Harnessing Your Staff's Informal Networks - Harvard Business Review

Harnessing Your Staff's Informal Networks - Harvard Business Review: "Harnessing Your Staff’s Informal Networks"

If your smartest employees are getting together to solve problems and develop new ideas on their own, the best thing to do is to stay out of their way, right? Workers can easily share insights electronically, and they often don’t want or appreciate executive oversight. Well, think again. Though in-house networks of experts—or “communities of practice”—were once entirely unofficial, today they are increasingly integrated into companies’ formal management structures.

Independent, off-the-grid communities have proliferated in recent years, and many companies have counted on them to deliver creative solutions to challenges that bridge functional gaps. But in the past few years, outside forces—technological advances, globalization, increased demands on employees’ time—have begun to undermine communities’ success. Consider the rise and fall of an informal group of experts at a large water-engineering company located just outside London. Starting in the early 1990s, they began meeting weekly to discuss strategies for designing new water-treatment facilities. The gatherings were so lively and informative that they actually drew crowds of onlookers. (The company can’t be named for reasons of confidentiality.)

The community initially thrived because it operated so informally. United by a common professional passion, participants would huddle around conference tables and compare data, trade insights, and argue over which designs would work best with local water systems. And the community achieved results: Participants found ways to significantly cut the time and cost involved in system design by increasing the pool of experience that they could draw upon, tapping insights from different disciplines, and recycling design ideas from other projects.

Too much attention from management, went the thinking, would crush the group’s collaborative nature. But the very informality of this community eventually rendered it obsolete. What happened to it was typical: The members gained access to more sophisticated design tools and to vast amounts of data via the internet. Increased global connectivity drew more people into the community and into individual projects. Soon the engineers were spending more time at their desks, gathering and organizing data, sorting through multiple versions of designs, and managing remote contacts. The community started to feel less intimate, and its members, less obligated to their peers. Swamped, the engineers found it difficult to justify time for voluntary meetings. Today the community in effect has dissolved—along with the hopes that it would continue generating high-impact ideas.

Our research has shown that many other communities failed for similar reasons. Nevertheless, communities of practice aren’t dead. Many are thriving—you’ll find them developing global processes, resolving troubled implementation, and guiding operational efforts. But they differ from their forebears in some important respects. Today they’re an actively managed part of the organization, with specific goals, explicit accountability, and clear executive oversight. To get experts to dedicate time to them, companies have to make sure that communities contribute meaningfully to the organization and operate efficiently.

We’ve observed this shift in our consulting work and in our research. This research was conducted with the Knowledge and Innovation Network at Warwick Business School and funded by the Warwick Innovative Manufacturing Research Centre and by Schlumberger, an oil-field services company. To examine the health and impact of communities, we did a quantitative study of 52 communities in 10 industries, and a qualitative assessment of more than 140 communities in a dozen organizations, consisting of interviews with support staff, leaders, community members, and senior management.

The communities at construction and engineering giant Fluor illustrate the extent of the change. Global communities have replaced the company’s distributed functional structure. While project teams remain the primary organizational unit, 44 discipline- and industry-focused communities, with 24,000 active members, support the teams. The communities provide all functional services—creating guidelines for work practices and procedures; publishing technical documents; and offering career development, access to expert advice, and help with technical questions. They are the first and best source for technical knowledge at Fluor.

Here’s one example of how this works: Not long ago, a Fluor nuclear-cleanup project team had to install a soil barrier over a drainage field once used to dispose of radioactive wastewater. But environmental regulators mandated that Fluor first locate and seal a 30-year-old well, now covered over, to prevent contamination of the groundwater table. Poor historical data made it impossible to tell if the well really existed, and ground-penetrating radar also failed to discover it. Simply removing the contaminated soil to find the well would have been costly and risky for workers.