Dave Ulrich recently spoke in front of 2,500 HR practitioners in Denmark on the role of HR. He argued that HR is not about HR; it is about creating value for others. According to Ulrich, this value is all about how to win the market because without a win by the company, there are no jobs. HR should therefore focus less on HR metrics captured as a dashboard, and more on the impact it generates on the business results. Or to use his words: an organization should evolve from roles and hierarchies, to capabilities that deliver value to the organization’s ecosystem. Dave calls this the market-oriented ecosystems on which he elaborates on in his whitepaper What is Your Point-of-View About What’s Next for HR. The key take-away message during his speech for 2,500 HR practitioners was that companies should explore new ways on how they can enable themselves to create value for all their stakeholders. In this article, we’ll explore a few tangible ways of doing so.
What are ecosystems?
Let’s look at the term ecosystems first. The Cambridge Dictionary defines an ecosystem in the commercial space as the “business activities that affect each other and work well together”. A more practical definition can be found in the article Introduction: Business Ecosystems come of Age by Eamon Kelly from Deloitte. Ecosystems are defined as “dynamic and co-evolving communities of diverse actors who create and capture value through both collaboration and competition […] with the distinctive characteristic that they form to achieve something together that lies beyond the effective scope and capabilities of any individual actor”.
How to understand your ecosystems?
So, what new ways are out there to understand a company’s ecosystem through which you can create value for all its stakeholders?
One of the methods to understand ecosystems is Organizational Network Analysis. This method makes the people and their relationships visible and helps companies to work on the right actions to add value in the ecosystems. The approaches to Organizational Network Analysis are, however, many. To put it very simple, the approaches can be split into individual and organizational.
The individual approach is about sharing plain data, or facts. These data are about themes such as how many people you are connected with, from how many departments or countries, and how strong these relationships are (usually measured based on when you last communicated with each other). These data are increasingly captured and shared in dashboards available to personal accounts on the Web or in some cases even via an App on your smartphone. The data behind these dashboards are often based on metadata from e-mail, telephone, and enterprise social network traffic, also known as passive data.
The organizational approach is about sharing insights. These insights are about themes such as what the barriers are between groups of people that withhold them to work as one, and how organizational agility can be increased by connecting the right group of individuals together. The data behind these insights are often based on survey input, also known as active data.
If we now bring back the definition from Eamon Kelly of ecosystems into play, it becomes obvious that when a company wants to use Organizational Network Analysis, the organizational approach should be the most preferred solution because it goes “beyond the effective scope and capabilities of any individual actor”. Let me illustrate this with two cases.
A case for leadership
The first case is about a leadership team of a company with 500+ employees. Each of the members of the leadership team is shown in the image as circles. The lines between the team members show a collaborative relationship. The color indicates on what level of the hierarchy they are. Red is the CEO, blue are the senior leaders, and green are manager. The size of each circle shows their seniority.
The facts you get from an individual approach will show you high connectivity at senior leader level. Their individual dashboards with key network metrics on connectivity look good. This fact is, however, not helpful when you need to enable the company’s ecosystem, because the leadership group as a whole shows a challenge: senior leaders cluster together. This is an organizational inefficiency for collaboration that cannot be solved with the facts from an individual approach. You need to go beyond the assessment of individual connectivity. You need evidence from the organizational approach to help the company to remove the barriers.
So, one method, ONA, and two different approaches, an individual and an organizational approach. Obviously, with different outcomes. Would you use the facts or insights to enable your company to create value?
Integration of organizations
The second case shows a company that recently went through a merger. This image shows that the two companies are still working as separate entities.
The facts you get from the individual approach may be useful to learn how many of your collaborative relationships are in the other company. If it turns out this number is low, you can try to strengthen the relationships. But relationships with whom? The data behind the email or telephone traffic only reveal with whom you have interacted with in the past. These people may not be the right people you need to interact with if the company is so siloed. You need to interact with those you don’t know.
The evidence you get from an organizational approach will help you with connecting to the ones you don’t know. The below images show where the two companies would benefit most from when strengthening its collaboration. As shown by the pictures below, the disconnection between the two companies is highest inside the Finance & Accounting department.
So, who do you need to work with to improve integration and increased agility in Finance & Accounting? The individual approach will enable the individual to make the connection. This may be easy for someone who already is a bridge between the two companies, but more difficult for those who do not have any collaborative relationships yet with the other company.
Again, one method with different approaches with different outcomes. Will you allow the individuals to act on their facts or will you allow the organization to act on the insights that matter?
Organizational Network Analysis is one method of the many applications to measure value. We need to be aware of that that is what you need to be aware of. Speeches like the one Dave Ulrich gave, give inspiration. This article – and more on AIHR Analytics – give the HR professional guidance on the implementation of such inspiration.
So, whenever you embark on an Organizational Network Analysis journey to enable your company’s ecosystem, consider the following questions:
- Do I want to get nice-to-have information or do I need decision critical insights?
- Do I want to strengthen my company’s ecosystem with individual network facts or with organizational network insights?
These questions will help you to decide what approach is the best fit for your company, because deciding on an Organizational Network Analysis will result in a cold shower. Make sure it delivers value to your organization’s ecosystem.