close window 
Given an hour over breakfast, Hobart W. Williams Professor of Sociology and Strategy Ron Burt set out to make an audience of Chicago-area executives instant experts in the “thriving science” of social capital. Burt spoke at the first of a series of networking events cohosted by Chicago GSB, Northwestern’s Kellogg School of Management, and the Human Capital Institute. At Gleacher Center September 21, Burt focused on the competitive advantages of social capital.
The basic principle is that people are ubiquitously embedded in little clusters where they have a set of people with whom they interact—within an office, a project team, or a group with similar interests, he said. “Each of us goes through life embedded in little groups where we have a lot of contact with one another. And we have these other ties, other people that we know in other groups, and our lives become this amalgam of different groups with which we’re affiliated,” Burt said.
These clusters have implications for information distribution, among other things. “Anyone who tells you that data will provide an answer is a fool,” said Burt. “Data mean nothing by themselves. Data mean everything in conversations with colleagues. Can I win you over with these data? Will you agree with my interpretation of these data? In these groups, people talk about how to interpret the data we have on life as we know it.”
Because people inside each group start thinking similarly and the thinking becomes homogenous, it is only in the interaction between the small clusters that “the big differences happen,” Burt said. “It is in dealing with diversity that new ideas are created.”
The person with higher social capital is the individual who has contact with a greater number of different clusters. Burt described his research demonstrates how the person who lives at the intersection of different social worlds is more likely to encounter and appreciate new ideas and to have his or her own ideas heard, which typically leads to such career advancements as promotions and higher compensation.
On the other hand, the individual who is limits relationships to people just like himself or herself, offers pedestrian improvement on what is already known, and has difficulty communicating those ideas to other groups often suffers from slow promotions and modest compensation. Burt said the heartening point is that average people can be made more creative and valuable by the way managers organize them. “The evidence on social capital is that invention has its origins in the way you organize, not in the capabilities of individuals.”
— Jenn Q. Goddu