Social Networks and Online Communities Create Elastic Ties and Surprisingly Powerful Pay-Offs


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More than 107 million users are on The business-networking site LinkedIn has seen more than a 300 percent annual growth of member professionals. Italian-auto lovers and others are passionately participating in

Why are people flocking into online social networks? What are the sustaining motivations? When you look at the social-psychological perspective underpinnings, you’ll find that this new powerful medium works by creating social capital—and building strong relationships with, not customers but, rather, active participants.

A simple definition of social is whether or not an individual participates and contributes to the group. If people do, they are being social. If not, they are asocial. The level of involvement determines the value to the individual, the other participants and the company behind the site. What does the individual get for this social participation?

People who actively pursue weak-tie relationships stand to gain substantial benefits.

Sociologists call the benefit social capital. In simple terms, social capital is like a “favor bank.” More precisely, it accrues to each individual when members of the social group adhere to the norm of generalized reciprocity: I’ll do this for you without expecting anything specific back from you, in the confident expectation that someone else will do something for me down the road.

Societies and even subgroups within a society that are characterized by generalized reciprocity are more economically successful; the people are happier and healthier; and they live longer. The key is trustworthiness. Low trust causes what Stephen M.R. Covey, author of The SPEED of Trust, calls a low-trust tax. Everything costs more, takes longer and is less pleasant.

Social ties

Social networks typically have, in sociological terms, weak-tie relationships. That means that the participants do not know each other well, moving in different social circles with less overlapping knowledge than, say, close friends. Following this theory, you can view social networking sites like—where members invite other members to join unique professional networks—as potentially powerful because of the size of the network. Even though most of the relationships are weak, they are valuable in their access to people and resources outside an individual member’s direct network. Social networks give individuals the bridging social capital necessary to gain perspective, broad insights and the connections to act.

Joining Linkedin is simple and free for the standard service. A prospective member need only to click on “join now,” filled out a profile and start building a network. A new executive signs up every 23 minutes. And more than 4,000 CEOs search the network every day. What are they looking for? Employees, consultants and potential business associates.

The power of online social networks comes, not from whom you know directly, but from the people the people you know know. People who actively pursue weak-tie relationships stand to gain substantial benefits. They can quickly take advantage of emerging opportunities, find collaborators, find jobs, find employees and build a pool of advocates.

The stronger the social capital, the more efficiently the group can function. As members learn that others are not operating with a hidden or one-sided agenda, they gain trust, enabling them to become more open and collaborative. Group members help each other simplify things in a fast-changing and increasingly complex world. The development of these strong-tie relationships means the group is limited in size. It is these strong-tie relationships that define it as a community. Communities provide the bonding social capital that produces the openness required to address big-picture issues.

Building online communities is not so straightforward, especially for companies. The level of suspicion and distrust of others, especially businesses, is substantial. The more companies focus on selling “things,” the more their actions trigger suspicion. However, when a company’s actions lead to “hopeful trust” on the part of the customer, they have a shot at community building. This “hope” is that the other party is interested and capable of helping customers address their issues and that they would have more fulfilling customer experiences.

Common interests

Larry Chase’s Web Digest for Marketers illustrates how a newsletter can foster communities of interest. Each week, the free newsletter provides more than 40,000 subscribers with a list of web sites that deal with common and contemporary marketing challenges. In addition to the providing the URL, the team at Larry Chase provides a short and informative description of what each site is about and why it is worth visiting. A few months ago, a speaker at a conference was asked how she keeps her team up to date and actively pursuing leading-edge ideas. Her answer:

Every week, we divvy-up the sites mentioned in Larry Chases’ digest. Each member reviews the assigned site with an eye open for how we can capitalize on the ideas. Our subsequent discussions are extremely energizing and lead to great strategies and tactics.

Based on the number of people who asked for the link to subscribe, this is now a common practice. Larry Chase fueled a community of common interest and has become an indispensable resource in a world of information overload.

The community,, is a brilliant example of a by-design site. It is sponsored by Dove soap, but it doesn’t sell soap. It “sells” people on Dove as a company. The focus is on helping young girls deal with self-esteem issues in a society that confronts them with unrealistic expectations about beauty. This extremely content-rich site draws young woman back time and time again. As many as 200,000 per month come for the advice as well as for ways they can deal with personal issues and help others deal with theirs. The community also includes an active role for moms and mentors.

Dove benefits from the community by building the credibility and trust that is critical to strong long-term relationships. Other companies use communities to solve more pragmatic problems. Symantec, for example, uses a wiki to build a highly interactive community of users who help each other deal with implementation issues—everyone wins.

Social capital contributes to an individual’s economic welfare and quality of life. Social networks connect you with people you don’t know personally and allow you to gain their insights and influence. Online communities are powerful brain trusts helping individuals face challenges and get more out of their lives. When used effectively, networks and communities play an essential role in helping people deal with the realities of today’s fast-paced and complex world.

John Todor
John I. Todor, Ph.D. is the Managing Partner of the MindShift Innovation, a firm that helps executives confront the volatility and complexity of the marketplace. We engage executives in a process that tackles two critical challenges: envisioning new possibilities for creating and delivering value to customers and, fostering employee engagement in the innovation and alignment of business practices to deliver on the new possibilities. Follow me on Twitter @johntodor


  1. You’ve aptly outlined the link between these social media tools and social capital. Their contribution to brand/customer equity is already a subject of widespread discussion. In this era of knowledge management and elearning, two more dimensions of social media’s contribution cannot be ignored-
    1.A tool for building a company’s knowledge capital and
    2.A tool for learning.

    Organisations have started harnessing collaborative intelligence for learning leading to cognitive involvement of the community members. Research has already proven the positive correlation between interactivity and learning outcomes. Interactivity interfaced with technology not only increases learning effectiveness, but also enhances the knowledge base of the community which includes organizational employees, customers and partners.

    Be it the Microsoft Developer Network which hosts a series of employee blogs to share tips on software, programming tips and solutions to programming issues or the GE research blogs, or the Sun Microsystem employee Blogs, the volume of company specific knowledge available on these is huge. Sun Microsystem CEO Jonathan Schwartz uses his blog for product announcements and discussion of new knowledge issues as part of his bid to interact with the community. Think of a layman’s ability to gain access to Sun’s whitepaper on multiplatform virtualisation through his online blog!!!!

    The accumulation of this company specific information have also made these blogs/online communities virtual repositories to be tapped whenever required. For that matter, think of the quantum of knowledge that can be retrieved regarding a person’s work in an organisation once he leaves, through his contributions to his blogs etc. The knowhow which is a function of a person’s experience, information, knowledge and learning is vast.The human capital may be dynamic, but the knowledge capital stays with the organisation!!!!!

  2. John, Vandana

    Great post. It is always good to see Mark Granovetter’s 1973 work on the strength of weak ties in the news. And Duncan Watt’s 1999 work on small world networks too. Both are part of the foundation of what we know about dynamic social networks.

    I think we need to be a bit careful in not pushing online social networks too far though. To where they do not really fit. There is growing evidence that much of the power of social networks is local, not global. That it is through friends, rather than through strangers. That it is still face-to-face (or at least phone-to-phone), not virtual. And that MySpace, Facebook and LinkedIn are the exception, rather than the rule.

    We should never forget that it is the social network that is important, not the sexy on-line tools that support them.

    Graham Hill
    Independent CRM Consultant
    Interim CRM Manager

    Gunning Fog Index: 9

  3. Agree with Graham absolutely that it is the social network that is important, not the on-line tools that support them. But, talking about communities, i dont agree wholly with the local/not global nature of these communities…
    An interesting article on The 4 types of community talks about big and small, local and global communities.When they talk about something like Netroots nation, i’d tend to differ on the ‘friends coming together concept’….
    ” Netroots is ….community that uses the internet and blogs as primary tools for expressing viewpoints; building consensus; acting to change the status quo; mobilizing huge numbers of people and informing each other and the world about current events, grassroots actions, networks, meetings and policy.”
    In this case, a set of people converge together and primarily use these online tools for making/mobilising more people come together-appears the reverse way here..the network is developing because of the tool..strangers coming together!!

  4. Vandana

    Thanks for your comment. And for your push-back. If only more people pushed-back with other points-of-view, rather than just glad-handing sometimes very average posts.

    I stick by what I said. And having looked at Ben & Jackie’s post, for once, I do not agree with them. Their model is just too simplistic or even wrong; like nearly all four-box models are. The real world is much more subtle than that.

    If I look at the real social networks of which I am a member, the main ones in no particular order are: extended family (personal), KÖln (local friends), CustomerThink (CRM), LinkedIn (business contacts), Toyota Deutschland (long-term client), CACI Sophron (work colleagues), Telecoms Social Networkers (social network analysis in telecoms peers), Conference Goers (freinds from the 30 plus conferences I have spoken at recently), Co-creation Club (customer-driven innovation peers), Ex-PwC (former employer), London University (undergrad studies) and Edinburgh University (postgrad studies). Of the 12 networks, 10 are made up of people that I have met through common experiences or interests. Of the other two, CRMGuru is mostly virtual, although I have met many of the other Gurus, and LinkedIn is almost entirely members of other networks I know well enough to invite.

    I suspect that most other people’s networks will also be largely local, long-standing, friends, rather than global, fleeting, acquaintances. Unless you are Robert Scoble, that is.

    I am a member of Facebook too. But to be honest, I see less and less value in it, particularly as it seems happy to abuse my trust by selling my data to the highest advertising bidder. And don’t even get me started on its malware problems.

    Graham Hill
    Independent CRM Consultant
    Interim CRM Manager

    Gunning Fog Index: 12

  5. Dear Graham,
    Thanx for the response. Regret if my post appeared like a pushback. I have found great intellectual content in your posts and responses…in fact at times you give a much wider perspective to an otherwise constrained thought process…and by pointing an arrow in another direction, open up a completely new line of thought…that’s what makes the most sense considering that we are trying to benefit from the community!!

  6. Graham and Vandana,

    Thank you for your comments. Vandana, I think Graham was complementing and encouraging you for you push-back. The issues we are discussing are not well laid out and therefore we need other to challenge our thinking so it can improve and in the process help others. By the way, this blog,the comments and push-backs, are a good example of an online community at work.

    Graham, I suspect we are not really very far apart on the role of social media or social networks. First, I think the most important role is in how they can offline experiences and relationships. In general, I agree with you about Facebook and the way most people are using it. It is a virtual toy where playing with it is an end-it-itself. For me the playing has lost value. I am, however, seeing some interesting ways that Facebook is being used to stimulate desire and motivate involvement. I will be writing about this soon.

    I just posted a blog titled: Social Media is NOT the Conversation. I think it germane to this discussion. Let me know what you think.

    John I. Todor, Ph.D.
    Author of Addicted Customers: How to Get Them Hooked on Your Company.

  7. Vandana, John


    As John writes, I was complementing you on pushing-back with your own, well researched, well thought-through opinions. Push-back is good. It is always great to hear different points of view and the assumptions up on which they are based. It helps us all to enrich our understanding of an exciting new business area. Keep up the great work.


    I will be interested to read your forthcoming facebook post.

    Graham Hill
    Independent CRM Consultant
    Interim CRM Manager


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