A Book List for Understanding How Networks Operate
In our book Rules to Break & Laws to Follow, Martha Rogers and I tried to convey our sense that as technology brings more and more "connectedness" to our world, our entire economic and social system is becoming more like a giant network. Whether you are talking about customers who are increasingly connected to each other, or employees and channel partners, or your portfolio of new product innovations, it is vital to understand how networks operate, and why.
Networks form by the rule of "preferential attachment," which means that each participant added to a network is more likely to be added by a connection to another participant who already has more connections. This is why influential customers become more influential at a faster rate than those who aren't influential. It's why the most visited Web sites gain visitors faster than others, and why wealthy people become wealthier at a faster rate than others. One consequence is that a small number of Web users exert an extreme amount of influence at many sites. The Wall Street Journal published an interesting article on this, "The Wizards of Buzz," in 2007.
In my posting a few days ago on this blog, Did Deregulation Cause the Financial Crisis?, one of Graham Hill's comments was that a financial crisis like this is, in reality, the end result of many different networked effects coming together in a kind of perfect storm. And this is a perfect example of the kind of randomness that an increasingly networked world is likely to treat us to.
So, if you really want to understand how networks will impact your business success as we become more and more connected, I'd recommend these books (in addition to ours!), and we've listed them sort of in order of increasing depth and complexity.
If you can read these books all the way to the end of the list it will change your whole perspective on business, and on how our economic system really operates:
• Secrets of Social Media Marketing: How to Use Online Conversations and Customer Communities to Turbo-Charge Your Business, by Paul Gillin. Gillin's latest and best - a series of "how to" check-list chapters with everything a business needs to know to wade in to social networks. There are a number of other books in this genre, but in my opinion this is one of the most straightforward and useful.
• The Black Swan: The Impact of the Highly Improbable, by Nassim Nicholas Taleb. Taleb has an obnoxiously self-important writing style, but what he has to say is actually very important.
• Ubiquity: Why Catastrophes Happen, by Mark Buchanan. Networks dominate nature, too - from weather to earthquakes, from chemical phase transitions to species extinctions.
• Linked: How Everything Is Connected to Everything Else and What It Means for Business, Science, and Everyday Life, by Albert-Laszlo Barabasi. This is for the more mathematically inclined, but you don't have to be a mathematician to understand Barabasi's main points.
• The Origin of Wealth: Evolution, Complexity, and the Radical Remaking of Economics, by Eric D. Beinhocker. The economy operates more like a network of evolutionary innovations than like a system of supply and demand always in equilibrium. (And by the way, just reading the more thoughtful reviews of this book on Amazon is worth a morning of your time.)
• Why Stock Markets Crash: Critical Events in Complex Financial Systems, by Didier Sornette. For this book a math degree really would help, but even if you skip over the equations it will radically alter your appreciation of markets.
• Hidden Order: How Adaptation Builds Complexity, by John H. Holland. Again, there's math involved. But Holland's book, based on a series of lectures delivered to the Santa Fe Institute, is definitely worth going back to school for, if you have to.
That's my list, anyway. Anyone else have a recommendation on this topic?
Hi Don
An impressive list. I have read them all except Sornette's 'Why Markets Crash'. Ditto the two books Tim Mentions.
What the list brings together is how various types of network underpin complex adaptive systems like markets, and how unexpected behaviour 'emerges' as a result.
To round out the list, I would only add:
Mark Buchanan
The Social Atom
Buchanan's latest book which looks at how social networks drive behaviour
Philp Ball
Critical Mass: How One Thing Leads to Another
A prize winning book that extends Buchanan's thinking
Sanjeev Goyal
Connection: An Introduction to the Economics of Networks
The title says it all
Tomi Ahonen
Communities Dominate Brands
An overlooked book that shows how communities drive behaviour in the most connected industry of them all - mobile telecoms
Ken Thompson
Bioteams
A look at what we can learn from self organisation in biology in building human networks.
And for those who really want to be challenged:
Stuart Kauffman
At Home in the Universe
A seminal book in the complexity sciences that brings many of these concepts together.
Some of these books and the books you listed are not for the casual reader. They are for managers who really want to think hard about the underlying physical and biological principles that influence what they see in business and markets all around them.
Happy reading.
Graham Hill
Independent CRM Consultant
Interim CRM Manager
Thanks Don,
I will seek some of these out for sure. Some additional books I recommend from my own reading;
I especially enjoyed "The Wealth of Networks" by Yochai Benkler.
"Linked" (referenced above) is very similar to Duncan Watts' "6 Degrees" but I found the Aussie easier to read.
As a great primer, I recommend the MSI Relevant Knowldege Series "Social Networks and Marketing" by Van Den Bulte and Wuyts.
Cheers