- Sustaining our firm’s culture is critically important.
- Professional development and mentoring are the only way to sustain our pipeline of talent.
- Knowledge transfer across generational divides (including institutional knowledge) is essential to our continued success.
Add in:
- Humans are social animals.
If you believe these things, as do I, you should care about "social networks."
I’ve written about them before, in "20% of our group’s value is quitting," "Social network analysis release 2.0," and "Who you know or what you know: How about both?", but today I want to take a different spin on this.
McKinsey has just validated the value of social networks in a new article, "Harnessing the power of informal employee networks." What do they bring new to the table?
First, they simply reconfirm what we already know: That through the informal networks in your firm flow rivers of information untracked by anything on the organizational chart. Call them communities of practice, peer groups, or no-name ad hoc spontaneously precipitating assemblages, they exist and they are in their own way highly functional.
Second, if you believe we’re in the business of knowledge sharing, the intangible power of these networks ought to be a priority for you—a priority, that is, for you to nurture, cultivate, and advance. They go a long way towards explaining how work actually gets done in your firm. I’ve called it the "Ask Sally" phenomenon, and I believe it’s ever-so-real.
When a lawyer or a staff member at your firm needs to know something both tangible and actionable that they don’t know and need to know, whether it’s who the working contacts at a client are for a specific matter or which associate last re-wrote a section of a brief, the most convincing and reliable source is usually along these lines: "Ask Sally; she’ll know."
In other words, we rely on talented co-workers, in informal networks, to get our jobs done.
This much is scarcely surprising. The question is how you as a leader can reinforce these informal networks.
Here’s the problem, as exemplified in this graphic:
This is a real case study from an energy company. On the left is the formal structure, headed by SVP Jones, with a fellow named "Cole" well down the hierarchy and, were he not highlighted by McKinsey, functionally invisible. On the right, by contrast, is the informal structure, showing Cole at the center of the way people get work done, and, were it not for a serendipitous direct connection to Cole, Jones would be all but left out of the loop.
Now, McKinsey has their own complexified protocol for how they recommend we might do this, and to be fair, I’ll summarize it here. Then, I have another idea. But first, McKinsey:
- "Redesign processes to eliminate or reduce noncore interactions"
- "Companies typically underinvest in the capabilities needed to make networks function effectively and efficiently." [So invest more.]
- "The greatest limitation of these ad hoc arrangements is that they can’t be managed." [So prepare to manage them.]
- Finally, to be fair, McKinsey has an engaging table contrasting matrix organizational structures with formally reinforced social networks. I’ll paraphrase their findings here:
| Matrix | Network | |
|---|---|---|
| Organizing Principle | Authority | Mutual self-interest |
| Mode of influence | Hierarchy | Collaboration & leadership |
| Number of bosses | Two or more on different axes | One per network |
| Implications |
|
|
One of the questions I’m asked most often by firm leaders is whether the ideal organizational structure is:
- by office
- by practice group, or
- by client/industry
My answer is usually a form of "it depends what you’re trying to achieve," but in actuality my default answer is that all three interact in mutually reinforcing ways if properly understood, somewhat along these lines:
- Office managing partners need to be aware of and attuned to the specifics of their local marketplace. This is particularly germane when it comes to recruiting, knowledge of local law schools and centers of business and economic power, and familiarity with nonprofits, foundations, and charitable and civic organizations.
- Practice group leaders are responsible for professional development, cohesiveness of the group, spotting new and emerging trends (and, no less, senescing and declining areas), morale-building, and talent spotting.
- Client/industry leaders—which would be my first choice if you could only organize your firm in a single dimension—are responsible for staying abreast of developments, staying in touch, being ambassadors, and ensuring the firm understands its clients’ businesses and conversely that clients understand the firm understands.
But back to social networks.
An impact of globalization has been to make matrix organizations increasingly dated and even irrelevant. Globalization increases both uncertainty, in the business environment, and the number of channels of "inputs" you need to stay attuned to to have a prayer of making sound decisions. In this environment, matrices reveal their brittleness, and social networks reveal their flexibility.
Without going so far as McKinsey does and proposing the calculated introduction, maintenance, and support of formal professional networks, one can readily envision small steps in that direction that could make great sense. For example?
I’ve long believed that client intake is one of the most profoundly strategic activities a firm undertakes on a day to day basis. Your client intake procedures do nothing less than shape the future demand pipeline for the firm. If it’s an automated conflicts check and an accounting munchkin OK’ing credit, you are sorely losing a tremendous opportunity. How to improve this and give it more of a flavor for grown-ups?
I just learned today that Latham recently instituted an internal wiki devoted to client intake. The immediate advantage is that the wiki begins to constitute institutional memory. "Let’s see, I think we had a potential client like this a few months ago; what on earth did we decide and why?" Check the wiki. Now this is a social network with legs.
And I have another idea.
It’s partly prompted by a reader who wrote a few weeks ago to note that, as an associate at a well-known Washington, DC based firm, he had to commandeer a conference room for a few weeks to conduct a major document organization. As it turned out, this particular conference room doubled as the informal office-away-from-the-office of a partner, who spent a large part of his day taking calls, dealing with clients and opposing counsel, briefing associates, and conducting the usual business a partner would conduct.
Now, you may be thinking: What a recipe for disaster! How could the partner get his business done and the associate get his document organization done, both in the same room at the same time, jealous about turf, no doubt, and trying to avoid the social impropriety of overhearing things or pretending not to listen while listening as intently as possible?
The answer, as reported by my correspondent, was that it was perhaps the single most valuable learning experience he had as an associate—and the partner minded not a bit, even seemed to enjoy the company. What did the associate learn? Simply put, how a partner deals with clients, opposing counsel, and associates. At least to a great degree, he learned these things.
Which gave me the idea to institutionalize this type of ad hoc social networking.
Traditionally, partners would share not just an office but a desk; this tradition ostensibly began in the offices of UK banking firms, but why couldn’t the concept behind it—collaboration—be revived to advantage today?
Now, while sharing a desk may be extreme, sharing an office, or, more realistically, a conference room on a long-term basis, might not be so extreme. We all need room to spread out once in awhile; why not make it a social instead of an exclusionary occasion?
I’ll conclude with an economic reason for doing so: Have you looked at Class A rents lately? I thought so. As your firm has occasion to move or to redesign its existing space, consider how to maximize shared/collaborative space and how to minimize—within reason, of course—private/un-shared space. Management consulting firms, accounting firms, architectural and advertising firms—never mind the likes of Google, Apple, Intel, and Cisco—have all shown the way over the past decade to get away from the corner office/cookie-cutter office hierarchical antique model and to adopt and embrace the fluid, open-space model, that encourages people to spontaneously interact, to fortuitously connect, and even to serendipitously overhear.
Are all those firms wrong?
Antique English Partners’ Desk
Update: 12 October, 4:45pm
A reader writes:
Hi Bruce,
A good summarization of the importance of people in the knowledge process.
One additional point that I’d make is that while in the above example it is evident that Cole is a “hub” in the social network, you ALSO need to understand why that is and what kind of hub Cole is. For example, is Cole a hub between all of those people because of overall knowledge…or is it also related to the fact that Cole may serve as the bridge between the different parts of the organization? Perhaps Cole’s background is such that Cole has the knowledge necessary to discuss situations or issues with Drilling and Production. Or it could be as simple as Cole’s kids in the same soccer league with the folks in those areas, so they know each other well. And while it is hinted at above — not all social connections are necessarily positive. It could be that Cole has some sort of administrative control (check-valve) over the other areas, so they have no choice but to connect to Cole.
In typical Social Network Analysis (SNA) it is important to also include arrows which then indicate flow. In the example I cannot really know for certain whether Cole is the source of knowledge, or if instead Cole is an active seeker of knowledge. Cole could be a conduit, or a bottleneck. Hard to say.
But what is clear is that there is a network which is undocumented and certainly not understood. The real issue unfortunately comes to head the day that Cole’s kids no longer play soccer with the kids of Jones, Cohen, Shapiro, etc. Then the “shadow organization” which exists will grind to a halt. Everyone will wonder why but they’ll almost certainly get it wrong.
Regards,
Dan
Dr. Dan Kirsch, CKM, CKEE, CKL®, MKMP, CKMI® Chief Operating Officer Knowledge Management Professional Society (KMPro) http://KMPro.org
email: COO@KMPro.org
