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How to Manage Informal Networks

How to Manage Informal NetworksEveryone who works in a large organization can tell you that the company's organizational chart does not capture how work actually gets done. Emailing your buddy in marketing to kick around an idea is usually quicker and more effective than having your boss line up a meeting with someone in the department. We all know it, there have been books written about it, and this month McKinsey Quarterly is offering in depth research on the phenomenon and how to manage it. McKinsey found that,

"the formal structures of companies, as manifested in their organizational charts, don't explain how most of their real day-to-day work gets done."
Informal networks built outside formal channels nurture innovation, collaboration, and can help solve complex problems, but they also present difficulties to managers. "They can increase complexity and confusion, and since they typically fly under management's radar, they elude control." Not to mention the chit-chat they generate can contribute to the communication overload many professionals complain about.

To manage these networks, McKinsey offers some best practices, starting with a appointing a formal network leader with,

"a discrete budget to finance network investments, which give the leader the muscle to offer the members added value. These investments might include infrastructure, both human and technological, to support network interactions; codified knowledge in forms such as documents, internal blogs, and "networkpedias"; training for members; and activities such as conferences to build a social community."
The network leader would be evaluated using either quantitative (email volumes, network participation, etc.) or qualitative means. The researchers note that the formal networks they studied produced good results including one at a large petrochemical firm that solved a technical problem, which was expected to shut down operations at an oil well for four days, in half the time.

The article itself is not exactly light reading, but it is detailed and offers valuable, specific advice for managers looking for information on harnessing professional social networks.

(Image of social network map by christophercarfi, CC 2.0)

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