Endless Knots

Enterprise 2.0: Networked--The New Geography of Organizations

No Enterprise 2.0 conference would be complete if Jeff Stamps and I didn't stake a session on what we've been thinking about of late. In this session, we'll give a preview of the new book we're working on (shhhh, we haven't really announced it yet but, hey, this is only my blog...). Need I say that the description, as written, is not precisely what we'll present, which is truly hot off the, er, screen:

Networked: How the 2.0 Enterprise Makes Itself Transparent, Participatory, and Collaborative #e2conf40 (Location: Harbor Ballroom III)

At a time when social tools are dismantling the old beliefs about organizations, savvy enterprises are finding ways to make it easier for people to understand how to get things done. Using insights from the "new science of networks" together with Web 2.0 capabilities, companies can make their organizations much more transparent, highly participatory, and increasingly successful through greater collaboration. With more and more organizations forced to work at a distance—and some companies shutting down travel altogether, it's even more critical that enterprises make it easy for people to truly see what's going on—both locally and globally.

Speaker - Jeffrey Stamps, Chief Scientist, NetAge

Jeff Stamps is co-author of numerous books and articles, including Virtual Teams and The Age of the Network. His early insights into what makes collaboration work have been picked up by organizations around the world, including Volvo and the US Army, where he has designed methods and tools for cross-boundary work that drive extraordinary performance.

Speaker - Jessica Lipnack, CEO, NetAge

Webcom-Montreal 2009 - Wed, May 13, 2009 - 6th Intl Conference

What are you doing next Wed? Come to Montreal for Webcom 2009, where the themes are "Digital Identity, Innovation and Economic Development." I'm not entirely sure what digital identity is so I won't be talking about that but I will be holding forth in two sessions: "Leading Innovation When People Are Far Apart" and "The Digital Organization Chart: How to Encourage Transparency Across the Whole Enterprise."

Here's a little "facebook" of all the speakers.

What's extremely cool about this conference is that the afternoon keynotes are free and open to the public.

And there's a party that night. Thanks, organizers, for inviting me. I'll report back in after the event.

Mapping the recovery - "follow the money" - part 2

Lost in the firestorm over AIG bonuses yesterday was a quiet announcement by Attorney General Eric Holder that laid another solid plank in the government's structure of transparency and accountability. Michael J. Sniffen's AP story, "AG overturns strict Bush-era information disclosure rules," has a cutline summarizing the change underway in Washington: "Agencies urged to release records unless law forbids," i.e. there's an a priori bent toward openness. The AG was way ahead of schedule with this, acting earlier even than the May 21st deadline for policy directives implementing President Obama's Open Government initiative, established by the very first acts of his administration (see "Obama's Midnight Memos).

With the presumption of release of government information, transparency and trust take a big step forward. Which brings us to the second part of "Mapping the Recovery" (see part 1) in our NetAge Reports series. Here, we address the specifics of the data that will be used to provide transparency and accountability for the chunks (block grants) of spending, particularly of the $787 billion passed by Congress in February.

It is especially important that tracking the expenditures be done correctly and that it truly makes responsibility and accountability clear. Renewed public trust rides so heavily on how this money is spent. While AIG's shenanigans show how difficult it can be to engender trust at the recipient end of spending, particularly in the private sector, the government has an opportunity to increase trust in itself, in how it is handling this money, and making sure responsibilities are clear. Done properly, this builds social capital, quite literally, that will make other parts of the multiple critical agendas possible.

Geek (or wonk) warning: this part of the story, below the break, is more than a little geeky (and plenty wonky--a bit of each). We discuss the data that is required for reporting the recovery funds, then what's missing. Specifically, what's missing is the organizational chart of responsibilities--which is not so hard to fix.

We've created a prototype map of the network of relationships called for in OMB's recovery reporting requirements. We illustrate our example with a dummy grant at the end of a real recovery program, which we show in four views: the government agency responsible for the grant, the grant recipient (whom we're inventing in this example) who will be held accountable, the physical location of the grantee, and and the overall purpose of the grant program. You can see the recovery network model live in your browser (wait a moment for the Java to load), and trace the grant along four axis as described below.

-- Jeff Stamps

What’s in the Recovery Picture?

Accountability starts with transparency of details. What, exactly, will we know about each block of money? How will we find it, track it, and understand it?

In network lingo, the recovery data model laid out in the OMB memo specifies six nodes, including the grant node. Each node has a unique ID situated in a defined classification system, and it has a line of text that describes it, a memo field, if you will, providing a name or title. The six nodes are:

• Grant block, a chunk of money with its record ID;

• Responsible agency, with a Treasury Account Symbol (TAS) code;
• Program vehicle, identified by a code in the Catalog of Federal Domestic Assistance (CFDA) which provides a wealth of purpose-related categories to sort grants by;
• Agency account, the extension of Treasury’s TAS code;
• Recipient of the funds, identified by a Dun & Bradstreet number (DUNS), which, like the program’s CFDA code, provides entry to an array of associated details and purpose-related classification systems (e.g., sector, industry); and
• Place, the physical location of the recipient, completely defined in the data model by an address with a zip code and a city, county, and state Federal Information Processing Standard (FIPS) code, which enable easy association with political districts benefiting from the funds.

The grant block record laid out in the initial guidance (see Figure 2) means, for example, we can follow a grant to a zip code, which puts this chunk of money in the context of a nested set of legal and political jurisdictions capped by states. Simultaneously, the same record can be represented in a variety of other classification systems, such as one organized by purpose (CFDA, the Catalog of Federal Domestic Assistance) or by a chart of accounts (TAS).

Links between nodes are either contained in the data record for each grant block (e.g., all the levels of address are specified) or are implied by an external classification system (e.g., the program code is part of the CFDA and nestled in tree structures there).

The grant block record laid out in the initial guidance (see Figure 2) means, for example, we can follow a grant to a zip code, which puts this chunk of money in the context of a nested set of legal and political jurisdictions capped by states. Simultaneously, the same record can be represented in a variety of other classification systems, such as one organized by purpose (CFDA, the Catalog of Federal Domestic Assistance) or by a chart of accounts (TAS).

Links between nodes are either contained in the data record for each grant block (e.g., all the levels of address are specified) or are implied by an external classification system (e.g., the program code is part of the CFDA and nestled in tree structures there).

What’s Missing? Responsibility

The OMB model for “following the money” is missing the organization itself, the codes that place the grant within a chart of responsibilities.

There are two pieces of data missing.

• First is the position responsible for each grant; and

• Second, where appropriate, the name of the person serving in the authorizing position.

Thus, for completeness and transparency on the input side—not just the output side–two more fields (with both a unique ID and a name/title) need adding to the recovery data model (see Figure 3).

Making the Recovery Map

The network logic of responsibility-accountability—a directed link between two nodes—provides a simple way to connect the key elements associated with each chunk of money. To illustrate, we connected four trees into a prototype network map of the recovery spending, including the missing organizational hierarchy. Each chunk, each block grant, shows up in four ways: by granting organization, recipient of the grant, the program and purpose for which it is used, and the recipient location.

As recovery dollars flow, so will the data stream start, and the mapping will be easiest. We have created an OrgScope model to demonstrate what a cross-linked network model might look like using an actual grant program by the NIH for external research facilities and an illustrative grant to a hospital in our city of Newton, MA (see org chart strip in Figure 1 in part 1).

• For the organizational side, we used our network map of the top levels of the US Government (click to see this map live). To the existing org chart, which included NIH, we added the string of positions ending in a specific (dummy) grant block to Newton-Wellesley Hospital;

• Program category and type is modeled with a simplified outline of the Catalog of Federal Domestic Assistance (see CFDA.gov);
• Recipient type is illustrated through general categories of sector and industry; and
• Place is represented by a location map of Massachusetts organized by county (Middlesex), city (Newton), and zip code (02462, Newton Lower Falls).

Relationship chains relating a grant to the four major spokes of the recovery-spending wheel can be seen in the Figure 4 overview and the strings of connection shown in Figure 5 (see the live OrgScope map of these relationships). Of these, three have well-established classification systems (zips, DUNS numbers, CFDA). For the fourth, the government chart of responsibility for the funds, our digital org chart is a start to locating the program within the government structure. However, the government’s map of itself could and should extend to reach at least the program, if not the program officer levels.

It would not be too difficult to create an open government network map. At the top of departments and agencies, a few thousand positions in total are detailed in org charts that can be easily connected together, as we have shown in our publicly available USGov OrgScope map of many of these positions. For the two million or so civil service jobs, much of the information needed to assemble them almost automatically into org charts is just sitting there in federal financial systems. OMB may have much of it. The rest is in the many government human resource and information technology systems. Hooking the whole thing together is mostly a one-time expense of time and IT resources, and a process can easily be set up to refresh the basic data.

Transparency of organizational structure enables people both inside and outside the government to understand better the bureaucratic whole. By connecting the many bits of information into a coherent, shareable picture of our common government, we develop trust, hold one another accountable, and think through solutions with many minds.

Figure 5: Illustrative Grant in Four Interrelated Contexts

 

Mapping the recovery - "follow the money" - part 1

AIG. Again. Let us add our voices to the outcry over the bonus scam. Outrageous. Worse than outrageous is the damage it does to the Obama agenda, particularly the still critical moves to come on the economic rescue plan, as Tom Friedman pointed out in a March 18 opinion column in the New York Times.

What to do? On the recipient side of bailout funds, it will always be difficult to get real transparency and build trust. However, on the input side, the government itself, there is a lot that can be done.

But there's something even more disturbing than the AIG bonuses themselves.

It has to do with an aspect of transparency that is getting a bit of short shrift, in our opinion. There's a lack of visibility into the clear responsibility within government for overseeing the use of so many billions, this oversight, so to speak, from no less an authority than President Obama. Jennifer Loven and Martin Crutsinger's AP story reported in today's Boston Globe quotes the president: "Nobody here was responsible for supervising AIG and allowing themselves to put the economy at risk by some of the outrageous behavior that they were engaged in. We are responsible, though. The buck stops with me. And my goal is to make sure that we never put ourselves in this kind of position again."

Responsibility is the flip side of accountability, two roles in one relationship. While AIG is accountable, the government is responsible. Clarifying--making transparent--the structure of responsibility, aka the org chart (see our dynamic map of the top levels of the US Government in your browser, which takes a moment to load), is one way the government can directly increase the public's trust and govern more effectively. This is a much more direct route to developing trust, and will apply much more broadly across the multiple complex agendas of this administration.

To this point, we've written "Mapping the Recovery," another NetAge Report, this one on transparency, accountability, and responsibility particularly as they apply to tracking the recovery spending as laid out by the Office of Management and Budget (OMB). We are posting Part 1 today (after the break below). In this first part, we describe the network of accountability and responsibility, and how the accounting system IS NOT the organizational system, although it sort of looks like it. In the second part, which we'll post tomorrow, we  look specifically at how OMB has set up the data to track the recovery funds, how its multiple elements can be mapped, and, most important, what's missing (hint--responsibility).

-- Jeff Stamps

How IT can track accountability from the get-go

This post is for IT departments. It offers some tips for tracking accountability through corporate data systems, a huge concern for the large number of organizations at both the federal, state, and local levels that will receive funds as part of the US rescue programs.

For months, we've been writing about how to reorganize for greater effectiveness with the smaller footprints. Over the past few days we've been writing about the opposite problem: reorganizing for expansion. The stimulus and other rescue funding is causing some organizations to grow, i.e. those responsible for managing the torrential funding stream (see "Transparency for accountability as the funds roll out" and "Accounting for trillions through OMB").

"Responsible," or accountable, are the operative words here. With a large number of new hires and even larger number of contractors flooding selected departments and agencies at the federal and state levels, the possibility of losing our "whose responsible" handle on the funds and their effectiveness is very high indeed.

There's something IT departments can do something right at the beginning, right now, to help. IT can do its part to ensure that org charts (what we're calling accountability maps) are naturally built into the system as people come on board. To do this, IT needs to collect two simple bits of data for each new "hire," whether employee or contractor:

1. A position title keyed to a unique ID representing its place in the organization's structure (separate from the person's name and unique personnel ID); and
2. A link to the supervisor position directly responsible for this job-holder (its "parent," in logical terms).

Large-scale enterprise data systems held by finance, HR, and IT departments usually house this information already. Finance tracks jobs for accounting purposes and HR tracks people's employment records, enabling them to automatically generate their own internal accountability charts. While most organizations, and certainly government, has this information, it is rarely rendered as a whole (see our USGov map of executive branch accountability.)

While IT often has this information (typically, in its LDAP directory), it sometimes has something more, the logins of all the contracted positions whose work is important enough to require access to internal information systems. If a contractor has access to the organization's network, there's usually a record of who authorized this access, i.e. the contractor's "parent."

Contractors are the "dark matter" of organizations, the great bulk of personnel who are not recognized by most finance and HR systems, except as line items and lump sums. If contractors are hired as a group, perhaps from an outsourcing firm, their from-to, parent-child links should connect to a lead contractor who in turn plugs into a particular supervisor, manager, or point of contact in the host organization.

If this information is collected at the beginning of the expansion wave, then you can automatically generate maps of the growing organization as it grows, attaching budgets, funds, deals, and other information as responsibilities are assigned. Thus, transparency for accountability is in place at the start, not after the fact. It enables complexity to be mapped and understanding to develop in real-time so changes and improvements can be made that are vital to success.

This simple recommendation--to gather and store job titles and parent links for all employees and contractors--is how any organization--public, semi-public, or private--develops its own charts of accountability. These connections serve  as the foundation for the much greater participation and collaboration required to make the new organizations work in a time of tumult and uncertainty.

-- Jeff Stamps

Transparency for accountability as the funds roll out

Transparency was a keyword in Obama's run for the office and it's been a critical tenet of everything that he and his administration have spoken about since. The first presidential directives out of the gate for the new administration were focused on transparency and open government. And, it is central to the bailout-stimulus-rescue plans now underway and soon to come.

There are many potential traps in promoting transparency, of course, and each time something seems a little untransparent, the commentators are quick to wave the hypocrisy flag. Putting aside the media's lack of transparency, we want to focus on another aspect of transparency which is this: its ability to keep a clear focus on accountability. If we know what ends are sought and who's responsible for reaching them, then we have a clear roadmap of accountability.

But how do you have a clear roadmap when the thing itself is far more huge than anything has ever been before?

We talked a bit here about the need for clear maps during reorganization where enterprises are shrinking, but we haven't talked at all about the need for clear maps when organizations are growing, or exploding in size.

Take the Federal Deposit Insurance Corporation, whose head, Sheila Bair, has been one of those voices for greater transparency. Yay, Ms. Bair. We've spent a bit of time putting the top levels of FDIC into our US Government Map (go to Federal Agencies, at about 2 o'clock).

Thanks to the careful reporting of Eric Lipton in a NY Times Valentine Day post ("Failed Banks Pose Test for Regulators"), we learn that the work--and the budget--of FDIC increased astronomically from 2007 to 2008. FDIC, which has the thankless task of toxic clean-up of failed banks (and the businesses that led to their failures), had just three failed banks to scrub-rinse-repeat in '07. Number in '08? Twenty-five, or, arithmetic fans, eight times the number it had to launder, so to speak, just a year earlier. Given that, as of last week, thirteen more banks already have failed in '09 (and we're only halfway through February), a whole lot more are landing in FDIC's dirty laundry basket even as we write.

To provide some perspective, Lipton examines just one part of FDIC, its Division of Resolutions and Receiverships, whose 2008 budget was $75 million. The budget for 2009? $1 billion. Let's keep following this through. How does FDIC manage to negotiate the deals that allow billions of dollars in assets to move to higher ground?

It hires people. As of right now (or maybe a few weeks ago), FDIC employs 4800 people, according to Lipton's article. When it was last responsible for the prior big bank horror show in the '90s, it employed as many as 15,000. Given that the mess we're dealing with now is HUMUNGUSLY BIGGER than what transpired in the '90s, shall we speculate that perhaps FDIC may need to do more than triple its size? Will the FDIC grow to 30,000? 45,000?

To meet this challenge, it is only hiring 1500 new people. Lipton reports that $700 million (!) will be spent hiring contractors to provide the warm bodies to do the work. So like so much of the rest of corporate America, FDIC is outsourcing the work to avoid the painful ballooning up followed by the excruciating shrinking that always follows windfalls.

How will FDIC manage accountability across such a fast and vast ramp-up of its capabilities? Accountability is all the more important because of the "army of contractors."

Like the dozens of other agencies whose budgets are about to swell--at the national, state, and local levels, FDIC desperately needs to upgrade its accountability mechanisms. One fundamental way to do that is by establishing and maintaining org charts of the whole organization, which are literally the structure of accountability. We're putting in some time as a start to that process and we encourage FDIC and the other agencies and departments charged with implementing the stimulus and other spending to do the same.

With transparency you can see accountability which (re)builds trust.

Revolution in networks: applying the new science to organizations

As we posted earlier, the Discovery Network's Science Channel (thank you, Joe Wehr) premieres "Connected: The Real Matrix" tonight, Sunday, February 15, at 9pm EST (and PST). As our friends at Future of Work note in their cross-post, "the program will also be repeated on Monday, February 16, at 12:00 AM, and on Tuesday, February 17 at4 AM (again, EST and PST). Maybe not the greatest times, but you can always set your trusty DVR to pick it up for you."

The TV show emphasizes the general applicability of the new network science to complex systems. We here at NetAge have applied this same science to organizations. As we've written, OrgScope is the tool we developed to visualize and analyze organizations as networks. So the show is the perfect lead-in to the next installment of our NetAge Working Papers series on management science for networked organizations:

"Revolution in Networks: Applying the New Science of Networks to Organizations." (Download Revolution in Networks)

We present the concept of “organization network science” as an application of the new network science, as described in the "Connected" show. As described in this working paper, the new science includes the concept of “scale-free networks” and their signature pattern of hubs developed by Albert-László Barabási and others. A second stream of new network thinking, personified by Duncan Watts, reveals how a few “shortcuts” dramatically reduce path lengths to form “small-world networks.” We reframe generic network principles of growth and “preferential attachment” for use in understanding and managing organizations as networks. At the paper’s end, we retrace in organizational terms a Barabási simulation of how a network grows, and address the development of hierarchical networks.

Here are a few paragraphs from the paper:

Background on the Network Revolution

Over the past few years, a new “science of networks” has rapidly woven across the physical, biological, and social domains, bringing the simplicity of common characteristics to diverse complex systems.

Our field work at the leading edge of global organizational development confirms that this new “linked” science applies directly and immediately to highly-complex organizations. It is our hope that a true theory-based, data-driven, testable science of “organizational networks” will enable an historic step-change increase in human organizational capabilities. Great ambition, but even modest improvements in collaboration could have widespread application and deep impact. We believe this new knowledge can substantially improve our collective ability to work together better, a clear imperative imposed by the era’s economic interdependence, digital information technologies, accelerating globalization, and deepening human power to modify ourselves and the world around us.

So what’s new about networks according to the latest research? In a phrase, they are organic, scale-free, small worlds. The new network science grasps complex networks by their nodes and maps their links, generating useful metrics related to configurations that help identify hubs, shortcuts, and all manner of characteristics that are directly applicable to organizations.

Download Revolution in Networks

-- Jeff Stamps

"Connected: the real matrix" - see it Sunday on Discovery

"Nothing is more practical than a good theory."

So says Duncan Watts in a wonderful documentary on the new science of networks. "Connected: The Real Matrix" airs Sunday night at 9pm on the Discovery Channel in the US. The promo (see below) is enough to get us excited as it features Watts and Albert Laszlo Barabasi, who represent the two great streams of advances in network science in the last decade: small worlds (Watts) and scale-free networks (Barabasi). It was Barabasi's work that inspired us to apply the new network science to organizations, a subject we have been studying for almost three decades (see our Library). From that early investigation came our OrgScope tool that maps and analyzes organizations as networks. We've let Barabasi know how influential his work has been on ours and we're excited that this show will be on TV.

What's the "new" in the "new network science?" Two things: an unexpected discovery and a resolution to an old problem. Barabasi led the team that discovered "scale-free networks," non-random configurations with sparse but many-linked "hubs" that turn out to be key nodes in networks. With Steven Strogatz, Watts finally solved the "six-degrees of separation" conundrum by showing how a few "shortcuts" could dramatically decrease average communication distance.

These final two advances enlarged traditional ("old") network science (known as "graph theory") that underlies social network analysis (SNA) and created a remarkable general-purpose network paradigm that is immediately applicable to both people and organizations. Listen closely, and you will hear news in the program about a "general network theory," a mathematically-rooted, experimentally demonstrated, and highly practical theory that applies across physical, biological, and human domains. Our work shows that this same general network theory applies directly to networked organizations (see, for example, our paper, "Principles for Reorganization").

On Monday, February 16, we'll release "Revolution in Networks: Applying the New Science of Networks to Organizations," the next in our NetAge Working Papers series. There, we tell the story and examine the work of both Barabasi and Watts, elegantly platformed by the upcoming documentary.

Check out what's in store on the documentary:

-- Jeff Stamps

Transparency at Treasury - The case of the missing org chart

Following yesterday's post on how the Geithner bailout plan did not provide the transparency required to fill the enormous trust gap, I checked out the Treasury page on the "Emergency Economic Stabilization Act" (EESA) which is where "details" about the TARP program hang out. First thing to notice is that it looks broken, i.e., the entire left hand column is blank. Strange. It's been this way since this section of the Treasury site was launched in October, 2008. Otherwise, since the new administration has come in, nothing has changed. A few press releases have been added. This stands in stark contrast to the White House site, which is, shall we say, nothing like what was there before January 20.

Then I looked for the Treasury org chart. Not to be found. A review of the site map confirmed that none was listed.

Curious, I checked out the other departments. Most have the Bush-administration org charts still posted. Notably, Steven Chu, the Nobelist Secretary of Energy, has already posted an updated DOE chart. And, Arne Duncan's Dept of Education site has the most interesting interactive chart, which, because of its design, is naturallly up to date. The Treasury Department is the only agency that has no org chart at all. Curious.

When I was assembling our OrgScope map of the US Gov, Treasury's org chart was the first one I keyed in, necessary because I was mapping the network of consultants, contracts, and bailout recipients associated with EESA (which you can see in our Rescue Map). I eventually collected and keyed in all the departmental org charts, posting them together here. As a good archivist, I had the url to the (old) Treasury map here. You can click to see for yourself where that takes you now: "We're sorry...file cannot be found..."

Surely an oversight, so as a public service we offer a link from our site to what is in all likelihood exactly the same Treasury org chart today. Moreover, we have added the organizational structure of EESA to the Treasury chart in our US Gov map. (Treasury is at 11 o'clock, then go to the Deputy, then Office of Domestic Finance, from which hangs the Office of Financial Stability.)

Treasury needs to set an example of transparency itself. Remarkably, they have become less transparent than their Bush administration predecessors. Unintentionally, I'm sure. I hope.

-- Jeff Stamps

Nodes and links, technically speaking

Like the economy, old mental models of our organizations are bankrupt. We've been developing a new model of organization for many years, one we believe is fit for these times. We're collecting and posting the more technical aspects of this new model, a small book's worth, as NetAge Working Papers, of which we're posting the second today. We'll post several more over the coming weeks.

"Understanding Nodes and Links: Core Concepts of People, Positions, and Relationships," the second working paper, provides the technical background to the idea that all organizations, including hierarchies, are networks. This is a topic we've been beating to death in our writings and on this blog. So for you deep conceptual divers, this one's for you. (Download Understanding Nodes and Links)

A little more formally put, this paper contains the foundation for a management science of networked organizations. Networks are known by their nodes. Key to this approach to nodes is the idea of the position, the central ingredient integrating the ephemeral organization with the flesh-and-blood people who populate it. Connecting the nodes in networks, of course, are links. Here we lay out a taxonomy for these relationships: directed links, both horizontal and vertical, with strong and weak versions. Nodes and links together generate dynamic representations of organizational realities. These ideas contribute the conceptual basis for the design of OrgScope, our tool for mapping, navigating, and analyzing organizations as networks.

Here are the opening paragraphs of "Understanding Nodes and Links:"

What Are We?

A formal organization is an emergent network of positions, a configuration of roles filled by people.

Simple idea, yet significant in consequence. Who or what are we? What is the us that works together as an integrated whole, from families and teams to enterprises and nations. It takes but a small shift in perspective to see individual people working together as an organization that is tangible, knowable, and measurable. An organized us happens when we step into roles and bring a particular configuration of positions to life.

An organization is its people—simple and obvious.

Yes, but…is that all? Is there something more, or different, something that is human in essence but separate from the people who comprise the organization?

Every organization tells a story, is its own play. It has a cast of characters and a plot. To perform their parts, actors step into their roles. Different personalities and capabilities emerge, depending on which actor plays the role. Whether great or poor, an individual’s performance takes place within the same set of formal relationships any actor playing that role must contend with. Thus, the role or position is part of the play’s structure, existing quite independently of the person playing that role. King Lear is William Shakespeare’s play, King Lear is a role in the play, and Sir Lawrence Olivier played the King Lear role to great acclaim. Shakespeare and Olivier are dead. The play—and the King Lear role itself—lives on, and has for four hundred years.

When people step into positions, they take on roles that link into a network of other roles. But that doesn’t prevent them from being the people they are, who come to their jobs with their unique preferences and idiosyncrasies. Organizational life is both:

Formal, with its the network of positions, constituent units, and working groups that stand apart from the people; and

Informal, with its social interactions among particular people, who stand apart from the roles they occupy in and around the organization.

These two kinds of networks--organizational and social--are inextricable (see Figure 1). When we think about all the relationships relevant to organizational life, their entanglement contributes to our sense of chaotic complexity. But we can distinguish these two types of networks. By clearly defining and specifying the organizational network of positions, we can more easily identify relationships that make up social networks of people.

Currently, social scientists and management theorists are trying to understand group life largely by examining the network of relationships among the group’s members. Social relationships are not only highly complex themselves, but they are especially obscured because the formal organizational framework is itself dynamic.

The network of positions moves to its own beat while the entwined people network has its own different rhythms.

The complexity of these two fundamental sorts of human networks is awesome, understandably hindering our ability to develop social and organizational sciences. New insights from network and complexity sciences, however, help us establish a new management science of organizational networks.

(Download Understanding Nodes and Links)

-- Jeff Stamps