Chicago Booth Review Podcast What Are We Losing When Work Gets More Efficient?

Episode Transcript

Hal Weitzman: Modern management is all about making the workplace more efficient, but what is the cost of that efficiency? Welcome to the Chicago Booth Review Podcast, where we bring you groundbreaking insights in a clear and straightforward way. I'm Hal Weitzman, and today I'm talking with John Burrows, whose new book on social capital argues that in the pursuit of a more efficient workplace, companies are missing out on innovation and individuals are missing out on professional development. This is the first of two podcasts about the book. So what is social capital? Why is it important? And how do we develop it? John Burrows, welcome to the Chicago Booth Review Podcast.

John Burrows: Glad to be here, Hal.

Hal Weitzman: Now we're here because you've written this wonderful book with your colleague, Seth Rachlin, Social Capital at Work: Building the Hidden Asset That Drives Trust, Engagement, and Performance. And I have to tell you, this is a great book. It's not an academic book. It's a popular book. It reads like a popular book, loads of story. You're a great storyteller. So first of all, congratulations on the book, which is thrilling.

John Burrows: Thank you.

Hal Weitzman: And you know, because I bumped into you a couple of days ago, because we have kind of an informal network, I guess, around U Chicago that I was kind of behind on reading this. So I had fun day yesterday. It was beautiful weather and I read basically the whole of the book. And it's such an easy read and so fun to read and so insightful. So first, let's start with this. Social capital at work. What is social capital? Because we know a lot about various kinds of capital. We might be getting capital fatigue, but we'll make room for social capital. What is it and why should companies think of this as a real asset?

John Burrows: Yeah. So let's take a step back. I mean, I'm going to say that there are three forms of capital, or at least we should focus for now on three forms of capital. Economic capital is well understood. We're in a business school. We all know what economic capital is. We use the money, we can hire people, we can build factories, we can buy the raw materials. We then have human capital. Interestingly, a term coined here at U Chicago by Gary Becker. Human capital is an understanding of individual level attributes and skills, the various things we teach in our classroom. So I'm learning accounting, I'm learning to negotiate, I'm learning these discrete skills. It's your resume, if you will.

Social capital is the shape and structure of relationships around each of us. And I would argue that is distinct from human capital. Sometimes gets globbed together and I think that's a category error and quite a substantial mistake. But Jim Coleman also, a sociologist at U Chicago in the late '80s operationalized, didn't coin the term social capital, but sort of wrote the theory around it. And the narrative focus for him was the co-evolution of human and social capital. I think one way to bring this alive for listeners would be to look at David Beckham.

David Beckham, when he was at Manchester United, was a star player. What was he known particularly well for? Kicking a stationary ball. He was very good at free kicks and also corner kicks. So Real Madrid buy him. But they're assessing him from his human capital. What skills did David Beckham have as David Beckham? He comes to Real Madrid and the magic isn't there. Why is the magic not there? Because he doesn't have the supporting cast of characters, the people who trust him, know where he's going to place the ball, know where to look like they were fouled in order to get a free kick in the right location.

Groysberg, a professor at Harvard, looked at equity research analysts who moved from being a star in one bank to another bank. And what he saw is those who went individually really struggled and those who took their team or later brought the team with them didn't struggle. There's a very real sense in which the unit of analysis we want to focus on is the star is the network, is the cluster of people. And I would say I felt this acutely an earlier point in my career. I worked in enterprise software sales at a company called Siebel and then I was at Accenture. I was pretty damn good at what I did there. Then I moved to Accenture. I was a direct admit partner in my early to mid-thirties and I sucked. I sucked in part because-

Hal Weitzman: The team.

John Burrows: ... the team around me. I was now competing against other people of a similar age, most of whom had spent their entire career since college at Accenture, making those relationships, building that trust and rapport. And suddenly I was playing catch up in a very big way.

Hal Weitzman: So it wasn't that you didn't have the skills or something had changed. What changed was you were suddenly playing in a new team and they didn't know exactly what your moves... It kind of reminds me of when the bass player leaves from your favorite band or whatever and suddenly the magic is gone. So you found yourself in a different band and it didn't quite work. Does that mean if you had stayed there longer, thank God you didn't because you came to us at U Chicago, but if you'd stayed there longer, you would have formed those relationships and returned to your former performance?

John Burrows: I think over time, yes. But it takes a long time and takes a lot of structured thinking and methodical tasks, the kinds of things that the book works through. We wrote this book for a number of reasons, one of which is there are lots of deep technical books written by the likes of Booth's Ron Burt, who I was grateful enough to study under. And then there are a handful of lightweight popular books on the value of networking, but it wasn't a very solid book that basically said, "Here's the problem or the set of problems that have been caused by the degradation of social capital. Is that societal? Is it organizational? Is it both?" And not just a lamentation but, "Here are some concrete steps that both individuals, junior individuals included, as well as more senior people might take to begin to remedy these things."

Hal Weitzman: You have these plays. It's a playbook. It's a project book. So that makes a lot of sense. It's so interesting that you talk about sport because I feel like in sport they take it much more seriously than in business. If I compare the way that a team would prepare in my imagination, because I haven't seen it, to team building "exercises" that we do in corporate life, which we all kind of look at our watch or check our email in between and think, "When is the day going to end?" And I can get done with the raft building and the conceptual problems.

John Burrows: I agree-

Hal Weitzman: We don't take it seriously enough, right?

John Burrows: I agree. I think the world of professional sports is a really terrific example of sophisticated analytics and thinking often being done in those worlds. Think of Moneyball, both the book and the movie is sort of making a move from intuition based decision making, old coaches going out and looking to, "Let's crunch numbers and let's figure out, let's use our Yale economist undergrad to figure out what does it actually take to win a game." And it isn't necessarily home runs, it's just accruing points laboriously.

We can look at basketball teams. There's some research that looks at if we look at the group of players on the court right now and what happens when one is injured and is injured for multiple weeks, right? Team performance can struggle initially, dips as you would expect. What's counterintuitive, but the data suggests is the performance of the team surprisingly returns to its sort of previous level, even with the player absent.

What is really interesting and has been assessed is actually if you then bring the player back, the team performance actually improves beyond where it was earlier. And I think there are some lessons that we might take in the corporate sphere that kind of parallel that.

Hal Weitzman: What does that tell us, that sometimes we over depend on some ties?

John Burrows: I think that's exactly it. I think we've got certain people who are overwhelmed because they're the go-to people.

Hal Weitzman: Pass it to John.

John Burrows: Exactly.

Hal Weitzman: Get the ball to John.

John Burrows: Get the ball... Exactly. And I think it can be exhausting-

Hal Weitzman: Definitely not me. It would be you in that case.

John Burrows: ... but it also keeps other people out from the development opportunity. If I'm always the one with the ball, I may be the best player right now, maybe really the great striker, but what about the people sort of sitting in my shadow who aren't getting the opportunity to upskill themselves? If I take a three-month leave of absence, they get to upskill themselves. I return and now we're all arguably functioning at a better level.

Hal Weitzman: Right. Now some people will be listening to this and saying, "Oh, I know what this is. It's the old boy network. It's the sort of country club black ball system where I'm cut out or marginalized groups have been cut out." How do you respond to that?

John Burrows: No, it's a good question. Look, Steven Durlauf, a colleague of mine at Harris is an ardent critic of social capital in part on these grounds. Lauren Rivera, she's a sociologist at Kellogg at Northwestern, has written multiple books on this topic. So there's no question the old boys network is a thing. Informal networks exist. I think what I want to argue, and Seth and I are arguing in this book is you as individuals can take measures to overcome those barriers. We can build our own social networks. We can build relationships with certain people.

So there's a nice story in the book about my friend, Caroline Johnson. She went to the Naval Academy and ultimately ended up flying as a real weaponsy officer, the FA-18, served as an aid to a three-star admiral. But she said early in her career at the academy, she found herself as a non-Navy brat in this sort of situation that nearly everyone she was competing against was the son of an admiral or the daughter of an admiral. And she quipped, "Ducks choose ducks. Ducks pick ducks." And she wasn't a duck. So in her mind she said, "Well, I want to find opportunities that give me visibility and make me visible to others who are important people."

So she saw there was this upcoming opportunity for an exchange program to be created between the Naval Academy and the German equivalent. And she happened to speak a little bit German, which was unusual at the time and certainly unusual at the academy. And she applied to be the midshipman who was going to be part of fostering this initial exchange program between these partner institutions. And she was chosen in spite of the fact on academic merit, she wasn't quite the right candidate, but people saw a sense of grit in her, a sense that she could build bonds across different silos. She spoke some German, she understood German society. She would be uniquely positioned to build these bonds, build these bridges across different groups.

So I think the argument here is we want to ourselves take those efforts to accumulate merit badges, learn different skills, learn different domains, join a running club, join a espresso tinkerers club, meet those people so you've got a network that can potentially compete with and stand up to the old boys network.

Hal Weitzman: Okay. Now one of the challenges of that, obvious challenges is remote work.

John Burrows: Oh, goodness. Yes.

Hal Weitzman: And you and I have talked about this before that younger people, particularly junior people not going to the office as much or they're not going in on the days when the senior managers are in. How do you do those things you talked about if you're remote?

John Burrows: Yeah. Remote is a problem, right? I don't think I'm going to sit here and say... I think we've been given a false dichotomy that we've either got to be fully in the workplace or fully remote. And I think the truth is both can work, but what we want to do is we want to organize how time is spent when we bring people in the office in an intelligent, thoughtful way. I mean, the story I hear again and again is, "I'm dragged into the office three days a week and what do I do? I sit on Zoom,"-

Hal Weitzman: Sit on a Zoom call.

John Burrows: ... "with other people who are elsewhere in the same building, but sat alone in their office on Zoom." I mean, this is madness, right? So I think what we want to think about from a leadership position is, can we be more thoughtful? You come in on a Friday, but maybe there are no Zoom calls or maybe there's no video or maybe we go to some meetings where we all have to put our phones into a basket or leave our electronics at the door. It doesn't have to be heavy-handed and overwhelming, but I think we need to make use of initiatives like that where electronics are pushed aside.

In terms of the remote work, I have an interesting experience that I don't think is in the book, but my oldest son, when he got offered his first internship, came to me and asked me some advice given the dilemma he faced, which was, "Dad, I got this offer and they said I can either work remotely or go into the office." I didn't grab him, but I wanted to grab him and be like, "Son, let's listen to me. This might be the one time I can give you advice that is fully grounded. Please believe me."

So I said, "Go into the office. Go into the office." He did. And he got back to me three weeks later and he said, "Dad, I had this amazing experience. You were right." I was like, "Can I get that in writing," from my then teenage son. He said, "You were right. That first week I sat in these meetings and everything that was being talked about sounded like gibberish. I didn't understand what anyone was talking about. But then there was a conversation in the corridor afterwards where a couple of the acronyms and buzzwords were described to me. Week two, I started to understand what was going on, the language that was used, the tacit knowledge that was being shared, who were really the decision makers in the room, who liked what, who didn't like what. Week two, I understood the conversation wasn't quite ready to contribute. Week three, I suddenly felt like I had the ability to contribute," but it's the conversations that occur in the hallway before or after the meeting, not the meeting itself.

Hal Weitzman: Yeah, it's all the informality.

John Burrows: Remote doesn't destroy the ostensible meeting. We can sit on Zoom and talk all day every day, but what Zoom doesn't allow for is the private conversation after the meeting, the private conversation-

Hal Weitzman: Or if it does, it has to be a lot more deliberate.

John Burrows: Yes, yes, absolutely. And that's perhaps what we should be more thoughtful about is turning off the recording devices, allowing a moment of candor in those Zoom calls or breaking larger group Zoom calls into smaller, more intimate settings where we feel comfortable being our authentic selves, sharing a little bit, taking some risk.

Hal Weitzman: John Burrows, in the first half, we talked about your wonderful book, Social Capital at Work: Building the Hidden Asset That Drives Trust, Engagement, and Performance. And you told us a bit about what that asset is and where it's built. One of the things that I found fascinating was this counterintuitive idea that everything you said sounds as if we want to get deeper and deeper ties. We want to know the people we know so much more. Actually, you talk about weak ties, how important weak ties. Tell us about that.

John Burrows: Yeah. So Mark Granovetter, a sociologist at Stanford, wrote in the early 1970s, 1973, I believe, an article called The Strength of Weak Ties, and it highlights what was a counterintuitive finding for him and obviously for you. He was actually trying to explore how people find a new job. His assumption going in was he was going to study how our job referrals naturally come from trusted people we know well, intimates, whether that's close friends or family. And what he actually found is in truth, if you look at how we get knowledge of new opportunities, it's from weak ties, it's from acquaintances, it's from someone we knew in high school we haven't spoken to in years.

What's the mechanism at play here? It's the people who we talk to all the time who are just like us, who are our family members or our close colleagues, they know all the same stuff we know for the most part. They don't know about this new opportunity coming along the pipeline, whether that's a new job, whether that's a new product, whether that's a new idea. So it's not that closed networks are a bad thing. They provide psychological safety and intimacy and can drive efficiency and productivity, but open networks, weak ties to distant people are actually where we get new ideas.

Hal Weitzman: So do you need to be more conscious about building weak ties?

John Burrows: Absolutely. Absolutely. You want to think deeply about, am I spending too much-

Hal Weitzman: Think deeply about being superficial.

John Burrows: I wouldn't characterize it as superficial. Let me put it in a context that helps me out and save me from surgery. So it's quite a dramatic example. So in my thirties, I was going to a gym more frequently than I do these days and I'd like to get back to those days, but that's a story for another time. I'm going to this gym and we're small groups and one of the first thing that the coach says is, "I'm going to pair you up and you're going to run this sprint." It's an indoor sort of AstroTurf thing. I'm a rugby player from my earlier days and something got in me. I was paired with this guy who was probably 10 years younger than me. I was like, "I'm going to beat him. I'm going to win this race."

So I ran off towards the wall and only when I was about a foot from the wall realized, well, a yard from the wall, I realized, "I'm about to smack straight into this wall, you idiot. Slow down." I did slow down, but I'm a big guy. I, as it turned out, herniated a disc or multiple discs, doubled over in pain. Anyway, took some painkillers, got to an orthopedic surgeon, well-regarded orthopedic surgeon. Orthopedic surgeon said, "You got to have surgery in the next 48 hours, John. You've done a serious injury to yourself here." I thought, "Well, I need to get a second opinion," because no one has surgery without a second opinion, but what was I going to do? I was going to go talk to another orthopedic surgeon.

My primary care physician said, "Don't do that. Go get an opinion from a neurosurgeon." Why? Neurosurgeon isn't going to have skin in the game in terms of supporting what his colleague said, but also they read different journals. They were trained at different places. They go to different meetings. They don't meet with the orthopedics. They meet with other neurosurgeons. So the idea is sometimes we want to get out of our network because it can solve problems for us. In some sense, we talk to the same set of people and we don't know we have a problem or we don't have a unique way of-

Hal Weitzman: So translate. I mean, it's a great story, but how do you translate that to the corporate world? I have an IT technology problem. Do I talk to someone who doesn't know anything about technology?

John Burrows: Look, clearly there is a role for spheres of knowledge. I'm not here to tell you that we shouldn't have a department of accounting and a department of sales and a department of marketing, but I think at times when we retreat too deeply into these silos, we lose something. And there's tremendous value to connecting the dots across silos, different organizations, but also across spheres of knowledge. And this ties very nicely into the ideas of innovation, and I'm going to argue that... And others do, the innovation occurs at the intersection of domains. And what you want to think about is how can we get people from different backgrounds, different fields of expertise to collaborate in a way that can unlock new opportunities. And we also need to think about how weak ties even enable new innovations to get to market.

The example we tell in the book is Jackson Pollock, right? Jackson Pollock, for many years, was literally a janitor at a museum. He wasn't an artist. He was an artist, throwing paint on a canvas at home, but he was unknown. He was found by Peggy Guggenheim who evangelized him, gave him a platform, paid him to be a full-time painter, and made Jackson Pollock, Jackson Pollock. There's the sense in which there's the individual doing the innovation, but there's also the piece that is the connector, the valid who connects that person to the broader market. And we need to do both. I think to the extent we retreat into our silos and make the boundaries between them too rigid, we often lose things organizationally.

Hal Weitzman: So you talked earlier in the first half about hiring a team, which is what often happens on Wall Street. I hire a whole research team. So if I bring a team to my institution, then I have to quickly make sure that they interact with others, otherwise they're going to form a silo, particularly if I brought them from outside. Is that right?

John Burrows: Yes. I think that is one way of thinking about it, right? But again, I think the point I would want to make here is we want to recognize that the two kinds of social capital Ron Burt talks about, open networks, closed networks, brokerage and closure, both are important. The naive takeaway that interestingly is too easy for MBA students, perhaps including myself when I was an MBA student, is to fall into the trap of thinking brokerage and open networks are good, closed networks, bad. The imagery of a broker feels like, "I'm going to go conquer the world. I'm going to talk to people over here and over here and create these new ideas and innovate and ideate and bring in revenue."

Yes, that's important, but the other side of the equation is also important, right? High performance teams are groups of intimates, people who trust one another, feel safe to be their authentic selves. Psychological safety is high in those groups, and what comes in with that is huge productivity gains, but there's always a trade-off here. The more closed a network is, the more efficient that group becomes at doing whatever they're doing. But because their focal point is turned inwards, they're looking for one another, they're focused on the relationships in their own network, in their immediate periphery, they're kind of blind to new opportunities and challenges coming. So organizations want to be very thoughtful about, "I want to ensure parts of my organization are organized towards closure because that's where I get the efficiency gains."

But on the other hand, I don't want this dramatic change in the macroeconomy or a new competitor arising or shift in consumer behavior to blindside us because we're so focused on building a better widget and not recognizing the sort of competitive threats that are coming. I need to have part of my organization set up to be open and with antenna array, listening for fresh ideas and challenges.

Hal Weitzman: Yeah. I should say that if you want to know more about open and closed networks, we have a lot on that on the Chicago Booth Review website because over the years we've covered Ron Burt's research a lot. John, let's bring this right down to earth. Three things. If our listeners are thinking, "This sounds great," apart from reading your book, which they should absolutely do immediately, but what are three things they can do right now this week to boost their social capital?

John Burrows: Yeah, I would say so the first thing is mention the book is a calendar audit. Simply put, the idea is look at your weekly calendar in Outlook or whatever calendar app you use and assess how many of the meetings, how much time you spend and who is it with. The expectation is most of us spend the majority of our time talking to people who already know one another, right? So in some very real sense, I'm building strong ties and then further investing in them. What I want to suggest is we naturally lean in that direction, the gravitational pull, if you will, is towards closure and strong ties.

Hal Weitzman: The team meeting.

John Burrows: But what I would argue is spend less of your time, most people, on continuing to build the relationships with the people you already know, liberate some of that time and make an outreach to someone fresh. It might be truly someone you don't know at all, or it could be someone you know peripherally or knew earlier in your career, right? So make that connection to a high school friend you haven't spoken to in a year. So a calendar audit of how you're spending time and rebalance it to breaking into new groups.

Hal Weitzman: And when you say someone you haven't seen for a while, I mean someone in your industry or not necessarily?

John Burrows: It doesn't matter. I would say I think at times we think that networking has always got to be with an immediate goal to further our career. And I think in truth, we ought to be thinking on a longer term horizon. We don't know who might help us out and who we might be able to help over the longer term. So join a running club, right? Join the local bowling alley. Join a church, not because it's going to immediately serve your ends, but because you get an opportunity to meet new people, learn new skills, and those relationships, I'm confident, will pay dividends for both of you longer term.

Hal Weitzman: So that was number one.

John Burrows: Number one. I'd say number two is related, which is I'd activate a dormant tie, which is to say, think of those people you crossed paths with in high school, in college, in grad school that meant a lot to you then, and in some sense mean a lot to you when you remember them, but you haven't spoken to in five, 10, 15 years. We all know that list. Put that list together and once a week, reach out to one of those people. Tell them, it doesn't have to be any more than, "I miss you. Life flies by. This moves fast, but it's been 10 years since I saw you."

I had a friend of mine I worked with at Siebel System years ago and I had dinner with him 10 years ago, but I thought that was like three years ago. I just text him, said, "Buddy, that dinner was 10 years ago. We worked together 20 years ago. This is crazy." We immediately jumped on the phone call and it was like old times. And actually he said, "That new book you've got coming out, I know someone who might want you to do a keynote around that. Is that the kind of thing you do?" So I would reactivate a dormant tie. And then the other one is be the Peggy Guggenheim, is who are two people you know who should know one another, but don't? We often think that the networking has to be done by us. "I have to be in the center." No, not true at all. Make an introduction, step away from that introduction and give them the opportunity for serendipity to happen.

Hal Weitzman: Okay. John Burrows, the book is Social Capital at Work. It's great, great read. I encourage people to buy it, to act on it. Thank you so much for coming on the Chicago Booth Review podcast to talk about it.

John Burrows: Thanks for having me, Hal, it's been a delight.