All right. Let's talk a little bit more about social capital. So we heard about the concept before, and it describes, very basically. >> Well the value people can get from their interpersonal relationship. >> That's right. Yeah. Whatever that value might be, right, so, the question is, what kind of network do you want? Right? What is more valuable. And we heard that there are two directly opposed views, right? The Coleman view, that value comes from the fact that all the people you know are also interconnected, so you have a densely connected network and that is characterized by closure. And then you have the view which says that what actually brings value is a network that is characterized by Structural holes, right. And your ability, as a broker, to bridge those structural holes, actually what brings information or kind of other benefits kinda to the network. Okay, so those are the two views. Let's talk about what they actually do, kind of what impact they have, right, these different structures. With a practical example so I'm going to use your networks fictionalized. There we go, so let's start with [INAUDIBLE]. [INAUDIBLE] you are connected to [INAUDIBLE] ,who is a motivational speaker, and she travels around the world and knows a lot of people. In all kinds of countries, and she is married to Hank. And Hank is a CEO, and he is very well connected. The business community, of course, being a CEO. So, he has lots of ties, himself. They see each other about twice a year because they're both very, very busy. So that's a very thin tie. But you see actually quite a bit. And you also know me, France. I'm an academic, I don't know anybody because I never leave my office, right? And then we have Josh's network. Josh, you know lots of people. That all work in your department. You know Mario, your best friend, and his pal, Luigi. You know them both. You know Antonio, and Antonio knows Mario. You know Nico, and you know Carlo, and you'll always go out together. And, basically, almost everybody knows everybody else there, right? So a very densely interconnected network. And, of course, you know Freda and you know me, all right? So we notice that Frederica has fewer direct ties, all right, just one, two, three. Than Josh does. So, for Josh it's one, two, three, four, five, six, seven. But the networks look very different, right? A densely interconnected network for Josh and a very open, kind of brokeraged network for Frederica. So, let's take those as our stereotypical representations and talk about what they actually mean. Let's talk about the functions that this network of ties has for you. All right, so let's talk about the information and knowledge exchange. Why do you think it is that we actually rely on information from our social ties more than from other sources? What do you think? >> Well, you trust them better. They're easier to access. >> Yeah, and why do you trust them better? >> Cuz you know those people, and they already to you. >> A long history, right? >> Yeah, a long history with them. >> Yeah, it is, because you either like and you trust them, or because you know what they're talking about, so it's kind of a competence based trust thing. Yeah, so that could be one reason. Any other reason why you will draw on your ties for that? >> Well they may have a different perspective from mine. >> Maybe, right. We'll get to that in a moment, yeah. >> So we can learn something different. >> Yeah, I have to say it's not in the cards for you with your network, but we'll explain why that is. >> Yap, they could also just be a convenient filter. So you don't have to search for other sources or wade through the ocean of information that's out there. You have basically these channels already that you have through your contacts. And that makes it more convenient. It's a less costly search, if you will, okay. This information exchange through social ties happens at any level of the organization. People have looked at this at the highest level, the board level of organizations. They have found that interlocks between companies, basically board members sitting on multiple boards of multiple companies The day also serve as an informational conduct. So, the board member of JP Morgan Chase also sits on the board of Dell. Right, that's a board interlock and there's some information that flows back and forth there, and people have shown that, that actually leads to adaptation of similar strategies, similar organizational structure, or poison pill adoption to defend against merger acquisition, all that stuff, right. So it happens at the highest level of the organization. Clearly everybody else, everywhere else too, right? If you work in a corporate strategy group and you actually have a buddy who works in sales, chances are you're gonna get some really nice and gritty information from the front line, right, from what's really happening in the market. That you cannot find anywhere else, so it is privileged information that you get out of that. So that can be an advantage. George let us start with you to see what kind of benefits you get out of your network from your information perspective. You are connected to a lot of people, but they are densely connected amongst each other. What do you think is the benefit? Well, I think I can trust information from them, since I know them individually. >> Yep. >> So, I think their reliability on the information is greater. >> Exactly, right? Both because you know them already for a long time and you know people that also know them that can vouch for the quality, the reliability, so on and so forth. So, dependability is higher as you say, reliability is higher, coordination is much easier because there's a lot of information flow that goes back and forth. And there is a lot of trust that people have because of these interconnections. But also might have disadvantages. Because there's so many interconnections there, chances that there is a new idea coming up, because you don't have a lot of ties that go beyond the group. Is lower, you know. So, you not feeding into it, you better use that contact, right? But within the group there might not be as much novel information coming up and there might be even some conformity pressures in the group, that if you're the only one with a dissenting opinion the others might actually pressure you to conform with the group, with the group way of thinking. So, you can get the group thing there. You have this kinda Echo Chamber effect, that everybody that you talk to be tell you the same thing and there's not another thought in sight. Fill your network, very different brokerage, very open, what kind of info benefits do you get from that. >> Well, I get a lot of diverse information. And the information I get are very unique because each of my direct ties has no access to it without me. >> Exactly. So you might be able to actually pass on information that is really novel, right? To your other contacts. And because your contacts are also again connected, at least one of your contact's connected very broadly There's a lot of opportunity there to pull in new ideas from all kinds of areas. Now, the one downside to that open structure is that the ideas that you pass on, because your contacts don't know each other, they might have a little apprehension of how trustworthy and how reliable that information really is, right? If you pass information from me, some New academic idea to treat you for example, she might not know whether she can really implement that. There might be a little risk there, like here so if we're not that closely connected, why should I adopt that idea? What really is important for example to make the teacher accept the idea that you pass on is how strong the connection to you is, right? How much does she actually trust you? And that's something one of my former colleagues said, actually found, he looked at production teams and artistic teams in Broadway, right? For Broadway musicals. And the ones that were most successful, both critically and financially, were actually the teams that had some ties to artists that had previously worked in other groups. Right? But those connections were very, very strong. So they had a chance to actually bring together different conventions, different styles. But they trusted each other to a degree that they were willing to take the risks of bringing that together. I say you get the best of both worlds of brokers and closers to some degree. One of the information benefits that you might actually get out of your network is that you hear about promotion or travel opportunities. So that's the mobility benefit if you will. So let's think about that for a moment. Your lead people work on there, work with their relationship and through their relationships to try to find new job opportunities, to hear about promotions. In your network, Josh, what kind of opportunities would you get? >> Well, if one of my friends, they know there's an opening, they probably will give me a personal. >> Yeah. >> Since I'm close to them. >> [LAUGH] So they give you preferential treatment, yeah? If they get promoted. That could happen, right? They think of you. If you applied with one of them, >> They probably like the application also, because they know you, they trust you. So there's a lot of loyalty in the group that could be beneficial. And that can be very beneficial in situations where a company's in trouble, where you need to keep your job. So think of, you work for General Motors, and they go through bankruptcy. You wanna make sure that you have a lot of people that you have really strong connections with. That really like what you're doing. You're a good company man, and that keeps you your job, right. It's also good to actually ensure relatively steady, reliable career progression in companies, right? You have a lot of people that know you well. And within that organization, you then steadily rise through the ranks. What would it look like for you, Federica? So you're very different at work, what opportunities do you get? Well, apparently, learn about opportunities that are very distant from me. And through all these indirect ties that I have. >> Is it a good thing? >> Well, it's a good thing because my opportunity spectrum will be very broad. >> Yeah. So, if your own industry, for example, is going through some kind of valley, some kind of crisis you hear about all these other opportunities out there that are beyond your own organization, maybe beyond your industry. Maybe even beyond your country that you're currently operating in, so they can really be beneficial. Very broad set through these indirect ties that you have in your network. Now there is a risk, of course, associated with that. >> You still have to translate those opportunities to actual, actual job, like being considered for a job is very different from being informed about an opportunity, and these people don't necessarily trust me, cuz I'm not very close to them. >> Exactly. So that is the barrier that you have to overcome here. So broad opportunity set, but a risk to actually translate those opportunities. So, the important thing here for Fredericka's network is she can draw on these indirect ties or weak ties, so that people that she doesn't regularly interact with to give her opportunities and this is something that people find is characterizes people who have successful careers si that they were able to read through those weak ties. Into other companies, into other industries to further their careers. And a famous story about Mariah Carey is how she got her big break. I don't know if you know how she go her first record contract? She tried based purely on merit. Sent her tape out everywhere to all record labels. They never wrote back. She was struggling as a waitress in a crummy apartment, New York. Very impressed that you didn't recreate and go anywhere. And she had an acquaintance, really just a fleeting acquaintance for Anna K Starr who was actually a big star at the time, though not very well remembered nowadays but she invited to a record label party and at that party she met Tony Muscleo. She gave him he was CEO of Columbia records. He gave him your tape. Wrote your name on it. He listened to it in his car after the party, fell in love, and then tried to find her to give her a contract, and then later ended up marrying her as well. And, so, it was not just the merit of her of her beautiful voice. She needed to be connected to the right person. And the person that did it for her is somebody that she didn't even know very well, right? And that often happens. As we see, there are these opportunities from big ties. Now when Federika applies, and you said you have to create that credibility that you're the right person for the job and that it's a barrier there you have to overcome. In an individualist country, contacts If you were applying in the U.S., for example, if you are clearly somebody who is connected to all these different spheres, as kind of a free agent, a broker, that can be a positive association, right? People like that. They think you are independent, you are flexible, you're agile, you're a go-getter. But in collectivist countries, Asian countries, by and large. There is a different attribution to that with the belief is not there that an individual person has that mud agency and can do that much. It's the group that has the agency. So if you've never been part of a tightly knit group that can actually be detrimental, right? So here Josh would be the right man because he has being part of a group. It's proven effective in that context and the attribution is are you going to be like that again, in the next job. There is a cultural twist here with how beneficial these different structures are as well. Alright, the last aspect of the networks I want to talk to you about is power. So information access is nice, job availability is nice. But power is even nicer. So let's think about what the power basis or power benefits of your individual networks are. So Josh, for you, with your network, what would be your power advantage? >> Well for my case, I think I would have a stronger connective power, so I can reform a social alliance with my friends. Other members. >> Yeah, so the common enemy. You can mobilize your friends. You can ask them for favors, right? And you can ask them basically for that favor without any immediate need for reciprocation, where you don't have to give them something for that. It's based on the trust and loyalty that's in the group. You can mobilize that, or you can count on that. As a point to be there. That's a little more difficult for right? >> Yeah, right. But on the other side I didn't have to pay any favor to the others cuz I'm not tied to them. >> That's right, so how do you. So how can you influence people then? >> Well I can give them unique information they wouldn't have otherwise. That's the kind of information I managed to have with my brokerage role. >> Exactly. Well that's what you could trade essentially the information against a few that they can pay you other information or some kind of support that they could give you in return, right? So yeah. You can't just call in favors, but you can trade on your position essentially. And the control that you have over information flow is really critical, right you really can benefit from the information yourself and you can decide whether or not to actually share that and who to share it with. And this benefit is something that brokers fiercely protect often, that they don't want the people that they are, that they kind of bridge with this bridge structure they don't want that hole to be closed, because then they lose their power advantage. So sometimes for leaders that is the case that they don't really encourage strengthening of relationships in their team. They want to be the one in the middle that kind of arbitrates everything. And they can become a bottleneck because of that, right? So it's not a great kind of leadership approach. In that sense. So there is power in the broker's position but there's also responsibility right. That you want to think about, that you don't want to be the only one who can make those connections, right. If you're away, if you're sick, if you leave the organization the group would suffer tremendously if you're not available any, anymore, right? So two very different power bases, but both of their advantages and disadvantages, right? So, now that we know about the benefits, information benefits, benefits and power benefits of different configurations, clearly as leaders you wanna know how do these networks emerge in the first place and what you can do to actually deliberately strategically shape that both for the benefit of the two and that's what we're going to talk about next.
