Are You Connected? Or Just Linked?

Are you connected? Or just linked? You know the difference when I phrase the question that way. It’s obvious.

• If you’re three degrees of separation away from someone on LinkedIn, you might be a Linker—but you’re not connected.

• If someone’s birthday is in your Act or Outlook database, and it links to their MySpace page and auto-triggers digital happy birthday emails from you to them, then you might be a Linker—but you’re not connected.

• If someone picked up your business card at your tradeshow booth, you might be a Linker—but you’re not connected.

We all know the difference.

But we all forget it—frequently, regularly, unconsciously. And we all suffer because of it. Here’s what I mean.

The ability to “link” is what freed up the mortgage industry. When a local savings bank sold loans to a larger aggregating bank, it “linked” to them by a financial contract; you pay me X, I give you rights to a mortgage. Ditto for that same savings bank paying mortgage originators to find mortgages. And for the aggregating banks to securitize their mortgages, and link to buyers of mortgage-backed securities.

The links, in every case, were one-off contractual transactions. They replaced connections. Connections were relationships, not transactions. They were ongoing, not one-off. They were between people, not just between corporate entities and lawyers. Connections presumed lots of links; but links alone don’t presume connections, any more than one night stands presume relationships.

The wholesale replacement of connections by links is a key feature of the economic landscape today. It is by no means all bad.

“Linking” has been key to outsourcing, and to globalization. Chop business processes up into smaller and smaller pieces, then Link them to a third party, maybe in Bangalore, maybe in North Dakota. The result is global scale of processes; global markets; and global risk-sharing. All good, per se—as far as they go.

“Linking” has meant greater efficiencies of the things being linked. Ten companies all with separate HR departments cannot run HR as efficiently as one company outsourcing HR services to ten users. One Match.com does a dramatically better job of forming markets for daters than a thousand bars in the Naked City could ever do.

There’s just one thing wrong with Linking. If allowed to entirely replace connection, linking will destroy connection.

If no one is connected across the whole mortgage business—if no regulators or companies or customers have stakes in the system as a whole—then the “market” will eat itself alive, as everyone maximizes their own good. The Invisible Hand simply does not work in a Linked-only system—it works only if someone has a stake in the market as a whole, and over time. A market of strangers linking once-off and then disappearing into the haze of transaction-land is what you see in dating bars at closing time, operating by rules of caveat emptor.

This is why eBay has buyer ratings. This is why stocks go up when governments intervene after linking-only has gotten pathological enough. This is why the internet (and new media channels) will drown in spam if they are nothing more than links. To be vibrant, these new marketplaces must find community—a sense of connection.

Our financial markets right now don’t suffer from just liquidity, or even solvency. They suffer from lack of trust. And nothing kills trust like the drowning of connection in a sea of links.

2 replies
  1. Scot Herrick
    Scot Herrick says:

    This nicely fits into ROI on soft skills training.

    Personal skills — dealing with people on your team — are the most important for creating trust. And trust builds confidence in transactions.

    Integrity is built on trust and that builds connections.

    Another great post, Charles.

    Reply

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