Research and development projects fail more often than they succeed. In fact, out of every 10 R&D projects, five are flops, three are abandoned and only two ultimately become commercial successes.1 These statistics are certainly daunting for any organization making substantial investments in R&D.
A principal problem in managing innovation isthat many companies don’t know how best to organize their labs to succeed. A classic hierarchical structure, for instance, tends to impede the rapid spread of knowledge. Its inefficiencies can be absorbed, to a degree, by allowing informal structures, such as social networks, to compensate. An alternative structure is the matrix organization, but it too has its shortcomings. Matrix organizations cansuffer from information logjams, confusion and conflict, with the overlap of responsibilities resulting in “turf battles and a loss of accountability.”2 These sentiments have been echoed in a recent survey of new organizational forms by The Economist magazine.3
The conundrum remains: What type of organizational design will create and sustain a learning organization in which people shareknowledge quickly and willingly, a design that will success-fully address the tension between too little versus too much structure?
To answer this question, I conducted an in-depth study of six R&D projects at the laboratory of a Fortune 500 corporation (henceforth referred to as “Global East”). Among other factors, I investigated the social networks at the facility. (See “About the Research,” p.50.) Employees tend to form different informal networks depending on the types of relationships they maintain and the content of the information they exchange. These include friendship networks, professional-advice relationships, gossip exchange circles and so on. In my research, I was concerned with the effect of multiple social networks on R&D projects and with the content of the informationand communication flow that is specific to a technical environment. I was especially interested in the relation between the informal social networks and the formal organizational structures in place.
Polly Rizova is an assistant professor in the Division of Social Sciences of the College of General Studies at Boston University. She can be reached at email@example.com.
To manage research anddevelopment projects, companies need to ensure that informal social networks are reinforced — and not thwarted — by formal organizational structures.
Four Social Networks
Workers interact with each other in myriad ways. In my study, I focused on four types of social networks. Instrumental networks map the relationships between individuals specifically with regard to work-relatedcontent, such as the transfer of physical, informational or financial resources.4,5 To uncover these connections, I asked respondents to identify the co-workers with whom they “primarily talked about problems that arose in the course of the project.” Expressive networks are marked by friendship and social support. Such relationships are not addressed by an organization’s formal structure, rules orprocedures because they do not directly involve work-related attitudes and behaviors.6,7 To investigate these ties, I asked respondents to name the colleagues (especially those they socialized with outside of work) with whom they “felt comfortable discussing what is going on in the organization in general.” These two types of networks — instrumental and expressive — have been the object of thoroughexamination in numerous past studies.
In addition, I investigated technical-advice networks, which include the channels through which the scientists, engineers and technicians obtained advice on technical issues as well as organizational matters (regarding, for example, project scheduling, assignments and coordination). I asked the respondents to name the people in the organization to whom they...