organizational network analysis (ONA)

What is organizational network analysis (ONA)?

Organizational network analysis (ONA) is a quantitative method for modeling and analyzing how communications, information, decisions and resources flow through an organization. It's used in a variety of fields, including business management and the social and behavioral sciences.

Practitioners use ONA to gain a data-driven understanding of the formal and informal relationships that affect the effectiveness and well-being of individuals and groups. To analyze information, ONA software pulls data from various sources, such as surveys.

How does ONA work?

ONA relies heavily on diagrams that depict the people or groups -- referred to as nodes -- that play a critical role in providing valuable information, ideas, decisions and connections between them.

There are three main kinds of nodes, according to consulting firm Deloitte, a main proponent of ONA:

1. Central nodes. These are influential people who seem to know everyone, are up to date on important news and have lots of information to share. They can be located anywhere in a hierarchy.
2. Knowledge brokers. These people facilitate information sharing, serving as bridges between nodes.
3. Peripheral nodes. These are low-profile people with poor or nonexistent connections to the organization.

This type of analysis results in metrics that help to gauge the nature and health of a network. The betweenness centrality metric measures the extent to which a node interacts with other nodes. A higher number can be an indicator of a thriving network, but it also provides an alert to a potential bottleneck.

Another ONA metric, network density, calculates the percentage of links to the total number possible among all the nodes. The closeness centrality metric uses the betweenness centrality score to determine whether the network is too centralized, among other things.

Other types of conclusions can be drawn from the analysis. For example, knowledge brokers often have important connections to outside information and expertise that can be underutilized if they lack strong internal ties. Peripheral nodes are at risk of leaving the organization, which can be a detriment if their skills are highly valued. ONA insights also can reveal that people with formal authority and titles aren't the real leaders of the organization. Identifying the real leaders or key influencers can, for example, speed buy-in and adoption of a new initiative.

Applications of ONA

ONA is used for a range of applications, including the following:

• Talent management. Organizational network analysis has numerous uses in talent management; some experts consider it to be a subdiscipline of people analytics. For example, companies can use it to spot exclusionary tendencies that might indicate discrimination and bias. It can also analyze the influence and networking skills of external job candidates, which, according to some studies, are predictors of career success, and can benefit the hiring organization. ONA also helps identify internal candidates for job openings and promotions.
• Workforce planning. Similar to talent management, workforce planning can benefit from ONA. Managers use it to decide where to assign people, so they collaborate more effectively using the fewest resources. ONA helps identify where work is being done and who's doing it, which can affect decisions about hiring, promoting and developing employees.
• Employee engagement. ONA analyzes communication patterns to help boost employee engagement. It provides feedback mechanisms that measure employee sentiment. The technology can even identify areas of unusually high stress in an organization, which, in turn, can indicate fraud or other undesirable behaviors. Surveys are one of the most effective tools for measuring employee engagement.
• People management. Companies that are considering reorganizing departments and business units can use organizational network analysis before making decisions and building a formal organizational chart. During mergers and acquisitions, ONA can find people with different titles who perform similar roles that could become redundant, enabling the organization to move them into roles that add more value.
• Knowledge sharing. Proponents of ONA have said it's indispensable in ensuring that decentralized and less hierarchical organizations can function effectively. For example, it can help create a knowledge hub where knowledge is shared among employee networks and teams and facilitate sufficient coordination and reporting.
• Information dissemination. ONA also helps companies with globally dispersed teams and offices to disseminate information, such as engineering schematics and data, by understanding the informal networks that cut across formal departments and product lines. Because of this, some companies have reduced project times and boosted profits, according to ONA advocates.
• Community issues. Nonprofits and nongovernmental agencies in fields like economic development use ONA to understand systemic issues of the communities they serve. Such agencies also use ONA to design projects and scale up techniques that have succeeded locally.
• Social network analysis (SNA). In the social sciences, ONA is often called SNA, a discipline that originated in the early 20th century. Some consultants and academics specialize in ONA or SNA.

Key benefits of ONA

There are several key benefits of ONA, including the following:

• Enhancing collaboration and innovation. ONA identifies and uses informal networks and communication patterns in an organization to further collaborative networks. This ensures diverse voices are heard and integrated into decision-making processes in ways that foster a more inclusive environment and enhance innovation. Moreover, ONA's insights into collaboration patterns can help organizations break down silos, an important strategy for operational resilience.
• Driving strategic decisions and operational efficiency. The actionable insights gained from ONA let business leaders understand the flow of information and the dynamics of collaboration across the organization in ways that help them make informed strategic decisions. By identifying central connectors and potential bottlenecks, organizations can optimize workflows and enhance operational efficiency, one of the key steps of improving a business process. Additionally, ONA can pinpoint areas where interventions are needed in managing change, enhancing employee engagement and improving retention strategies.
• Uncovering hidden influences and relationships. ONA identifies stakeholders and decision-makers in an organization, revealing how relationships influence business processes, decision-making and resource allocation. By mapping informal networks, ONA exposes patterns of collaboration that differ significantly from formal structures, often uncovering overlooked key players who contribute substantially to value-adding collaborations.

Challenges of ONA

There are several challenges to ONA. Privacy concerns are significant as organizations must balance insightful data extraction with respecting individual privacy rights. Implementing strong data protection, security and privacy measures is crucial to maintaining trust.

The accuracy and completeness of data directly influence the effectiveness of ONA. Inaccurate data can lead to false insights, necessitating rigorous data management practices to ensure reliability. Additionally, integrating ONA into existing systems presents technical challenges, including compatibility issues and the need for seamless data integration, which requires substantial investment in technology infrastructure.

ONA technology

Niche vendors typically sell ONA software, or it's offered for free from academic and research institutions. The software captures information from various data sources: emails; collaboration tools, such as enterprise social networking; and feedback technologies, including employee surveys. It then applies data analytics to draw conclusions.

ONA software typically also has a component for automating surveys, which are essential in data collection. The surveys ask respondents questions designed to reveal the nodes and ties in their networks, such as who's on their work team, where they get information and who they collaborate with most often.

The software also includes data visualization tools that provide a graphical depiction of the network structure and ONA metrics. A network map is typically created to show the main nodes, ties and information flows at a glance.

American Express, BP, Cigna, Cisco, GM, IBM, Microsoft and TD Bank are among the large companies using or exploring ONA tools, according to analysts and ONA software vendors.

Organizational network analysis is a methodology used in business management. Learn how to develop a business process.