We already know that it is essential that organization’s hire the smartest, most capable people possible. However, this isn’t enough. Organizations must also ensure that individuals are relationally positioned for optimal success. In other words, bringing in the best people is only part of the solution. Firms must also bring out the best in people. This means, that people need to be positioned to leverage what they know. Or at least, positioned to find what they need, as they need it. To do this entails a new frontier, unleashing the potential of social capital.
Social Capital
The Bridge People
One particular network position is incredibly important, the bridge people, or brokers. High performers tend to be uniquely positioned as brokers in the organizational network. Brokers are much more likely to be in the top 20% of performers within an organization (Cross & Cummings, 2004). These individuals generally perform better, get promoted sooner, and are better compensated than others. Brokerage represents the bridge connections from one network cluster to another. For individuals, being in a broker position has three specific competitive advantages:
- Wider access to diverse information
- Early access to new information
- Control over the diffusion of information (Burt, 2005).
The implications of bridge people might be even greater when it comes to innovation. It appears that innovation is as much of a social phenomenon within complex organizations as it is a technological one. Brokers are more likely to discover and distribute novel ideas across an organization. Research suggests that individuals who are connected to a broad external network of experts have greater access to innovative ideas. As a result, many companies have adopted innovation scouting programs focused on establishing and nurturing external discovery connections. However, this is only part of the solution.
Variance Hypothesis
Researchers Linus Dahlander and Siobhan O’Mahony studied what is called the “variance hypothesis” to better understand the benefits of these programs.7 The variance hypothesis suggests that a broad set of external connections leads to better innovation outcomes. The researchers were interested in validating this hypothesis, so they examined the innovation outcomes of more than 660 senior technical experts from IBM who were formally responsible for scouting new ideas. The primary responsibility of these experts was to figure out what would be the next big thing for IBM. They operated with high degrees of autonomy to search for new ideas. Dahlander and O’Mahony collected data to comprehensively understand where each of these experts spent their time. They then compared these results to the innovation outcomes that were generated. What they discovered was surprising. Individuals who focused most of their attention on building internal brokerage connections were actually quite innovative. While external discovery connections were important, internal brokerage seemed to be equally critical.
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When you think about it, this makes sense. If people spend too much time searching for external ideas, there is no time available to engage internal colleagues. They actually risk being marginalized by the internal network, often being accused of being too theoretical or impractical. Building internal social capital enables these brokers to more readily share their discoveries. While external bridges are essential to discovering new ideas, internal bridges are crucial to driving application within the company. Consider the analogy of a structural bridge across a river. Civil engineers spend much of their time designing the abutment on both ends of the bridge span. Each side must be intentionally designed for the bridge to be effective. The substructures at the ends of a given span are essential. They provide structural support for the bridge. Abutments transfer the load of the bridge span to the foundation. The same is true for brokerage bridges. If they are only connected on one side, they become unstable. For external discovery connections to be effective, they must be supported by solid internal connections, or the new learning cannot be distributed into the network. This is how external ideas are seeded into the organizational network.
In Practice
In one case a junior marketing professional had externally discovered a new digital design platform. He was convinced that this discovery was critical to driving internal innovation. When he presented his idea to a member of the senior marketing team, it was cursorily dismissed. However, the young marketing professional was so resolved on the benefits of the new solution that he decided to share it with some young professionals on other teams who he had already known. One of these professionals discovered that the new platform featured capabilities that alleviated a major migration problem. It helped him to automate a very manual data transfer. He quickly began to showcase this solution to his local team, and they too realized the value. As a result, the entire marketing department, even those who were initially dismissive, adopted the solution. The junior marketing professional bridged his external connections with internal network clusters. As a result, he was able to trigger new insights that led to a new solution.
This is how innovation generally spreads; it is rarely declared from the top or the result of a single-minded expert. More often than not, it is the result of someone acting as a broker, creating a bridge from external discoveries to internal needs. To be effective in this rapidly changing world, organizations need to find their bridge people.
Click here to read more work by Michael Arena.
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