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YOUN Youngsoo

Network Management brings Innovation

YOUN Youngsoo

May 28, 2010

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Strong ties or weak ties, which do you prefer? Most people would probably think the former would be the overwhelming choice. Not sociologist Mark Granovetter. In a sociological study, he interviewed several hundred people about how they got their jobs. Fifty-six percent of the respondents said an acquaintance was involved and of those, 69% said it was a weak tie, such as someone known only by name.

Strong ties facilitate easy communication and smooth collaboration but at the same time, the information being shared in a tightly-coupled relationship may have little value because it is similar or overlapping. A loosely-coupled relationship is more useful in acquiring new ideas and can broaden the scale of weak ties even further.

In the corporate world, cultivating loosely-coupled relationships is a business strategy; it prioritizes quantity rather than quality of personal connections. This is necessary inside companies, where diverse ideas can lead to innovation. Proctor & Gamble (P&G), Google and Apple are examples of global companies where a variety of networking spurs innovation that breaches existing boundaries of competition.

To establish a wide web of relationships, companies should consider four strategies: 1) energize informal channels; 2) generate shortcuts among departments or teams; 3) encourage employees' external activities; and 4) strengthen links with different industries or businesses.

First, informal channels complement the communication limits of official channels and can absorb and transmit ideas from individuals. While informal channels are often perceived negatively as rumor mills, 82% of the information distributed through informal channels actually is true and worked positively in quickly spreading ideas as well as enabling free flowing communication, according to one finding. It is therefore necessary to have a variety of communication channels such as coffee breaks, blogs and online community, to vitalize informal channels.

For example, IBM in 2004 began an internal service called "On Demand Workplace," a platform that integrates Wikipedia, blogs, online community and bookmark. Wiki has more than 30,000 individuals or in groups who create information on a voluntary basis. Through the company's internal blog, spirited discussion is held on issues ranging from software development to business strategy. Meanwhile, it is also necessary to reorganize work space by examining employee traffic patterns so they can interact in a natural way.

Second, shortcuts between teams or departments are needed. Communication among departments tends to wane as an organization becomes larger, which can reduce employee satisfaction and motivation.

It is therefore necessary to create shortcuts to facilitate the spread of information and sharing of ideas. For example, job rotation or exchange of department heads, creation of cross-functional teams and mixed education are good systems that can break down barriers between teams. In addition, online and offline conference and best-practice exchange meetings can be held for internal benchmarking. Japanese manufacturer Matsushita developed drum-type washing and drying machine by benchmarking the company's air conditioner technology. By utilizing the heat pump technology of air conditioners, it removed moisture from the laundry. As a result, fiber damage fiber was reduced and drying time was shortened, cutting energy costs by 50%.

Third, employees should be encouraged to engage in activities outside their workplace in order to actively interact with a complex and dynamic environment. The reason why IT companies and biotechnology companies flock to California 's Silicon Valley is because it is the home of related companies and venture capital and has a personal networking infrastructure that enables them to easily monitor the market and technology.

Diversity inside a workplace is a precondition to creating a sound, mutual interaction in various kinds of environments. Google, 3M, Johnson & Johnson, Pepsi, General Electric and Goldman Sachs all operate a separate department and program to manage personnel diversity. For example, 3M has an HR advisory committee, while Google has a position called Chief Culture Officer. Also crucial is online and offline activities through academic societies, research meetings, information exchange meetings, blogs, and social network services such as Twitter. Dell and Southwest Airlines collect complaints, questions and various ideas of customers through twitter.

Finally, networking between different sectors should be strengthened. Innovative ideas often come from a combination of ideas from different industries or businesses. Picasso was inspired by an African mask, which gave him cubist inspiration. Automaker Henry Ford, who introduced the modern assembly line, got his idea from a conveyor belt while touring a meatpacking plant in Chicago . G.S. Altshuller, who has been studying methods to promote innovation and creativity, classified more than 200,000 registered patents until 1946, and found that only 2% of patents were new inventions while 98% was utilized from existing ideas. To actively use technology and know-how of a different company of industry, it is necessary to set up a search-specialized team. P&G has 70 specialists exclusively in charge of searching for its partners, and these specialists have sourced more than 1,000 technologies, which are well reflected in P&G goods.

A loosely-coupled system is possible only through openness and reciprocity. Various ideas can be made by developing new relationship rather than by sticking to already established relationships. Ideas are something that are given and taken. In addition to sourcing more than 1,000 outside technology, P&G also actively licenses its technology. This is the important point of network management.

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