The traditional methods for driving operational excellence in global organisations are not enough, write Rob Cross, Peter Gray, Shirley Cunningham, Mark Showers and Robert J. Thomas for MIT Sloan Management Review. They say the most effective organisations make smart use of employee networks to reduce costs, improve efficiency and spur innovation.
The authors observe that chief information officers are being held to increasingly high performance standards in information technology. They are also expected to drive the adoption of innovative technologies that differentiate the organisation from competitors. As they try to address these challenges, they often rely on the same managerial tools used to pursue operational excellence, such as establishing well-defined roles, best practice processes and formal accountability structures. However, the authors claim that the key to delivering both operational excellence and innovation is having networks of informal collaboration.
The authors insist that CIOs who learn to harness and balance formal and informal structures can create more creative and efficient organisations than those relying primarily on formal mechanisms.
They can work to improve performance in four critical ways: attain benefits of scale through effective global collaboration; drive work force engagement and performance; align collaborations with business partners and external stakeholders; and minimise network inefficiencies and costs.
The authors explain each of these strategies in more detail.
1) Attain benefits of scale through effective global collaboration. IT operations are usually optimised locally rather than globally, which can lead to "tremendous redundancies in expertise, capabilities and technology investments as well as fundamental incompatibilities across geographies".
The authors observe that benefits of scale, such as faster innovation through technology transfer and more access to expertise, require connections across geographies.
2) Drive workforce engagement and performance. IT operations often focus on measurable goals and operating metrics to find out how effectively a process is working. But that detracts attention from aspects that are harder to measure like work practices, collaboration and documentation.
3) Align collaborations with business partners and external stakeholders. The article recommends creating a map of ties to key business partners and external stakeholders to show CIOs where units need to invest more or less collaborative time.
In studying the IT function of a major online retailer, the authors traced the average number of employee ties to each business unit, the percentage of ties that were related to problem solving and the degree to which IT employees found the interactions energising.
Those three indicators enabled them to see which business units were engaged in innovative interactions and which had low-energy information exchanges.
4) Minimise network inefficiencies and costs. IT employees often interact with a large number of colleagues to ensure potential solutions don't create new problems, but these collaborations can be costly or even counterproductive if an excessive number of people are involved in the communication and decision making.
The Collaborative Organisation: How To Make Employee Networks Really Work
Rob Cross, Peter Gray, Shirley Cunningham, Mark Showers and Robert J. Thomas
MIT Sloan Management Review