The New Social Business

Strategic Competitiveness - Social Capital

Monday, 17 December 2007

Leadership and Social Acumen

As I posted on my People Business blog at HR Circles last week, social networks are important in helping HR deal with global people management challenges. They provide significant benefits to other business leaders too.

One of the most provoking blog posts I’ve read this month is Gill Corkindale's Harvard Business blog on the leadership crisis in the UK. Looking at the prime minister, the chancellor and the government, the Bank of England and its governor, and a couple of football managers (you can probably guess which ones), Corkindale notes a long string of leadership failures. Most of them, to me, see to have developed through these leaders being too remote from their organisations – a lack of social connection.


Continued at: http://blog.social-advantage.com/2007/12/leadership-and-social-acumen.html

 

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Saturday, 15 December 2007

Carly Fiorina: People aren't the soft stuff

I've been attending (and presenting at) HR.com's VIEW conference (see my HCM blog for details). Carly Fiorina provided the opening keynote, and one of her points caught my attention. She said that people aren't the soft stuff - they're the software, ie the clever stuff.


I agree with her on people not being the soft stuff, and you'll find plenty on my HCM blog about this to. I also recommend Scott McArthur's blog, particularly this post.


However, in this post, I wanted to extend on Fiorina's point about people being the software. You could see:

  • Human capital as the software sitting on each individual PC

  • Organisation capital as the hardware - particularly the computer networks linking different PCs together

  • Social capital as the intra and inter net, including web 2.0.

Tuesday, 11 December 2007

Social capital in Second Life

From my HCM blog:

I hope you like my new avatars (digital characters) on the right hand column of this blog - I suspect experienced bloggers will find them extremely annoying, but I hope I'm forgiven as a newbie for a bit of experimentation. I've also been doing a bit more playing around in Second Life (SL).

For those that don't know, SL is a three-dimensional, virtual reality world where you can meet interesting people, do amazing things, and live out your fantasies.


Continued at: http://blog.social-advantage.com/2007/12/social-capital-in-second-life.html

 

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  • jon [dot] ingham [at] social [dash] advantage [dot] com

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Mintzberg on social capital

From my HCM blog:

I've already mentioned that one of Mintzberg's remedies for short termism is to get the analysts of the backs of the corporation. Others are to:

  • Take corporate governance seriously
  • Keep the mercenaries out of the executive suites.


But I think Mintzberg's last suggestion is potentially the most valuable.This is:

  • Treat the enterprise as a community of engaged members, not a collection of free agents. We can start, for example, with compensation systems that encourage co-operative effort. Corporations are social institutions, which function best when committed human beings (not human "resources") collaborate in relationships based on trust and respect. Destroy this and the whole institution of business collapses.

Flooding and social capital

From my HCM Blog:

I came across an interesting article on the floods across the UK recently: "When the waters clear". The articles notes that flooding destroys organisational but not social capital:


"Floods and other disaster destroy physical and financial capital. But not relations between people and their networks - what's often called social capital.

Even truckloads of goodwill can't offset the trauma of being flooded. Indeed, unlike any other form of capital - social capital can actually increase at a time of crisis. People who come together learn the importance of appreciating the value of neighbourly support, often act with greater community spirit in the aftermath of a disaster. All of us can help by encouraging the victims of the flood to look for solutions that will improve their lives instead of looking for someone to blame. Blaming often weakens social capital and undermines the return to "normalcy". Instead of looking for a hidden meaning behind the flood we ought to be focusing on learning the lessons. We now know that floods are normal part of our life. What we have to figure out is how much of our resources we are prepared to devote to minimising their destructive impact on our lives."



Ie it is our reactions to crises like floods, not the floods themselves, that can damage us most.
I guess the same is true in organisations as well. It is a rare organisation that thinks about how it will react to challenges and particular failures in a way that will increase its social capital.

Saturday, 24 November 2007

Examples of intangible capability

From my book:

In some ways, there is little new in these categorisations of value. For example, McKinsey’s 7’S’ model basically consists of different elements of human, organisational and social capital:

· Human capital = staff and skills
· Organisation capital = strategy, structure and systems
· Social capital = super-ordinate goals and style



Continued at: http://blog.social-advantage.com/2007/11/examples-of-intangible-capability.html

 

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  • jon [dot] ingham [at] social [dash] advantage [dot] com

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One definition of social capital

I love this international development blog's definition of social capital: "the sum total of all the unselfish acts* that it's members perform". (* I'm not sure yet whether this includes acts of enlightened self interest or only altruism.)

Social capital

From my book:

Social or relational capital is an emergent property arising from the organisational system – the organisation and the people working in the organisation. Social capital includes the network of relationships and features of social life within an organisation, the knowledge tied up and shared in these relationships, the ability to work together with other people in value creation, the corporate culture, beliefs lived and values demonstrated by employees. It provides the glue that holds organisations together. Social capital is even less tangible than human capital and demonstrates even more attributes of complex systems. How is this for a paradox: it is not owned by the people but leaves when they leave and is not contained within the organisation but does not exist in the same way without it:

‘Social capital is owned jointly by the parties in a relationship, and no one player has, or is capable of having exclusive ownership rights’

(Nahapiet and Ghoshal)


It cannot be managed but it can be influenced, mainly through conversation. I also think that there are some signs of a positive feedback loop here. As social capital along with other intangibles becomes more important, so it needs to be increasingly socially constructed which needs effective conversations. This increases the importance of social capital, which requires it to be socially constructed, ad infinitum.

Organisation capital

From my book:

Organisation or structural capital is the infrastructure that supports people to do their work. It includes elements like the fitness of the organisation structure, operational and management processes, procedures, routines, general use of information, IT systems and databases, existence of a knowledge centre, explicit knowledge and know-how. Some of these elements may be legally protected and become intellectual property rights, legally owned by the firm, for example patents, copyrights, design rights, trade secrets, trademarks and service marks. Organisation capital has the advantage of being fully owned by the company – it remains in place when the employees leave - and is therefore to some extent easier to manage and change than human capital.

Human capital

From my book:

Human capital exists as a resource and a capability, at individual and organisational levels. Individual human capital can be acquired by attracting and selecting staff with the right skills and experience. It can be developed through learning. Human capital can be converted into an organisational resource by aligning people with the organization, engaging its owners and investors, so that they will choose to make it available to the organisation. This can then be leveraged by applying it to meet business requirements.

What's this Social Business thing about?

 

I've been blogging about human capital management (HCM) for a few months now, and have explained that I see this, not as the management of people AS human capital, but the management of people FOR human capital. HCM is an approach that invests in the accumulation and development of human capital as an intangible basis for ongoing competitive advantage.

However, I actually believe that there are three main intangibles in an organisation, which are human, organisation and social capital. And out of these, I think it is social capital that provides the greatest opportunity for business competitiveness. This is partly because of the new possibilities provided by social media, and the new expectations of the millennial generation. It's also because it's becoming increasingly apparent that the traditional way of managing organisations isn't working very well.



Continued at: http://blog.social-advantage.com/2007/11/what-this-social-business-thing-about.html

 

  • Consulting  - Research - Speaking  -  Training -  Writing
  • Strategy   -  Team development  -  Web 2.0  -  Change
  • Contact  me to  create  more  value  for  your  business
  • jon [dot] ingham [at] social [dash] advantage [dot] com

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