News & Content: ITA Take Aways

Exec Spin: Unlock Your Network

Friday, May 4, 2018   (0 Comments)
Posted by: Gary Hotze
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Julia Kanouse, CEO, ITA

 

Buzzwords such as innovation may have lost some of their potency over the last few years, but there are still times when they can nevertheless pack a punch.  Recently, at a Hyde Park Angels event on Executive Leadership I was struck by a new take on this timeworn concept, and while there were many great takeaways from the day, it was Laura Sanchez-Greenberg's insight that resonated with me the most. A Managing Partner at Verde Associates, she spoke about the fact that “closed networks” are built for efficiency and “open networks” are built for innovation.  Although she was talking about developing and cultivating a culture within an organization, it struck me that this concept to could be applied outside the organization as well.

The underlying research behind Sanchez-Greenberg’s claim comes from Dr. Ronald Burt, a professor with the Booth School of Business at the University of Chicago.  In Burt’s courses he talks about the rules of social capital:


•    Rule 1: For bottom line growth, closed networks facilitate and maintain trust and reputation within the system, promoting reliable, efficient operations within the network.


•    Rule 2: For top-line growth, large open networks facilitate innovation and achievement via information breadth, timing and arbitrage advantages from bridging structure holes between closed systems.


What does all that mean?  And why did it so strike me?  I’ve been working within the association space for almost 14 years.  I believe firmly in the power of community to build businesses.  I think that we need to pick our heads up and get beyond our four walls to drive innovation and move our organizations forward.  Burt’s research provides explanation and guidance for why that is so imperative.


Organizations – for reasons of opportunity, shared interests, experience and pure inertia – tend to drift toward a structure known as “small world.”  When organizations are insulated, they experience enhanced productivity.  Although trust builds, it is at the expense of free-flowing ideas.  Closed networks create reputation costs for individuals who express opinion or behavior that is not consistent with group standards.  While Burt doesn’t refer to it as such, “group think” takes hold – creating value by lowering costs for labor, management and time. 

On the flip side, open networks drive innovation. Burt references the role that “brokers” play in the process of providing information. Brokers create bridges to connect systems and accelerate the detection and development of new ideas.  We often think that one or two genius individuals drive innovation.  According to Burt’s research, it depends much more on employees finding opportunities to broker knowledge from where it is routine to where it can create value.


ITA strives to be that open network knowledge base, brokering expertise from outside your circles of influence. More than just a liaison, organizations such as ITA can bridge closed systems to create synergy. Smart companies are encouraging their employees to get engaged and channel this capability.  They are taking advantage of the open network we provide, to seek new knowledge; to harness the untapped potential that this unlocked interaction can bring to isolated innovative systems.

 

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