Social physics: How founders can increase their team productivity

Today our actions online, from buying a product in an e-shop, to spending time browsing articles, leave behind a huge mass of data about our digital habits, and therefore, who we are and how we behave. But how can we better make sense of our digital behaviour, and in doing so, apply it to increasing the productivity of our teams? One answer is by using social physics.

Social physics was coined two centuries ago by Auguste Comte, who believed that ideas shape the development of society. Nowadays, social physicists use big data to give us the answers. To get a grip on the human idea exchange, they look at the digital crumbs we leave behind, like credit card transactions or GPS locations. This data is different to the deliberate posts we publish on Facebook, for example, as these reflect what people are choosing to say. Instead, by looking at where people spend their time or what they buy, we can learn more about who they are. Professor Pentland, MIT’s Human Dynamics Lab Director, thinks that by using social physics, we can “predict the productivity of small groups, of departments within companies, and even of entire cities.”

Pretty cool, right? So we can use the learnings of social physics to enhance the productivity of our own startup teams, and work smarter and faster.

With that in mind, here are five practical takeaways for founders, based on the research of Professor Pentland’s team. Rest assured they used millions of hours of quantitative observation of the human social experience, from end user to company data, to produce “Social Physics: How Social Networks Can Make Us Smarter”.

How to build an energetic and creative company

Companies have different types of idea flows than individuals, and therefore different ways of learning from both inside and outside their communities. In companies, team members can integrate innovations from other people outside and bring them into their own team. Good examples are today’s startups hubs or accelerators. We rely so much on our ability to learn from the ideas of others that some psychologists refer to us as Homo-imitans.

Takeaway #1: To build highly creative teams, make sure the team has the time to explore and learn from outside the group. Very important is also their engagement within the group. Morning digital coffee might do the trick nowadays.

What are the best learning strategies?

Models of learning in complex environments tell us that the best strategy is to spend 90% of our effort on exploration. The remaining 10% should be spent on individual experimentation. Professor Pentland and his teams show that in most things we are collectively rational, and only in some areas are we individually rational. The logic is simple: if we have to use a new computer system, why read the manual if we can watch someone else who has already learned to use the system?

Takeaway #2: People who rely on social learning are most efficient because of it. Make sure you set up daily stand ups, recurrent training sessions or create an internal library to share increase your team’s social learning. 

It’s all about engaging your team

Engagement means, in this context, the success of being part of a team. Engagement builds trust and increases the value of a relationship. Which in turn builds the social pressure needed to establish cooperation. In other words, engagement builds culture. As a consequence, the level of engagement is a strong predictor of team productivity and resilience. When a group is faced with change, it needs to create and enforce new habits of interaction that will help it adapt to the new circumstances. To learn more, take a look at Robert Putnam’s book “Bowling Alone”, where he explores the relationship between engagement, trust, and people’s ability to act as a team.

Takeaway #3: It’s not about if it’s possible to get lots of people to work together. You should focus on building an organization that engages first, and therefore does the work.

Fast thinking is better than slow thinking

Daniel Kahneman and Herb Simon, both Nobel Prize winners, talk about two ways of thinking. Kahneman talks about one way of thinking as “a fast, automatic, and largely unconscious mode”. In order words, fast thinking is about unconscious habits and intuition, based on personal experiences and times we have learned from others. He then defines the second way of thinking as “a slow, rule-based, and largely conscious mode”. Slow thinking uses reasoning, combining beliefs to reach new conclusions. To the surprise of some, Professor Pentland and his teams consider fast thinking better than slow thinking for many tasks. This is especially true when there is limited time to make a decision. You can see this in people’s behaviour in emergency situations or while driving and talking. Very similar to daily management of a startup, when sometimes we only have a couple of minutes or hours to respond.

Takeaway #4: Don’t be afraid to use fast thinking and make decisions. The startup world is a trial and error world, trust your intuition, personal experience and those of your peers.

Exchange networks not markets

According to Professor Pentland, the main reason exchange networks are better than markets is trust. His research shows that a consequence of trust is fairness. And due to more trust and fairness, exchange networks are also more cooperative and resilient to outside shocks.

Takeaway #5: Think beyond markets, and build networks based on trust and fairness instead. As Professor Pentland states this is “a good recipe for building a society that will survive”, which can be applied to your startup’s survival too. Start by having a clear vision and mission: you’re in this for more than business success. For example, join online peer communities to learn or solve problems together. Now is a great time to put your mind and resources together to build a network which will survive no matter what.