If you read history books such as most of us do, there is a bias from the writers which is normal and natural. Much of the world is formally in a hierarchical process and given the nature of the beast, it is much easier to research. In a book called The Square and The Tower by Niall Ferguson published by Penguin Press, NY, 2018, the author suggests that one should also concentrate on the informal change or networks of the people with power.

Mr. Ferguson believes there has always been networks and the first networked era was the introduction of the printing press in Europe in the late 15th century. The second era is from the 1970’s with the introduction of the computer. The zenith of hierarchically organized power was the mid-20th century the era of totalitarian regimes and total war.

Hierarchy means there is a node at the top, and other nodes can communicate only through the one ruling hub.

Networks operate differently but they still have gatekeepers. The gatekeepers must decide whether or not to pass information to their part of the network. Part of the decision is based on whether their decision is how they think that information will reflect back on them. This help explain why some ideas go viral and others fizzle out in obscurity because they began with the wrong note, cluster or network.

Networks according to John Pladgett are important not just as transmission mechanisms for new ideas, but as sources of the new ideas themselves. Networks by themselves do not create new ideas because they can also attack one another. Most of the attacks on networks tend to be from hierarchical entities. Networks may be spontaneously creative but they are not strategic.

Network theory summed up:

1. No man is an island – remember crucial roles are played by people who are not seen as leaders but connectors.
2. Birds of feather flock together –
3. Weak ties are strong
4. Structure determines vitality
5. Networks never sleep
6. Networks network
7. The rich get richer

Linking to dividend paying stocks, everyone is an network and in a hierarchical arrangements, how your company reacts to both is important to your as an investor. Investigating the President and the Board of Directors gives you an indication of the people the President must talk to in order to keep his/her job. Is the Board dynamic or old and collecting payments? In does not matter if they are collecting payments, but you want to see innovation or desire to accept change on the Board.

There are more questions than answers, till the next time – to raising questions.