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The network effect

This step begins by explaining to learners what the network effect, social capital and mentorship are, and why they are important for development.

As you saw in the previous step, networking is essentially professional relationship building, and it comes with many benefits.

In this step, you will explore what is meant by the network effect, social capital and mentorship. But what do these terms have to do with networking and why are they important for developing a career?

Why develop a network?

Whilst having a professional network can of course help you to find potential job leads, it can also be used in many other ways to help you advance your career. These include the following:

  • Learning about a career: Perhaps you’re looking to go down a new path and you want to learn more about it by informally interviewing someone who currently works in that field. You can always look to your network for help in meeting people to interview.
  • Learning about your potential employer and employees: You may be being interviewed for a new job and you want to learn more about who you may be working with. You could ask your network if they have any contacts at the company who can share some insight.
  • Finding prospective candidates for a role: Perhaps you’re already in a job and you need to hire a new person to join your team. Your network of contacts may be able to find prospective candidates or put you in touch with someone who may know a great candidate.
  • Advice on a work project: If you’re working on a new project and need advice from someone who’s worked on a similar project, you could find that advice within your network.

The network you cultivate for yourself is something you will be able to go back to throughout your career and life.

The network effect

In it’s more traditional usage in business, the network effect describes a circumstance where the value of a good or service increases in line with the number of people who use it. For example, the internet had only a few users in its early days, as it was of little value to those not working in specific fields such as research. However, as the number of users increased, so did the value of the internet.

In the context of today’s world of work, the network effect relates to the idea that as you build up your professional relationships, your value as a potential employee increases. You now have a larger professional network that is able to vouch for you with potential employers, that can mentor you if needed, and that can advise and share opportunities with you.

The same can be said for building up your knowledge and learning. Your value as an employee increases as your skill set increases.

Today we’re much more focused on our ‘personal brand’, with people more likely to be hired through a senior referral in a company. We’re in the age of the network effect, so building those professional relationships is vital, no matter what career field or stage you are in.

You can find out more about the impact of the network effect in the short video provided in the See Also section.

Social capital

Social capital means the interpersonal relationships, institutions and other social assets of a society or group that can be used to gain advantage. Put simply, it is about how social networks and relationships are valuable and have productive benefits.

As a concept, it is quite broad. According to the research and training consultancy Social Capital Research:

“[…] One may approach practically any social entity or situation through the conceptual framework of social capital.”
When it comes to your career, social capital opens the door to potential resources from your network of relationships. When you exchange social capital, you can access resources from others in the social system that may be valuable to helping you grow your career and reach your goals. By resources, we mean anything from information and status, to trust and sponsorship.
For example, if you exchange social capital with someone at work, it could be valuable in helping you with promotions and growth within that company. Alternatively, you could exchange social capital with someone outside of your company and in a different field. This could be valuable in helping you with a career change, or getting back into work after maternity/paternity leave or a sabbatical.


Building your network does not have to be done on your own. You can also build this through the mentors you have found in life. If you’re networking in the right places, you will likely meet a lot of experienced professionals and experts in your sector.
If you’re at the beginning of your career or you’re looking to change careers, getting first hand tips, insights and guidance from those who have been there and done it all before is priceless. People with business experience are often very willing to share their knowledge and advice with those who are open to listening.
It’s important to seek mentorship where you can, and to know that it’s ok to ask for help when it comes to developing your career and network.

Share your experience:

Take this opportunity to reflect on the following questions:
  • Have you previously heard of the network effect and social capital? Do these terms make sense to you in the context of building your network and identifying opportunities for career growth?
  • What do you think about mentorship? Is this something you have previously explored for yourself?
Share and discuss your responses with other learners in the Comments section.
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