May 14, 2009 In today's financial crisis, networking know-how is a necessity for finding jobs and business opportunities. But a series of new studies by Dr. Yuval Kalish of the Leon Recanati Graduate School of Business Administration at Tel Aviv University suggests that, in some cases, networking can do more harm than good.
"If you're at the intersection of two previously unconnected niches of a network, you're occupying what I call a 'structural hole,'" says Dr. Kalish. Filling that space can lead to prestige, opportunities and power — or it may have quite the opposite effect.
"While it's been reported that people who occupy these 'structural holes' become more successful, some structural holes may be 'social potholes' that can harm you and your business," he warns. Both the positive and negative lessons of his unique research, he says, can be applied to business, politics, the arts, and even the military.
Power and Peace
In his latest study, reported in the Asian Journal of Social Psychology, Dr. Kalish analyzed the networks among groups of students at a teachers' college. Among group members, he found two quite different personality types: Ambitious "power-hungry" entrepreneurs who tried to keep the network closed and increase their own power, and "peace-builders" who tried to close the structural holes, bringing members of the group together to enhance the collective good.
Ultimately, he found that both ambitious entrepreneurs and socially-conscious peace-builders ran great risks in manipulating the networks and structural holes to their advantage. "Ongoing research shows that occupying a structural hole, even by the well-intentioned, is associated with short-term gains and long-term costs," says Dr. Kalish, the first to evaluate the negative impact of structural holes.
Burnouts and Blackouts
People who fill these structural holes may be putting themselves in more jeopardy than they think, Dr. Kalish says. "For example, if I'm the only connector between Arabs and Jews in a classroom rife with intergroup conflict, I'll probably burn out," says Dr. Kalish. They may be the lucky ones. "History is full of leaders who faced the negative consequences of occupying a unique structural hole. Martin Luther King is one example, and so is the insurance giant AIG."
Occupying a structural hole, Dr. Kalish says, lets you control information. Information is power, which translates to prestige and monetary benefits. But once your manipulation of information is revealed to others, you may suffer negative consequences. In the recent financial meltdown, business people and stockbrokers who transferred information between parties when they shouldn't have were the among the victims of those consequences.
Take Your Networking Advice from Madonna
Before occupying a structural hole or starting a new business venture that connects two or more niches, there are a few things to consider. The main question to ask yourself is why the structural hole exists. "One needs to stop and think first," Dr. Kalish warns. "Why is that network linkage not formed yet? Is there intergroup animosity or conflict involved? If not, and the hole is there simply because of an oversight, go and plug it," he says.
In that case, timing is the key for networking success for entrepreneurs looking for opportunities in business or the arts. "If you're playing the structural hole game, you need to occupy that hole right away and leave it quickly, as soon as others start joining. Madonna, the singer, is an excellent example of this. She connects niches, reinvents herself, gains power and prestige, then moves on as soon as others start doing similar things."
But peace-builders can make a longer-term commitment, says Dr. Kalish. "Social entrepreneurs who work on behalf of the larger community should remain authentic to themselves. They should stay in the structural hole for as long as they can and will succeed so long as they provide a clear, consistent message," he concludes.
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