This Executive Is Rethinking the Org Chart to Enhance Innovation

What is Arena using to disrupt the way GM works?  

“Human capital has been talked about a lot in talent. Competencies, evaluation programs, and development programs are all great, but they are incomplete,” says Arena in my recent interview with him.  

According to Arena, a company’s organizational chart is helpful for the first week, then it becomes obsolete because it presumes that people will relate the way that it is structured. Social capital, on the other hand, provides a more realistic picture of how employees work with each other, how new ideas are discovered, and decisions are made.

“The social connections that are happening deeper inside the organization that may not resemble the formal organizational chart enhance speed, agility, and innovation,” says Arena. “We are now able to make the invisible visible through algorithms and networking tools.”

Human capital is what people know, but social capital is how well positioned people are to leverage what they know. 

People positioned at the center of a company’s internal network have great access to internal information, decision-makers, and other resources so their ability to implement and execute is very high. Others on the edge of the company network are better positioned to get access to new and diverse information and have the ability to share the information from one group to the next. 

“Friends go to friends and they’ve been doing that long before they ever joined organizations,” says Arena. “Traditional organizations create barriers for that and those barriers are sometimes necessary but most of the time they stifle.” 

GM is predominantly using a survey-based methodology to map out the social capital within the organization. Other methods include using email, social media, or sensors–inside company badges for example–to understand how information is flowing and how decisions are being made. (Click here to use Arena’s assessment to begin mapping your organization’s social capital.) 

In today’s era of disruption, organizational agility is paramount. 

One way for organizations to unleash potential, positively disrupt, and remain agile is through social capital. 

Listen to my full interview with Michael Arena here.