Few elements in business are as ubiquitous as the organizational chart. While constructing rigid hierarchies of employees and outlining them in a fixed structure may have worked in older industries like railroads, the ever-changing nature of work today demands an organizational chart that can handle those changes quickly.
These days, based on research that suggests we work best in teams that change often, the best leaders write their organizational charts in pencil, allowing the best teams to be fluid and form around problems and products.
To understand the true value of this new way to write an organizational chart, we must travel — not to the executive boardrooms of high-level consulting companies — but to the bright lights of Broadway. Specifically, we must investigate the teams that bring a Broadway musical from idea to reality.
Every Broadway production is created and run by a senior leadership team with the same seats at the table, but who sits in those seats and how they got to them can tell us a lot about the best way to staff projects and design organizations. The senior leadership team of every show consists of about six roles — producer, director, composer, lyricist, librettist, and choreographer. Broadway as an industry, however, is a very small world. It is an amazingly dense and interconnected network, with different people often rotating to new roles as new shows are produced. As a result, the people in these roles sometimes find themselves working with total strangers but at other times find that their new team has several familiar faces. This constant churn caught the attention of two researchers, Brian Uzzi of Northwestern University and Jarrett Spiro of INSEAD.
The duo was interested in discovering the right mix of connections for a team, and hence the right level of connectedness for Broadway as a whole. “It’s well known that people in the industry form long-term partnerships with one another and these partnerships repeat themselves in different musicals,” Uzzi explained. “What we were looking for was, how are these partnerships imbedded, so to speak, in a larger web of relationships that goes beyond just the team that someone worked with and into how that team was connected to other teams?”
To answer this question, Uzzi and Spiro collected reports on every six-person leadership team from every Broadway show from 1945 to 1989. They even included shows that were started but killed in preproduction. In the end, they built a database of 474 musicals and more than 2,000 individuals, from unknown choreographers to legendary composers such as Cole Porter and Andrew Lloyd Webber.
Using the database, the researchers could re-create the network of the Broadway industry spanning over four decades and calculate the levels of connectedness for any given year. They then analyzed the density of the network from year to year using a measurement they called a “small world Q,” or simply “Q.” Q measures the level of interconnectedness in a network on a scale from 1 to 5. A loose network with very few preexisting relationships and little familiarity between network members would have a Q score of 1, while the densest possible network, one in which everyone knows and has worked with everyone else, would have a Q score of 5.
Using the Q scores, they analyzed the success and failure of a given year on Broadway (judged by critical acclaim and financial success) and the extent to which networks affected Broadway’s overall success. The result was astounding. The Q score — and hence the networks — had a tremendous effect on success, but it wasn’t linear. As the Q score of a production year rose, so did that year’s success rates, but it only rose so far before the success rates started dropping again. Instead of a straight line, Uzzi and Spiro got an inverted U, with the peak success rate hovering around 2.6 on the Q scale of 1 to 5.
What this meant was that a team of total strangers usually wasn’t very successful, but neither was a team of strongly familiar colleagues. The best years on Broadway were marked by teams with a combination of somewhat close connections and new perspectives. “Broadway as an industry works best when things are connected to each other but there is also enough space that the creative material can flow and go to different people at different times,” Uzzi explained. As teams with this combination tackle the challenges involved in producing a show, they benefit not only from the experiences and social norms of their known colleagues but also from the diverse perspectives and new ideas of newbies.
It’s tempting to read the results of Uzzi and Spiro’s study and assume that the key to success is merely to build project teams that combine old colleagues with newcomers. But the study isn’t about the team — it’s about the network. It’s the network of Broadway that allows 2.6 teams to form, produce a show, and then disband into new teams. If you build a 2.6 team and force it to work together for a long time, it ceases to be a 2.6 team and moves toward becoming a 5 team. Instead, you need to focus on the overall network so that you can create the right-combination team around a project but you can also reassign its members quickly to new projects and new teams.
While Broadway may seem a far cry from the boardrooms of America, the parallels are striking. The idea of writing the organizational chart in pencil may go against traditional thinking, but the evidence would appear to suggest that this is exactly what businesses must do to function in an increasingly competitive world.
To abuse the analogy slightly, just because you can’t write the organizational chart in pencil doesn’t mean you can’t write it in erasable pen.
David Burkus is the author of “Under New Management,” published this week by Houghton Mifflin Harcourt. Burkus is host of the Radio Free Leader podcast and associate professor of management at Oral Roberts University.
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