Are you in the 70% of companies who name 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.
But, it also turns out that only 9% of companies report an understanding of which talent dimensions drive performance in their organization. It seems that while we are recognizing the possibilities on a theoretical basis there’s a substantial gap between the will to do so and the ability to get it done when it comes to actually implementing learnings of your HR analytics team.
So, why is this gap occurring? 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 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 of communication and also who communicates with whom within your organization. To use a colloquialism, 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An organizational network analysis chart reveals how out-of-date a more traditional hierarchical chart is for understanding the day-to-day makeup of a group, as in the following example:
An ONA chart also reveals 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.
An ONA chart also reveals 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 seeking 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 where 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, ensuring 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. For example, they’re a scientist working on a particular project. Equally, an individual relaying more information than others may not be a sign of an attention seeker, but rather of a single source of truth conveying important data or insight. 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 who come up with good ideas
- Influence: Which employees are influential in changing others’ behavior
- Efficiency: Which teams will complete projects on time
- Innovation: Which teams will innovate effectively
- Silos: Whether an organization is siloed
- Vulnerability: Which employees an 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 skills development resources.