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 / Fourth Quarter 2002 / Issue 29(originally published by Booz & Company)


Karen Stephenson’s Quantum Theory of Trust

Professor Stephenson, in fact, refers to Diane as a “hub” in the work network: an individual so well connected to others that she plays an indispensable role in keeping the flow of information going. Hubs are characterized, Professor Stephenson says, by an extraordinarily high level of trust: People know what to expect from them. Their calls are returned. They attend all the key meetings. They convey news. Those who worked closely with Diane, for instance, hardly needed to speak to each other directly; she became their main communication channel.

But Diane’s social links (Exhibit 2) and her career advice network (Exhibit 3) are minimal. She was, in short, a workaholic whom everyone depended on but nobody felt close to. “She was sick of her work colleagues,” says Professor Stephenson, “and just wanted to go home at night and veg out.”


Diane also was a time bomb. She wanted desperately to be promoted to a higher position, believed she deserved it, and felt almost disenchanted enough to leave the company. “Remember, knowledge in this company was generated through mutual trust and exchange,” says Professor Stephenson. “If Diane, God forbid, died in a plane crash, a lot of that company’s capability would be gone.”

Diane’s polar opposite was Joe, another of the CEO’s direct reports. In Exhibit 1, there is only one thin link between Joe and Diane, representing the minimum collaboration that they absolutely could not avoid. “These two executives actually did not see eye to eye,” says Professor Stephenson.

Joe, as it happens, was not very knowledgeable about the company’s technology or business, nor did he get much trust or respect from others in the organization. But he had one enormous asset: a strong social bond with the CEO, represented by the thick line in Exhibit 2. Joe and the CEO regularly played golf, and afterward, on the “19th hole,” as Professor Stephenson puts it, they plotted the future of the company. For this CEO, socializing outside work with Joe had come to substitute for all other meaningful learning contacts. That, in turn, had weakened the organization and made it far more difficult for him to choose a successor. Because all of this was taking place in a turbulent and highly competitive business environment with an overloaded staff, nobody thought to speak out about the lack of balance in the CEO’s network.

Then the CEO retired and passed the mantle to Joe. Diane left the firm. Joe tried to use his connections with others as a surrogate for the knowledge he lacked — and whether intentionally or not, they made it difficult for him to do so. Joe was quickly dismissed by the board, after three months of terrible performance that could have permanently crippled the company. “Someone like Joe, who is neither knowledgeable in himself nor connected within a network of trust, is at high risk of being undermined by others or failing,” says Professor Stephenson.

As it happened, however, with Diane and Joe out of the picture, there was now room for a third individual, Stan, to step into the CEO’s position. Stan’s work connection with the CEO had been fairly weak, and he was only moderately well-connected in the social network. However, Stan was strong in the career network; he met regularly with three other people to make sense of the organization and its future direction and to plot its common course. This was enough to give other people throughout the organization a sense that they could rely on Stan, and that was enough for the board to recognize his value and appoint him CEO. Stan had always kept himself in the background, but he turned out to be very competent. In the next few years, the division recouped much of its performance and profitability, although it never regained the growth momentum that was squandered when Diane left.

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  1. Joel Garreau, “Disconnect the Dots,” Washington Post, September 16, 2001
  2. Malcolm Gladwell, “Designs for Working,” The New Yorker, December 11, 2000; Click here.
  3. Albert-László Barabási, Linked: The New Science of Networks (Perseus Publishing, 2002)
  4. Howard Rheingold, Smart Mobs: The Next Social Revolution (Perseus Publishing, 2002)
  5. Journal of Social Structure: Click here.
  6. NetForm International:
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