I was asked today by a colleague of mine to define social capital. This is what I e-mailed back to him:
Social capital is the invisible stock of connections between people that makes collaboration possible. It basically measures trust and how people really care for one another. When members of a group know each other very well and share the same values, social capital is high. When they don't and have no shared awareness of the situation facing the group, the same words can mean very different things to them, and the trust level is low. Social capital and culture go hand in hand.
Social capital determines the behavior of groups facing change. High social capital means stong cohesion of the group, and thus a great capacity for incremental innovation and problem-solving, but it also means great resistance to change, unless change is decided within the group. Think about an R&D team of French engineers ;-) Low social capital means low cohesion of the group and a greater capacity to accept change imposed by the boss (the formal organization), but it also means low capacity for innovation and problem-solving. So building an innovative organization is also about beefing up its social capital.
Large groups of people, and big companies in particular, are best seen as collections of high social capital groups loosely joined together in a broader community of relatively low social capital. That's why the approach taken by Northrop-Gruman when they had to downsize the company was to identify the practices and expertise that they wanted to keep alive, and found out who in the company best embodied those practices as community leaders, or as subject matter experts. They focused their attention on those people and convinced them to stay with the company. Their plan was not about getting rid of older and/or low-level people, which usually happens in such circumstances.
This is related to our KM practice, because effective sharing of knowledge only takes places within groups with high social capital. That's why KM is primarily about building up links between people through various forms of collaboration. Hence the importance of project teams, communities of practice, web 2.0 tools, group collaboration methods, taxonomies, tagging etc.
It is also related to the case of [company name withheld], because social network analysis will tell them whether the change they want to implement will be easy or not, and what the outcome is likely to be. High social capital means hard to move, but as a block and with little loss of key capabilities. Low social capital means easy to move, but the people who will move to [name of place withheld] are likely to be the ones with no alternative, which can mean great loss of capabilities. So they might consider taking a close look at the people who matter, i.e. the icons of the organization's knowledge.
