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 / Autumn 2006 / Issue 44(originally published by Booz & Company)


On Trust and Culture

GE also thrives because it knows its own culture. The leadership deliberately establishes core values and reinforces them by having leaders who consciously model the right way to do things. These values are nourished and promulgated among incoming generations of employees through informal conversation, training courses, large events, and performance reviews.

Therefore, well-supported new ideas, such as Mr. Immelt’s commitment to Ecomagination, can be engineered to pass a tipping point quickly and efficiently, setting this huge organization in a new direction. Such shifts take place in any organization only when they are reinforced inherently and completely by well-established networks. Dr. Stephenson’s theory elegantly explains how a company like GE could accomplish this. She points out that “networks, more than hierarchy and more than markets, make culture what it is and what it can be.”

GE fosters its social networks through a variety of means, but one important way is its management development curriculum. The company’s more than 60 years of management development programs — including those given at GE’s famous Jack Welch Learning Center at Crotonville, N.Y. — attract the top cadre of people who become the leaders of businesses over time. Casual friendships struck up during courses become the basis of informal networks that last for the length of an individual’s career, and that become indispensable in getting things done. What you become at GE is a function of who you knew when. The transfer of people across divisions and functions has also kept networking alive and robust. Additionally, there is the ritual of the senior management meeting every January in Boca Raton. The value of networking at this major event is well known. And in GE, a big measure of knowing you’ll “make it” is “When do I get to go to Boca Raton?” And the famous “deselection” process at GE, in which managers routinely weed out those who don’t perform or share the corporate values, is a way of ensuring that the people who don’t fit the culture leave while the networks support the rest.

These five books describe how trust fuels networks, which then feed and sustain the expertise and culture of the enterprise. For those interested in institutionalizing something similar at their own company, books may not be enough. Fortunately, a cottage industry has sprung up to offer tools for social network analysis. A regularly updated list of these appears at This Web site offers an overview of more than 70 programs, including Dr. Stephenson’s and Mr. Cross’s, of computer algorithms that can help users create two-dimensional graphs and tools to map their organization’s network. The list is a product of INSNA, the International Network for Social Network Analysis. Its Web site has a changing view of social network graphs that provide insight into many types of networks.

Networks can be difficult to see, but once you spot them, you’ll never look at an organization chart — or think of “culture” — the same way again.

Reprint No. 06311

Author Profile:

Karen Otazo is a management consultant concentrating on Fortune 50 executive clients. She is the author of The Truth about Managing Your Career… and Nothing but the Truth (Prentice Hall, 2006) and The Truth about Being a Leader…and Nothing but the Truth (Prentice Hall, forthcoming, 2006). She can be reached at
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Social Networking Resources:
Works mentioned in this review.

  1. Rob Cross and Andrew Parker, The Hidden Power of Social Networks: Understanding How Work Really Gets Done in Organizations (Harvard Business School Press, 2004), 304 pages, $29.95
  2. Malcolm Gladwell, The Tipping Point: How Little Things Can Make a Big Difference (Little, Brown, 2000), 279 pages, $25.95
  3. Per Hage and Frank Harary, Structural Models in Anthropology (Cambridge University Press, 1983, out of print), 201 pages
  4. Pamela Walker Laird, Pull: Networking and Success since Benjamin Franklin (Harvard University Press, 2006), 439 pages, $29.95
  5. Karen Stephenson, The Quantum Theory of Trust: The Secret of Mapping and Managing Human Relationships (Financial Times Prentice Hall, 2006), 256 pages, $41.30
  6. International Network for Social Network Analysis’s list of networking resources: Click here.
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