16 �� 2007 Wiley Periodicals, Inc. Published online in Wiley InterScience (www.interscience.wiley.com) Global Business and Organizational Excellence ��� DOI: 10.1002/joe.20129 ��� January/February 2007 Social Networks at Sempra Energy���s IT Division Are Key to Building Strategic Capabilities C H R I S C H E N How does an IT division, faced with new and chal- lenging strategic goals, get technical people to understand and appreciate the impact of human relationships on individual and organizational per- formance? It turns to social network analysis (SNA)���a nifty tool for quantifying and visualizing the number and strength of connections between people. Taking advantage of a large menu of SNA���s analytical options, this organization learned how it could better identify succession candidates, build social capital, lessen dependence on the senior lead- ership team, and improve interdepartmental collab- oration and communication���in short, move to the next level of organization effectiveness. �� 2007 Wiley Periodicals, Inc. For Sempra Energy, a FORTUNE 200 energy services company based in San Diego, California, its future continued success hinges heavily on its ability to leverage information technology to provide innova- tive services, streamline business processes, and meet the growing demands of an increasingly mobile workforce. For the IT organization that serves the company���s two utilities, greater expecta- tions to significantly contribute competitive advan- tage to the company means functioning at even higher levels of effectiveness���with communication, collaboration, speed, innovation, and leadership being just a few of the organizational capabilities critical to fulfilling its strategic role. But the social aspects of these capabilities are not always well understood, or comfortably addressed, in a techni- cal organization with a penchant for hard data and concrete concepts. The IT organization turned to social network analysis (SNA)���a data-driven methodology with visual tools for quantifying and clarifying the mysterious nature and magnitude of human interactions���to understand how individuals and the organization currently function and how they can improve their effectiveness. The Impetus for Change Sempra Energy employs a workforce of 14,000 and in 2005 generated revenues of nearly $12 bil- lion. The holding company comprises two busi- ness units: Sempra Global, which houses its unregulated businesses such as energy generation and trading and the Sempra utilities, which include two California regulated utilities, San Diego Gas & Electric and the Southern California Gas Co. The Sempra utilities boast the largest cus- tomer base of any U.S. energy utility, with an esti- mated 21 million customers. Sempra Energy���s strategic goal of leveraging infor- mation technology to create competitive advantage clearly influences the mission of the Sempra utilities IT division, whose 600 employees provide informa- tion technology and telecommunication infrastruc- ture and application support to the utilities business unit. The division is organized into three application development groups, two infrastructure groups, and a group that develops and oversees strategy and governance as well as client relationships. The IT organization is led by the Chief Information Technology Officer (CITO), six directors reporting to the CITO, and approximately 70 managers throughout the organization. The IT division was confident it had created a highly competent technical workforce adept at delivering

17 Global Business and Organizational Excellence DOI: 10.1002/joe January/February 2007 reliable IT systems and services, as past performance demonstrated. However, to meet its new challenge��� becoming a driver of business success by leading the transformation of business processes through techno- logical innovation���the organization would have to move to the next level of performance and, to achieve that, find ways to function even more effectively. Strong leadership would be one key���the right peo- ple with the right skills in the right roles. To this end, Sempra Energy���s formal succession planning, leadership development, and performance manage- ment processes would be vital. Another key would be improving organizational processes to better sup- port innovation and a stronger client focus���for example, ensuring the unimpeded and timely flow of information. These were all areas where the IT division���s organizational change management staff could provide valuable support. Why Social Network Analysis? The IT division���s organizational change manager (OCM) had experience using social network analy- sis in other companies to improve organizational effectiveness. Believing SNA would help the IT divi- sion drive leadership and organization development in service of its strategic objectives, he proposed the tool to the leadership team. What Is Social Network Analysis? Social network analysis is the behaviorally based mapping and measuring of connections between people. Each network is made up of ���nodes������ people who are linked to each other through human relationships and the flow of information. As both a visual and a mathematical analysis of human relationships, its function is to create easi- ly understood visuals (network maps) and metrics that can shed light on how connections between people affect behavior. SNA has a wide variety of applications in economics, marketing, organiza- tion development, facility planning, health ser- vices, and even fighting the war on terror.1 What SNA Would Bring to the IT Division While Sempra Energy has formal succession plan- ning, leadership development, and performance management processes in place, the IT organization needed credible and actionable organizational and individual feedback to support these processes. It regularly put all of its managers through a 360�� feedback process, and it administers an annual employee survey to help it gauge employee percep- tions of how the organization is doing���both help- ful tools for making the leadership and organization development processes more effective. However, the leadership team quickly saw SNA as a way to bring more objective, measurable data to bear on deci- sions historically reliant on more subjective input, such as opinion surveys and focus groups. The data- based foundation, visual maps, and mathematical analytics of SNA are especially appealing to an information technology group that is more comfort- able with hard data, logic, and analysis than with ���touchy feely��� processes. By helping the IT organization to model how and what work was really getting done, SNA would bring visibility to, and greater understanding of, the relationships and connections among IT managers and the senior leadership team. This would be valuable input for several key process- es: succession planning, leadership development, creating social capital, and maintaining strategic focus. Succession Planning. SNA would provide a behav- ioral measure that would help identify the key players in the organization: whom people went to SNA has a wide variety of applications in econom- ics, marketing, organization development, facility planning, health services, and even fighting the war on terror.