A key aspect of what one might term ‘Innovation 2.0’ is the ability to share ideas among a community, and have that community help identify and refine top ideas. It turns out that a University of Chicago professor studied this dynamic in 2003, and found it to be true.
Professor Ronald Burt wrote an academic paper, published in the American Journal of Sociology, entitled Structural Holes and Good Ideas (pdf). “Structural holes” are the gaps that exist within organizations between people and groups of people. Every organization has them. They represent a lack of communication between people, and are a limiting factor on companies’ ability to be agile and responsive to change conditions.
Professor Burt decided to focus on individuals who broker these gaps: being connected among different groups. Such brokerage is the core driver for companies that implement social software, overcoming the inability to make knowledge and perspectives more widely available. In studying this, Professor Burt put forth this hypothesis:
Idea generation at some point involves someone moving knowledge from this group to that, or combining bits of knowledge across groups. Where brokerage is social capital, there should be evidence of brokerage associated with good ideas, and vice versa.
His research shows his hypothesis to be true: better social connections improve ideas. To determine that, he worked with the supply chain group of Raytheon. We’ll get to this research in a moment. First, a quick tutorial on brokerage across structural holes.
Brokerage across Structural Holes
The graphic below is an example of a sociogram. Sociograms are used in social network analysis to identify the connections and the strength of relationships among people and groups.
There are essentially three nodes in this social network: A, B, C (+D). The structural holes exist between A and B, B and C & A and C. Notice the two actors. James is relatively “network constrained”. His social world really revolves around a tight core that all know one another. Robert is not constrained. He has ties into different groups, allowing him to tap non-redundant sources of information. Reaching across these social nodes is brokerage.
Professor Burt describes four levels of brokerage for which a person could create (increasing) value:
- Make each side aware of the other’s interests and difficulties
- Transfer best practices
- Draw analogies between groups ostensibly irrelevant to one another
- Synthesize beliefs and behaviors that combine elements of both groups
From simple to complex brokerage, there is value in making connections. Specifically, value in terms of the quality of ideas produced.
The High Correlation Between Idea Quality and Brokerage
The study of the supply chain group involved 673 managers. Professor Burt was given detailed access to the employees’ backgrounds, titles, salaries, and performance reviews. He constructed the sociogram for the workers through online surveys, giving him information on which workers were network constrained, and which ones spanned structural holes. The social network analysis provided a powerful way to test the effect of brokerage.
And what did he test? The quality of the ideas submitted by these 673 workers. He asked each of them to answer this question:
From your perspective, what is the one thing that you would change to improve [the company’s] supply chain management?
Employee provided their ideas for how things could be approved. These ideas were then evaluated by two senior-level executives who had gained prominence for running the respective supply chains of their business units.
The graph below plots the ratings of employees’ ideas against their level of “network constraint”. Network constraint is the measure of how connected or insular a given employee is inside the organization. On the left side, the Y-axis is the score given to the idea by the senior managers. Notice one manager regularly scored the ideas lower than the other, but their assessment curves are consistent across the spectrum of network constraint. Thick center line is the average of the two managers’ assessments:
Employees who do not access the knowledge, perspectives and ideas of others generated lower quality ideas. Their network constraint consistently hurt them in the idea evaluations. But more importantly, look at the quality of scores for those employees with better collaborative networks. Being well-connected to colleagues across the organization resulted in generating high quality ideas.
This has incredibly important ramifications for companies. Creation of work-based communities has many benefits in terms of raising organizational IQ. It turns out collaborative networks play an important role in improving innovation of companies’ innovation as well. Companies have typically had siloed innovation efforts, and they’ve accomplished much with this approach. There is a new opportunity to jump ahead of competitors by accessing a source for innovation not previously available: the employee network.
In a New York Times article about his research, Professor Burt offered some clear recommendations for improving the situation:
What he discovered was that many potentially good ideas died at the hands of those who brought them. Raytheon managers had a wide gap between coming up with good ideas and making them happen.
“Although managers with discussion partners in other groups were positioned to spread good ideas across business units,” he writes, “the people they cited for idea discussion were overwhelmingly colleagues already close in their informal discussion network.” The result was that the ideas were not developed. Instead, he says, they should have had discussions outside their typical contacts, particularly with what calls an informal boss, a person with enough power to be an ally but not an actual supervisor.
Key here is expanding the circles of collaboration beyond a close core group to others in the organization at large. Leverage broader collaboration networks to surface and refine the best ideas.
Ready to get started?
(Cross-posted @ the Spigit Blog)