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The power of Swiss Cheese

Link to Primary Source (Ronald S. Burt, Structural holes: The social structure of competition):

In his famous article titled “The Strength of Weak Ties”, Mark Granovetter illustrated that weak ties are more useful than strong ties for accessing new information. The people we have weak ties with are more likely to know a completely different set of people (i.e. in different professions) than those with whom we have strong bonds. This huge array of acquaintances can be very useful in terms of hearing about new opportunities.¬†Ronald S. Burt expands on Granovetter’s approach and gives some surprising statistics in his article. He begins with a summary of types of capital we posses, and continues to elaborate on how advantageous it can be to fill a structural hole in a network.

Burt introduces three different types of capital that we posses: financial capital (i.e. the power of our checkbooks), human capital (i.e. charisma), and social capital (who we know). He distinguishes the later from the first two as the difference maker in deciding who (out of many qualified people) will receive an opportunity (job offer, faculty appointment, etc). Our social capital helps in terms of access to information, timing, and referrals. In modern times, we are constantly bombarded with information (especially in the form of e-mails). Since there is exponentially more information available than we could reasonably process, our social network acts as a type of filter. When we hear news from friends we are more likely to follow up. Timing of information is also crucial; Burt gives the example of knowing that the stock market is about to crash before it crashes. Less drastic examples (such as knowing about a job opening before it has been publicly disclosed) are significant as well. Finally, people in our social network can be crucial in recommending us for positions. In particular, acquaintances that are trusted by ‘opportunity-givers’ can help legitimize our cases.

Burt suggests that we increase the efficiency of our networks (i.e. decrease redundancy). In the most extreme case, every person we know would not know each other; that is, our network would be perfectly sparse. If incur a time investment per acquaintance and receive a payoff in the form of opportunities gained by relationships, this model yields the greatest payoff with the lowest cost; we are connected to the greatest number of different networks. We also gain an enormous amount of power because we can control the information that passes through these different networks-  we can manipulate this information to our advantage. This would suggest that we can be most powerful not in densely populated situations (i.e. a close work team), but in those where our position resembles the holes in swiss cheese. In class we examined a study that concluded that those who filled these structural holes in their organization received many advantages. Therefore, we should (at least in some situations) strive to fill the holes of communication in our networks


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September 2011