Is your business building social capital?

Social capital is a long-standing concept that means the cumulative resources that form and flourish through relationships and networks of humans.

Those resources can be tangible – things like information, ideas, money or labor – and more intangible – like influence, trust, goodwill or emotional connection. The latter can be more powerful than the former. In balance, they animate each other and create lasting outcomes for networks and organisations.

The ‘social’ in social capital means no single person owns these resource – they exist as a feature of the collective and are amplified by it. In a nutshell, we’re better together. The ‘capital’ means that it’s productive – it gets things done and creates outputs.

Here are some of the reasons it pays to cultivate social capital in your organisation – both internally, and as part of a wider ecosystem.


It drives learning

Formal systems of learning and knowledge management are often less powerful than knowledge transference that emerges from informal interactions. We learn by watching each other, talking, telling stories and hanging out.

When these interactions are allowed to flourish, learning is continuous, intrinsic and celebrated.  Mentoring and collaboration trumps competition and information hoarding - and people are more inclined to work out loud for shared value.

The result? Social capital boosts organisational competence.

It cultivates reciprocity

Would you like to work more cooperatively, generously and sustainably? Of course. Investing in social capital increases the odds that this way of working will become the norm.

Reciprocity means mutual aid; give and take, counting on each other. Creating an environment where people can help each other out directly and indirectly, understanding that it lifts the entire network up, is priceless. Be helpful, be helped.

Beyond individuals, the group can start to take on a collective identity – thinking of themselves as a ‘we’ (whether that is formalised or not).

It breeds diversity

If you’re amassing capital, you want to diversify to ensure its gains are sustainable. In the same way, the networks and communities that come together to form social capital function best when they’re diverse.

If you want to unlock different skills, assets, resources and perspectives, a group comprised of highly similar people from highly similar backgrounds aren’t as effective as a network of difference.

Social capital supports healthy diversity by interconnecting people that may not normally interact with each other and illuminating the best of their experiences and insights.

It promotes loyalty

The trust, emotional support and sense of belonging that comes along with social capital means people feel they can turn to others when they need to. This, in turn, means they’re naturally loyal to the group or network where they get these need fulfilled.

If you’re battling to engage employees or struggling to build fans and advocates, investing in social capital can be an antidote. Let alliances come together organically, attracted by shared values, reciprocity and a sense of ‘we’.

A loyal network will amplify your mission and message exponentially faster and infinitely more persuasively than individual talking heads or one-way advertising.

It sparks innovation

Understanding that continuous innovation is essential to thrive in today’s world, businesses need to create working cultures where their people are comfortable taking risks and thinking unconventionally. Leaps of faith demand a trust and emotional safety; two elements commonly found where there is an abundance of social capital.

Without networks and communities, and the social capital they yield, an organisation will struggle to connect, understand, innovate and grow. A business dense with relationships enjoys a freer flow of information, exposure to a greater range of idea and perspectives and expedited collaboration between individuals and groups to solve problems and meet challenges.

It’s financially smart

If you build social capital with integrity over time it helps your bottom line. Add up the outcomes above and they’re a formula for profitability.

Businesses that understand and nurture social capital also tend to have a deeper understanding of their role in wider ecosystems. This often leads to a focus on ways of working and producing that build social good, rather than contribute to social ill – allowing a flourishing triple bottom line.

Social capital is a currency, but don’t make the mistake of treating it like one.

It requires a more holistic approach and a fundamentally human one. We can’t survive without it, but we typically overlook or dismiss it in lieu of reductive key performance indicators.

In the haze of the corporate domain, we slough off the connections that carry us through life in every other context. Those businesses that embrace and nurture it experience tremendous advantages.

Put your capital into focus.

Venessa Paech