What Is Social Capital and How Do You Measure It?
“Most organisations don’t suffer from a deficit of ideas…. They just need to create more deliberate connections,”
So says Michael Arena, faculty member in Penn's Masters in Organisational Dynamics and VP for Talent and Development at Amazon Web Services, in conversation with David Green in the latest series of the Digital HR Leaders podcast.
Throughout the episode, Michael and David explore the concept of innovation and how it is achieved and maintained in an organisation, especially in a remote environment. As the quote above suggests, it might not necessarily be the ideas, knowledge and capabilities – the human capital – that are lacking within organisations today, but the way in which workers come together to realise, collaborate and act on these ideas – the social capital.
In this article, we’ll explore the concept of social capital further, answering the following questions using insights from Michael’s episode:
On a societal level, the OECD describes social capital as “the links, shared values and understandings in society that enable individuals and groups to trust each other and so work together”.
Applying the term in a work context, Michael Arena describes social capital as “the competitive advantage that is created based on the way an individual is connected to others” in his book, Adaptive Space. If human capital is about what an individual knows, social capital is about how well positioned that individual is to use what they know, in order to get work done.
Bonding social capital can be thought of as the level of trust that is built within a team or a small group.
Bridging social capital is about how well positioned individuals are to reach out across teams, functions, departments, or even externally, to get work done. These types of interactions, that go beyond your team, are much more susceptible to waning.
Bridging versus bonding social capital
Social capital can be measured with Organisational Network Analysis, or ONA. ONA can be conducted through surveys, by asking simple questions like ‘who are the top five people you regularly connected with’. This is what’s known as active ONA – the respondent is actively participating in the data collection.
Another way to conduct ONA is by analysing email, chat messages, and meeting schedules to understand who is connected to whom. If you use Microsoft MyAnalytics within your organisation, for example, you will see this type of information in the ‘network’ section. This is passive ONA, because the individual is not required to handover information; the information can be gleaned without their participation.
Another type of passive ONA is using sensor badges, or wearables, which are fitted with location or voice sensors and infrared technology to monitor in-person interactions. Companies like Humanyze are at the forefront of developing and deploying this kind of technology.
The Network feature in Microsoft MyAnalytics
The idea of using wearables to measure employee interactions can raise a lot of eyebrows. There’s no doubt that ethics and privacy play a huge role when conducting ONA and measuring social capital. Here’s two high-level ethical principles for ONA:
Be open and make it opt-in. This is clear with active ONA, but passive ONA requires upfront transparency. Explain to employees what data is being collected, why and how. Ask employees to opt in and allow them to opt out at any time.
Keep it anonymous. Leaders and managers should only need insights at the aggregate level to understand patterns across teams or within a team – how well connected is the team, for example, or how well connected is the team to other teams. There’s rarely a good reason to share insights at the individual level.
At the beginning of the pandemic, as lockdowns and remote working were enforced around the world, bonding social capital strengthened, as relationships with closest contacts intensified and communication increased. However, research shows a rapid decay in bridging social capital, connections outside of an individual’s immediate team. A decay in bridging social capital has a significant impact on innovation. New ideas are less easily shared and scaling new ideas across the organisation will be increasingly challenging.
A study from the University of Michigan showed that whilst it takes six one-on-one interactions to build up trust in a physical environment, it takes about 16 interactions – three times the amount – when using virtual communication technologies. This means, in order to maintain bridging social capital remotely, you have to be far more intentional in nurturing relationships and build up much more repetition in communication.
To explore Social Capital, ONA and the impact of virtual and hybrid working on innovation, have a listen to the full episode of the Digital HR Leaders podcast with Michael Arena.
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ABOUT THE AUTHOR
Caroline is the Research Director at Insight222. She is a thought-leader, researcher and writer on people analytics and the future of HR. Prior to joining Insight222, she worked at the Center for the Future of Work where she was an advisor and in-demand speaker on topics related to the future of work. She has also held roles in digital services and transformation consulting at Cognizant. Contact Caroline at caroline.styr@insight222.com