Social capital and good books

“Social capital… reflects the community skills that have co-evolved with individual skills. People working together generate webs of social capital”. So say Jessica Lipnack and Jeff Stamps in Virtual Teams. Social capital is built on rich social networks.

It is a delicate thing. Social networks are forged from trust and as anyone who has suffered from infidelity in a relationship can tell you, trust builds up over time and but is very easy to destroy. According to Stephen Covey, trust becomes established when individuals demonstrate character and competence. Where these intersect trust and credibility is established.

Stephen Covey’s model of trust

We can easily see the beneficial consequences of trust and the accumulation of social capital when we consider those societies where trust and social capital has been shattered. Many of us can only imagine what it would be like to live in community where there is frequent violence, abuses and threats. In circumstances such as these the dismantling of social capital is accelerated when the state is perpetuating abuses.

Social capital is relevant for all social units: families, cities, businesses and nations. According to Lipnack and Stamps:

People generate wealth in dense networks of horizontal relationships in two primary ways because they lower transaction costs [and] increase opportunities for cooperation.[1]

A simple example is the knowing a friend will meet you as agreed, although a week has elapsed since the meeting was scheduled. You can probably think of a friend like this – and, by contrast, those that you would always contact to confirm the meeting. The extra workload, even if it is only small as illustrated in this example, reveals an added “transaction cost” to the relationship. Stephen Covey Junior provides another example in The Speed of Trust. A New York street vendor selling hot dogs found long queues dissuaded potential customers. He decided to enable customers to make their own change. This freed him up from dealing with cash and enabled him to provide much quicker service. His customers appreciated being trusted.

Now take these small gains and multiply the effect in large organisations (such as businesses) and their multiple stakeholders. The difference between a high trust and low-trust environments is clearly substantial.

Better World Books

Better World Books exemplify the development of social capital. They are a social business, motivated to do good. The profits flow, and they disburse much of them by supporting literacy initiatives around the world. According to Kevin Jones Better World Books “is now approaching $60 million in revenues with healthy profits and a compound annual growth rate of 35 percent. It’s donated more than $11 million to nonprofit groups helping to give the gift of literacy.[2]

Better World Books stock comes from donations from individuals, educational institutions and libraries. They are sold for a reasonable price to fund the company’s philanthropy. The Good Capital Social Enterprise Expansion Fund (SEEF) invested in Better World Books to aid it through its establishment phase. So we have a company who have a philanthropic supply chain, have staff who are no doubt inspired by the company’s mission, social enterprise investors, customers who buy into the mission and an increasing cohort of beneficiaries of literacy programmes. This is a potent recipe to build social capital that extends well beyond the boundaries of the company.

As Professor Muhammad Yunus says, every problem can be solved with a social business. The challenge for more conventional companies is how to use this dynamic and learn from its masterclass of engagement and social capital accumulation.

Here is a YouTube video of Better World Books. Note that the figures presented are four years out of date (reinforcing their incredible growth).

[1] Jeffrey Lipnack and Jessica Stamps: Virtual Teams: People Working Across Boundaries With Technology (2008) http://www.netage.com/pub/books/VirtualTeams2.html

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Book review – We: How to Increase Performance and Profits Through Full Engagement

Rudy Karsan and Kevin Kruse’s book is pragmatic and of use to anyone looking to improve employee engagement. The book is organised into four parts. The first two deal with the individual and I will get my objections to them out of the way before discussing the gems to be found in parts three and four.

In parts one and two the focus on the individual is understandable – as engagement happens from heart to heart. We know that globally, the rates of disengagement are too high and too many people are disconnected from their work. I also accept that people will feel more fulfilled if they find meaning and purpose in their work – but after reading the first few chapters I was left with an impression that we are Homo economicus – we are one dimensional and our primary function is our work. Through our work we will find fulfilment and happiness. But it feels like a rationale to get people to work harder.

As a New Zealander one bad habit my fellow Kiwis share with the people of the United States (the home of the authors) is that we work long hours – we work too hard. Work-life balance is seriously out of balance. In this context I get concerned when I encounter an evangelistic approach towards the virtue and necessity of hard work.

The positives

Having got that out of the way, this book has many gems. The authors have obviously rolled their sleeves up and got involved with engagement processes. They share the three questions they use to gauge engagement (you will find them in the book). I am a fan of short and open survey questions and intend to incorporate these into my work.

The authors make a beautiful distinction: harmonisation = engagement + alignment.

Engagement is the catalyst to get you to that extra edge in performance, while alignment ensures everyone is heading in the same direction. (page 145)

They raise the bar for us here. Some organisations struggle to get to the point of surveying staff about engagement. They may or may not do anything with the information gleaned. To ensure the material issues blocking greater engagement are addressed, and then to go on to align people across the various structural and ideological barriers in an organisation is a worthy aspiration.

Another concept that resonates with me is their management prescription, embodied in chapter eight – “great managers focus on growth, recognition and trust”. This chapter atones for the issues outlined earlier. The authors prefer valuing employees to recognising employees. To survey your employees, survey them to see to what extent they agree with the statement “I feel valued as an employee of this company.” They prefer it to “I receive recognition when I do good work”.

Valuing is about appreciating the worth of something (someone) and of esteeming something (someone) highly. When we value employees, we appreciate them for who they are and what they bring to the organization. We acknowledge them not merely for tasks, but to the deeper intrinsic worth they add to the organization by just being there. (page 177)

When authors apply concepts about qualities of character, such as trust and trustworthiness, they reveal to me a deeper understanding of the human condition than encountered in many business books. Rudy Karsan and Kevin Kruse highlight trust as an important driver of employee engagement. To understand this better they suggest questions such as: “How can our leadership team foster greater trust among employees?” The three qualities that inspire trust are competence, caring and commitment.

It is hard to find books that focus on engagement – so this one is well worth the purchase price. If you know of others you would recommend, please comment.

We: How to Increase Performance and Profits Through Full Engagement by Rudy Karsan and Kevin Kruse (2011) New Jersey: John Wiley

website: www.wethebook.com