Introduces social network and innovation research, reviews previous evidence and presents highlights of a study I conducted at a top 10 oil and gas company.

1. The Networks of Top Innovators
Matt Desruisseaux, A.B. (Harvard), PhD (Cambridge)
Based on research funded by the Bill & Melinda Gates Foundation
Also available on request:
The Networks of Effective Leaders
The Networks of High Performers
Social Networks in Healthcare
© 2013 Matt Desruisseaux. Do not circulate or use without permission.

2. Introduction
Social networks are a high-growth area in management research.
The accumulating evidence is that the networks people build, within and across firms,
constitute social capital in that they help people and groups attain certain outcomes.
My own research tested hypotheses on how networks create competitive advantage
and support innovation.
This presentation introduces network and innovation research, reviews evidence from
previous research, and presents highlights of a study I conducted at a top 10 oil and gas
company.
Overview:
2
1. Networks
• Concepts
• Metrics
2. Known network
effects
• On creativity
• On innovation
3. Case study
• Diagnostic
• Recommendations
© 2013 Matt Desruisseaux. Do not circulate or use without permission.

3. 1. Networks
Concepts & metrics
Page 3

4. Network concepts
4
Networks can been mapped at different levels
(individuals, firms, etc.) and for different kinds of
ties: idea discussion, advice, investment, strong
vs. weak ties, etc.
They indicate access to “sticky information” that
sits in different clusters and power to take certain
actions.
Innovation has been linked to two network roles:
• brokers, who link disconnected contacts and
are said to to span structural holes
• boundary spanners, who have contacts in
different groups, e.g., their own R&D lab and a
few other labs
Brokers and boundary spanners have greater
access than their peers to non-redundant
information and greater power to coordinate
information flows.
Nodes can be
individuals, teams,
departments, firms, etc.
broker
brokers & boundary
spanners
lab A lab B
structural
hole

5. Network metrics
UCINET and other software can
calculate (bold = linked to innovation):
• network properties, e.g.,
centralization or the number of
brokers in a team
• whole-network actor properties,
e.g., eigenvector or betweenness
centrality
• ego-network actor properties,
based only on ego’s direct contacts,
e.g., knowledge heterogeneity of
ties (Blau index), Simmelian
boundary-spanning ties (E-I index),
or Burt’s constraint
Or validated scales can capture
networking behaviours, like the tertius
iungens strategic orientation.
5
Metrics help answer questions like:
• Do networks differ unexpectedly across
departments or locations?
• How can we encourage employees to build,
maintain and use informal networks more
conducive to innovation?
Where pij is the proportion of time and energy spent
by i on contact j (and pqj is the investment between
two alters), Burt’s constraint is:
Expanding the squared term reveals the metric’s links
to network size, density and hierarchy (more later).
EXAMPLE: CONSTRAINT
© 2013 Matt Desruisseaux. Do not circulate or use without permission.

6. 2. Known network effects
On creativity and on innovation

7. Creativity
Creativity is the generation of new ideas. It can be measured by observation,
experiments, textual analysis of written ideas, or supervisor ratings on validated scales.
At least 13 studies suggest that boundary spanners and brokers are more creative
than their peers. Effect sizes are generally small, yet may have large impacts for firms.
7© 2013 Matt Desruisseaux. Do not circulate or use without permission.
EXAMPLE: GOOD IDEAS FOR A SUPPLY CHAIN
The 673 managers running
the supply chain of a US
electronics firm submitted
their best idea to improve the
chain. Managers in broker
positions were
29% less likely to have
their idea dismissed,
had their idea rated as
significantly more valuable,
and received better
evaluations, promotions and
compensation. (Burt, 2004)

8. Innovation
8
Innovation is the generation and implementation of new ideas. Not all brokers succeed at t
implementing new ideas. Besides creativity, innovative teams or individuals have:
• a central network position (explained 9-16% of innovativeness in ad agencies, chemicals
firms, and a food manufacturer)
• a tertius iungens strategic orientation, a tendency to join others when their
combination can be productive*
• certain inter-unit ties** and contacts with diverse knowledge
• rotating leadership, i.e., a manager in one firm brings contacts on board, then
someone in the partner firm takes the lead and mobilizes other contacts
*At a car manufacturer, a 1-point increase (on a 7-point scale) made people 32% more likely to
reach a given degree of innovation involvement. (Obstfeld, 2005)
**At an electronics firm, weak ties sped up projects by up to 4.5x when knowledge was codified, but
slowed them down when knowledge was complex. (Hansen, 1999)
**At a high-tech multinational, strong ties between people in different R&D labs who also had a mutual
contact were the greatest network predictor of successful patents. (Tortoriello & Krackhardt, 2010).
EXAMPLE: PRODUCT DEVELOPMENT
© 2013 Matt Desruisseaux. Do not circulate or use without permission.

9. 3. Case study
Diagnostic and recommendations
Page 9

10. Diagnostic: method
I surveyed 132 people at an oil and gas company. They reported 482 contacts inside and
outside the firm (e.g., who they discuss new ideas with) and the ties between those
contacts. The result, clustered by internal unit and type of external contact, looked like this:
Employees also completed measures of networking behavior and I interviewed many of
them in three cities. Supervisors rated their innovative performance.
10© 2013 Matt Desruisseaux. Do not circulate or use without permission.

11. Diagnostic: top 5 findings
1. A personal tendency to use brokers* increased innovative performance.
2. Network hierarchy made up a high fraction of total constraint on brokers (especially
for foreign-born employees)**. This suggests that people networked through a
boss or other partner who made them somewhat redundant as brokers.
3. Time and geography were key barriers to building and using networks to innovate.
One manager said: “there’s a network in London I don’t have access to, even when I travel there.”
4. External contacts were not fully leveraged: “I have so many contacts … [in] other oil
companies… business developers, bankers and lawyers but [the company] does not have a way to
capture this.”
5. Some wanted better recognition of less visible types of innovation. This confirmed
a company survey showing low performance-reward alignment in some units.
11
HQ native Born elsewhere
Size +
density
Hierarchy
**Sources of
network constraint
personalized
broker
focal brokee
all-around
broker
focal brokee
*Brokees relied on all-around brokers to access non-
redundant information and on a personalized brokers
to mobilize cliques around their new ideas.
© 2013 Matt Desruisseaux. Do not circulate or use without permission.

12. Selected recommendations
12
1. Implement a practice of scanning team members’ external contacts
2. Increase the frequency of cross-unit events
3. Incentivize certain types of employees to act as informal brokers; train
them on the benefits of brokerage (see below)
4. Develop online social tools that routinize and lower the costs of informal
information flows
5. Reduce network hierarchy by steering workflows and organizational
culture toward more autonomy in informal relationships
© 2013 Matt Desruisseaux. Do not circulate or use without permission.
Raytheon, the US defense contractor, trained some of its executives on informal networks
and brokerage. Two years following the training, these executives, compared to an untrained
control group, were:
43-72% more likely to be promoted
36-42% more likely to receive top performance evaluations
(Burt & Ronchi, 2007)
EXAMPLE: IMPACT OF TRAINING

13. Extras
Page 13

14. Preview: Social Networks in Healthcare
Much network research has been done in healthcare. Highlights include:
• 29% of variability in the adoption of 68 change initiatives in the UK’s NHS
explained by models incorporating change agents’ advice networks
• costly departures of informal brokers when there are few among a hospital’s staff
• 20-35% lower costs for Boston hospitals with small GP-specialists networks and
5-15% lower for hospitals with networks centered around GPs (see below; Lewis &
Fisher, 2012 )
Also, my own study in a Canadian healthcare system showed that high performers
and effective leaders tended to use others as brokers in order to get work done.
14© 2013 Matt Desruisseaux. Do not circulate or use without permission.

15. Recommended reading
15
Administrative Science Quarterly
Ahuja, G. (2000). Collaboration
networks, structural holes, and
innovation: A longitudinal study.
Davis, J., & Eisenhardt, K. (2011).
Rotating leadership and collaborative
innovation: Recombination processes in
symbiotic relationships.
Hansen, M. (1999). The search-transfer
problem: The role of weak ties in sharing
knowledge across organization subunits.
Lingo, E., & O’Mahony, S. (2010). Nexus
work: brokerage on creative projects.
Obstfeld, D. (2005). Social networks, the
tertius iungens and orientation
involvement in innovation.
Tushman, M. (1977). Special boundary
roles in the innovation process.
Other publications
Burt, R. (2004). Structural holes and
good ideas. American Journal of
Sociology.
Burt, R., Kilduff, M., & Tasselli, S. (2013).
Social network analysis: foundations and
frontiers on advantage. Annual Review of
Psychology.
Lewis, V., & Fisher, E. (2012). Social
networks in health care. Journal of the
American Medical Association.
Rodan, S., & Galunic, C. (2004). More
than network structure: How knowledge
heterogeneity influences managerial
performance and innovativeness.
Strategic Management Journal.
Sosa, M. (2011). Where do creative
interactions come from? The role of tie
content and social networks.
Organization Science.
Tortoriello, M., & Krackhardt, D. (2010).
Activating cross-boundary knowledge:
The role of Simmelian ties in the
generation of innovations. Academy of
Management Journal.
Books
Burt, R. (1992). Structural holes: the
social structure of competition. Harvard
University Press.
Kilduff, M., & Shipilov, A. (2011).
Organisational networks. SAGE.
© 2013 Matt Desruisseaux. Do not circulate or use without permission.

16. Enquiries welcome at
mathieu@post.harvard.edu
© 2013 Matt Desruisseaux.
Do not circulate or use without permission.