McKinsey on Informal Networks

Catching up on some back reading, I ran across Harnessing the Power of Informal Networks in the Q4 edition of McKinsey Quarterly. It's a really nice article, written by my friends and former colleagues Lowell Bryan, Leigh Weiss, and Eric Matson. Well worth a read. The main points, taken from McKinsey Quarterly's website are that:

• Most large corporations have dozens if not hundreds of informal networks, in which human nature, including self-interest, leads people to share ideas and collaborate.

• Informal networks are a powerful source of horizontal collaboration across thick silo walls, but as ad hoc structures their performance depends on serendipity and they can’t be managed.

• By creating formal networks, companies can harness the advantages of informal ones and give management much more control over networking across the organization.

• The steps needed to formalize a network include giving it a “leader,” focusing interactions in it on specific topics, and building an infrastructure that stimulates the ongoing exchange of ideas

What I particularly like about the article is the notion that managers can and should do things to foster the development and health of informal networks. Managers (or at least thinkers about management) have recognized the existence and importance of informal networks for a long time. But they haven't really tried to do anything to encourage them--except for heavy-handed attempts to formalize them with reporting structures and heavyweight IT systems. This article strikes the right balance between ignoring informal networks and squashing them.

Comments

[John Tropea]

Hi Michael,

I posted on communities and informal networks, and in that post include an excerpt to a post by Jay Cross's in reaction to the McKinsey paper.
He mentions realising people get things done by networking is great (horizontal value), and offering tools that perhaps are better than email is great. But to formalise these groups is a mistake...what once was about sharing interests can expertise becomes work and deliverables.

Also about the "trust" factor, and the shared abstract (same wavelength) that makes informal networks immediately intimate.

What I do like is for management to realise these networks, such as "Sustainability", and promote it to a formal business unit...but if the network is a shared interest about a topic that is not core like a business unit, then leave it be.

I think it's a hard call: we talk so much about communities and social capital, but the moment we formalise already exisiting communities in our effort to promote social capital (ie. revealing them and telling people about them so more people are involved in the horizonal value chain), we may actually kill them.

http://libraryclips.blogsome.com/2007/11/12/cops-and-informal-networks/

[Vikas]

Have you checked out www.keyhubs.com? A simple, online tool for mapping informal networks.