How networks of trust can unlock innovation

Informal networks are the links and exchanges that bind people together.

Dr Karen Stephenson, a corporate anthropologist and an expert on social networks in business, explains: "Your informal networks might include the colleagues that you come into contact with on a daily basis, the 'experts' you turn to when you need advice on a subject and the people you engage with for learning purposes. The links between people in a network can be made up of knowledge, products and services - although knowledge is always involved to some extent. Trust is the glue that holds the network together."

Trust rankings

Just as there are different types of knowledge within networks, there are also varying degrees of trust. Karen says: "If you ask an innovation question, you'll get responses from an innovation network. If you ask an expertise question, you get an expertise network. You might get individuals who feature in both networks, but their 'trust ranking' is likely to be different in each."

Karen stresses that trust isn't something that you can track simply through movements and transactions between people. "The people you trust most aren't necessarily the people you see and interact with every day. I have contacts that I only speak with or email once a year - but they're still amongst the people I trust the most."

Experts and innovators

Within an organisation, the 'experts' are those people who are ranked highly for trust. They're likely to be well-established in the organisation, perhaps having been around in the early days when values and policies were being developed. The 'innovators' may have been around for a while too, but they're more likely to be new to the organisation and to have brought a fresh perspective and a questioning attitude with them.

Karen says that experts can sometimes feel threatened by the innovators within their organisation, while the innovators might feel intimidated by their more trusted colleagues. For innovation to thrive, both groups of people need to be able to communicate and work together effectively.

"Innovators look to the future, while experts try to preserve the past," explains Karen. "From these two tribes, 'learners' emerge as people who can translate between the two. Learners know why tradition is important but also understand that innovation is essential for the organisation to evolve. They have the ability to make the case to both sides and to nurture mutual trust - and this is key to creating innovations and partnerships that stick."

Tapping into informal networks

Technology has a crucial role to play in helping organisations access the innovation potential of informal networks, but it's also essential that the organisation has a methodology to understand the informal networks that operate within it. "There's no point linking people together without having an understanding of the trust that binds them," says Karen. "Equally, it's pointless having an understanding of trust without the technology that links people."

Karen highlights the importance of having an objective overview of trust and networks. "Leaders can't rely on their own perceptions of how these things work within their organisation - what they think they see is not an accurate reflection of reality," says Karen. "Leaders need to open their eyes to the true organisational form that they've long since forgotten or buried. If they can do this, their organisation could become significantly more effective."

When working with organisations who are seeking to understand and access informal networks, Karen often partners with innovation and change agency Entheo. "I'm a diagnostician - I can tell organisations what's not working and what they need to do about it. Entheo are expert facilitators and can help organisations achieve change and become more effective as a result."

Making networks more transparent

Karen says that connections between financial, health, government, education and other institutions have always existed but there has been little transparency about these relationships. She cites the recent financial meltdown as a clear consequence of the highly networked but non-transparent economy. "People weren't aware of the extent and nature of the interconnectedness in the financial services system. When its failures were exposed, it led to a complete breakdown of trust."

She describes the challenge of creating a new transparent networked economy as, "a gargantuan problem" - and says that the answer won't be found by looking to the past. "Organisations are connected and interconnected in ways for which there is no precedent in human history. The solution has to come from people on the ground. It certainly won't come from academics - the disciplines haven't even been created for the problems we're now facing."

Dr Karen Stephenson, CEO of Netform, is a corporate anthropologist and pioneer in the growing field of social network business consultants. In 2007, she was one of only three females recognised from a distinguished short list of 55 Random House's Guide to the Management Gurus. www.drkaren.us