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And then, of course, each individual in that organization maintains a large number of connections outside the organization: family, friends, former coworkers. Those connections link your organization to many more organizations, and ultimately to every other company or school on Earth.
It’s exciting to think that you’re probably somehow linked to almost every other person on earth, but of course so is everyone else (see sidebar). Your position in a network is a limitation as well as an asset. A social network isn’t like the Internet, where information can freely whip from one end of the network to the next . . . and actually, it doesn’t always work that way on the Internet, either.
You can only maintain so many meaningful social connections; there are probably no more than several hundred people you would recognize and greet
by name if you passed them on the street, and there are many fewer people who you actually see regularly and have substantial interactions with. One of the most important insights of network analysis is that it’s that small circle of people, rather than the total number of people who belong to the social groups you’re nominally a part of, who really define your social situation.
The Strength of Weak Ties
When you look at a social group as a network of connected individual nodes, it changes the way you think about both the group and the individual. You can see any given individual’s place in the social structure, and you can
see exactly where their lines of information and influence are arranged. Information and influence normally don’t flash through a group like wildfire; they flow like water trickling through a series of streams.
In this section, I describe some important discoveries sociologists have made about social networks; and the discoveries’ implications for individuals who want to strategically position themselves in their own social networks.
Why your acquaintances are more valuable than your best friends
This section takes its title from a 1973 article by sociologist Mark Granovetter, which has become one of the most influential publications in all of sociology. Granovetter was studying the process of job seeking: How do people find jobs? It’s a natural subject for network analysis because jobs are very often found through personal connections.
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In Chapter 6 I explain the concept of bounded rationality in markets: You don’t have perfect information about all the products available for purchase, so you need to decide how much time it’s worth taking to gather information. Job seeking works under the same principle, even more so than buying a car or another consumer product.
Many jobs are publicly listed online or in newspapers, but many are publicized to only a limited audience, so there are a large number of jobs you’re not going to find out about by surfing Craigslist. Further, when you do find a job you’re interested in and qualified for, it helps tremendously to have a personal connection with someone at the company where you would like to work. That person can both supply you with detailed information about the
job and, often, increase your chances of being hired by recommending you to the hiring committee.
In mapping network ties, Granovetter made the crucial decision to distinguish between strong ties and weak ties.
Strong ties are your most intense personal connections: your connections to your closest family members and friends. People with whom you share strong ties are people you know very well; you may live with them or talk with them daily.
Weak ties are all your other social connections: your connections to people you know, but don’t know particularly well. Coworkers, classmates, neighbors, most friends — you might not talk to or see these people very often, but you know them and they know you.
Granovetter’s finding — which, like many important sociological discoveries, was surprising at the time but seemed like common sense after it was established — was that for job-seeking purposes, your strong ties are actually not all that valuable to you.
Why? Because your closeness to them means that you already know everything — and just about everyone — they know. If there’s a job opening they know about, you probably know about it already. If they have a good “in” with a particular company, you probably know that person, too.
From a network perspective, your strong ties are redundant. That is, by and large they connect you with people you have other connections to. For example, your spouse may have introduced you to all their friends and family when you first met, but after years of marriage, you’ve formed your own connections with those people. If your spouse were to die, devastating as that would be from an emotional standpoint, from a social network perspective your network would not be much changed despite the fact that you’ve lost your strongest tie.
From a network perspective, it might be worse to lose your socialite friend, with whom you have only a weak tie but who connects you to many people you might never encounter otherwise. It’s your weak ties that help you out
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when you look for a job because they are connected to many people you have no acquaintance with and they can, therefore, supply you with much more information. Plus, there are many more of them: you can maintain only a few strong ties, but you may have hundreds of weak ties, each of whom represents an entire world of potentially useful connections.
Think, for example, of a cousin who lives in another neighborhood and whom you see only once a year at the annual family reunion. From a network perspective, that cousin is essentially spending all the other 364 days of the year working for you — meeting new people with whom you’re not acquainted, learning new information that you don’t know. When you’re looking for a job, you can call on them to help you out. So, in this way, your acquaintances may be more valuable than your best friends.
Of course, just because information can flow through a network tie doesn’t mean that it does. Sociologists today appreciate that even where weak ties exist, they’re no good unless they’re activated. People may have a reason to hide information from you — they may have a stake in keeping that information to themselves — but more likely, they just don’t think to tell you. You don’t share much knowledge with most of your weak ties … that’s exactly what makes them weak ties. If you want to activate your network of weak ties, you’re probably going to have to put some effort into it.
Companies are well aware of this, which is one reason they pay their employees for successful job candidate referrals. It may seem odd to think that anyone would need an incentive to tell a job-seeking friend about a good opportunity, but in fact there are several reasons you might fail to spread information about job openings at your own company.
You may worry that suggesting a job opening will offend your friend by making it seem like they need help.
Most people have hundreds of acquaintances that they rarely speak to; if you haven’t talked with someone in a couple of years, it may be awkward to pick up the phone and suggest that they apply for a job at your company.
You may just forget.
This is why companies feel the need to offer incentives to help motivate their employees to pick up the phone and let their friends know about job openings.
But how much should a company pay for a successful referral? Sociologist Alexandra Marin studied the pay-for-referral process at a large company, and in the end she found that companies should save their highest referral bonuses for the least specific positions. Why? Because a position with very specific qualifications (say, someone familiar with a specific programming language) requires a very specific type of applicant. If you happen to know one who’s looking for a job, you’re likely to pass the information on, but a job with very general qualifications (say, a “project manager”) is less likely to
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fire any immediate light bulbs in your head, and you may need a little more incentive to reach out to potential candidates for that job.
This is an example of how different kinds of information flow through different kinds of network connections. You may see your neighbor every day and be acutely aware of when she gets a new haircut or buys a new car, but have no idea of what her job qualifications may be — whereas you may be familiar with a former coworker’s job qualifications but have no idea whether he has a new haircut, a new spouse, or even whether he’s living or dead. Separating “strong ties” from “weak ties” makes sense, but it doesn’t do justice to the complexity of human relationships.
Find a structural hole and jump in!
You’re probably already starting to see the tremendous value of network analysis for businesspeople. In the business world, information is money: a tip about anything from a cheap supplier to a competitor’s marketing campaign to an under-the-table merger discussion can inform strategic decisions that might yield millions of dollars in profits. Where does this information come from? You might catch it on TV or in the newspaper, but that’s information everyone knows. The most profitable information likely comes through network connections that provide “inside” information.
And it isn’t just information that travels through network connections — it’s influence as well. If you have a connection at another company, you can possibly ask your connection to prod that company to do business with yours, to shun a competitor, or to hold off on the launch of a product.
So clearly, any businessperson wants to increase their personal network . . .
but it doesn’t make sense to just add contacts willy-nilly. For one thing, you can’t productively maintain an overly large number of social ties (even weak ones), so you have to pick and choose. For another thing, everyone wants to feel special, and if you’re “friends” with everyone, well, everyone is likely to know that and will not consider you a particularly special friend. Good luck exercising influence in that situation!
The question, then, becomes which network ties you want to build and maintain. Sociologist Ronald Burt’s research suggests that you pay particular attention to building ties across “structural holes.”
What’s a structural hole? Think about a network map, with dense clusters of people who know one another well and just a relatively few ties connecting those clusters. Between some clusters, there may be no ties at all. For Burt, these places where not many ties exist are structural holes — gaps in the network structure. The best-positioned people in a network, says Burt, are not the people at the center of dense clusters but rather the people who fill the structural holes.
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Inside information: It’s a good thing
In December 2001, homemaking maven Martha Stewart sold all her shares of stock in a drug company called ImClone. Her timing was extremely good because shortly after Stewart’s divestment it was announced that a key product ImClone was developing had not been approved by the U.S. Food and Drug Administration (FDA) — news that caused the stock price to plummet. Had she not sold the stock, Stewart would have lost nearly $50,000. Stewart’s decision later attracted scrutiny because her friend Sam Waksal, ImClone’s CEO, had known about the FDA decision before it was made public. Stewart was found guilty of lying to the government in a subsequent investigation and spent time in jail, though she continued to maintain that she had not received any inside information from Waksal.
Why would it be a problem if she had received a tip from her friend? Because in the United States and most other countries, it is illegal to exchange certain kinds of information about
publicly held companies. That law exists to even the playing field between the Martha Stewarts of the world, who know many powerful people, and the rest of us, who don’t.
The law against “insider trading” is, in effect, the government’s official acknowledgement that network ties can be a source of profit. There is supposed to be one official bridge — the corporate spokesperson — between the cluster of people who know what’s happening in a company and the many people who invest in that company. Through her friend Sam, Martha Stewart had a network tie bridging that structural hole: a tie that she allegedly cashed in on to the tune of about $50,000 at the expense of the people she sold the stock to, people who didn’t have access to the information she did.
This is an extreme case of a valuable network tie, but all your network ties are potentially valuable . . . especially the ones you keep to yourself.
The people at the center of dense clusters may know a lot of people well, but if it’s a close-knit group — say, a small company — all those other people know each other well, too, and don’t have to rely on any one person for information. You don’t actually need to know that many people, Burt’s work suggests, or even know them very well, just so long as they don’t know each other. When that’s the case, each group relies on you for information about the other group. You have information both groups want, and you can sell that information at a profit.
This may sound nefarious, like being a double agent spying for two different countries. A double-agent superspy is certainly filling a structural hole . . . but then, so are all these people:
Movie producers: connecting filmmakers with actors, studios, financial backers, and other groups necessary to make a movie.
Realtors: connecting house buyers and house sellers.
High school counselors: connecting students and college admission officers.