Last week, Ralph-Christian Ohr (who should have the title of Innovation Leadership Blog librarian) pointed me to a really fascinating study that was published last year in the American Journal of Sociology that throws up a new set of questions about the relationship between network structure and innovation performance. For a start, the American Journal of Sociology is a really tough peer-reviewed journal to get your work into, so this work is top-draw methodology that addresses a significant question. It’s worth mentioning that the famous small world networks in the Broadway musical business discovery was published in the same journal.

This new research into network ties within a business has a really elegant design. The authors looked at email networks within an executive recruitment firm with 14 offices across the United States. This has two big advantages in that they were able to look at the content of the emails and also relate the network position and type of network to project success. This addresses two significant challenges in network research in relating networks to performance and also looking at what is actually going on in the network.

Consistent with other notes on networks in this blog, the authors start by arguing that you can have networks with low bandwidth connections (weak ties) and network diversity (low density and low network closure) or you can get networks with high bandwidth (strong ties) and high cohesion with everyone talking to everyone else. The conventional position is to argue that novel ideas can’t circulate in dense networks with strong ties. What they actually found was that under certain conditions novelty flourished in these strongly connected, dense networks.

So what were those conditions? Well, these actually make perfect sense to me….

When there is a high rate of change in the information environment, strong ties and many connections do better and result in better business performance. Here the problem isn’t novelty because that is being generated by the business environment (think of a rapidly moving IT-related industry). In these conditions, the challenge is knowing who knows what because this is changing all the time. Strong tie networks here are a bit like a hotline to get the latest information from others. They are fast and efficient.

Network bandwidth (tie strength) also trumps network diversity when the task is complex and information-rich. Again, diversity and novely is not the problem in this case (think of a complex project like building the Boeing Dreamliner). The authors call this a ‘high-dimensional’ information environment. In this case, innovation will be supported by bringing people together rather than having brokers to keep groups apart. Brokers don’t work well because they just get overloaded and become bottlenecks.

Something that immediately occurred to me after reading this article was that in rapdidly moving and complex innovation environments (radical innovation), organizations must invest in building social capital between employees at the frontline of the innovation process. Here, taking time out from the desk to talk and make connections is core to business success.

On the other hand, a business based on continuous improvement in a mature industry can benefit from fostering brokers to bridge different communities.

This goes back to another long term theme on this blog. Networks aren’t an end in themselves, they are part of your strategy execution. First be clear on the strategy then create the networks that you need to deliver the strategy.