Tag Archives: measuring social capital

Social Capital– Power of Virtual Social Currency for an Expanding Social Economy: Key Driver for Sustained Growth…

Social capital is an asset, its currency and it refers to relationships that people or organizations have with each other. Social capital is leveraged in many different ways in the business world– from getting a job by knowing someone, to making business deals, to establishing trusted alliances, to developing merger and acquisition scenarios… These and many other relationships have common goals in mind.  According to Konstanze Alex Brown; social capital is critical for fueling business relationships for sharing, innovating… and the bigger the network of real and relevant social engagement the more access to social capital…

The concept of social capital is not new, but its application have been relatively limited due to less-than-evident connection to measurable economic value (think ROI). But things are changing; social return-on-investment (SROI) is becoming a hot buzz word and organizations are finally figuring out how to apply social analytics and derive actionable insight from social networks that can lead to increased social capital…  Critics argue that social capital is nothing new– that it’s the latest buzz word meaning all things to all people– but it lacks empirical specificity…

In the article Social Capital by Ivan Misner writes: Social capital is built by design, not chance… it’s very similar to a monetary account for it, too, is accumulated by an individual or organization for production of wealth… Put more simply, it’s an accumulation of resources developed through social networks… According to Wayne Baker; success is social and all things that are customarily thought of as contributing to success are, in fact, intertwined with social networks… 

Social capital is about the value of social networks– the bonding and bridging of people, organizations, business… with norms of reciprocity. it’s goodwill and its value lies in the structure and content of the social relationships. According to Cindy Blackstock, Marilyn Weiss; social capital extends beyond the traditional ideas of networking, to something deeper and more meaningful– it’s the building of genuine, long-lasting relationships… Fostering strong social capital is simply imperative for an organization’s long-term success...

 In the article Social Capital Matters In Business by Vanessa DiMauro writes: Social capital is ability to retain customers, and attract and keep staff, and growth… The central premise is that social networks have value, and the collective value of all these networks (who people know) and the inclinations that arise from the networks to do things for each other (norms of reciprocity)…  

According to Yoon J. Lee; social capital is form of economic and cultural capital in which social networks are central and transactions are marked by– reciprocity, trust, cooperation… It’s currency and valued like a bank account– when capital is withdrawn the account balance is reduced–and unless it’s replenished with deposits, eventually the account can be overdrawn… 

In the article Valuing Social Capital by PwC writes: Companies are increasingly seeing the value of social impact valuation, and are adopting approaches, such as; social return-on-investment (SROI). Companies that employ social impact measurement are able to know and understand which decisions lead to useful social impact and which don’t… Hence, they are better able to manage and value the impact of social programs. Social impact valuation allows social costs and benefits to be properly identified and accounted for– meaning that long-term benefits or costs can be measured and managed like any other asset or liability…

It’s about leveraging network links between people/organizations… According to Jay Palter; building social capital is akin to investing for long-term accumulation, rather than for short-term profits… It requires investment of time and resources without expectation of any immediate measurable return… Hence, think social capital in term of engaging deep relationships, developing thought leadership, and networks of resources. 

In the article Invest in Social Capital by Laurence Prusak, Don Cohen write: Strong relationships are the fuel of great organizations. They run much better when people know and trust one another– deals move faster and more smoothly, teams are more productive, people learn more quickly and perform more creativity… Social capital is a term that nicely captures the notion that investments of social currency in relationships will return real gains that show-up on the bottom line…

Yes, it all sounds pretty simple and straightforward; organizations need only get their people connected with one another and wait for the payback: Easy, right? Well ‘no’; wrong for two reasons: First, social capital is under assault in many organizations because of– rising volatility and over reliance on virtuality… More simply, it’s under assault because building relationships in turbulent times is tough, and tougher still with many employees working off-site, or on their own…

Second, social capital is under assault because few organizations know how to invest in it. Knowing that good relationships help organizations thrive is one thing; making relationships happen is quite another.  These are virtual times… Most people used to work at the office, but now aided by technology, work happens in all imaginable configuration   of time and space, e.g.;  telecommuters, virtual team members, and laptop– toting road warriors abound…

Virtuality is an asset for many organizations– chances are you are one yourself or have a slew of them working for you… According g to Laurence Prusak and Don Cohen; there are advantages to volatility and virtuality, e.g.; volatility gives opportunity– for every organization crushed by new technology, a new one is born… virtuality is flexibility– organizations gain great mobility– being anywhere, at anytime with instant access to huge amounts of information…

But volatility and virtuality also erode relationships, which is why– organizations must learn to invest in social networks… According to Eva Cox; social capital is the fabric or glue that connects people and organizations… it’s the preeminent, most valued form of any capital– providing currency to build truly successful organization. Without a hefty social capital bank account, an organization cannot be sustained or fully developed…