One of our taglines at Favela Fabric is “We help organizations harness their social capital”. Many definitions exist for social capital, so what do we harness exactly? One of the characteristics of social capital is that it refers to something intangible. Another could be that it refers to human (social) relationships. To me, we’re talking about the value of networks, in an dynamic environment where these relationships can change all the time.

Frequent changing relationships in networks is a threat to harnessing the value in these networks. In that perspective, organizations can need some help. In this post I will elaborate some more about the concept of social capital, which is in fact not so obvious at all. The assumption however is quite obvious, that there is underutilized potential in these networks.

What is this potential? Do we have to see social capital as a resource? As a possible value? If so, in what appearances? If we, like myself, see social capital as the value of networks, what do these networks look like? And what social characteristics are needed to increase or maximize their value? And how can all that be influenced for the better? These are questions that pop into my head when thinking about it. Answering some would probably make the concept and the usefulness easier to understand.

In a network there is a certain structure. This structure can be seen as who is connected to who, for what purpose, what information flows between the nodes of the network, under what circumstances, how often, and so on. Without any guidance or practice, this structure just emerges by forces that are present intrinsically. Social relationships, at least in organizations, are normally shaped and strengthened by opportunism and trust. In terms of business these relationships can proof extremely valuable, but chances are that this value is far from maximized. Some nodes in the network are probably overutilized, causing inefficiencies and can lead to too much central persons. When these persons leave the network, you can understand what happens with the flow of knowledge and information.

Professional relationships between some people or groups of people have enormous potential in terms of innovative capacity, exchange of knowledge and best practices, and so on. Too really capture the value of the network, or to harness the social capital, it can help to make use of a social network analysis. That makes it easier to evaluate the value of the network, and identify (potential) problematic areas to increase the value of the network or the social capital.

Harnessing social capital in organizations is possible as well by embedding other enabling tools in the organization. Tools that help designing some aspects of the business, relational aspects, the social network in (and between) organizations. Tools that lower transaction costs and barriers to form valuable relationships, making the formation of social networks more likely. Depending of the goals and end-products of the organization (often the customer is very important here), the business needs to be designed accordingly. Bringing the right structure between strategy and operations is where the opportunities are. A social network analysis is a good starting point.