In the February 07 edition of their magazine, View, PriceWaterhouseCoopers (PWC) addresses social networks from a business’ point of view. Three articles touch on social networks; the first concerns consumers and the following two discuss employee networks.

View calls this new type of consumer, the socially networked consumer, a powerful force in the marketplace that CEOs “simply cannot ignore”. Citing examples such as Sheraton Hotel’s Global Neighborhood and American Express’ OPEN, the article explores the idea of harnessing the economic power in user communities’ social networks. There are several macro manifestations of user community created value, including but not exhaustively:

(a) Users explicitly contributing content (YouTube).

(b) Users providing services for a company’s product, such as troubleshooting (Skype’s community forums).

(c) Users’ social networks themselves as a source of economic value by way of advertising (MySpace).

The article continues by discussing how businesses should interact with these user communities: while direct or indirect interaction with the user base is frequently beneficial, new risks emerge. These risks apply not just to forums and communities managed by the company itself (like OPEN), but also public forums (MySpace etc). Concerns over privacy as companies capture “rich data” from these social networks have arisen, and at times a company will feel the negative reactions of trends and fads spreading through the social networks. (For example, the Diet Coke / Mentos experiments in videos all over the net are somewhat resented by Coca-Cola). Alternatively, some companies are giving power to their consumers’ networks, for example by running competitions to have users create advertising videos for them (Wal-Mart).

It is interesting to consider the impact of the network as a whole on a company or an entire industry, in contrast to our studies where we have studied mostly characteristics internal to the network. The articles on employee networks similarly offer novel approaches in looking at networks. We have studied (among other things) positions of power and structural balance in social networks; View interviews Rob Cross in order to better understand employee performance and employee networks.

Cross is the co-author of The Hidden Power of Social Networks: understanding how work really gets done in organizations. He has studied a layer of energy across the graph, and discovered that performance is related to employee positions relative to energy centers. An employee who energizes others is also a higher performer. Being central in an energy layer is “four times the predictor of high performance than being a hub of information ties only”; this is not immediately obvious in a team-project oriented environment.