Leading during 3rd Industrial Revolution: Value creation through networks
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Transcript of Leading during 3rd Industrial Revolution: Value creation through networks
May 2012May 2012www.hhs.sewww.hhs.senordicworlds.netnordicworlds.net
TodayToday’’s discussions discussion
Background Background
Organizational network analysisOrganizational network analysis
Into the future….Into the future….
"...when the rate of "...when the rate of change outside an change outside an
organization is greater organization is greater than the rate of change than the rate of change
inside, the end is inside, the end is near...." near...."
Jack Welch…Jack Welch…
Did You Know: Shift HappensDid You Know: Shift Happenshttp://www.youtube.com/watch?v=cL9Wu2kWwSY&feature=searchhttp://www.youtube.com/watch?v=cL9Wu2kWwSY&feature=search
1.1. What trends do you recognize?What trends do you recognize?
2.2.How are these trends affecting you and your How are these trends affecting you and your organization?organization?
3.3. What does this have to do with networks?What does this have to do with networks?
GrowthGrowth
TimeTime
Information Information and knowledgeand knowledge
Human Human absorptive absorptive capacitycapacity
Human capacity cannot keep up…Human capacity cannot keep up…
Adapted from Cohen & Levinthal 1989Adapted from Cohen & Levinthal 1989
””No one knows everything, No one knows everything,
everyone knows something, everyone knows something, all knowledge resides in all knowledge resides in
humanity.”humanity.”networksnetworks
Adapted from Lévy 1997
Six degrees Six degrees of of
separationseparation- Milgram, - Milgram,
19671967
What is a network?What is a network?
A set of actors connected by tiesA set of actors connected by ties
•Ties/LinksTies/Links−Knowledge, trust, Knowledge, trust, team, sit by, team, sit by, dislike, etc.dislike, etc.−Alliance, Alliance, customer, customer, investment, etc.investment, etc.
TieTie
•Actors/NodesActors/Nodes−IndividualsIndividuals−Teams, Teams, organizations, organizations, etc.etc.
ActorActor
Social network analysis has a long Social network analysis has a long history history
and is based on matrix algebra and and is based on matrix algebra and graph theorygraph theory
http://en.wikipedia.org/wiki/Social_network
Hidden influence of social networksHidden influence of social networks
http://www.ted.com/talks/lang/en/nicholas_christakis_the_hidden_influence_of_social_networks.html
Happy peopleIn between peopleUnhappy people
Christakis & Fowler, 2011
Why else do networks matter?
An actor’s position in a social network, i.e., social capital, determines in part the actor’s opportunities and
constraints.
Casper & Murray 2002Casper & Murray 2002
German biotech scientists
60% Compared to 61% Compared to 61% and 39% of and 39% of those who never those who never use Social Tools use Social Tools
86% recently promoted
72% likely to be promoted
Across Europe, people who frequently Across Europe, people who frequently use Social Tools are ‘more use Social Tools are ‘more
successful’ successful’ Very satisfied with job –
compared to 18% who never use Social Tools
Very likely to recommend workplace – compared to 42% who never use Social Tools
Have more interesting work – compared to 42% who never use Social Tools
38%
64%
Google Social Media Study, 2012
Bridging unconnected groups brings Bridging unconnected groups brings advantagesadvantages
•More rapid promotions•Greater career mobility
•Higher salaries•More adaptable to changing environments
Brass, Burt, Podolny & Baron, Sparrowe et al, Gargiulo & BenassiBrass, Burt, Podolny & Baron, Sparrowe et al, Gargiulo & Benassi
TodayToday’’s discussions discussion
Background Background
Organizational network analysisOrganizational network analysis
Into the future….Into the future….
Uncovering informal networksUncovering informal networks
Formal organization Informal organization
Teigland et al. 2005
What do you notice about the What do you notice about the informal network? informal network?
Cross, Introduction to organizational network analysisCross, Introduction to organizational network analysis
Betweenness•Control over what flows in the network•How often are you on the shortest path between two individuals?
Closeness•Access to what flows in the network•How quickly can you reach all others in the network?
Network position is related to ….. Network position is related to …..
Influenc
e
and Info
rmal
Power
Myths about networksMyths about networks
I already know what is going on in I already know what is going on in my network my network
We can’t do much to help informal We can’t do much to help informal networksnetworks
To build networks, you have to To build networks, you have to communicate morecommunicate more
Adapted from Cross et al. 2002
1) Central connectors within one 1) Central connectors within one locationlocation
Whelan & Teigland 2010
Peripheral players
Bottleneck
Surprise!!
With which colleagues do you discuss everyday technical issues/work-related
problems at least once a week?
Schenkel & Teigland 2011
Red=MaleBlue=Female
=Left org
With which colleagues do you discuss exciting new ideas and better ways of
getting things done?
Schenkel & Teigland 2011
Red=MaleBlue=Female
=Left org
2) Peripheral players and 1) 2) Peripheral players and 1) Central connectors help manage Central connectors help manage
information overloadinformation overload
Whelan & Teigland 2010
Peripheral players
…..you “hire” his or her network.
When you hire someone,… When you hire someone,…
Dual loyaltiesDual loyalties
Loyalty
Loyalty Loyalty
Loyalty
OrganizationOrganization ProfessionalProfessionalnetworknetwork
Teigland 2003
Stockholm
London
Brussels
HelsinkiMadrid
Copenhagen
3) Boundary spanners cross divides3) Boundary spanners cross divides
Transferred from Stockholm
Teigland 1998
San Francisco
What are they doing?What are they doing?
Are more social get-togethers Are more social get-togethers and coffee and coffee breaksbreaks the solution? the solution?
”Birds of a feather flock together”“Lika barn leka bäst”
People find similar people attractive and develop relations with people like
themselves
Our networks tend to be homogeneous and not heterogeneous
Marsden 1987, Burt 1990Marsden 1987, Burt 1990 27
““ManagingManaging”” networks in your networks in your organization organization
Before After
Anklam & Welch 2005
1. Uncover networks
2. Analyze networks
3. Improve connectedness
Actions
•Identifying overly connected people
•Bridging invisible network silos
•Creating awareness of expertise distributed in the network
•Identifying and drawing in peripheral network members
U.S.
Brazil
Angola
Saudi Arabia
Canada
U.K.
Nigeria
U.S.Gulf ofMexico
Brazil
AngolaUK
Canada
Saudi Arabia
Nigeria
U.S.
Brazil
Angola
Saudi Arabia
Canada
U.K.
Nigeria
U.S.Gulf ofMexico
Brazil
AngolaUK
Canada
Saudi Arabia
Nigeria
U.S.
Brazil
Angola
Saudi Arabia
Canada
U.K.
Nigeria
U.S.
Brazil
Angola
Saudi Arabia
Canada
U.K.
Nigeria
U.S.Gulf ofMexico
Brazil
AngolaUK
Canada
Saudi Arabia
Nigeria
Obtaining benefits of scale and Obtaining benefits of scale and lateral coordination through lateral coordination through
communitiescommunities
Gulf ofMexico
Brazil
Angola
UK
Canada
Saudi Arabia
Nigeria
Gulf ofMexico
Brazil
Angola
UK
Canada
Saudi Arabia
NigeriaBusiness results•Lowered customer dissatisfaction by 24%•Reduced cost of poor quality by 66%•Increased new product revenue by 22%•Improved operational productivity by more than 10%
ONA results•Cohesion – average # steps for each person to get to another – improved by 25%
Cross 2010Cross 2010
Comparing performance across firmsComparing performance across firms
Teigland et al 2000
Networking activities recognized and rewarded at individual and unit levels
Management support for informal and formal networking activities across internal and external boundariesBest practice task groupPersonal initiatives
Extensive socialization: personnel rotation, cross-office teams, “open” office layout
A visionary organization − Clearly defined mission: ”To make technical
contributions for the advancement and welfare of humanity”
− Supporting core values, e.g., teamwork, helpfulness
− Company-wide goal of World’s Best Laboratory
Hewlett-PackardHewlett-Packard
Teigland et al 2000
BA
Two individuals/organizations Two individuals/organizations with the same number of contacts…with the same number of contacts…
……but with very different access to but with very different access to resourcesresources
BA
A
Poor Poor creativity and creativity and
innovative innovative performanceperformance
Highcreativity and
innovative performance
Teigland 2003
B
Avoid creating insular networksAvoid creating insular networks
http://www.enronexplorer.com/focus/19185#http://www.enronexplorer.com/focus/19185#
Myths and reality checksMyths and reality checks
I already know what is going on in my network Those who think they know their network the best are usually the ones who know the least
We can’t do much to help informal networks Informal networks can be “managed” through changing the organizational context
To build networks, you have to communicate more
Networks can be strategically developedAdapted from Cross et al. 2002
TodayToday’’s discussions discussion
Background Background
Organizational network analysisOrganizational network analysis
Into the future….Into the future….
A shift from being “problem solvers” to “solution finders”
Access to 24x7 global workforceAccess to 24x7 global workforce
Average wage Average wage approx. USD 1.40 / approx. USD 1.40 /
hourhourhttp://www.people.fas.harvard.edu/http://www.people.fas.harvard.edu/~drand/~drand/
““Distributed groups of Distributed groups of individuals focused on solving individuals focused on solving
general problem and/or general problem and/or developing new solution developing new solution
supported by computer-mediated supported by computer-mediated communication.communication.””
Dahlander & Wallin, 2006 p. Dahlander & Wallin, 2006 p. 12461246
User-driven Innovation
Di Gangi 2010Di Gangi 2010
The wisdom of the crowdThe wisdom of the crowd
ClosedClosedExpensiveExpensiveComplexComplexAccurateAccurate
OpenOpenInexpensiveInexpensive
SimpleSimpleClose enoughClose enough
Hinton 2007
AccurateAccurateUp-to-dateUp-to-date
History tends to repeat itself….History tends to repeat itself….Innovation, financial crisis, industrial Innovation, financial crisis, industrial
revolution, … revolution, …
Steam Steam engineengine
Internal Internal combustion combustion engineengine
MicroelectroMicroelectronicsnics
Late 18Late 18thth C C Late 19Late 19thth C C Late 20Late 20thth C C
Schön 2008
Third industrial revolution?
A new workforce is appearing…A new workforce is appearing…
Prensky 2001, Beck and Wade 2004, Mahaley 2008 Prensky 2001, Beck and Wade 2004, Mahaley 2008
““Digital ImmigrantsDigital Immigrants””““Digital NativesDigital Natives””
Company loyaltyCompany loyaltyWork ≠ PersonalWork ≠ Personal
Learning=Behind the deskLearning=Behind the desk
Company loyaltyCompany loyaltyWork ≠ PersonalWork ≠ Personal
Learning=Behind the deskLearning=Behind the desk
Professional loyaltyProfessional loyaltyWork = PersonalWork = Personal
Learning=Fun and gamesLearning=Fun and games
Professional loyaltyProfessional loyaltyWork = PersonalWork = Personal
Learning=Fun and gamesLearning=Fun and games
Adapted from FredCavazza.net
“u r always on….”
Drivers of changeDrivers of changeIncreased
Interactivity
Di Gangi 2010Di Gangi 2010
Our economy changesOur economy changes
Pine Jr. & Gilmore 1998, 1999; DiGangi 2010DiGangi 2010
30% profit margin in commodity business
HierarchyHierarchyLinear, static, process-Linear, static, process-
based organizationbased organization
HierarchyHierarchyLinear, static, process-Linear, static, process-
based organizationbased organization
HeterarchyHeterarchyDynamic, integrated Dynamic, integrated
collaboration networks collaboration networks
HeterarchyHeterarchyDynamic, integrated Dynamic, integrated
collaboration networks collaboration networks
70 empl70 empl230+230+PartnePartnersrs
41,000+41,000+CommunityCommunitymembersmembers
5,000+5,000+Customers in Customers in
130 130 countriescountries
• Content management software, #1 in Content management software, #1 in media industrymedia industry
• Customers: UN, Vogue, Hitachi, 3M, MIT, Customers: UN, Vogue, Hitachi, 3M, MIT, FT, WSJFT, WSJ
• 70 employees in 9 countries (US, Europe 70 employees in 9 countries (US, Europe & Asia)& Asia)
eZ PhilosophyeZ Philosophy
Connecting people who share a passion for something they
do so that they can collaborate, share ideas, learn, and create knowledge
eZ provides eZ provides platforms for platforms for interaction interaction
throughout its ecosystemthroughout its ecosystem
eZ Software development team
OpenSimulator: A value-creation OpenSimulator: A value-creation ecosystem ecosystem
AcademicEntrepreneurHobbyistLarge FirmNon-profitLocal PublicFederal PublicResearch InstSME EmployeePeriphery
Teigland, Di Gangi, & Yetis Teigland, Di Gangi, & Yetis 20122012
““Open source” …Open source” …not just about software anymorenot just about software anymore
3D printing becoming more 3D printing becoming more commonplacecommonplace
Here comes the Immersive Internet….Here comes the Immersive Internet….
O’Driscoll 2009O’Driscoll 2009
How many How many usually usually think of think of virtual virtual worlds…worlds…
My CV•Leading a virtual team of 30 individuals from across
the globe•Creating and successfully executing strategies under
pressure•Managing cross-cultural conflict without face-to-
face communication
Building skills in virtual Building skills in virtual environmentsenvironments
What can Virtual Worlds be?What can Virtual Worlds be?
http://www.youtube.com/watch?v=Quh2OiPHkm8
Platforms for unleashing Platforms for unleashing creativity and creativity and
revolutionizing value revolutionizing value creationcreation
““Clearly, if social activity migrates to Clearly, if social activity migrates to synthetic worlds, economic activity will synthetic worlds, economic activity will
go there as well.go there as well.”” Castronova, 2006Castronova, 2006
US$ 635,000 for a virtual asteroid!US$ 635,000 for a virtual asteroid!
http://blogs.forbes.com/oliverchiang/2010/11/13/http://blogs.forbes.com/oliverchiang/2010/11/13/meet-the-man-who-just-made-a-cool-half-million-from-meet-the-man-who-just-made-a-cool-half-million-from-the-sale-of-virtual-property/the-sale-of-virtual-property/
•US$ 500,000 profit in 5 US$ 500,000 profit in 5 years by Jon “Neverdie” years by Jon “Neverdie”
JacobsJacobs•Entropia Universe with Entropia Universe with
GDP >US$ 440 mlnGDP >US$ 440 mln
From the mobility of goods From the mobility of goods to the mobility of financial to the mobility of financial
capital to … capital to …
Teigland, JVWR, 2010Teigland, JVWR, 2010
...the “mobility” ...the “mobility” of labor?of labor?
Some things do not changeSome things do not change
Innovation Exchange
Exchange Trust
Trust RelationshipsRelationships Interaction
What should you think about?What should you think about?
How to let go?How to let go?
How to leverage the power of How to leverage the power of networks to create value inside networks to create value inside and outside the boundaries of and outside the boundaries of the firm?the firm?
How to create a sustainable How to create a sustainable ecosystem?ecosystem?
Develop three forms of networkingDevelop three forms of networking
OperationalOperational PersonalPersonal StrategicStrategic
Purpose Getting work done efficiently
Enhancing personal and professional development
Developing and achieving future priorities
Members Mostly internal contacts and focused on current demands
Mostly external contacts and focused on current and future interests
Both internal and external contacts and focused on future
Network attributes
Depth through building strong working relationships
Breadth through reaching out to contacts who can refer you to others
Leverage through creating inside-outside links
Ibarra & Hunter, HBR Jan 2007Ibarra & Hunter, HBR Jan 2007
How do you stay How do you stay in command in command
…………while letting go while letting go
of control?of control?
Open LeadershipOpen Leadership
Having confidence and humility to give up
need to be in control, while
inspiring commitment from people to
accomplish goals
Karinda RhodeKarinda Rhode
aka Robin Teiglandaka Robin [email protected]@hhs.se
www.knowledgenetworking.www.knowledgenetworking.orgorg
www.slideshare.net/www.slideshare.net/eteiglandeteigland
www.nordicworlds.net www.nordicworlds.net RobinTeiglandRobinTeigland
Karinda RhodeKarinda Rhode
aka Robin Teiglandaka Robin [email protected]@hhs.se
www.knowledgenetworking.www.knowledgenetworking.orgorg
www.slideshare.net/www.slideshare.net/eteiglandeteigland
www.nordicworlds.net www.nordicworlds.net RobinTeiglandRobinTeigland
Photo: Lindholm, Metro
Photo: Nordenskiöld
Photo: Lindqvis
t
If you love knowledge, set it
free…
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