Social Capital Is Value Which Your Business May Be Missing

“People who like what they do, do it better”. This is what Henry Engelhardt had as his philosophy when he started Admiral Insurance in 1993. He wanted to enjoy work. He recognised that if his staff were happy and enjoyed work too, there would be better productivity, so he set to work with a company philosophy putting happy staff at the centre of his business model.

One initiative to promote this philosophy is to have a business team called the Ministry of Fun, a team dedicated to organising weekly social activities for staff, such as come to work in fancy dress days, such as Superhero Day, nights out, or computer game tournaments in lunch breaks.

For 14 years in a row, Admiral Insurance has been in the 100 Best Places to Work in the UK. The business has grown to a $5.6billion valuation, is in the UK’s FTSE 100 stocks and has 7000 staff across Europe and India.

ARE YOU MISSING OUT ON SOCIAL CAPITAL?
Venture capital, human capital, financial capital, leveraging, share offerings are all sources of value that are utilised in business. And, yet, businesses can still miss out on a key source of capital to help them grow – Social Capital!

The Admiral Insurance story is one of a deliberate culture setting out to build and use strong Social Capital.

Work is, and always has been, one of the most defining aspects of our lives. It might be where we meet people, excite ourselves and feel at our most creative and innovative. It could also be where we can feel our most frustrated, exasperated and taken for granted.

With the average worker now spending over 90,000 hours at work in a lifetime, the workplace has become a “centre of meaning, membership, and mutual support “, and of friendship. Indeed, many people count some work colleagues as good friends.

Work organisations are inherently social. Many organisations depend upon the goodwill of staff members, and on their cooperation with customers and each other, to achieve the goals and mission of the business. The 2016 Edelman Trust Barometer shows that the trust of the majority cannot be taken for granted.

Failure to acknowledge Social Capital and to build an environment to cultivate it may mean that your business is missing out on this vital form of capital and the opportunity to advance to the next level.

WHAT IS SOCIAL CAPITAL?
Social Capital is the sum of goodwill and potential resources available to individuals and groups stemming from their networks of relationships.

When the members of networks have established some level of knowledge and trust, it brings them to a level of commitment to each other and a desire to exchange resources with each other, and this provides a context in which innovation can flourish. People have the desire to do things for and with others within their social networks. People tend to do things to help and encourage those in their same social network, creating a cycle of mutually beneficial reciprocity.

Like monetary capital, Social Capital has some value. It can be accumulated, invested and exploited, through deposits and withdrawals. The Ministry of Fun initiatives at Admiral Insurance are examples of ‘building deposits’ of Social Capital with the staff.

The outcomes of Social Capital are:
• Exchange and Reciprocity – “I’ll scratch your back, because I can trust you to scratch mine, when I need it”
• Good spirits
• Follow through – a willingness to go the extra mile with those in your network
• Trust overcoming uncertainty – it is far easier to come to an agreement with someone with whom you have a positive connection than with a stranger. There is a banking adage that says, “A relationship is worth one basis point”.
• Team Identity, even ‘team pride’

The ‘value’ of Social Capital can be seen by imagining a workplace where Social Capital was missing, one where:
• competition trumped cooperation
• there was little trust, with too much suspicion, whispering and cynicism
• there was little willingness to:
o share information, or to share it in a timely manner
o share resources
o assist each other
• business units stay stovepiped within their silos

HOW IS SOCIAL CAPITAL DIFFERENT FROM HUMAN CAPITAL?
Social Capital differs from Human Capital (as in HCM). Human capital may be said to be focussed on the education, experience and abilities of an employee for a particular role or pathway. It is a main focus of HR and managers, who are trying to hire, develop, performance-manage, promote and retain their talent pool. There may be some overlap between Human and Social Capital depending on how a business’s culture, employee engagement and wellbeing are defined. Many businesses choose to invest in the happiness and well-being of their employees because this investment indirectly benefits the bottom line by cultivating a happier, more energetic workforce.

IS SOCIAL CAPITAL THE SAME AS EMOTIONAL INTELLIGENCE?
When Billy Aydlett became the 7th principal in 6 years at Leataata Floyd Elementary, a school with a long history of dysfunction in a low-income part of Sacramento USA, he quickly discovered that the young students were not going to be able to make progress on the academics until they had gotten help with their social and emotional issues.

However, although Aydlett had risen through teaching ranks to become principal, he was a socially awkward man who confessed to being “awful” at ordinary human encounters, so he attended social-emotional training. Since beginning the emotional-literacy work, Aydlett said he had become more aware of interpersonal dynamics, and even made going on a vacation with his wife a priority – something he had never bothered to do before. (“I didn’t see the point in that kind of connectedness,” he admitted. “But I’ve learned that it’s important.”)

Emotional Intelligence is the ability to recognise emotions in oneself and in others, to be able to harness and manage them. They are the individual skills that are used by each person to build his or her Social Capital within work or other networks.

The experience of Mr Aydlett shows that building social connections does not come naturally for many people, even successful ones!

Deliberate action needs to be undertaken to foster Social Capital across the staff in a business. Some may be able to make flourishing connections naturally, for example “She’s a ‘people-person'”, but many are not able to do it on their own.

HOW IS SOCIAL CAPITAL OBTAINED?
Social Capital is built by the types and frequency of social interactions. Staff need fresh, shared experiences and face-to-face interactions to keep Social Capital flourishing.

Attending an event together gives a shared experience, which creates their own unique narrative/stories amongst attendees.

“Do you remember when we went xxxing? Wasn’t it great!? Wasn’t it funny when yyy completely messed up? And wasn’t zzz surprising in how she blitzed it!?”

This helps develop ties and bonds, and begins trust between participants.

Team building events can be very useful. If you have met someone from the business at an event, the ice is broken. The next time that you meet them, you are further along the path than with a stranger and better positioned to ask for a favour.

Most team building falls flat because it is a one-time activity, done and then forgotten. The challenge is to keep creating opportunities for people to connect and interact in meaningful ways, outside of regular meetings or training.

BENEFITS OF SOCIAL CAPITAL
Social Capital offers advantage to businesses iv. Here is a listing of the kinds of effects achievable through deliberately helping staff to build Social Capital.

RESOURCE SHARING
Team members have more certainty about how their peers will respond to requests for help. They can drive at unique solutions due to more certainty of a favourable response.

The resources available to individuals via his or her social networks within a business or industry are very wide ranging. The type of resources that someone else could provide include:
• Offering to use their influence,
• Providing their time,
• Accessing some of their budget dollars,
• Providing advice,
• Connecting an idea with the right person,
• Offering support,
• Giving (privileged) information,
• Sharing space and tools,
• Releasing a worker to join a project team,
• Providing an introduction to the right person,
• Giving a testimonial concerning another’s abilities,
• Smoothing access to higher echelons, sponsors or approving bodies,
• Gaining opportunities for advancement and development, or
• Simply rolling up their sleeves to pitch in when a deadline looms.

INNOVATION
Those who define Social Capital claim that it can influence innovation. How so?

It can provide an excited environment full of positivity, collaboration and willingness. It can also provide ‘casual collisions’, whereby unexpected encounters may connect diverse ideas. Roman Philosopher Seneca defined luck as what happens when preparation meets opportunity. Sports commentators can be heard to regularly say that great teams or sports people ‘create their own luck’, which probably means that they show a mixture of being more polished, less clumsy, displaying a commanding, professional presence and competence.

IMPACTING EMPLOYEE ENGAGEMENT
For the last 5 years, the Gallup organisation has found that the percentage of US employees who are unengaged has remained steady at 70%. This is despite concerted efforts by executives in those years to drive engagement higher than 30% in business.

Gallup defines an engaged employee as, “[They] are involved in, enthusiastic about and committed to their work. Gallup’s extensive research shows that employee engagement is strongly connected to business outcomes essential to an organization’s financial success, such as productivity, profitability and customer engagement. Engaged employees drive the innovation, growth and revenue that their companies need.”

Using this definition, we can surmise that 70% unengaged employees have low involvement, low enthusiasm and low commitment to the business and its profitability, and this effects its bottom line.

Clearly, something needs to be done about increasing staff engagement and involvement, and one way to impact this is have an active Social Capital building, through events, training and team building/team bonding activities.

HEALTH IMPACTS
Social Capital can also impact employee health, with positive benefits for those who have Social Capital and negative risks for those low in it or without it.

A 5 year study of 65,000 Finnish Public Servants ending in 2005 showed that men with low Social Capital had a 40-60% higher risk of chronic hypertension (high blood pressure) compared to their peer males who had high Social Capital. They also had risks of an unhealthy lifestyle involving alcohol and obesity.

Interestingly, no association between workplace Social Capital and hypertension was found for women. Is this because of the natural inclination of women to socialise?

LEARNING
It turns out that happiness and learning are tied very closely together. Trying new things with your staff can generate good vibes among employees, which in turn benefits the business itself.

Positive or happy experiences activate the learning process. The ideal state of learning is called flow, when you lose yourself entirely in an activity. Flow happens when you’re so engaged in what you’re doing, that you lose track of time.

These are merely a sample of the positive outcomes available to business managers who choose to provide a positive culture and deliberately assist all staff to build Social Capital. Staff will call upon colleagues to gain access to resources that they would not otherwise have… and then reciprocate.

THE CHANGING NATURE OF WORK
In the past, we commuted to a workplace, committed to a single/or a few employers, knew work colleagues well for years and disconnected from work when we went home. Success was achieved via isolated effort through personal drive, ambition and competition.

According to Seth Godin (blogging and marketing genius), the old paradigm of a commute to rows of cubicles, with meetings behind closed doors, is all too expensive and slow. There is going to be a huge focus on finding the essential people and outsourcing the rest. It will be a high-stress, high-speed, high-flexibility way of working, with your efforts auctioned off to the lowest bidder.

Futurists predict that billions will be connected by mobile services in the cloud, working flexibly, surrounded by digital bots, assistants and learning machines. Success will be achieved through the combination of mastery, to stand out from the ‘crowd’, and connectivity, leveraging what the ‘crowd’ brings. Therefore, having a deliberate strategy to build Social Capital is a strong means of growing and leveraging connections.

The Deloitte Institute of Innovation and Entrepreneurship says that in a future increasingly defined by innovation (the capacity to combine and connect know-how), both competencies and networks will be key. It’s in this synthesis from the diverse members of the network that real innovative possibilities lie. So, whom you choose to connect with, and to whom they are connected, will be one of the defining aspects of future working life.

Workplace management, says Godin, will mean managing a tribe, creating a movement and operating in teams, sometimes in person, often online, dispersed throughout global time zones. Therefore, leaders will have to find new ways to help everyone feel like they ‘belong’.

SUMMARY
Social Capital will not disappear along with your dedicated workstation, but it will be ever evolving.

For some, building and using Social Capital is natural, but for many it is not. Deliberate interventions, such as team building activities, need to be undertaken… and repeated.

Consider these questions too. What happens to the networks when someone leaves the business? And, similarly, how does a new hire develop any relationships or break into existing networks?

Choosing regular activities that are unique and slightly outside of people’s comfort zones can encourage them to gel together for the first time or in new ways, building connections from which they can draw resources – Social Capital!

What are you going to do to build and leverage Social Capital in your business?

49 Seconds is a Team Building business that understands the value of social capital for businesses. It provides interactive team building/bonding events with military themes. These are unique, somewhat secretive, but always striking. Check out our website at http://forty9seconds.com and contact the author.

Ian Pfeffer is an exceptional facilitator and designer of training events. His company is 49 Seconds Team Building in Sydney Australia. 49 seconds offers innovative and striking military-based interactive team building/bonding events, reflecting Ian’s 15 year career as an officer in the Royal Australian Navy. Being a 20 year veteran of training design, delivery and management, Ian brings extensive experience and knowledge to the team building field. His special focus is on generating Social Capital for businesses.

Article Source: http://EzineArticles.com/expert/Ian_Pfeffer/2294188