Work & performance

August 3 2016

How leadership networks can benefit your workplace

Professor Giles Hirst
By Chair of Leadership in the College of Business and Economics at Australian National University

Developing connections outside traditional hierarchies can help organisations and employees to become more efficient, creative and better able to deal with complex problems.

The modern workplace is an increasingly complex and interconnected beast and as such traditional leadership hierarchies – which can morph into troublesome ‘silos’ that discourage information sharing across departments – are no longer viewed as the most effective way to manage an organisation.

That’s not to say formal authority isn’t an important source of influence, but an emerging body of research is beginning to show the benefits of informal leadership networks to both organisations and employees. It turns out that building informal connections across organisations aids efficiency, knowledge sharing and the capacity to deal with complex problems.

What are leadership networks?

Most organisations have a formal leadership hierarchy that’s usually illustrated in much the same way as a family tree with the CEO at the top, followed by department heads in the middle and their direct reports at the bottom. An informal network looks more like an interconnected web where employees come together based on informal groups rather than adhering to the hierarchy.

Network mapping is a cutting edge analytical technique that measures these networks by capturing patterns of relationships among people. The insights are unique because they not only characterise people’s patterns of communication separately from each other, but also as part of departments and groups.

For example, network mapping may reveal that a specific manager is central as a source of advice in the organisation, but also that the manager links two departments that would be otherwise disconnected. It may also show that people who place lower on the traditional hierarchy yield a lot more influence than some of their superiors.

North American research that examined how change occurs in the UK’s National Health Service (NHS) found that people who were central to the organisation’s informal network had a clear advantage instigating change, regardless of their position in the formal hierarchy.

What’s in it for organisations?

Leadership networks can identify who has the power in an organisation, who is influential and who are the key gatekeepers. They also give a key insight into the social structures of an organisation.

Identifying and building leadership networks helps companies assess patterns of information sharing and networking across the organisation and increase connections. It’s about breaking down silos, connecting parts of the organisation that don’t talk to each other and identifying managers who are key conduits.

And the good news is organisations don’t need to go through an extensive and expensive restructure to change the key aspects of how people relate to each other. Research  shows that applying the science of social networking with relatively short-touch, high-impact interventions can fundamentally change social structures.

The result is creation of much broader networks and a much more diverse collection of senior leaders across the organisation. It’s a powerful way to improve goal sharing, communication and cohesion in an organisation without a massive restructure.

How can organisations build leadership networks? Encouraging leaders to seek new and diverse connections and providing individual feedback can be a powerful incentive. Building leaders’ knowledge of the organisation can also help them to better navigate the various departments.

What’s in it for employees?

This is where leadership networks are really useful. Encouraging the development of leadership networks helps employees to feel empowered at work, increases capacity to solve complex problems and promotes innovative, out-of-the box thinking.

And it’s not just who employees know but the people their contacts know that matters. One recent study that examined networks in a large Chinese pharmaceutical company found ‘non-redundant ties’ – the people one does not interact with directly but with whom one’s direct ties interact – offer the greatest efficiency for employees to gather information. This information can then be used to generate creative ideas.

So it’s not just about having a broad network within an area of expertise; rather, developing networks outside an area of expertise helps to improve knowledge and spark those lightbulb moments.