I’ve been writing recently about why social capital is important and how to improve it.
In a recent article in Institutional Investor called The Economic Value of Networking, Ashby Monk argues that we need big finance companies to start to measure, manage, and model social capital in the same way they cultivate human or financial capital.
Monk points to seminal research from Brian Uzzi at Kellogg showing that social capital has real economic value in financial markets. Further research has shown the correlation between better-networked VC firms with superior financial performance, through a sharing of knowledge, having access to better deal flow, and reducing risk.
This makes sense intuitively, but it’s exciting to see that researchers are proving these concepts out with real numbers.
The idea that social capital is central to business success is an idea suited not only for finance, but for every industry across the board, especially those that rely on knowledge workers to make their business successful.
So if social capital is as important as financial capital and human capital, why not measure it the same way? Here are four ways to formalize a focus on social capital in the workplace:
- Develop, track, and measure some KPIs related to social capital. It’s a complex enough concept that one KPI won’t do it, and you’ll probably have to use some proxy indicators, but here are a few ideas: trust ratings, network size, network reliance, and network change over time.
- Benchmark employee satisfaction indicators related to social capital. Include questions about how connected employees feel, how often they ask for and provide help, and how their networks are changing and growing over time.
- Encourage self-assessment and peer-reviews related to participation in a giving corporate culture.
- Implement a scalable knowledge collaboration platform like Givitas, so you can make it easy for employees to connect and track how well they’re doing it and how their social networks are growing.
Are there other ways you are measuring social capital or institutionalizing practices that encourage it? I’d love to hear from you in the comments.