The New Social Business

Strategic Competitiveness - 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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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

.