The Impact of Social Networks on Decision MakingIn a number of previous posts, I've discussed the social networking research of Rob Cross, an associate professor of management at the University of Virginia's McIntire School of Commerce.
Prof. Cross has now published Driving Results Through Social Networks: How Top Organizations Leverage Networks for Performance and Growth, co-authored with Robert J. Thomas, executive director of the Accenture Institute for High Performance Business. In the book, Cross and Thomas explain what their research has revealed concerning the impact of social networks on the efficiency and effectivenss of organizational decision making.
You can get an overview of this research by reading an article by Cross, Thomas, and David A. Light, an Accenture Institute research fellow, that appears in the Winter 2009 issue of the MIT Sloan Management Review. Illustrating their points with two case studies, the authors argue that poor decisions result not just from cognitive biases and dysfunctional small group dynamics, but also from shortcomings in the way an organization's informal networks are structured and tapped during the decision-making process.
When the researchers analyzed the networks of top-performing executives, they found an above-average number of connections "with people who bridged ties across functional lines, physical distance, and hierarchical levels." This helped avoid bias in the information the executives received, and improved the efficiency and effectiveness of their decision making.
One of the case study companies improved decision-making efficiency by correcting overcommunication i.e., overcollaboration among employees, a problem identified via process mapping and network analysis. The company took corrective action that included confining discussion of decisions to those who were directly involved in making the decisions, devolving authority for certain types of decisions onto more junior employees, adjusting its leadership training to support needed cultural and behavioral changes, introducing conflict resolution training, and adding proficiency in decision making to the competencies on which managers are evaluated.
The other case study company undertook a network analysis to identify where executives' networks were overloaded and where they were underdeveloped. The researchers report the executive team "learned that for framing strategic decisions, the company was fairly insular and could benefit from reaching out to more people. But for execution of decisions streamlining was absolutely critical to better performance within the group." Corrective action included individual coaching to help executives adjust their networks to eliminate gaps in the expertise they tapped while framing decisions, and revamping decision-making authority to take some of the load off the CEO and the most connected leaders.