The Shadow Knows

Age-Old Theory

Social network analysis can trace its origins to the 1930s, when sociologists began using tools called sociograms to map patterns of personal connection among members of a group. Sociometry, as the emerging discipline came to be known, was further refined after World War II, but until recently, social network mapping remained of interest mainly to academics. The key to making network mapping useful to businesses was the availability of personal computers that could analyze and graphically display even very complex social networks quickly and inexpensively.

Organizational network mapping, as the practice is also known, still isn't quite ready for prime time, however. "There are a few of us who know the tools and can do it," says Eric Darr, a social network analysis consultant who works out of Ernst & Young's Philadelphia office. "But to make it mainstream, it needs to be made easier."

Social network mapping's benefits to businesses are already proven. Tracking informal relationships within your company can explain how and why new hires either succeed or fail to assimilate into your corporate culture. It can also explain why failure dogs efforts to boost work-force diversity, says Krebs. "You can get two people with identical abilities and resumes, but one is a white male and the other is a black female," he says. "A year later, one will have connected to the right information flows and will perform better, not because of ability but because of better connections."

Similar factors control how well a company retains valuable employees, especially new hires. Workers are more loyal and perform better when integrated into a shadow organization. "Employees who are well-connected into a social network," says Darr, "are less likely to leave." Companies undergoing mergers have found that social network mapping illuminates unsuspected leaders and other employees who control influence and information flows--both of which may be critical to conducting an optimal reorganization.

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This article was originally published in the January 2000 print edition of Entrepreneur with the headline: The Shadow Knows.

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