Understanding Brokerage in Organizations

44051372-Brokerage

Source: A. Mrvar: Network Analysis using Pajek

I stumbled upon this article by two Harvard Business School researchers who were looking at Employee-suggestion systems from a different angle. While process improvement isn’t my field of expertise, this passage really caught my eyes:

Tucker also explains this finding in terms of “boundary spanning.” Nurses are at the far end of an internal supply chain. Even if they discover a gap between what the supply chain is providing and what the patient needs, they usually don’t have the authority or knowledge to go back to those supply departments and fix the problem; a higher-level person needs to be involved.
“This finding tells us that process improvement in hospitals will require people to work across departmental boundaries, where the problems happen, rather than within a particular department,” Tucker says.

Boundaries are often the equivalent of information flow and collaboration breakdowns in organizations. They arise for different reasons. The most common boundaries, as identified by Kate Ehrlich are:

  • Functional: Breakdowns between divisions (e.g., marketing and finance)
  • Geographic: Breakdowns between geographically separated locations (e.g., US and European offices, East Coast and West Coast offices)
  • Tenure: Breakdowns between long time employees and new employees
  • Organizational: Breakdowns because of M&A scenarios, or among leadership networks

So, if boundaries are obstacles to information flow for most networks, spanning or bridging them is a goal organizations seek to attain (as it’s the case of the hospitals in the HBS’s study). Employees who span these “Structural holes” and tie together otherwise disconnected people and information/knowledge entities, are referred to as brokers.  In order to understand the role of these employees, I’ll refer to Mrvar’s classification of the different types of brokers:

  • Coordinators are those who mediate between the members of the same group
  • When twomembers of a group use amediator fromoutside, this mediator is called an itinerant broker
  • representative is someone who regulates the flow of information and goods from his own group
  • Gatekeepers regulate the flow of information and goods to his own group
  • And finally liaisons are those that mediate between two groups while not belonging to either of them

Due to their unique position, brokers gain enough Social Capital to make them as much indispensable for the network as they are dangerous. Their bridging role translates into Control of the flow from one part of the network to another. They can thus be great change agents. Yet, the negative spin suggests that brokers can play a “Tertius” Strategy where they induce competition or conflict between neighbors who are not linked directly. This could render information retention problems, more conflicts and hence structural holes (which were supposed to be spanned in the first place).

For this reason, it is very important to identify and recognize your spanners early on. This is challenging because, as these employees sit in the white spaces between network pockets, they are not highly visible  and are frequently not in a position of formal authority. Cross and Thomas state that leaders can only recognize 30% of their key brokers which shows how much potential is lost because we are not leveraging network players as we should.         

Are you aware of the brokers around you? What are you doing to turn their power to the advantage of the organization?

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