But in today’s world, your company is really a series of networks. These networks include both internal and external players. Knowledge is dispersed throughout the network—it is not concentrated in the managerial class. And the organization needs that knowledge to succeed. This means that a traditional hierarchical approach where knowledge and power flow from the top down will not get you the results you need. To describe this model, we borrow the image of orchestration from Peter Drucker.

Drucker used the metaphor of the orchestra conductor over and over again to describe the challenge of management in the knowledge era. He explained that an orchestra conductor does not know how to play each of the instruments of an orchestra.  Yet, the conductor clearly is the leader and manager of the team making up the orchestra. In his or her work, the conductor cannot and should not get too deeply into the technical details of each individual instrument and musician.  Rather, the conductor chooses the music, sets the pace, and ensures that all the musicians are playing together. “A great orchestra,” he asserted, “is not composed of great instrumentalists but of adequate ones who produce at their peak.”

Sound easy? Of course not. But it captures the essence of the challenge of management in the knowledge era. And makes it clear that a new management model is needed because workers underneath a manager have special talents and skills that the manager does not possess. This approach contrasts sharply with the widely understood dynamic in the industrial model. Industrial workers were expected to do as they were told. They were not valued for their knowledge or creativity. While this is an overly simplistic statement, it is more true than most people would care to admit, even today. Because the majority of organizations are still set up as if they were running factories where workers are interchangeable and dispensable—rather than businesses dependent on knowledge workers to create and preserve competitive advantage.

Adapted from Intangible Capital: Putting Knowledge to Work in the 21st Century Organization by Mary Adams and Michael Oleksak.

On a practical level, organizations often do take a top down approach and try to influence and improve the performance of their networks—or even to create them. Chris Meyer of Monitor Network explains this view in Consulting magazine (April, 2006–not on line) by saying “networks are like computers in that they need applications software or a design of how to use them to be productive, and to do this we begin with the work and not the technology.” In other words, networks need a task, a sense of purpose to be effective.  His suggested approach is to first define the work to be done, then identify the talent needed to make it happen, “engineer” the exchanges needed, design the experience, and assemble the technology.  In other words, build your networks by thinking about the business purpose first and then the technology and platform.

As explained in a past post, the knowledge factory is an updated version of the Value Chain diagram developed by Michael Porter. When it came time to organize the kind of business depicted in Porter’s graphic, the organization chart fit the bill. There was someone in charge of each of the boxes in the value chain. Sometimes there was a manager overseeing several of those managers—a head of manufacturing, or of an individual plant. Many companies also had Chief Operating Officers. At the top was a CEO and/or a President. Power, funding, and communications all flowed from the top to the bottom along the “chain of command,” a term that invokes a military organization but one that is changing as we speak.

Of course, every organization still has an org chart. And a chain of command. But neither is as monolithic as they used to be. The work of most organizations today cannot get done if employees are forbidden to reach into another silo or chain or command directly as opposed to the old way of “going through channels” that slowed things down and inhibited communication. As you will see in the coming posts, there is a balance to be struck between the org chart and the network map….

Adapted from Intangible Capital: Putting Knowledge to Work in the 21st Century Organization by Mary Adams and Michael Oleksak.

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One of the common ways of using this kind of map is to identify and find patterns in the interaction between groups of employees and/or groups of external people. This kind of analysis can be used to identify critical sources of knowledge, the “go-to” people to find information or solve problems. It can also be used to understand the knowledge exchanges that happen—who helps connect people together, who helps solve problems and those with specialized knowledge.

A simple but very clear example of this kind of analysis was published a number of years ago by some of the leaders in the field of social network analysis in an article entitled Knowing What We Know. It described a company that had made significant investment in knowledge management technologies. Within this company, there was a large division with an organization chart like this:

In the research described, the flow of information within this division was examined. It produced a very different pattern from the org chart:

This map makes it clear that a mid-level manager, Cole, was very important to the flow of information. This represented a risk to the organization. Cole could become overburdened. Further, if he were to leave the organization, there would be a big hole in the communications flows. A key outcome of this analysis was to channel some of the requests that Cole was receiving to other managers. Other findings included the fact that the most senior manager, Jones, was one of the most peripheral people in the network and needed to re-engage with the group. Finally, it was clear that a recent office move by the subgroup at the top had separated them from their peers, a situation remedied through more deliberate communication and instant messaging.

Although very simple, this example illustrates the power of network analysis at the level of individual people in your organization. Much larger analyses are now possible using visualization software. Social network analysis can be done for groups of all sizes and purposes. In the medical device company described above, for example, this approach would mean moving beyond roles and mapping people—each of the 80 or so internal and several hundred external players—as one large network or as a series of geographical networks across the country. Or in a research network, it could mean mapping players in multiple organizations across the globe. The goal of any of these is to identify the quantity of information flows and the role played by individuals in the network.

Adapted from Intangible Capital: Putting Knowledge to Work in the 21st Century Organization by Mary Adams and Michael Oleksak.

This perspective looks at the roles people play in your organization. This is the Value Network methodology* described by Verna Allee in The Future of Knowledge.

This approach involves mapping a network where a specific task or process occurs. The nodes in this network are “roles.” A role speaks to the specific function that a person is playing. This is not their title on an org chart—it is usually more descriptive—such as advisor, buyer, designer, marketer, mentor, partner, problem solver. It is common for a person to serve in more than one role.

Once you identify the roles, then all the different “exchanges” between roles are catalogued and mapped. An effort is made to identify both tangible and intangible exchanges. Delivery of a product, document or money is a tangible exchange. An intangible exchange is something like the sharing of knowledge, an introduction to someone else or personal support. Generally, the tangible exchanges are more formal. The intangible, while less structured, can be critical in creating trust and facilitating better communication in an organization.

This is an excerpt of a Value Network map. It was developed to improve the process for handling complex technology repairs at a large utility company. The excerpt shows the sequence of activity that takes over once a problem has been reported and documented. Solid arrows show tangible exchanges and dotted line arrows show intangible exchanges. The first step is for the Service Coordinator to send the Field Technician a dispatch ticket (tangible) and suggestions on the potential solution (intangible) based on information the coordinator has obtained from the customer. The Senior Tech Advisor also gets a copy of the dispatch ticket (tangible) and provides advisory (tangible) to the Field Tech and the Service Coordinator. The Field Tech provides the service (tangible) to the Customer Tech Manager. If all goes well, the Customer Tech Manager and the Service Coordinator exchange completion documentation and the process ends. If not, the field tech informs the field manager that an escalation may be necessary and a new phase of the process kicks in.

The full version of this map includes upfront agreements as to customer expectations and commitments on service level agreements. There is also a set of procedures for escalating problems that cannot be resolved through the initial work of the field tech. The analysis found a number of places in the process where responsibility shifted from one person to another but the person receiving the hand-off wasn’t getting full information. Communication flows for these hand-offs was improved. The map also graphically showed that initial service level negotiations were handled without input from the field which often led to agreements that did not work well in reality. Small work groups were able to make dramatic progress in the span of just a few weeks.

The power of this approach is that the map is created by the people that do the work that is being mapped. It helps them think through what actually happens in their everyday work—and how to improve it. Unlike pure process maps, this approach also captures the critical exchanges of information and assistance, the human-centric intangible exchanges that help make the system work. The concept of mapping intangible exchanges helps, we believe, to make sense of the multiplicity of goals and benefits that network participants have in a business setting. It also empowers the people doing the work to improve it themselves. This kind of bottom-up thinking is critical to the optimization of the knowledge enterprise.

We also like Value Networks as a case study for operationalization of knowledge and its 21st century business model. From its beginnings in the mid-1990s, the methodology has been developed into both an open source and commercial offering. There is also a software package that facilitates the analysis and visualization of the network maps. Rather than trying to keep the methodology as a proprietary offering, the group is maximizing its reach and impact by empowering people on the line inside organizations to model and optimize their own work.

Adapted from Intangible Capital: Putting Knowledge to Work in the 21st Century Organization by Mary Adams and Michael Oleksak.

*A principal of our firm, Mary Adams, is an Advanced Practitioner and
Facilitator of the Value Net Works methodology and is currently working
on several articles about our firm’s work with Value Net Works.