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Harnessing Your Organization's Untapped Innovation: How to Leverage Social Capital and Scale Agile


In today’s rapidly changing business environment, organizations require constant innovation to stay competitive. However, breakthrough ideas are difficult for any single person to generate in isolation. Research shows the most innovative companies cultivate communities and ecosystems that unlock new possibilities through collaboration and connection.


Today we will explore how organizations can harness the untapped potential of employee networks to scale agile innovation initiatives.


Building Social Capital Through Trust and Reciprocity


At the foundation of an innovative culture is social capital - the collective value of relationships within a group. Social capital theory posits that networks enriched by trust and mutual obligations between members enable the flow of information and cooperation needed to catalyze fresh thinking (Nahapiet & Ghoshal, 1998). Two key aspects of social capital that drive innovation are trust and norms of reciprocity.


Trust. When employees feel psychologically safe to share ideas without fear of criticism or repercussions, they are more willing to propose unorthodox solutions (Edmondson, 1999). Management builds trust by demonstrating consistency, fairness, and care for employees' well-being over quick profits. Google famously gives workers 20% time for passion projects, cultivating trust that empowers risk-taking.


Reciprocity. The expectation that helping others will lead to help received in return motivates collaboration (Coleman, 1988). 3M's "15% time" norm honors this norm and employees freely assist one another's experiments. At Sony, engineers swap favors and knowledge, recombining each other's work in novel configurations.


Developing Networks Through Communities of Practice


Communities of practice (CoPs), informal employee groups that organically form around areas of joint expertise or passion, are proven vehicles for accumulating social capital (Wenger, 1998). Three approaches can empower CoPs to drive innovation organization-wide:


Encourage Self-Organizing Around Shared Interests: Rather than top-down formation, allow CoPs to emerge from natural affinity among colleagues. For example, a network of engineers at Microsoft coalesced around developing more sustainable products. Community managers provide light facilitation but defer to members' autonomy.


Sponsor Connections Across Silos: While specialization fosters deep skills, it can breed insularity. Invite CoPs to organize cross-functional gatherings or rotate members to reduce parochialism. At HP, an annual conference convenes all technical expert networks in one place to spark novel interdisciplinary partnerships.


Disseminate Outputs Organization-Wide: Once groups solve local problems, spread solutions firm-wide to achieve scale. For instance, Capital One’s internal social network profiles exemplary projects to inspire emulation throughout the 140,000-employee enterprise. This builds upon social capital accrued within CoPs for economy-wide benefit.


Supporting Employee Experimentation


To fully leverage social capital, organizations need processes that empower networked learning through low-risk experimentation. Three pillars of an experimentation culture are:


Dedicate Time and Resources for Learning: space, funding, and freedom from day-to-day work responsibilities give mental space to explore. Amazon popularized the "two-pizza rule" for small cross-functional project teams that can nimbly test and validate ideas.


Establish Feedback Cycles for Rapid Iteration: Short sprints with ongoing review cycles prevent commitments to failed experiments. At Spotify, teams present work-in-progress every few weeks to identify issues early. Fail fast to learn faster.


Share Results Generously: When going public with trials, focus should be progress over perfection. Humble transparency builds trust and cross-pollinates learnings. At Design Thinking firm IDEO, sharing failures is as valued as victories to advance collective knowledge. Over time, this accumulates social capital for innovation at scale.


Implementing Agile at Scale: Three Examples


The above approaches embrace principles of lean startup and agile methods proven to catalyze innovation through adaptive networks. This section explores real-world cases of organizations scaling agile initiatives across divisions:


Capital One. After agile pilot success in technology teams, community leaders cascaded training to community managers throughout the business. Leaders leverage specialist networks as “centers of excellence” to propagate innovation across regional offices worldwide.


Amazon. Beyond pioneering two-pizza teams, leaders incubated several internal startups annually using lean product development. Successful experiments become formalized as new business units, with founders spinning up virtuous innovation cycles organization-wide.


Boston Children's Hospital. To accelerate patient-centered design, clinicians and coaches institute agile "scrums" and rapid prototyping across departments like nursing and operations. Frontline staff feel empowered as partners in continually improving experiences and outcomes.


Conclusion


Today's organizations must cultivate social capital and experimentation habitats to keep pace with disruption. When accorded time, trust, and opportunities to learn together, organizations can sustain a culture of continuous improvement powered by the connections among its people. The most adaptive businesses of tomorrow will be those attuned to uncovering possibilities through harnessing the full capability of human networks.


References

  • Coleman, J. S. (1988). Social capital in the creation of human capital. American journal of sociology, 94, S95-S120.

  • Edmondson, A. (1999). Psychological safety and learning behavior in work teams. Administrative science quarterly, 350-383.

  • Nahapiet, J., & Ghoshal, S. (1998). Social capital, intellectual capital, and the organizational advantage. Academy of management review, 23(2), 242-266.

  • Wenger, E. (1998). Communities of practice: Learning as a social system. Systems thinker, 9(5), 2-3.

 

Jonathan H. Westover, PhD is Chief Academic & Learning Officer (HCI Academy); Chair/Professor, Organizational Leadership (UVU); OD Consultant (Human Capital Innovations). Read Jonathan Westover's executive profile here.




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