Harness corporate social networks to spur collaboration / McKinsey Quarterly

In McKinsey Quarterly 2007 Number 4, McKinsey research discusses how corporations can better harness the power of information employee networks to spur collaboration and unlock value.

I confess that this article caught by eye originally because it opened with a sentence which supports my blog post on the formation of networks, social or not:

In any professional setting, networks flourish spontaneously: human nature, including mutual self-interest, leads people to share ideas and work together even when no one requires them to do so. As they connect around shared interests and knowledge, they may build networks that can range in size from fewer than a dozen colleagues and acquaintances to hundreds. Research scientists working in related fields, for example, or investment bankers serving clients in the same industry frequently create informal—and often socially based—networks to collaborate.

Article at a glance (quoted from abstract)

• Most large corporations have dozens if not hundreds of informal networks, in which human nature, including self-interest, leads people to share ideas and collaborate.
• Informal networks are a powerful source of horizontal collaboration across thick silo walls, but as ad hoc structures their performance depends on serendipity and they can’t be managed.
• By creating formal networks, companies can harness the advantages of informal ones and give management much more control over networking across the organization.
• The steps needed to formalize a network include giving it a “leader,” focusing interactions in it on specific topics, and building an infrastructure that stimulates the ongoing exchange of ideas.

Harnessing the power of informal employee networks
Formalizing a company’s ad hoc peer groups can spur collaboration and unlock value.
Authors: Lowell Bryan is a director in McKinsey’s New York office; Eric Matson is a consultant and Leigh Weiss is an associate principal in the Boston office.
Abstract | Article

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Get more from less / McKinsey Quarterly

In McKinsey Quarterly 2007 Number 3, Stephen Corbett, a principal at McKinsey's Toronto office, discusses the challenges of adopting the lean production approach in nonindustrial environments and shows four examples of how managers met these challenges in a variety of operating contexts.

Contexts

1. Applying lean production to the public sector: Governments at all levels must deliver more for less. The principles of lean manufacturing offer surprisingly apt solutions.
2. Applying lean to application development and maintenance: To make application development and maintenance more productive, IT managers are getting lean.
3. Better manufacturing in China: An interview with two of PLP's top executives: Bill Haag and Wu Yu explain the lessons of a lean transformation at the Chinese factory of a manufacturer based in Cleveland.
4. Toward a leaner finance department: Borrowing key principles from lean manufacturing can help the finance function to eliminate waste.

Key points from example 2: Applying lean to application development and maintenance

• The McKinsey study shows that applying the principles of lean manufacturing to ADM (Application development and maintenance) can increase its productivity by 20 to 40 percent.
• Transforming ADM begins with a diagnostic phase to find waste.
• A large financial institution going through the diagnostics discovered two main causes of waste:
  1. The process for defining project requirements was chaotic and inefficient. IT had no standard way to get a comprehensive description of the requirements for maintenance requests, so developers had to keep asking questions to clarify them, which led to delays and rework.
  2. There was also no clear way to prioritize projects. As businesses requested exceptions and rush jobs, developers shifted focus from one application to another, and some projects were never finished.
• After the diagnostic phase, IT managers launched a pilot program focused on three lean principles:
  1. Improving the work flow. To make the work flow smoother, the managers scheduled bimonthly software releases, with clearly defined steps and a capacity based on the available resources (designers, coders, and testers). this predictable schedule allowed the business to plan for current and future releases and diminished the tendency to rush late requests into the process.
  2. Balancing workloads. To even out the workload, the managers defined work groups more flexibly. Developers and testers were cross-trained to work on projects throughout the organization. Managers could now deploy people more efficiently; when one group was busy, it could borrow developers or testers from another.
  3. Managing performance. A "dashboard" was created so that problems could be recognized early. In one case, managers saw that a task was taking longer than estimated and therefore redistributed the developer's workload to minimize the disruption. The decision to track the performance of individuals encouraged developers to take on additional tasks, since their efforts were now more visible
• The pilot surpassed expectations, boosting productivity in the targeted application maintenance areas by 40 percent in less than two months. IT's business counterparts were more satisfied with the process, and employee morale reportedly rose.
• As a result of this success, the company rolled out the effort to the rest of the application maintenance organization to other parts of IT.

Full article:
MKQ: 2007 Number 3: Beyond Manufacturing: The evolution of lean production

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How social media influences change in the marketing practice / MKQ

In the McKinsey Quarterly article titled The evolving role of the CMO (MKQ 2007 Issue 3, pp.29-39), David Court discusses how the change in technology influences change in marketers' roles and how CEOs can help them set priorities and drive organizational change.

Some interesting points noted (quotes):

• User-generated media account for almost one-third of all the time individuals spend on the 100 most visited US Web sites, up from roughly 3 percent just two years ago. Consumers skeptical of push ads are flocking to a medium they trust more.
• Although good for consumers, this explosion of user-generated content comes with big risks for business. Individuals and nongovernmental organizations that don't fully understand the products of a company... can sometimes have as much influence over its image as its marketing communications unit... thus proving to be a short-term PR nightmare for many companies.
• It is, for example, the marketing department that is likely to develop (as Toyota Motor has done) programs to position a company in online communities such as Second Life, the leading virtual marketplace, which provides low-cost opportunities to learn how role-playing consumers would design and use new products
• A deep understanding of the needs of consumers in these markets and the trade-offs they make will be critical in designing products and retail formatss that strike the right balance between price and quality.
• Within marketing, for example, the ability to build brands across an increasing number of media, including vehicles dominated by user-generated content, will be critical.

The article concludes with three ideas for CEOs seeking to help their CMOs and ensure that their companies thrive:

• Take time to understand what's really happening with customers.
• Foster the right connection between the CMO's efforts and those of the other parts of the organization.
• Be a "thought partner" for the CMO as he or she transforms the marketing organization.

Read abstract or the full article on MKQ's website

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