Submission 2
New approaches for identifying and understanding complexity for product innovation success. Fraser S. Bruce, David Townson, Professor Tom Inns School of Design - University of Dundee, Scotland, UK
Abstract With most complex business issues emerging from the inter-and-intra relationships of individuals, many business leaders are now attempting to improve the social conditions found within their businesses. In this paper, the author presents the findings of an exploratory research project which explores the potential of Social Network Analysis (SNA), as a diagnostic tool for visually mapping and analysing the social relationships found across the extended boundaries of a medical device organisation. With a clear visualisation of these relationships, the author examines network maps to identify and understand barriers that are likely to restrict the successful identification of stakeholders needs - one of the factors for product innovation or development success. From the findings, the author prescribes network specific recommendations for improving the social conditions within the organisation. Keywords: complexity, product, social, networks, stakeholders, relationships
Introduction Complexity theory is concerned with the study of complex self-organising systems. These nonlinear dynamic systems can be described as a group of independent parts interacting together to function as a collective whole (Sardar & Abrams, 2001; Stacey; 2000). Many systems naturally organise themselves from a flock of birds, atoms, planets and even galaxies (Waldrop; 1992). From a business perspective, complexity theorists are suggesting that reaching peak performance depends on the future strengths of an organisation’s employees and their ability to work together (Kelly & Allison, 1999). With most complex business issues emerging from the inter-and-intra relationships of individuals, many business leaders are now attempting to improve the social conditions found within their businesses.
A thorough review of the product design and development literature revealed a number of success factors that a business can adopt to help improve its product innovation capability (Cooper, 1979 & 2001; Madique & Zirger, 1984). Typically, these success factors will be ‘off the shelf’ models and to some extent will incorporate aspects of organisational structure (Jones, 1997; Ulrich & Eppinger, 1995), process (Booz, Allen & Hamilton, 1982; Cooper, 2001; Pugh, 1991) and people. However, actually transferring and aligning these models of practice into the inner workings of a business can be a complex task. For example, there are many potential human barriers that can restrict the transfer process - attitudes, values and the relationships of individuals. Herbruck & Umbach (1997) state that ‘In New Product Development (NPD), an organization can have all the right information, as well as the technical and financial resources necessary, but unless its human resources are full committed and communicating effectively opportunities may be lost (p 44). In this paper, the author presents the findings of an exploratory research project which explores the potential of Social Network Analysis (SNA), as a diagnostic tool for visually mapping and analysing the social relationships found across the extended boundaries of a medical device organisation. With a clear visualisation of these relationships, the author examines network maps to identify and understand barriers that are likely to restrict the successful identification of stakeholders needs - one of the factors for product innovation or development success. From the findings, the author prescribes network specific recommendations for improving the social conditions within the organisation. The research demonstrates a method for gathering accurate representations of actual organisational structures and working networks within a business. Equipped with this information it would seem more likely that ‘off the shelf’ models that promote innovation could be successfully imported into a business.
Principles of Social Network Analysis (SNA) In the context of this paper, it is important that the fundamental principles of Social Networks Analysis (SNA) are first explained. Mind mapping and concept mapping are powerful techniques for representing information visually (Buzan and Buzan, 2000; Craig, 2000). Social Network Analysis (SNA) is regarded as a mapping technique and is defined by Valdis Krebs (28.10.04) as ‘the mapping and measuring of relationships and flows between people groups, organisations, computers or other information/knowledge processing entities. The nodes in the network are the people and groups while links show relationships or flows between the nodes. SNA provides both a visual and a mathematical analysis of human relationships.’ Figure 1 below shows an example of a network map created using a SNA software package called Cyram NetMiner (Further information is available at the website: www.netminer.com). The map highlights the number of connections that a person has for a help network (e.g. Are you likely to ask for help from this person to do your job?). The arrows indicate incoming and
outgoing connections, while the thicker lines represent the strength or frequency of the relationship between people (nodes).
Figure 1 - a visual view of a help network When conducting the technique of SNA Cross and Parker (2004: 143-162) suggest a six step process. The process while discussed in length by Cross and Parker has been summarised for this paper. Step 1: Identify a strategic/operational organisational goal and intended participants. Typical applications include post-merger integration, identifying Communities of Practice, improving the decision making process and increasing an organisations ability to innovate. Step 2: Design a questionnaire to capture data for a meaningful relationship (e.g. communication, information exchange, knowledge awareness). Step 3: Using a SNA software package, visually map and analyse the results from the data gathering process. Step 4: Using a SNA software package, quantitatively analyse the results from the data gathering process to determine the position of individuals and groups within the network. Quantitative analysis is used when visual maps become difficult to interpret due to the network growing in size and complexity. Step 5: Provide feedback sessions in the form of workshops and interviews. This ensures that any misinterpreted results from the analysis can be rectified (e.g. Peter may be seen as an isolated node in Figure 1 above owing to the fact that he had only recently returned from long term sickness). Step 6: Conduct periodic re-evaluations of the networks to assess progress.
Application of Social Network Analysis (SNA) in practice Much of this paper, particularly network measures and the six step process referred to above, relies on the work of Cross & Parker (2004).
A case-study was conducted in order to explore the potential of SNA as a diagnostic tool for identifying the human barriers likely to restrict product innovation from successfully occurring. Due to its size and complexity comprising of a vast network of internal and external stakeholders, a medical device company was identified and chosen to participate in the study. A total of 27 individuals, representing the unique resources of the organisation took part. To learn more about the technique of SNA, it was decided to examine one of the drivers of product development success - the identification of stakeholders needs. This activity is typically associated with the front end stages of the product development process. The essence of a stakeholder-focused approach to design ensures that the wants and needs of stakeholders are identified, understood and incorporated into products satisfying their needs. Marr and Walker (2001) discuss the importance of involving stakeholders in the process: ‘To be a true leader in the new economy, we must earn the trust of all our key stakeholders by learning to place faith in the people and by weighing their needs and opinions into our business decisions. If we as managers use tools to listen to them, then collaborate with them fairly and intelligently, we will take care of the business and its constituents and, as a result, take care of ourselves as well’ (p.232). Taken this into account, a primary set of external stakeholders were identified. These included a pharmaceutical company, regulators, internal regulators (i.e. external to the company but part of the internal structure of the organsiation), clinicians, nurses and patients. Each stakeholder was regarded as having an active interest in the development of the organisations past, present and future product range. Figure 2 below highlights the key stakeholder groups.
Figure 2 - stakeholders
Data collection was undertaken via structured interviews and questionnaires. The aim of the questions was to reveal the strength of relationships found within the product development network. Table 1 below shows an overview of the questions and subsequent networks to be mapped.
Table 1 - questions and network maps The questionnaire took the form of a participant operated system, specifically designed to gather first impressions. Furthermore, the document was capable of translating a participants response (i.e. no; sometimes; often; very often; always) into a numerical value, allowing for direct input to the network analysis software package. Figure 3 displays a typical response from a participant and the associated numerical value. The value indicates the strength or frequency of the relationships.
Figure 3 - sample question On completion of the data gathering process, the results were entered into a SNA package and the visual maps constructed. Figure 4 displays the view of the help network (e.g. are you likely to ask for help from this person to do your job?)
Figure 4 - view of the help network
Examining network maps in relation to drivers of product development success For each map, initial exploration and analysis was performed in order to identify the driver of product development success (i.e. the identification of stakeholders needs). The findings from the analysis stage are presented below and include a number of visual maps to help illustrate and simplify the network barriers. It must be noted however, that in the context of this paper, only the relationships and network barriers that restrict collaboration between core functions of the business (i.e. internal stakeholders) and external stakeholders are reported. A more detailed investigation which would explore internal cross-functional collaboration is not reported.
Identification of Network Barriers The visual maps and analysis highlighted a number of interesting and surprising insights. The most significant finding of the analysis, revealed a lack of direct or close connections between internal and external stakeholders. Figure 5 below shows the visual map for the advice network (i.e. are you likely to ask this person for advice?). The square nodes represent the external stakeholders whilst the circular nodes represent the internal workforce.
Figure 5 – view of the advice network This visual map illustrates the following network problems: 1. No relationship or link exists between Patients (end users) and individuals from within the organisation. In network terms these nodes are described as isolated nodes. This untapped knowledge source suggests missed opportunities for the organisation. It could be argued however, that the identification of patients needs was still possible via other pathways within the network (i.e. the likely connections that exist between the clinicians, nurses and patients). 2. It was also evident from the map that the external stakeholders were positioned on the periphery of the network. As a result, two nodes Charles and James played significant bridging roles connecting individuals from within the organisation to its external stakeholders. In network terms these nodes are described as boundary spanners (Cross & Parker, 2004; Krebs, 28.10.04). The map also suggests that only specific business functions of the organisation are actively engaging and considering stakeholders as an integral part of the development process. Another way to understand the potential barriers within the network is to consider how it might be broken. Figure 6 displays how the network can be further fragmented with the subsequent removal of these boundary spanners (i.e. Charles and James). The Clinicians & Nurses become inaccessible and the number of connections to the External Regulator deteriorates.
Figure 6 – the removal of two organisational nodes 3. No direct connection exists between members of the Design and Development (D&D) Department and the external stakeholders. This suggests that it may be difficult for D&D to successfully identify and gather accurate needs from stakeholders. As Ethel Romm (1999) states: ‘designers who don’t meet with customers early and often are trying to read minds at a distance’ (p.59). However, it is still possible for the D&D Group to reach the stakeholders through a sequence of inter-connected nodes (path) within the network. For example, in Figure 7 the thick black line represents the pathway between Heather and the Pharmaceutical Company. The total number of links can be counted and indicates the shortest (geodesic) distance between the nodes (Cross & Parker, 2004; Scott, 1991). The map suggests that Heather (and the other representatives of D&D) may find it difficult to share information with this stakeholder in an accurate or timely manner.
Figure 7 – path between two nodes 4. Further analysis of the map revealed the extent to which nodes Frank and Craig (both Top Management) were positioned ‘between’ all other nodes within the network. In network terms these nodes can be described as ‘central connectors’ and can play brokering roles, influencing and controlling what flows within the network (Cross and Parker, 2004; Krebs, 28.10.04; Scott, 1991). Interestingly, if these nodes were subsequently removed from the network, no pathways would actually exist between the Design & Development Department and external stakeholders. The external stakeholders would become ‘unreachable’. On completion of the exploration and analysis, a number of interventions were proposed to improve organisational characteristics. The interventions are presented below.
Interventions that would improve organisational characteristics The main aim of the interventions was to develop closer working relationships with external stakeholders. The strategies for achieving this included: •
increasing the awareness of stakeholders expertise within the network
•
managing and maintaining external relationships by assigning the role of boundary spanners to additional individuals
•
introducing new boundary spanners and establishing links with external stakeholders (assisting the knowledge transfer process)
•
designing and re-configuring organisational pathways (i.e. connecting boundary spanners to central connectors and core business functions)
By considering external stakeholders as an integral part of the product development process and developing networks that encourage people to collaborate and share product ideas, organisations will strengthen relationships, improve their decision making process and increase the rate of stakeholder-focussed products successfully launched on the market.
Conclusions This paper explored and experimented with Social Network Analysis (SNA), as a potential technique for ‘bridging the gap’ between drivers of product development success and the complexities of practice. The case-study documented in this paper looked at one specific driver - the successful identification of stakeholders needs. The study revealed SNA to be a powerful visual mapping and analysis technique, that when used appropriately, can help an organisation derive important insights into the human barriers that affect positive results. With a clear visualisation of these intangible relationships, recommendations for improving organisational characteristics can be positively and quickly made.
Ongoing study In relation to the case-study, the future plan is to hold a series of workshops and feedback sessions in order to present the findings and to allow for any misinterpreted information to be rectified by the participants. Finally, it is planed to periodically re-access the network maps on a six monthly basis in order to determine the usefulness of SNA as a technique for breaking down barriers that restrict product innovation. Research is currently ongoing to expand the exploration of SNA for the remaining drivers of product development success. Research to date suggests that there are a number of generic stages that make up the New Product Development (NPD) process. It also suggests that at each stage a multidisciplinary team is required, representing the unique resources of the organisation (Pugh, 1991; Ulrich and Eppinger, 1995). According to Cooper (2001) ‘a true cross-functional team approach is mandatory in order to win at new products’ (p.118). Building on this understanding, and employing the technique of SNA, research is currently under way to establish if organisational networks can be re-configured and strategically designed for each phase of the product development process.
Acknowledgements The author would like to thank the following colleague Sean Kingsley for his encouragement, advice and assistance in the writing of this paper.
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Biographical Note Fraser Bruce is a product development engineer on the recently established Innovative Product Design program at the University of Dundee. He has an undergraduate degree in Integrated and Manufacturing Engineering and is presently completing an MPhil by research.
Contact Details School of Design – University of Dundee, Scotland, UK, DD1 4HT Email:
[email protected] Telephone: +44 (0) 1382 348101
