Valdis Krebs, Founder and Chief Scientist, orgnet.com 03-24-09 Interview

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Interview and transcription March 24, 2009

Valdis Krebs, Social Network Software and Analysis

Insights from Valdis Krebs: Networks of Corruption, Employment Networks, and
Research Innovations

Hi, I’m Valdis Krebs, and I work with Orgnet.com and we do social network software
and services for organizations, communities, and their consultants.

Learning from Networks of Corruption

What I’ve been working on lately, has been a little bit of the opposite of what I started
working on. I started working on large companies, helping them operate better and
helping them function better with things like information flow and knowledge exchange
and helping them to improve that so they can be more innovative and more productive.
But lately I’ve been working with much smaller concerns, been working with civic
networks with Ed Morrison and I-Open, and also looking at negative networks. Looking
at corruption networks. A lot of networks we’re always thinking about and looking at and
thinking they’re always positive and everything’s good and the more connections you
have the better and all that other stuff but, there’s also another side of networks and that’s
the negative side. How people achieve certain crimes, certain influence, even terrorists
operate in networks and so these are all the things that, these are all networks we don’t
want to work well. So, rather than trying to improve these networks, we look at how we
can disrupt these networks.

So, one of the things that’s interesting though is that by looking at how we disrupt
networks we also start to understand how networks are strong and networks are resilient.
So, some of my greatest learning in how to make effective community networks, small
team networks, small neighborhood networks that are resilient and that are aware of what
is happening, are getting the information they need, I learned, by looking at terrorists
networks and trying to do just the opposite. So, how do we take this small group of ten,
fifteen, twenty individuals and how do we disrupt that network? Who are the key people
here? Where are the key clusters? Where are the key bridges of communication and how
do we stop that? If we understand how to stop it, we also understand how to build it. So,

Copyright 2009 Betsey Merkel and I-Open. Creative Commons 3.0 Attribution-
Noncommercial-No Derivative Works. Institute for Open Economic Networks (I-Open)
4415 Euclid Ave 3rd Fl Cleveland, Ohio 44103 USA

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it’s kind of an interesting thing because we can learn from the opposite of what we are
trying to do, an interesting thing about networks that way.

A lot of the work that I am doing now is looking at these various networks that are trying
either to get away with something or trying to do something against another group. When
we look at corruption networks what we see is that even though these people are not
schooled in the knowledge of networks, or the science of networks, it is amazing how
they utilize certain things that we know about networks to get away with what they do. In
normal networks what we try to do is to shorten the distance between people. Because the
less hops you have in the network, the less steps it takes for anything to be
communicated, or for information to travel or for knowledge to get around the better it is
because distance usually delays and distorts so we try to minimize distance amongst
groups, working teams that are working together, communities, civic networks and so on,
so that when something pops up in one part of the network it’s quickly known in other
parts of the network and so the network can easily adapt and do what’s necessary.

In a network of corruption, or a network of criminals, they have to get things done so
they need to look at that also. They try to hide themselves by putting distance between
themselves and the events they are trying to affect. So, they kind of flip that whole
distance mantra on its back. So, instead of minimizing distance, they are trying to
maximize distance. So, if I am trying to influence a certain politician, it’s stupid for me to
do a quid pro quo, it’s stupid for me to give money to that politician and then that
politician goes off and either supports a contract that I want or votes for a law or a
resolution that benefits me, because then it’s a direct relationship and people see that it’s
quid pro quo.

What a lot of people are doing these days, a lot of corrupt business people and politicians
is they are putting distance between themselves so they are doing this thing that I call “in-
direct quid pro quo.” So, rather than give the money directly to you, so that you go off
and vote in a certain way, I’m going to give the money in an indirect circle but it’s
eventually going to get to you. So, I may hire a lobbyist and I may give the money to the
lobbyist. The lobbyist then goes out and hires one of your family members to do a project
and they overpay that person to do what they do and they give them a huge sum of money
and of course you get that money and your married to the politician, or related to the
politician and then he or she votes the way the original corrupt person is trying to get
them to go. What also happens, is sometimes there is an even more indirect route where
the money goes from the lobbyist not to a family member or to a spouse but goes to a
charity that the spouse is sponsoring or the head of, and then the money gets there. So,
often we get three, four, steps between the person who is trying to influence and then the
person who gets influenced. What this allows for is this thing called, “plausible
deniability.” When the media accuses this person of trying to influence the vote or trying
to influence a contract or anything like that, this person can say, “Well, I don’t even
know the person, I don’t even have any direct contact with the person, there is no quid
pro quo.” Technically, he is right, there is no quid pro quo, there is nothing showing that
there is a direct relationship between me and the person he is trying to influence, and the
person I’ve tried to influence. Most people have a real hard time chasing down this


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indirect flow because those things just aren’t that visible. So, when we’re looking at
corruption networks, we are looking at these indirect paths. How are people trying to get
things done and yet hide at the same time?

In a positive network, that network is not concerned about hiding they are just concerned
with getting things done. So, if it’s a civic network or a project team, whatever, they are
just worried about getting things done, getting the knowledge they need, meeting their
deadlines, meeting their budget, getting rewarded for their good work. A corrupt network,
or a criminal network kind of has a double role. They have to get things done too, but
they also have to hide from prying eyes, the authorities, from the media, from just
citizens. They have the double goal of hiding and getting things done. So they have to use
less efficient network needs but they can’t use very inefficient means or else they won’t
get anything done. That’s one of the things that we learned about terrorist networks is that
even though they are usually cloaked, and they’re hidden, at times, just like on Star Trek,
they have to uncloak in order to do what they need to do. And when they uncloak and
when they get things done that’s when we can spot them, that’s when we can see how
they’re connected, that’s when we can see that here’s a group that’s working together and
so that’s when they are visible. It often takes these kind of groups longer to do what
they’re doing because they have this double need, but eventually and especially if no one
is watching, no one is paying attention, they are able to get these things done. But in
today’s world where transparency is kind of the new mantra, maybe with the media
watching, with all sorts of watch groups watching and with local citizens watching what’s
going on in their neighborhood, maybe some of these corrupt practices will be exposed
and we’ll see less of them. Unfortunately, at least for the time being in the world of social
network analysis, corruption seems to be the growth industry. That seems to be where
things are happening and there’s a lot of attention that needs to be paid to it.

Employment Networks

[10:05:17] So, another area where I think networks come in very handy and very useful
and actually very critical, is the other part of our world today and that’s the economy,
where especially in middle class jobs where you have anybody from an engineer, an
office worker, that type of person, on up to small business people running their own
business and things like that, networks are very important. Networks are important for
finding jobs and networks are very important in keeping a job. Often when those people
are let go and you go back and look at their networks those were the least networked
people in the organization. Networks are important for small business people. Networks
are important for us to find clients, for us to find partners, for us to find ideas. It’s real
important to understand how networks work and how we can build them strategically.
Networks are often looked at as, “Well, that’s schmoozing, it’s what a lot of people do,
it’s getting on Facebook, it’s getting on Linked In, it’s connecting to a lot of people that
you may not even know. So if you go on to Facebook and you look at the list of people
that someone’s connected to, or on Linked In, you’ll find that they may connected to five
hundred people, but they only know fifty of those people. A lot of these networks get
built almost in a race of “mine’s bigger”, or people are trying to have more connections
than their friends and then they can brag about it at the bar on Friday night. But the


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problem with that though is that network is a false network and it gives a false sense of
security and people think, “Well, I’ve got five hundred people in my network, I’m fine. I
don’t have to worry about loosing my job, and even if I do loose my job, with that five
hundred person network, I’m going to find a new one lickity split.” But that’s not how it
happens, because once people try to use this network, once they start to use this network
of false ties, they find it doesn’t work as well. All of a sudden they call this person up and
boy, this person was real nice to them when they met them at the local COSE event, or
the conference they were at, or the I-Open event, but now all of a sudden this person
doesn’t even know them anymore so it’s not really a useful tie. Or, it’s somebody they
might have chatted with on Twitter and then all of a sudden, “Oh, my God, help this
person?” “No, I’m sorry, I’m too busy.” So, what people realize is that they really need a
network they can depend upon. They have to have a network of connections where the
trust goes both ways and also knowledge and information go both ways. So, it’s
important to have these strong connections, but it’s also important to have distributed
connections. Often, some of the best connections you can have are of high trust that are
elsewhere in the country or elsewhere in the city, or elsewhere in the industry that you are
in. Because if two people work together in the same place, in the same industry, in the
same office, there’s a good chance they have a highly similar network. So, the people that
you know or the people that I know and that’s good and feels warm and comfortable
everybody knows each other but from a business perspective, that’s not an ideal situation.
What you like to have are key connections in different cities, different locations, because
what happens is in these different locations, there are different social circles that get
formed and there are different communities that get formed and there’s different
information that flows around those and so that’s why this whole concept of weak ties
has come up because weak ties are actually not connections with people you don’t know
well, it’s connections with people that you do know well that trust you but that are far
away so you do not have a lot of interaction.

[14:50:03] So, it’s important to have these kinds of connections called weak ties because
what these are, are connections you have with people in other places. The reason they’re
called weak ties is because they are connections you don’t activate a lot. They stay
mostly dormant but these are people you mostly know well, they trust you and you trust
them. So, they could be like a former College roommate, or former College friends, or
people that you grew up with or people you worked with at a prior employer and you
really liked these people and you really got along with them well and so you stayed in
contact. So everybody knows each other and everybody knows each other well and trusts
each other, so when you are looking for a job, it’s like, “Oh, okay, well I know this
person and I trust this person and I don’t mind talking to my boss about this person to get
them a job.” Whereas if a stranger were to ask that, we would say, “Well, geez, I really
don’t know this person, I met them once, they seemed like a nice guy, but I don’t know if
I want to go out on a limb with my boss. It may be a tough economic environment to
suggest somebody that I don’t really know. Because if this person ends up being a jerk, it
not only looks bad on him but it looks bad on me. Also my boss says, “What are you
doing? Why are you recommending people who aren’t working out?’ People don’t want
to get in that kind of situation and they tend to be real careful. The tougher economic


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times we have, the more careful people are. They want to take less risk so they would
recommend these people that they know well.

So, you have this network where you have these strong connections both locally and
globally and globally, I mean basically outside your neighborhood, outside your city and
this helps you get things done. As an entrepreneur, it helps me understand what is going
on in the world because I have these little sensors planted throughout the country,
throughout the hemisphere over in Europe, over in Asia, and people are telling me what’s
going on locally and it’s good to have that kind of knowledge coming in. It’s also good to
know what’s going on, but then also be able to do something with it. So, when you have
this strategic network what it usually has, is that you have this local network of people
you know well, that you do things with, that you can execute things with, and then you
have this distributed network, which is more for exploration. So you’ve got these two
“E’s”, exploration, the wider network that’s paying attention to what is going on in the
world, paying attention to what’s going on in the Internet, paying attention to what is
going on in this conference and that conference, and this council meeting and that state
legislature and things like that, and then you have this local group where you get things
done, these are people you are used to working with, these are people you’ve done
projects with before, these are people who you’ve had successes with before. When you
have this core periphery network, you have this ideal network. You are strong locally,
you are strong with getting things done, and you are also strong globally with knowing
what needs to be done. So, if you have just the periphery, you may have lots of great
ideas and lots of new things come up, but you have no way to execute on them. If you
have just the core, you end up doing what you’ve been doing all along, and you are
probably doing it very well, but it may be the wrong thing. You need to have both this
external monitoring situation and this internal execution of getting things done. We find
these types of networks work well for entrepreneurs, they work well for civic
communities, they work well for regions, especially with different core periphery
networks in different parts of the region intersect and overlap and they also work well in
the corporate world because in the corporate world, these kinds of networks help break
up the silos that we have in organizations, with this part of the organization is not talking
to this part of the organization and so on. These wise ranging distributed networks tend to
alleviate that problem.

Innovations in Network Research

[19:58:02] So, one of the nice things about working in the network world is it’s a real
exciting place to be these days. There is a lot of research going on and there is a lot of
people doing a lot of different things and it’s just amazing, all of the neat papers and
articles that come out, it’s almost like I don’t have time to read them all. So, this whole
field of network science has been around a while, it started basically with sociologists
and anthropologists back in the 1930’s when they were studying small groups. They were
studying small groups in schools, they were studying small groups in organizations, they
were studying small groups on wild Pacific Islands and they needed a way to map things
out so they started drawing circles and lines and showing these people are connected
through family ties and these people are connected through neighbor ties and these


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people work together on this workbench and then they pass off their finished work
product to those people on this workbench and so, this whole mapping process became
part of network analysis, as it was called back then. It is still very useful today except that
today we computers to help us do all that, we no longer do it by hand. As computers have
become more and more functional and smaller and smaller and cheaper and cheaper,
we’ve been able to do many things on them that we couldn’t do before. So people in the
fifties, if they were lucky they had access to some kind of mainframe or more in the
sixties that was true and they were able to do some analysis, but today the kind of
analysis that people would wait twenty-four hours for on a mainframe, we can do on a
Mac Book in twenty-four seconds. We can have a discussion now with our clients, with
our customers, about network maps and network patterns and what’s going on. So we can
quickly run various 'What if's?’ we can say, “Okay, what if we add in a new connection
between these groups? What happens if we add in a new person? What if this person
leaves? What if these people who are used to working together, now get moved to two
different buildings?” We can do all sorts of “What if?” analysis very quickly and
understand what might happen with this very complex human system that we’re dealing
with.

[22:40:24] So, back to the research, like I said, sociologists and anthropologists started
this whole field, and probably in the 1980’s we had lots of business people getting
interested in what was going on here and in the 1990’s, and in the late 1990’s physicists s
became very interested in networks and mathematicians and biologists and so now, this
field of network science has many of the hard sciences, not just the social sciences, all
competing with each other, writing papers, not always quoting each other, but that’s how
it goes, it’s kind of the Wild, Wild West, the Gold Rush in the network world, but, that
also makes it a very exciting place to be and what makes it exciting is that learning from
one party of the field often gets transferred over to another part. I am a big believer in this
concept that innovation happens at the intersections, so the more intersections we can
have with people who have similarities and differences, the better we are. Because
innovation usually isn’t something brand new that gets created out of the blue, it’s
usually taking something that kind of works over here and moving it over there and
getting it to work. It’s not like in organizations where we were looking often at best
practices, where we were trying to move something exactly from one place to another,
but when we move something we usually have to adapt it. Because it works in the context
that it’s in a certain way and then when we take it out of that context some things have to
change so we have to adapt to it. Often, the fundamental pattern, the fundamental
structure can be moved and adapted between various organizations, various groups,
various communities, and various regions. So, works in Northeast Ohio region, may work
in Indiana. What works in Indiana, may work in Wisconsin. What works in rural
Southeast Ohio down around Athens, may also work in Madison, Wisconsin in the rural
area there. There are things that can get transferred, there are lessons that can be learned,
there are techniques that can be transferred, but then again we have to realize we can’t
take it ‘lock stock and barrel’. Once we uproot this tree here, we have to plant it
elsewhere and we have to put different dirt around it and we have to make sure there’s
enough roots and all that other stuff.


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[25:35:00] So, in this whole field, we are finding from the biologists that there’s this
concept that they’re all interested in called, “motifs” and what that is, is that there are
certain network patterns that seem to show up in diseases, there are certain network
patterns that seem to show up in the Brain, and in the Brain of multiple species, there’s
certain patterns that show up in nervous systems, in eco systems and things like that.
These are adaptive patterns that have evolved in nature over millions or billions of years.
These are patterns that are useful for that species to do what it needs to do. We are taking
that learning from Biology and we’re looking at organizations and communities. Are
there certain motives; are there certain patterns that we see in organizations that perform
well, in communities that perform well? Is there a difference between a so-called “Smart
Network” and a network that doesn’t perform as well, a network that struggles? That’s
kind of an interesting thing to look at because we can take learning’s from other sciences
learning’s from complexity sciences, looking at the world from fractals and chaos and
emergence, and what does that teach about structures that evolve and are useful for
communities and organizations? It’s an exciting time and there’s a lot of people doing a
lot of things and sharing information. If you go on to places like Twitter or the SONET
list or if you go to the Sunbelt Conference and places like that there are all these ideas
flying around and people are sharing these things and people are walking away with new
intersections. They’re going back to their home base and hopefully, a lot of interesting
innovations will happen out of these new intersections that are happening.

Our generous thanks to Valdis Krebs
http://www.orgnet.com
The Institute for Open Economic Networks (I-Open)
4415 Euclid Ave 3rd Floor Cleveland Ohio 44103 USA
Copyright 2009 I-Open
http://i-open.org
Creative Commons License
Attribution-Noncommercial No Derivative Works 3.0 United States

Related I-Open Interviews

• Insights from Valdis Krebs: Networks of Corruption, Employment Networks, and
Innovations in Network Research [00:27:58] Vimeo, Livestream
• Learning from Corruption Networks [00:10:17] Livestream, Vimeo, You Tube
• Building Employment Networks [00:10:17:00] Vimeo, Livestream
• Network Research Innovations [00:08:19] Tube, Vimeo, Livestream
• Social Network Analysis 1997 – 2007 Valdis Krebs Part 1 Defrag Conference
2007 Livestream, Vimeo
• Social Network Analysis 1997 – 2007 Valdis Krebs Part 2 Defrag Conference
2007 Livestream, Vimeo

Articles
• Social Networks – the new front in the war on terror, Military Tech, CNET News


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http://news.cnet.com/8301-13639_3-10315748-42.html
• Fireside Chat with Ed & Valdis – First of a series of chats on leading edge ideas
in regional economic development with Ed Morrison and Valdis Krebs
http://www.thenetworkthinker.com/2009/08/fireside-chat-with-ed-valdis.html

Biographical

Valdis Krebs is the Founder, and Chief Scientist, at orgnet.com. Valdis is a management
consultant, researcher, trainer, author, and the developer of InFlow software for social
and organizational network analysis [SNA/ONA]. InFlow maps and measures knowledge
exchange, information flow, emergent communities, networks of alliances and other
connections within and between organizations and communities.
http://www.orgnet.com/VKbio.html

Contact Information
Valdis Krebs
E-mail: valdiskrebs@orgnet.com
Twitter: ValdisKrebs


Valdis Krebs, Founder and Chief Scientist, orgnet.com 03-24-09 Interview

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