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What is Social Capital

Enemies of Social Capital

How to Invest in Social Capital

Demerits of too much Social Capital



²ðusiness runs better when people within an

organization know and trust one another

²Trust is a very important factor to move faster

and be productive

r the relationships that make
organizations work effectively






%There is a
%ðuilding relationships in difference between
turbulent times is tough theory and practical



² Companies thrive when they have dense social networks, high levels
of trust and norms of cooperation but management theory and
practices undercut them

‡ Drastically reduces employee¶s

Hoteling opportunities for people to communicate
their identity

Reengineering ‡ Efficiency is important but not at the

cost of breathing space and time for
and its progeny human connections

The leader as a ‡ Emphasis on larger than life leaders

detracts from trust, collaboration and
super star perceived fairness

‡ Exampler praising cooperation and

Hypocrisy knowledge sharing while promoting the
wheeler dealers




Fostering Enabling
Innovation Trust



² Workplace that spills over in a positive sense to non%work

areas of employees life by availability of fringe benefits.
(ex% SAS, food coupon of M&M)

² ðy promoting from within (ex% S)

² Giving people time and space to bond in person

(telecommuting, virtual teams, face%to%face interaction)

² Fostering Knowledge Sharing


² roviding Ice%breakers by open and attractive

environment (ex% Grand Rapids)

² Fostering Durable Networks (ex% S)

² Investment in community%building activities

ðut investment should not be heavy%handed

²No one can manufacture trust or mandate it

into existence

²Trust building can backfire if management is

too heavy%handed

²Conditions and connection people experience

day after day is more important than trust
building exercises

² Give Employees No Reasons to Distrust

² Transparency
² Rule of the Law

² Show Trust Yourself

² Trust is self%reinforcing
² Trust employee¶s judgment
(Nordstom¶s two ruler . se you judgement, 2. There is no second rule)

² Send Signals that Trust is Valued

² Trust Responds to Rewards

¬ "

² Each Worker can be a company of one, porting his

expertise, on a project%by%project basis, to wherever in
the world it is needed
² Claimsr Free agency is becoming model of work and

² Claims are counter to how people understand shared

task and come together to work

² Silicon Valleyr Ability to work ³Independently´ is

dependent on their being socially tied to a physical
community through durable networks

² Adversity or opportunity%impulse is to pull together

Ex%Malden Mills
² Give people a common sense of purpose
Ex%ohnson & ohnson
² Adverse situations%
² Noble goals & inspirational leadership can draw people
² Give their work meaning beyond the need to earn a living
² Financial stake in the outcome%´all in this together´ feel
Ex% S

² Sharing ownership
² Reward teamwork & signal its importance
² ðonuses%more importance to group & corporate
performance and less on individual importance
² Establish some rules
² increase the efficiency of the recruiters¶ efforts
² force the consultants to get to know one another in ways
they wouldn¶t in self%reliant searches
² ³Hire for it´
Ex%South West Airlines
   & *   


² Social capital is not a

² ðusiness strategy
² Marketing plan
² A substitute for either
² Not always even a good thing
² Companies%damaged by high social capital
² ðreeds ³groupthink´%a tendency not to question shared
² Support ideas that are narrow or wrong
² revent people from challenging one another with tough
   & *   


² Discourage ³Creative abrasion´%a source of innovation

Ex%Digital Equipment , olaroid
² In general effects of social capital are positive
² Engagement, collaboration,loyalty,persistence &
dedication are important benefits
Ex% S, H, Russell Reynolds, SAS


² ³The key for an actor is sincerity because if you can fake

that you can fake everything´%Samuel Goldwyn
² Invest in social capital only to the extent that you believe
in it
² Lasting social capital cannot be built merely by going
through the motions of team building
² Trust is built over time
² It represents organic growth of trust, understanding,&
loyalty%takes time to develop

² The social capital that used to be given in organizations

is now rare and endangered
² We can build social capital to capitalize on the volatile,
virtual possibilities of today¶s business environment
² ðuilding social capital can¶t be ³legislated´ or ³managed´
² It occurs through natural development that orients rather
than orders, that provides nourishment rather than
² ³Everything in this firm works because of social capital´
%Hobson ðrown, resident & CEO, Russell Reynolds