Networking Inside & Outside the Firm to Drive Innovation

Linus Dahlander, Siobhan O’Mahony, and David Gann have conducted a fascinating new study regarding researchers at IBM.   They studied more than 600 technical experts at IBM, people responsible for many of the firm's patents.  They paid attention to how these experts networked with others both inside and outside the firm.  In an HBR digital article, the scholars summarize their findings:  

We measured the breadth of each person’s external social network by the different types of external sources they interacted with. Then we assessed how the breadth of each person’s external network was associated with subsequent innovation outcomes at IBM, like the quantity and quality of the patents the individual produced.

Surprisingly, we found that our respondents’ most common sources of inspiration for new ideas were their colleagues inside, rather than outside, the firm. In contrast with current theories of open innovation, people with broader external networks were no more innovative than people with narrow external networks. Many of the experts relied mostly on internal networks and were still innovative. To better understand this puzzle, we examined how people allocated their time among their information sources inside and outside IBM.

We discovered that experts with a broad external network were more innovative only when they devoted enough time and attention to those sources... This is an important finding, as many managers are keen on the idea that networking and forming external ties can boost the flow of ideas that spurs innovation. What we found is, for that to happen, employees need to devote significant time and attention to creating and sustaining their external relationships. In some cases, people who focused on learning from colleagues inside the organization were just as innovative.

About 30% of the respondents who had a broad external network did not allocate enough time to learn from those relationships. These people would have been better off deepening relationships with their colleagues inside the firm. For spending time inside the company is also important to understanding the firm’s innovation needs and knowing how to develop and execute on innovative ideas.

In sum, the best innovators engage in a balance of external and internal networking.  They scour the outside world for ideas, but they do so given a solid understanding of what's happening within their firm.  Moreover, they engage with people in sufficient depth so as to truly learn from them, rather than simply gaining a superficial understanding of the trends and developments in the outside world.  You can't simply have coffee with a hundred people in search of the next big idea. You have to immerse yourself in certain contexts, whether they be internal or external.   Learning takes time, as does relationship building.