“The structural designers of organisations […] are much like architects who try to predict where the pedestrian traffic will be or should flow on a university campus. They lay their cement, install fences and other obstacles, but inevitably the flows of people and classes carve bare spots in the grass where the sidewalks need to be.”
This brilliant quote from Gerald R. Salancik tells you a lot about human nature. Authorities can structure our lives and tell us where to go, but there will always be people who make up their own rules and routes, and others will follow. Such group dynamics from the fields of sociology and anthropology are – as Salancik writes – highly relevant to understand why and how relationships between leaders and employees impact an organisation. Especially when the organisation needs to implement new projects, new ways of working or otherwise change gears.
Organisations that do not have the insight into how formal and informal hierarchies play out in their organisation are left in the dark. A lack of understanding the true group dynamics within an organisation is often the underlying reason why business processes are inefficient, why people are not collaborating as intended, and why projects fail. And the most concerning part is that management cannot see the dysfunctional structures in their organisation because they are not visible and therefore cannot be reported.
Individuals are nodes in a network
In organisational theory we have seen how the design of an organisation has changed over the years. In the distant past, organisations were defined by formal hierarchies where old school authorities ruled the decision-making process. Then came the functional hierarchies where an organisation got divided into specialised departments which was later supplemented by location-based hierarchies in new matrix relationships. Today, we have arrived at the time of organisational networks. This development goes hand in hand with leadership styles going from assertive through persuasiveness then bridge-building to ideally being purely attractive.
Organisational networks are best visualised as individuals being nodes in a graph where you connect all the dots that form relationships between people in terms of collaboration, exchange of views, influencing and all other activities that are crucial for an organisation’s business processes. These connected nodes are a more trustworthy depiction of how work is done in an organisation compared to that of an organisation chart.
Information does not follow formal, fixed structures; it flows unevenly across an organisation and often comes down to human preferences and chemistry between people.
An Organisational Network Analysis (ONA) is a quantitative analysis that maps out all the relationships within an organisation. An ONA shows you how your organisation works: Who communicates with whom, who people trust the most, who they like, who they follow, who they think are most competent and so on. You can also use an ONA to, for instance, follow up on your goals for inclusion and diversity: Do men and women, young and old, directors and junior employees, natives and foreigners collaborate and inter-communicate on the level you want them to? Or do they turn to old habits when the spotlight is off? This tendency to match like-with-like is a property of human communication that dies hard.
When we do an ONA, we gather information via a simple survey that can be carried out in mutual confidence to create trust. Based on the survey results we develop a social network that can be laid out in a visual graph if it is not too big, say, over 1000 people. When completed the graph will give you a better understanding of how the structures in your organisation work, which relationships drive business value, and where you need to optimise. Do you for example have a structure where new ideas can travel quickly to decision-makers (as it is often seen in startups), or do you have an organisation defined by hierarchies that are good at executing but where information travels slower – perhaps as a feature – between business units? Do you have people or entire business units with low or no access to others in the social network which means that resources are being underutilised? And so on. There are many takeaways from an ONA.
Improve the probability of success
While an ONA is good for illustrating the People Factor in your organisation and make the formal and informal interrelationships transparent, it is equally important to dive deeper into the business processes in each subunit. Therefore, we have partnered with Celonis who use their powerful tool to perform process mining, understand the root cause of an issue, optimise workflows and implement changes to overcome for example bottlenecks and traffic jams in processes. Celonis has experienced massive growth in recent years as their software is used to cut costs, boost cash flow, improve customer experience, reduce cycle times and much more.
For use cases, a demo and an introduction to both ONA and the Celonis tool, check out this video on business organisational management.
The combined offering from Deloitte and Celonis is what you can best describe as a quantitative approach to a new form of leadership. It is new tech applied to Human Resources. The ONA and process mining digitises your organisation on a granular level and gives you a mathematical understanding of structures, hierarchies, human qualities, competences, seniority, diversity, inclusion and other parameters relevant for your business. You can find the most optimal changes with the least disruption in the organisation.
Forfatter spotlight
Jacob Bock Axelsen
Jacob Bock Axelsen (Snr Manager) is CTO in Deloitte Risk Advisory and is an expert in mathematical modeling and a specialist in artificial intelligence. Jacob is educated in mathematics- economics (BSc), biophysics (MSc) and physics (PhD) with nine years of research experience abroad. His scientific background has proven useful in advising both private companies and public institutions on AI, AI governance, Quantum Computing, Organizational Network Analysis, Natural Capital Management and much more. After six years in Deloitte he has developed a strong business acumen. He holds the IBM Champion title for the fourth year in a row and is part of Deloitte’s global quantum computing initiative.