How SNA can help companies to get a better understanding of the outcome of change projects

Problem: Identifying key employees in SMEs

Every time companies are facing significant structural change, there is the danger of manifold failure: failure of convincing employees about the long term benefits, failure of keeping the budget aligned for the change process, failure of acknowledging crucial elements of human network interaction.

After having sit in this class, I believe that SNA can provide insights, which can help to navigate through the stormy waters of any company specific change process. Given the scope of the topic and my experience in the corporate world, I would like to focus on one single example, yet I believe that with the necessary adjustments in e.g. the research question or the scope of the survey, the same reasoning can be applied to any organization.

Background

I have worked for three years at RheinChemie Rheinau GmbH (RCR), a company specialized in rubber,lubricant and plastics additives in the specialty chemicals industry. They are fully owned by LANXESS AG, a major player in the German economy who was also represented in the DAX between 2012 and 2015. Due to an apparent missmanagement at the top executive level the restructuring of the company was announced in September 2014. The three-phase program foresaw the merging of different business units to benefit from more synergies, honestly spoken the intention was cutting costs, an organizational restructuring in mainly the Sales and Marketing operations and a better diversification on its client base.

I was actually writing my bachelor thesis in the summer of 2015 about the roll-out and shortcomings of this change project as more than eight months after the announcement and first kick-off workshops with the top management and employees there was still confusion to be felt and everybody was unsure about his or her future role. Retrospectively I believe that this companywide "paralysis through anaylsis" state of operations was caused by an HR-related cause-and-effect scenario that was underestimated, misunderstood or simply not acknowledged for by the management team. In a very early stage of the transformation process, the company was visibly pushing people close to their retirement age to leave the company (cutting costs) in exchange for pay-offs depending on their role,function and time in the company. I have been told consistently by people who received these offers that they were very good from an employee perspective, independently of their decision to take or drop the offer itself.

After only a few initial job rotations the trickle of resignments got stronger and stronger and until end of January 2015, (the changes were implemented and officially valid from January 1,2015 onwards) roughly fifty people left the administrative departments of the company, amounting to a workforce reduction by roughly 20%!

How SNA could have helped RCR in turning the odds in favor of successful change

The corporate culture at RCR - and many other SMEs I was in contact with - is similar to a family environment. After a few months in the job, you know all about the colleagues you are directly working with.There are many occasional chatters in the hallway, people actually drop by your office to ask a quick question and then stay there for another 20mins or so, talking about everything under the sun except of job-related issues. The people, who were more or less chased away, were corporate veterans and based on the research I did for my bachelor thesis, I know that they were highly regarded in the organization/network and people were getting demotivated by their quitting and left the now less enjoyable workplace shortly after.

Doing a SNA prior to the restructuring announcement could have possibly helped to gain a better understanding of these invisible staff relationships. (Discussing whether top management needs to be aware of the company's grapevine, would belong in another paper) Furthermore in the dawn of a change project, management can utilize knowledge about networks to penetrate the company with new ideas and thus facilitate change.

Gathering the required data to perform a SNA

I think that the actual survey of the people wouldn't be that hard as the amount of individuals is manageable. I would ask all 250 people working in the administration as well as roughly another 40 employees out of production, mainly the supervisors, who often are in touch with staff from adminsitrative funcitons. A challenge for sure though would be the creation of an environment in which all employees are willing to participate and give honest answers. This could be achieved with extrinsic or intrinsic motivators, given my personal conviction though, I would go for an intrinsic apporach and talk with all potential participants about the purpose and benefits of such an analysis. I assume that at first they won't be pleased and might see it as an interference of their privacy but given time and the argument to make their work as enjoyable as possible (we have unlimited resources,right?) they might eventually agree and provide us with high input quality. Similar to our class survey, I would ask them two research questions with the purpose of getting to know something about their work-related network and their social network in the workplace e.g.:

• Whom would you intuitively approach for help and/or professional advice, once you need assistance with any given tasks or new responsibilities?
• Whom are you having lunch with?
• Whom are you socializing with outside of work? (can be an especially tricky one...)
• With whom are you enjoying to work together?
• Whom do you like to talk to during your breaks or idle times?

Providing a 5-point-scale for answering (Not at all-Very Frequently) gives a lot of room for analysis and can give more insights into different layers of interaction. The attributes or demographics would include gender, department, tenure, hierarchy level, age group and place of residence. Additional qualitative information which could turn out to be useful for the analysis and interpretation might include a question about whether the persons knew eachother before working in the same company or other considerations about possible touching points like childrens that could be of the same age,etc...

Important SNA measures

Given the overall goal to identify the individuals who are the informal leaders of the company and positively affect the motivation and involvement of others overall network measures are secondary and the focus should definitely be put on centrality measures. Since we were asking about two different types of leaders indicating different characteristics, on the one hand those people who are willing to share information and knowledge and thus people think of them as first contacts once they require help and on the other hand those individuals who make the workplace more enjoyable and fun a separate analysis of the networks is necessary although a person could stand for both.

Special attention shall be paid to a component analysis and its further breakdown into subgroups and probably most importantly in this scenario cliques. Especially on a high frequency of interaction/ties, strong cliques can be an indicator of dependencies. Nodes or individuals that are part of a strong clique can be strongly impacted by the quitting of one of the members.

Bridges linking different subgroups or even components with eachother and connectors those who can introduce you to so far unknown influential people (Eigenvector) are also essential players in the attempt of facilitating change.

The simple yet meanngful measure of degree connections (In- & OutDegree) is also interesting as it gives a picture of the popularity among colleagues.

Another way of understanding the directionality of the network can be given by the E-I-Index. Capitalizing on the attributes, management can get an impression whether information spreads homogeneous and therefore among those who are alike or among those whose attributes are different. The latter might be an indication about very good cross-functional or cross-hierarchical communication and thus decreases the importance of an individual egonetwork because it is more likely that people also approach those with heterogenous attributes.

Betweeness and closeness are less important as they provide information about nodes relative to others. Primarily we are interested in identifying individuals we need to bring along during the change (according to change management literature the so-called leaders or agents of change, not to be confused with the initiator(s) of change).

The number of isolates can indicate but should by far not be the only criterion upon which costs can be saved through offering a termination bonus payment and can definitely be worthwhile to be given a second look.

Conclusion

Having laid out how SNA can help with both problems, the urgent question from an employer side about which individuals are the less harmful to be removed from the network (of course this should be interpreted only as a starting point) and the problem about identifying those individuals able to promote change, I want to quickly put the discussed points into the bigger picture. Coming back to the above mentioned clueless and in the long term destructive or at least harmful approach of simply chasing away those that wont be in the company for long anyways but might be fundamental for its bonding, top management automatically delayed the turnaround point for the change implementation.

Any company must first develop an understanding of the importance of social networks in organizations before significantly disturb it by any means. In this specific case, SNA might have led to actions that would help ALL employees to carry or be carried through the implementation gap, typical for change. Based on the findings management could have also engaged much earlier with key employees to make sure that all the perspectives are considered and complications, existent in every project, could have been minimized. Benefitting from the familiar corporate culture instead of bringing up this family to oppose the new and unknown should make up for the costs of such surveys and increases chances for success. In the end prevention is always more effective as curing as postulated from the discipline of quality management.