Brian Uzzi is the Richard L. Thomas Distinguished Professor of Leadership and Organizational Change at the Kellogg School of Management at Northwestern University, and his work examines social networks to chart the unwritten and often unconscious rules governing social interactions and professional success — trying to map the “wisdom of crowds.” Most of this research into social networks is done in the areas where art, science, and business converge.
In a 2005 paper for Science, Professor Uzzi and his co-authors examined 2,258 Broadway musical productions to determine the common factors present in successful collaborations. He explained the reasons behind the analysis to Kellogg World Alumni Magazine (emphasis added):
“We developed a model by which if you know how people assemble local teams, you are then able to estimate what the larger, systemic-level network structure looks like,” says Uzzi, adding that this fact can be important for analysts, investors or artists seeking to estimate the best arena to focus their energies or investments because different systemic level networks partly determine how likely it is that breakthrough innovation will emerge from the network independent of the talent of individuals within the network.
The research found that breakthrough innovations, or successful productions, most often came from teams of individuals who had previous connections with one another working alongside newcomers who had not collaborated with the group before. Because social networks can grow stagnant without an infusion of new ideas, the ideal groups avoided the under-performance common to teams who were overly comfortable with one another, but they also avoided the problems of an inexperienced team confronting challenges that none of them had encountered before.
In addition to looking at ways that social connections affect the way a business endeavor is created, Professor Uzzi has also examined how social networks affect the way that these works are received. In 2010, the Wall Street Journal discussed some of Professor Uzzi’s more recent research, which examined a survey of more than 180,000 respondents discussing 338 movies.
The Wall Street Journal article reported that pre-release buzz — the ability of a movie to infiltrate personal discussions and spread in a way similar to gossip — could directly predict box-office performance during the film’s opening weekend and beyond. While the Professor Uzzi’s research found no link between the amount of buzz a movie received through social networks when compared to the film’s advertising budget, “for Hollywood movies, the crucial tipping point occurs… when 21% of Americans are buzzing about the film.”
At the 65th CFA Institute Annual Conference in Chicago, Professor Uzzi will explore more of these connections between social contacts and business transactions during his session, Six Degrees of Separation: The Power of Social Networks to Build Business and Move Markets, You can register to attend the event to hear from Professor Uzzi about ways to build and map your personal network and the value of its connections and to hear how traders can improve performance by leveraging their networks and the wisdom of crowds. You can also follow this blog for more speaker updates as the conference draws closer.