The Value “Social Capital” Has On Your Organization

Let’s think a bit about social capital, and what it might mean for your organization.

Per Wikipedia[1]:

In sociology, social capital is the expected collective or economic benefits derived from the preferential treatment and cooperation between individuals and groups. Although different social sciences emphasize different aspects of social capital, they tend to share the core idea “that social networks have value”. Just as a screwdriver (physical capital) or a university education (cultural capital or human capital) can increase productivity (both individual and collective), so do social contacts affect the productivity of individuals and groups.

So within your organization, the existing social networks have value. This makes perfect sense, particularly for people who understand “how to really get things done” outside of formal channels.

Without getting into a deep discussion of various types of social networks and the relationships that they imply, for now let’s just consider individual relationships of trust. A network of trust exists among individuals who are connected to one another by relationships of trust – trust that important information will be shared appropriately, and trust that important requests will be properly responded to. This kind of social network is very important to an organization.

Note that this kind of network does not necessarily imply “friendship”. While the people we trust within the organization are often also friends, there may well be people who we know we can rely on and trust who are not friends. In fact, there may be people we know we can trust, but who we dislike intensely! I once worked with a brilliant systems programmer who was personally unpleasant and nasty to just about everyone, but who was utterly reliable in terms of the information he provided, and in performing the assignments he was given.

There may also be people in the organization who are friends, but who we would never trust or rely on for any important work-related need. I once had a golf buddy who my boss at the time hired after they happened to meet at a social gathering. The guy was a close friend, but at work he was a disaster – unreliable, dishonest, and lazy – an embarrassment.

We should also note that there may be social networks within an organization that actually operate to the determent of the organization – networks of disengaged or disgruntled employees who reinforce one another’s negative attitudes, and who may actually share hostility to the goals of the enterprise and act, or fail to act, in ways that interfere with organizational goals.

For better or worse, networks of trust are dynamic and constantly evolving, as individual relationships are forged, or broken. There may even be multiple, non-intersecting networks within a given organization.

Also note that these networks may or may not align with formal organization lines of reporting – the “org chart”. Org charts establish relationships, but they cannot establish trust. Effective managers know the difference between how things are supposed to work, and how they really work. They see the real value of social capital.

So how can we nurture and invest in this social capital to the greater benefit of the enterprise? I’d love to hear your ideas. A lot of startup money has gone toward “enterprise social network platforms” (ESNPs) on the theory that giving employees secure, private facsimiles of Facebook or Twitter to facilitate and support internal social networks is the answer. In fact, Facebook, LinkedIn, and Google+ are working hard to muscle in to enterprises for this purpose.

It remains to be seen whether any of these technologies will really take hold and contribute value on a broad scale. At the same time, it is very clear that social capital is a key to bottom-line organizational effectiveness and efficiency.  With so much at stake, sooner or later someone is going to come up with a winning way for organizations to identify, grow, empower, and reinforce trust networks, and so build social capital. It might be a Google or Facebook, or one of the many well-funded startups (slack.com is pretty hot right now), or even some bootstrap operation coding away in a garage as you are reading this!

Jim Tyson – Word to the Wise

I am an IT Senior Executive www.linkedin.com/in/jimtyson1/ with over 30+ years of experience. I have a passion for human nature and Information Technology – working to understand the relationships between both to create productive environments.

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[1] http://en.wikipedia.org/wiki/Social_capital