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Building a Social Network
Founded in 1950, the Young Presidents’ Organization (YPO), a global network of young chief executives, has 18,000 members worldwide. According to one estimate, YPO member companies contribute $6 trillion in annual revenues to the global economy. Based on a culture of mutual trust and support, YPOers form lifelong connections in the small, geographically based YPO Forums where they share successes and challenges (both business and personal) in complete confidentiality.
A case by HBS associate professor Mikolaj Jan Piskorski, senior lecturer John Macomber, and research associate David Chen examines what happens when YPO launches a Networks Initiative focused on linking members through shared interests in particular industries, activities, and social causes with the goal of adding an additional layer of “connectivity.” The case has implications for any group hoping to build loyalty and involvement by bringing members together through new and different contexts.
In classic HBS style, “Young Presidents’ Organization” opens at a crucial turning point. The time is March 2009; the place, a windblown Palm Beach, Florida. During a board meeting break, George Weathersby, YPO’s recently appointed CEO, ponders this puzzle: Of the 59 YPO networks (including groups devoted to golf, family business, real estate, wine, and environmental action), half are rated positively by YPO members. Board opinion is divided regarding how to improve ratings for the other half. The organization’s strategy to date has focused on a “broad” approach where member interest drives group formation; to generate the revenues needed to provide online and administrative support for the new initiative, YPO increased annual dues by 10 percent.
A second proposal under consideration would overhaul the existing initiative by taking the “deep” networks approach of sinking resources into already-successful groups and shutting down others. YPO members would pay separate dues to join individual networks.
“This case illustrates the fundamental dilemma organizations face when they try to help individuals build better connections,” Piskorski says. “Should you do this by allowing open communications without guidelines — the equivalent of bringing people into one big room and letting them talk — or should you go for a more structured experience where there are rules on who should talk to whom and how.
“Through discussion, students discover that there is no such thing as one best way to structure human relationships,” he continues. “It really depends on the context.” Greater complexity demands more structure and support. Want to go skiing with a YPOer who lives in Colorado? Great! A few well-placed e-mail inquiries and you should be all set. Want to leverage YPO members’ considerable brain power and clout to help bring peace to countries in conflict? That will require more effort and administrative support. In a related example, Piskorski notes that the matchmaking site eHarmony (reportedly responsible for 5 percent of all marriages in the United States) requires its users to respond to dozens of questions and adhere to strict guidelines before making direct contact with potential matches. (Marriage, needless to say, is a deeply involved networking experience.)
What quickly comes out, Piskorski observes, is that YPO’s strategy should encompass both approaches to building networks, since choosing one strategy over another could leave out valuable layers of connectivity for its many members. “It’s possible to create a gradation that allows for some broad networks requiring minimal support and others that will be more difficult to build,” he says. “It should be thought of as a continuum, not a trade-off.” In fact, YPO’s Networks Initiative has evolved over the last few years to reflect that approach.
Those connections can have benefits well beyond the personal. The case underscores the power that can flow from special YPO relationships and the YPO culture, as with a videoconference convened by the Peace Action Network that brought together two Palestinian, one Saudi, and two Israeli YPO members. In the case, coauthor and YPO member Macomber states, “We understood that we can use our experience with the YPO Forum to reach across to other people who are vastly different and see what we can do in common. …We know how to communicate; we have the money and political influence. If we’re not going to reach across borders, who is?”
— Julia Hanna
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