Leveraging social networks for strategic success

  • Eisenberg E
  • Johnson Z
  • Pieterson W
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Abstract

Increasingly unpredictable and competitive organizational environments have put pressure on leaders across all industries to better manage change. Key to successful change management is the ability to both: (1) communicate the desired change in ways that create line of sight; and (2) develop regular sources of feedback that measure the extent to which the change has diffused throughout the organization. Social Network Analysis provides this type of useful feedback. By allowing leaders to visualize the informal communication networks in their organizations, social network analysis can help organizations continuously assess and evaluate the effectiveness of their change strategies. Social Network Analysis is gaining in popularity today due to the convergence of interest in performance dashboards and in social media. Organizations investing in social network analysis are doing so now because it helps them to identify individuals who are critical to the organization's communication flow as well as opportunities for strategic communication aimed at tuning the network to better promote organizational effectiveness. partly in jest, few companies find strategy development and execution a simple matter. Particularly in today's global, dynamic business environment, organizations are often forced to quickly change strategic direction to remain competitive. Across every industry, rapid technological developments, fluctuating consumer demands, and unpredictable market forces are digging at the foundations of even the most successful organizations. This turbulence increases pressure on leaders not only to rigorously assess what strategy will be most effective but also to swiftly and effectively imple-ment the chosen strategy at all levels of their organizations. Most organizations follow a similar process in developing a competitive strat-egy. The first step is to conduct a detailed analysis of the competitive environment, including potential partners, competitors, and related entities who might enact poli-cies or practices that could affect their success (e.g., governments, industry associa-tions, or accrediting bodies). The second step is to prepare an honest inventory of the organization's current strengths and weaknesses to identify core competencies that can be leveraged. The third step involves the development and evaluation of strategic scenarios that can position the organization relative both to its existing capacities and potentially available niches in the marketplace. Once a strategy is chosen, senior leadership and governing boards are then engaged to obtain their input and approval. Strategy development is typically the work of executive leadership. Efforts to pro-mote employee engagement and empowerment sometimes make it unclear who is responsible for developing strategy. Although it is true that people support what they help create, as a general rule competitive strategies should not be crafted democrati-cally. Line employees have limited access to the kinds of financial and environmental data that must inform strategy selection. As a result, the chances of success are usually greatest when senior leadership owns the development of a competitive strategy, just as it should own the organizational vision. In the past century, firms could sometimes get by without a clear competitive strat-egy, and circumstances were such that ambivalence or a lack of focus was sometimes even rewarded. A scattershot approach can actually work in a placid competitive envi-ronment, where the consequences of not delivering on a brand promise or of strategic inconsistency are not great. Before global competition in the automobile industry, U.S. carmakers could afford to be unfocused in their strategic thinking, and lacking in alter-natives, customers were powerless to do much about it. The same has been true until quite recently in health care, but thanks to advances in communication technology, comparison shopping has become more feasible. The nature and intensity of competi-tion in the 21st century has been changing rapidly and will continue to change. In an environment where consumers have unprecedented access to price and quality data through the Internet, and where new competition can crop up unexpectedly almost overnight, it is critical for a company to know what they do best and where they are best positioned to compete. Failure to do so can quickly lead to obsolescence. Whereas in more placid times it could make sense to hedge one's bets, organizations must now choose how they wish to compete and align the bulk of their resources behind this strategic commitment.

Author-supplied keywords

  • Business strategy
  • Management
  • Organizational communication
  • Social networks
  • Strategic change

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Authors

  • Eric M. Eisenberg

  • Zachary Johnson

  • Willem Pieterson

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