Are you in the 70% of companies naming people analytics and organizational network analysis as a high priority? If so, congratulations! It’s a discipline that’s receiving a lot of interest due to its huge potential to transform the way organizations manage their people resources.
Somehow, however, only 9% of companies report understanding what drives performance in their organization. It seems that while we recognize the impact of investing in organizational network analysis, we’re still not willing to do anything with the insights gleaned from these analytics.
Why? Paul Leonardi and Noshir Contractor from Harvard Business Review have a theory:
“We believe it’s because most rely on a narrow approach to data analysis: They use data only about individual people when data about the interplay among people is equally or more important.”
They’re referring to what they call relational analytics, or organizational network analysis (ONA).
What is organizational network analysis?
So, what is organizational network analytics (ONA)? It could be described as a subsection of workforce analysis, but is typically referred to as the study of how information and communication are transmitted. ONA is a visualization of methods and patterns of communication in your organization. ONA is more interested in who you know than what you know.
Why is organizational network analysis becoming such an important area?
People analytics leader David Green says that organizational network analysis is the number one technique that people analytics leaders want to learn more about. Why? Because as organizational structures move away from hierarchies, ONA has the power to unlock what’s really happening within your organization.
Back to Leonardi and Contractor; “Decades of research convincingly show that the relationships employees have with one another—together with their individual attributes—can explain their workplace performance. The key is finding ‘structural signatures’ patterns in the data that correlate to some form of good (or bad) performance.” Now, let’s identify those patterns.
How to interpret an organizational network analysis chart
An organizational network analysis chart reveals how out of date a more traditional hierarchical chart is for understanding the day-to-day makeup of a group.
ONA charts also reveal the direction of information flow. In this example, a line indicates a relationship between two people, and the arrows denote the direction of information flow, with incoming arrows indicating the source of information and outgoing arrows displaying a team member seeking information.
They also reveal the central members of an organization or team; there will be some nodes on the chart indicating that certain members are more active than others in terms of information given. Meanwhile, it will also reveal those on the periphery, who are only loosely connected or totally isolated (like Kevin in the example above).
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How to evaluate an organizational network analysis chart
Creating a diagram is one thing, but the interpretation of an ONA chart is the key to deploying a relational analysis effectively. For example, if there are too many people getting all their information from an individual, it may be that that person isn’t collaborating well with others and seeks to be the center of attention. Meanwhile, a member on the periphery could be an under-utilized resource who needs to be integrated more effectively into the team.
Here’s how you can get a gauge on the health of your organization: aim to create a healthy flow of information that doesn’t bottleneck at one player, and ensure that everyone’s talents are utilized effectively and are integrated into the team.
However, this will look different in every organization. There may be good reasons for some people to be working independently, as your organizational analysis may show, like individual contributors focusing on independent projects. Equally, an individual relaying more information than others may not be a sign of an attention-seeker, but rather a single source of truth conveying important data or insights. In cases like these, it’s important not to assume that things are broken because there’s not an equal distribution of information.
What are the other practical uses of organizational network analysis?
Leonardi and Contractor hypothesized six signatures of relational analytics, and have concluded that it can be used to predict certain traits at employee, team, and organization level. The six signatures are:
- Ideation: employees coming up with good ideas
- Influence: employees who are influential in changing others’ behavior
- Efficiency: teams most likely to complete projects on time
- Innovation: teams innovating most effectively
- Silos: how and where organizations are siloed
- Vulnerability: employees the organization can’t afford to lose
For more detail on each of these applications and how to identify these traits, you can read this fascinating Harvard Business Review article here.
When used effectively, ONA is a powerful tool that can help HR teams predict and get ahead of possible roadblocks and issues. For example, identifying which employees are valuable to the flow of information and ensuring that those people are engaged to ensure retention; another application of this knowledge is to help broader human resource analytics and their HR leaders know how and where to direct culture transformation, engagement strategy, and soft skill development resources.