Is it possible that the global financial meltdown may actually be good news for Web 2.0 social networking?
By most accounts, the economic crisis won’t spare Silicon Valley or the high-tech sector. eBay has announced layoffs, and there are rumours that Yahoo is about to push a large number of employees out the door. IT software spending at many corporations is bound to decline. Some are even comparing the current climate to the high-tech bubble bursting eight years ago.
But let’s look at the potential upside.
First, perhaps the financial crisis will force corporations to give serious consideration to putting into practice, instead of merely talking a good game, Web 2.0 strategies aimed at harnessing the productivity advantages of horizontal collaboration and open innovation. With pressures to rationalize operations, maybe now is the time for making a solid “ROI” (return on investment) case for Web 2.0. Perhaps Enterprise 2.0 is finally about to shift from evangelist vision to executed strategy
Second, an intelligent working hypothesis would be that social networking sites like LinkedIn, Plaxo, Ning — and even Facebook — will see their membership ranks soar in coming weeks and months as widespread insecurity drives people to connect with others to boost their social capital. A cynical way of putting it would be: “misery likes company”. Still, there can be no doubt that, as people worry about their financial security and career situation, many will feel motivated to plug into social networks. Anxious about their institutional status inside vertical hierarchies, people will turn to the social dynamics of horizontal networks.
On this second point – which is my main concern here – empirical data already appears to validate this hypothesis. In the spring when petrol prices were spiking, Neilson released findings that suggested people were networking online to “cope” with hard economic times. LinkedIn meanwhile has been boasting soaring membership numbers, reaching 28 million worldwide. Nobody will be surprised to learn that many of LinkedIn’s new sign-ups are coming from the financial sector, whose membership has doubled. It may be hard to feel sorry for bonus-bloated investment bankers on Wall Street and in London’s City, but many are frantically dusting off their CVs and rushing to online social networks in the hope of repositioning their careers.
A new LinkedIn survey has revealed that 42% of the network’s members feel their job security has been impacted by the economic crisis, while 13% say it’s too soon to tell. In other words, more than half of LinkedIn’s worldwide membership is scared.
But is joining LinkedIn really the answer? Or as BBC tech blogger Rory Cellan-Jones put it: “It sounds pretty desperate to me — and I still fail to see the attraction of a network where everyone is only interested in what you can offer them, rather than what you have to say.”
Cellan-Jones’ comment underlines two fundamental tensions that we analyze in some detail in Throwing Sheep in the Boardroom. The first is the tension between rational and non-rational motivations to belong to social groups. The second is the tension between “close” and “weak” social ties.
Motivations for joining social networking sites are varied and complex. At risk of oversimplifying, we can classify motivations into two broad categories: rational and non-rational. Professionals who join sites like LinkedIn are primarily motivated by rational calculations related to their career interests. Most teenagers who collect “friends” on MySpace, on the other hand, are not looking to improve their career prospects. Their social interaction is motivated primarily by a non-rational instinct to forge social bonds.
The classic conceptual dichotomy for these two impulses comes to us from 19th century German sociologist Ferdinand Tonnies: gemeinschaft versus gesellschaft. Loosely translated, gemeinschaft describes “community” identification based on common values and close bonds. Gesellschaft, by contrast, describes rational forms of association based on self-interest. MySpace is largely a gemeinschaft social networking site; LinkedIn is essentially a forum for gesellschaft interactions.
This dichotomy is complicated by an intriguing paradox. Most of us like to feel connected to others through close-knit ties or shared interests and passions. Yet in truth, we frequently depend on people with whom we maintain only “weak” ties – especially when we are looking for a job. The strength-of-weak-ties theory was famously elaborated by American sociologist Mark Granovetter. He defined “weak ties” as social relationships characterized by infrequent contact, an absence of emotional closeness, and no history of reciprocal favours. In professional parlance, you might say people in your “extended network”.
Granovetter found that we rely on “weak tie” connections much more often than we think. Most intelligent job-seekers don’t turn to close friends or family for jobs, unless they are expecting to benefit from the advantages of cronyism or nepotism. Most turn to their extended network. And most business networks are based on relatively “weak tie” associations.
Which brings us back to the economic downturn. When out-of-work investment bankers scramble to sign up to LinkedIn, they are making a rational calculation. They’re not looking for friends; they are seeking to leverage the strength of weak ties.
What happens, however, when people start invading Facebook – where “friend” values are embedded in the site’s social etiquette – to network for career reasons? It’s easy to see how a tension between gemeinschaft instincts and gesellschaft calculations could create some social conflict on Facebook. And yet Facebook is cluttered with self-promoters, career artists, and marketing entrepreneurs. Can these people really be considered “friends”, even when defined as “weak” ties? Just how many Facebook “friends” can we reasonably have anyway?
Anthropologists tell us that it’s impossible to maintain stable social relationships with more than 150 people. This is widely known as “Dunbar’s Number“, named after British anthropologist Robin Dunbar, who argued that the necessary ritual of “social grooming” breaks down in groups whose membership exceeds roughly 150. Interestingly, the social networking site, Friendster, originally capped the number of any one member’s “friends” at — you guessed it — 150.
If we apply Dunbar’s figure to all social networking sites, any “friend” list that exceeds 150 is not credible — and pushes social networking into the zone rational calculation. Maintaining a professional network of more than 150 connections on LinkedIn might be plausible, but it would appear to be humanly impossible to maintain social relations with more than 150 different people. And yet many Facebook profiles — including mine — feature “friend” lists that not only surpass that figure, but double, triple, and quadruple it. Some Facebook “friend” lists count in the thousands. Which leads to the question: is the virtual world exempt from basic laws of socio-anthropology?
While we ponder that question, it’s a safe bet that the economic downturn will accelerate the trend towards a blurring between non-rational instincts to connect socially with like-minded people and rational calculations to build a social network for self-interested reasons.