Systems & complexity

How a balanced social network aids our decision making

Originally posted on The Horizons Tracker.

The ability to make the right decisions in high-risk situations is an incredibly valuable skill in our VUCA world. A new study1 from Northwestern University highlights the crucial role our social network plays in how successful these decisions turn out to be.

The longitudinal study explores various aspects of the structural balance theory (SBT), which entails an analytical framework for characterizing how relationships change over time. The SBT contains four rules to explain our relationship with others, stating that they are either:

  • A friend of a friend is a friend
  • A friend of an enemy is an enemy
  • An enemy of an enemy is a friend
  • An enemy of a friend is an enemy

If these conditions are met, the theory posits that the network is balanced. The researchers tested the theory by analyzing day traders over a two year period. The data revealed that people do indeed tend to gravitate towards a balanced state in their relationships, and performance seemed to improve when this balance was achieved.

“This data shows that companies reap the benefits when conflict among employees is reduced,” the researchers explain. “There are certain types of conflict that can’t resolve themselves. This work can help managers identify those conflicts and actively step in to resolve them, ultimately leading to better performance.”

Reducing conflict

The interactions of the day traders was gauged by monitoring their instant messaging communications, with the relationships observed then compared to the performance data for each trader. After controlling for factors such as the volatility in the market they were able to determine that traders with the highest level of balance in their social networks seemed to perform at the highest levels. What’s more, this trend emerged even after discounting the talent of the traders.

“We suspect that conflict in networks monopolizes some portion of workers’ mental energy,” the researchers explain. “Resolving that conflict frees up mental energy to make better decisions and perform at a higher level.”

The researchers believe that their findings apply to any professional operating in a high-stakes environment, including politics, medicine and the military, but they accept that more research is needed to confirm that the rules apply equally in different domains.

Article source: How A Balanced Social Network Aids Our Decision Making.


  1. Askarisichani, O., Lane, J. N., Bullo, F., Friedkin, N. E., Singh, A. K., & Uzzi, B. (2019). Structural balance emerges and explains performance in risky decision-making. Nature communications, 10.
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Adi Gaskell

I'm an old school liberal with a love of self organizing systems. I hold a masters degree in IT, specializing in artificial intelligence and enjoy exploring the edge of organizational behavior. I specialize in finding the many great things that are happening in the world, and helping organizations apply these changes to their own environments. I also blog for some of the biggest sites in the industry, including Forbes, Social Business News, Social Media Today and, whilst also covering the latest trends in the social business world on my own website. I have also delivered talks on the subject for the likes of the NUJ, the Guardian, Stevenage Bioscience and CMI, whilst also appearing on shows such as BBC Radio 5 Live and Calgary Today.

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