How Degree, Betweenness, and Closeness Centrality Predict Informal Power in Organizational Networks

For informal network metrics to predict employee performance, an organization’s actual work must flow outside its formal reporting hierarchy. In matrixed knowledge environments where cross-functional collaboration drives revenue, the formal organizational chart explains less than 20% of how information actually moves. The remaining 80% flows through invisible, informal pathways. When companies attempt to identify their most critical talent, they frequently look at formal titles, missing the employees who actually hold the network together.[4]

To map this hidden structure, organizational psychologists and data scientists rely on Organizational Network Analysis (ONA), a discipline anchored by sociologist Linton Freeman’s foundational 1978 paper in the journal Social Networks. Freeman established the mathematical definitions for three distinct types of network power: degree, betweenness, and closeness centrality. "Each measure describes a different structural advantage in the communication network," Freeman wrote, defining how an individual's position dictates their access to resources and influence.[5]

Degree centrality measures the sheer volume of direct connections an employee maintains. If a product manager interacts with 45 different colleagues in a given week, they have a high degree centrality. This metric serves as a proxy for localized influence and immediate information access. However, research published in Heliyon in 2022 analyzing formal versus informal power networks demonstrated that while high-degree individuals are highly visible, their connections are often redundant, trapped within a single department or silo.[4]

The highest performance premiums belong instead to those with high betweenness centrality—the employees who act as bridges between otherwise disconnected groups. In his 2004 analysis published in the American Journal of Sociology, Ronald Burt quantified the value of spanning these "structural holes." Burt examined 673 managers at a large electronics company and found that managers whose networks bridged structural holes were significantly more likely to have their ideas evaluated as valuable by senior leadership.[6]

The compensation and performance data attached to betweenness centrality is stark. Burt's 2004 data revealed that managers bridging structural holes earned higher base salaries and received better performance reviews than peers with identical formal titles but insular networks. A 2024 review in MDPI tracking information cascades in executive networks further confirmed this, showing that high-betweenness directors transmit critical market signals 2.4 times faster than those relying strictly on formal reporting lines.[1][6]

Closeness centrality, the third metric, calculates the shortest average path from one employee to everyone else in the network. An employee with high closeness centrality might not have the most direct connections or bridge the most silos, but they are positioned just one or two introductions away from anyone in the company. This structural position allows them to mobilize resources rapidly during a crisis, bypassing the bureaucratic friction that slows down formal requests.[2][5]

The trade-offs between these three positions dictate how an employee should build their internal network. Optimizing for degree centrality requires massive time investment in relationship maintenance, often leading to collaboration overload and burnout. Optimizing for betweenness requires the cognitive flexibility to translate jargon between distinct departments—such as engineering and sales—but yields the highest innovation premium. Closeness centrality offers the most efficient return on relationship investment, requiring fewer ties but strategic placement near other highly connected individuals.[2][7]

Modern human resources departments are increasingly using active and passive ONA data—analyzing anonymized email metadata and communication patterns—to identify these central nodes before restructuring. When a company lays off an employee with high betweenness centrality, they do not just lose one worker; they sever the primary communication artery between two departments. The data dictates that retaining these informal bridges is a mathematical necessity for preserving institutional knowledge and operational speed.[3][7]