Social origins of great strategies

Abstract

We use network theory to define the social origins of great strategies. Our argument proceeds in four steps: (1) The bridge and cluster structure of social networks is a proxy indicator of variation in knowledge and practice (homogeneity within clusters, heterogeneity between); (2) people with strong connections to multiple clusters (network brokers) have breadth, timing, and arbitrage advantages in moving knowledge/practice from clusters where it is a commodity into clusters where it is valuable. (3) New strategy is a new perspective on, or new combination of, prior knowledge/practice; so (4) network brokers have a competitive advantage in detecting and developing new strategies, a subset of which are great strategies.