maximum possible productivity?

Social Network Analysis and Workplace Design

Modern organisations are rapidly moving away from ‘command and control’ structures to more ‘empower and support’ frameworks, with of course social business initiatives leading the way. It is therefore not surprising that staff would be given more input into their physical working environment and in particular who they would like to sit near. The essence of this change is cleverly articulated in “Re-imagining Work”, part of the popular RSA animate series, where the choice of who we choose to work with and near is increasingly becoming a personal one. Social Business principles would dictate that it’s the people themselves, more so than their management,  that are best placed to choose their most productive collaboration partners. One doesn’t need to look further than the successful open source software industry to see this in action.

Social Network Analysis (SNA) is a method of choice for analyzing and understanding informal collaboration patterns. Typically an SNA study surveys staff about who they benefit from working with.  Social networking maps and analytics can then be developed to assess where the most productive patterns of collaboration exist and also potential productivity bottlenecks or blockages.

The “who would you like to sit near at work” question was designed to support projects looking to consider productive networking patterns into workplace occupation activities. Forward thinking facilities design and development firms are now appreciating that having a deeper understanding of the natural collaboration patterns of their prospective clients will enable them to provide a more convincing design and development proposition. In a recent project Optimice worked with one of Australia largest developers in developing an occupation plan for their key client, a major telecommunications organisation that was looking to refurbish their central city facilities. Their objective was not only to optimize their floor space, but to configure their physical spaces to be aligned to their ‘future way of working’ vision, which of course included much more mobility and technical enabled communications. Some 5,000 staff were asked to nominate and rate the people they would benefit most in terms of their personal productivity, by being co-located. As with any SNA study it only takes a relatively modest sample to characterize an organisation’s overall collaboration patterns. By aggregating at the ‘Team” level we were able to quickly identify those teams that feel they would be most productive when co-located. Additionally, because we were able to measure the ‘strength of ties’ between teams we could incrementally “fill” a building floor with teams preferentially by manipulating the strength filter, as illustrated below:

SNAW4The top panel identifies the two teams with the highest collaboration score (94), along with the total number of staff (230) contained within those teams. Decreasing the strength filter exposes additional teams with collaboration scores above (24) as shown in the middle panel, constituting a total staff of 1589. Decreasing the collaboration strength even further down to (12) exposes even more teams configured in several clusters. The clustering patterns, along with the staff counter, can be used by occupancy designers to effectively ‘stack’ building floors according to stated collocation preferences. Note that only just over 3,000 of the 5,000 staff would have been allocated at this point. We could continue to decrease the strength of tie filter to allocate the remaining teams or we could determine that those teams with only weak connections could be placed anywhere without seriously impacting their productivity. If you like, these teams could be used as ‘fillers’ for floors only partially occupied.

Where to Next?

 The above example identifies how SNA can be used to realize social business principles for collocating teams. The science of social networks can assist in mediating the politics that regularly pervade office space allocations. There is more to do however. Cohesive, co-located teams can deepen capabilities and enhance efficiency. Productivity however, is not just about efficiency.  We know that a certain level of diversity of connections is needed to facilitate creativity and to deliver innovation. Such connections may not require extended co-location but will require an environment where serendipitous connections are more likely. Those staff in roles requiring diverse networks tends to be those that are more often not in the office and/or not at their desk that often. These people may feel that nominating permanent co-location partners is incongruous with their desired mode of operation. Like teams that have no strong ties to other teams, at the individual level, those staff without strong ties are far from being outcasts, especially if they are seen to ‘bridge’ between cohesive teams, providing the important balance between cohesion and diversity that characterizes high performance organisations.

For the individual, the network ensuing from the simple question of “who would you like to sit near as work?” can be much more than your position in a popularity contest. While you may have a view of who you would benefit from being co-located with, even more insightful is who, if any, have nominated you as someone that they would benefit from being co-located. But that’s another story!


Leading from the Bottom

We have been long term advocates of J.B. Quinn’s inverted hierarchy model for new service led economies.

Inverted HierarchyEssentially Quinn’s argument was that the vast majority of jobs in the developed world (around 80%) are now service oriented and that competitive advantage now comes from having ‘best in class’ competencies. His inverted hierarchy emphasises the need for line management to “support”, rather than “direct” front line staff in services organisations. Since its publication in the 1980s there has been a plethora of supporting voices from all quarters. The Deloitte’s led study “The Big Shift”; and book on “The Power of Pull”; the MIT management think tank on “Leaders Everywhere”; Steve Denning’s book “Radical Leadership”; plus numerous HBR and McKinsey articles all imploring the same message, get rid of the bureaucracy, flatten the organisation, and empower the front line staff. Easier said than done? 

Try as we might the management hierarchy, with its military heritage adopted by industry in the last century, has been a hard one to shake. Over a decade and a half of Social Network Analysis (SNA) studies has highlighted to us just how embedded this model is within organisations, though clearly the degree of hierarchical compliance does vary significantly across industries. A network model of a well functioning hierarchy will show cohesive networks at the executive level. The cohesive groups will then fragment as you move down through the levels of the organisation chart. At the base of the chart you will see shop floor level teams only connected through higher levels in the hierarchy. 

Network Hierachy

Of course in an industrial age, where the workforce was largely engaged in manufacturing or producing widgets, this form of work organisation has stood the test of time in terms of efficiency and low cost production. The situation changes when those passive widgets become active and opinion fuelled customers! As aware as we are how can we enact change to the inverted hierarchy?

 Barriers to Change

Rather than going straight to solution mode it is worth reflecting first on the nature of the barriers that we are faced with:

  1. Your organisational remuneration systems are likely to be strongly biased to the levels in the hierarchy, hence there is a vested interest for those at the top to maintain the status quo.
  2. Those part-way up the hierarchy have developed long term strategies as to how they can climb that hierarchy and have little interest in disrupting the status quo.
  3. Those at the base of the hierarchy have learnt that to progress up the hierarchy one must first learn to do what your line manager boss wants, hence reinforcing the hierarchy.
  4. For many nationalities the management hierarchy is embedded in their cultures. Asian cultures in particular have ‘respect for your elders’ and ‘respect for your leaders’ built in, even if sometimes that respect is not implicit, it is usually explicit.
  5. Even office or workplace designs reinforce the hierarchy. The default design is to co-locate those according to the organization chart. Though some forward thinking organisations are now challenging this by looking to engineer innovation and developing serendipitous connections through judicious physical space design.

There have been several sources of suggestions for facilitating the required changes. For example, leadership guru Steve Denning in his book on radical management suggests:

–       A shift in goals from making money for shareholders to delighting customers through continuous innovation.
–       A shift in the role of managers from controlling individuals to enabling self-organising teams.
–       A shift in the way work is coordinated from bureaucracy to dynamic linking.
–       A shift in values from a preoccupation with efficiency to a broader set of values that will foster continuous innovation.
–       A shift in communications from top-down commands to horizontal communications.

Gary Hamel in his writings on “Leaders Everywhere” suggests:

 –       Too much is required by too few people on top — change is belated, infrequent, convulsive, i.e. by the time the top realises that a change is needed, it’s too late.
–       Instead of continuing to ask more and more of the top leaders, we should move responsibility and expertise downwards.
–       We already realise that value is created by the associates (note: most don’t call them employees any longer), e.g. by interacting with clients, we talk about co-creation with clients.
–       One of the next important steps, after 360-feedback, is 360-compensation that gets rid of the rigid, hierarchical structure of compensation, but attributes compensation more fairly to where it is created.

Authors of the “Power of Pull”, John Hagel, John Seeley Brown and Lang Davison address the issue of client engagement (the pull) with these suggestions:

 –       Choosing environments that increase our likelihood of encountering people who share our passions; becoming and staying visible to the people who matter most.
–       Influencing their endeavors so they amplify our own work.
–       Discovering and interacting with the right people at the right time (timeliness).
–       Making the most of every serendipitous encounter (relevance).

Along the same lines MIT professor Thomas J Allen, the inventor of the ‘Allen Curve’ which articulates the level of drop off in communications with spatial separation, with co-author Gunter Henn, find that levels of physical co-location predicts the level of electronic communication. In their book the Organization and Architecture of Innovation, they make the compelling point that non-collocated teams that share an organizational membership will suffer some loss of intra-departmental communication, but this would be more than offset by increased inter-departmental communication with co-located members of other departments, which would be virtually non-existent without that co-location. The increasing availability of electronic communication facilities has no or little effect on this. So their suggestions could be summarised as:

 –       For staff involved in tasks requiring complex communications, co-location is essential.
–       For staff tasked with coordinating others, co-location is not critical
–       Where organizations are looking to build a diversity of interactions (like the base of the service pyramid) the tradeoff between intra-departmental vs inter-departmental communication, in deciding on who sits near who, is well worthwhile.

Orchestrating Change through Networks

For our part we believe that the value that SNA can add is the ability to provide specificity to these general recommendations. By providing targeted areas for action, the effects are likely to be felt in the shorter term, providing a stronger catalyst for change. For example, in addressing Denning’s recommendations, SNA can provide a baseline as to how the current organisation is working. What are the current levels of bureaucracy? Is it uniform or are some areas more bureaucratic than others? Which areas are likely to be engaging in innovative co-creation activities with clients? Is this happening at the service interface or at higher levels in the hierarchy? How are customers being engaged at each level of the hierarchy? How is client intelligence being vertically integrated up and down the hierarchy?

Management LayersThe above map is filtered to show predominantly reciprocated relationships to accentuate the relationship patterns. One can see how the management layers are closely clustered with a selection of clients. At another level we can see many associate-client disconnected clusters. The opportunity exists for the management to facilitate peer connections between these disconnected clusters to achieve a broader base of client connection, without the need to introduce bureaucratic overheads.

In addressing Gary Hamel’s suggestions, SNA can assess how much appreciation the management layers have on the value being generated at the client interfaces. We regularly find that in hierarchical organisations dependency nominations rarely point downwards i.e. managers tend not to acknowledge their dependency on their own staff, but will freely nominate ‘up and out’. In the Hamel scenario we would see many more reciprocated nominations. SNA is often compared with 360 deg reviews. When asked a question like “who helps you most in getting your job done well”?” Those staff nominated the most would qualify for higher remunerations according to Hamel. SNA can identify these ‘most valued’ staff precisely.

In terms of efficiency we had already indicated that the dependency relationships invariably point upward, rather than the other way. As Hamel indicates, this causes a logjam at the top, with many organisations paralysed while waiting for management responses. Many of the executives we work with have despaired at what they see as their staff’s inability to be accountable and to resolve peer level issues amongst themselves, rather than relying on the line management to make a call on any little dispute. We shouldn’t be surprised as hierarchies are designed this way. Unfortunately with growing interdependence between job roles the call on managers to adjudicate disputes is growing with it. What we need to see and encourage is natural ‘leaders without authority’.  These are the influencers and ‘can do’ staff who can influence others through their powers of persuasion, rather than through the power of position. They are able to successfully negotiate outcomes through co-operation and collaboration. We have found that the ‘key players’ identified by the SNA are, more often than not, these types of people. 

Natural leaders

In the above map we have identified those that are not part of the line management, yet have attracted several peer dependency nominations, which are often reciprocated (red lines).

In the “Power of Pull” much is made of being able to quickly identify the people you should be collaborating with, independent of a formal structure. An ‘industrial era’ response to these needs would be to build a skills or ‘yellow pages’ directory where everyone’s skills and experiences could be catalogued and freely searched. These efforts have largely been miserable failures. For several organisations we have been able to fill this gap by using the key players identified in the SNA as connection brokers. Rather than building expensive directories that become out of date before they are published, the SNA identified brokers who are organised to respond to people search enquires, by doing what they do naturally. And that is to provide qualified referrals, meaning that the right connections are being made in the fastest possible time.

 Yellow Pages

The “Power of Pull” also identifies the importance of serendipitous connections or relevance. In SNA terminology these are called ‘weak ties’, made famous by Mark Granovetter’s “Strength of Weak Ties” theory. Granovetter’s research identified that someone looking for a new job is much more likely to be successful by working through people that they might only know peripherally, rather than working through their closest connections. The logic is that your weak tie network provides a far broader search potential than your close ties, whose connections you are likely to be already connected to.  SNA can explore your ‘weak tie’ network, identifying those that are best positioned to broker connections to the largest number of relevant connections.

 Weak Ties Network

The above map identified only those connections that were nominated as ‘minor’ and therefore representing this organisation’s ‘weak tie’ network. The nodes were sized by a ‘betweenness’ metric, which identifies those best positioned to broker connections between diverse groups. Interestingly the most dominant grouping (coloured ‘grey) were viewed as somewhat peripheral in comparison to the core groups. Our advice to the management was to make them aware of the potential role these ‘brokers’ could play in triggering breakthrough innovation.

Finally lets address the Thomas Allen’s research and the powerful influence physical proximity has on connectivity and collaboration. This topic is addressed in more detail in Workplace Space and Connectedness, but for this article we highlight how SNA can overlay physical location attributes onto the social network analysis maps to identify just how powerful this impact might be in any given workplace. To ‘engineer serendipity’ we basically need to change where people sit. In doing this however, we don’t want to destroy existing teams. Using SNA we can clearly identify those teams showing the strongest density of internal connections. It is these teams that are mostly susceptible to the negative aspects of group think and therefore would benefit most from a more diverse suite of connections. They are also the teams least likely to be damaged by physical separation, as the existing trust links will ensure continued collaboration, independent of physical location.

 Network Map - Across floors and levelsThe above map identifies the connectivity patterns across physical work areas (identified by a Floor/Area code). In this case we can see the organisation has allocated the physical space according to the organisational structure (as per the colour of the circles). The connectivity patterns identify the ‘traffic pattern’ of connectivity across the physical space. The cohesiveness of the existing teams can also be seen, providing a choice for those teams that could be physically separated for ‘engineered serendipity’ purposes.

Summing up

There are many arguments for inverting the management hierarchy in order to thrive in today’s economy. It is however, easier said than done, with many structural mechanisms working to reinforce rather than dismantle it.

We have identified a number of ways SNA can facilitate this challenging task:

  • Identifying how clients are actually being engaged with at all levels of the organisation. Visually identifying where bureaucratic processes are impacting performance.
  • Identifying who the ‘key players’ in the organisation are, being those identified through 360 degree nominations. Rewards and acknowledgement of these key players can change behaviours.
  • Identifying the ‘leaders without authority’. These are the people at the bottom of the hierarchy who through their powers of influence and persuasion can lead the way from the bottom.
  • Use the identified key players as connection brokers. In this way ensuring that the right connections can be made at the right time, without the overhead of bureaucratic systems.
  • Build the reach across the organisation through identified brokers in the ‘weak tie’ network, as a more effective alternative to relying on the formal hierarchy.
  • Identify the most cohesive teams as those who would benefit most from an injection of diverse connections through co-location. They would also suffer least from not being physically co-located. 

Human Capital Flows in Australian Banking – Courtesy of Linkedin

One of the lesser known features of Linkedin is the company insights feature that identifies where a company’s current staff have been employed in the past (just search for a company and then select ‘Insights’ to see where employees have come from). Now its not hard to take this data from selected firms in a given sector to create a network map based on people flows between these firms, if you like, a  visual market representation based on people flows.

So what insights can we gain from this type of visual market? For a start people flows are the closest we can get to identifying critical knowledge flows. Despite the emphasis that is put on protecting intellectual capital assets through the use of patents and secured document libraries, the real competitive insights are often held tacitly within the heads of the employees. While patents may protect old and existing ideas, more often it is the value of the ‘next idea’ that drives much of the headhunting activities undertaken by the recruitment industry. Of course its not uncommon to see a move by a high profile employee accompanied by a longer list of loyal followers to their new company. The high tech industries in particular are rife with poaching and headhunting activities, looking to leverage the unique knowledge of a successful product creator. 

Another aspect that can be investigated is the diversity of the source of employees. For example, its not uncommon for consultants and sales people in the IT/consulting industry to move between the top 4 to 5 firms in the sector. Ultimately this can lead to a ‘sameness’ between the key players in the industry, resulting in less innovation and less diversity of offerings.

To explore some of the insights that a people flow focussed visual market can provide, we have selected to investigate the top 4 Australian banks; ANZ, Westac, NAB and the Commonwealth. The Australian banking industry has been somewhat protected by anti-merging laws that govern these top four banks. This has led to a polarisation of the market around the ‘big four’, making it difficult for the smaller banks to grow to compete on  level terms. We used the Linkedin Company insights feature to mine the people flows around these four major banks. This feature provides the top 5 sources only. Using the snowball sampling approach we identified another 24 companies to form the ecosystem for the visual market map shown below:

Note: This map works best with Chrome, Firefox, IE9 and Safari 6 and above.

Some of the functions/features that you can explore with this map:

  1. There is a ‘fly out’ menu (select the orange triangle) where you can choose what you want to colour and/or filter the nodes by. The start up map uses the Australian head Office location for both the colouring and filtering.
  2. You can manipulate the ‘zoom’, ‘font’ and ‘expand’ sliders to explore the map visually
  3. You can slide the ‘relationship strength’ slider to expose the strongest flows
  4. The thickness of the lines and direction of the arrows identify the size of the flows.
  5. The red lines indicate a bi-directional flow.
  6. The size of the circle reflects the number different firms the company draws from (note this is limited to a maximum of 5 by Linkedin)
  7. The different colours represent the attribute selected. The other options are ‘industry’, ‘country’ and ‘vertex (company name)’.

Some Potential Insights

Here are some of our insights from manipulating the map. We’d be pleased to hear about yours:

  1. By moving the relationship strength slider to the right we expose the Sydney/Melbourne Head Office split. ANZ and NAB are headquartered in Melbourne, with Westpac and Commonwealth headquartered in Sydney. Staff appear to be happy to move banks but not as much cities. The balance of flows between these same city banks did not appear to favour one bank over the other.
  2. Click on IBM to find who they provide staff to and you can see that IBM is a dominant  resource for each of the major banks as well as Australia’s leading telecommunications company, Telstra. Much of this could be attributed to IBM’s dominant position in outsourcing and mainframe computing which is central to big banking.
  3. We can see that ANZ and to a lesser extent Macquarie Bank are ‘brokering’ the most international expertise, mostly from HSBC and Citibank. You can simply click on ANZ or Macquarie bank to expose their ecosystem. Macquarie bank appears to ‘feed’ Commonweatlh bank. Select ‘show all’ to get back to the full map.
  4. Select Westpac and carefully move the relationship strength slider. You may note that their ‘acquisitions’ in BT and St. George Bank are being drained of resources to the ‘mother ship’. Not as much going the other way. In fact St.George Bank also has a significant flow into Commonwealth Bank. Again the Sydney head offices would have something to do with this.
  5. Under the ‘flyout’ menu select ‘industry’ as the filter and then select ‘update map’. Now you will see the filter selections are industry sector. Now uncheck banking and finance. You should now see that Telstra is gaining significant people flows from other providers like IBM, Optus and Ericsson.
  6. Go to the fly out menu again and select ‘country’ for both the attribute colour and filter. Remember to select ‘update map’. Now uncheck Australia and the international network is exposed. Citi Bank and HSBC appear most dominant.
  7. Select Australia and the USA and uncheck the rest and you can see the role Citibank plays in connecting USA banking resources with the Australian banking industry via ANZ and Macquarie Bank.

We are not banking experts, so its not possible for us to know whether the above are really true insights or something everyone in the industry knows. If you work in the industry we’d value your comments and feedback.