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Invest in social capital to boost corporate growth
Financial capital as the pillar of business world is familiar to all. Social capital is the low profile sibling of this pillar, which nevertheless greatly impacts the profit lines of an organisation. It constitutes the informal networks, the know-how amassed through years of experience, the bonding between the employees, business ethics, work culture, trust and corporate mission. Building this soft side of business helps immensely in achieving sustained corporate growth.
Social capital needs to be consciously developed and carefully nurtured through appropriate organisational policies and practices. Organisations that recognise the importance of social capital as part of their success formula build it on the following lines:
Hiring the best fit: More than education and experience the right organisational fit is considered important in building social capital. Technical skills are honed through training but the right attitude that fits the corporate culture is important for employees to have good interpersonal relationships with co-workers and develop a strong bond with the organisation. This they believe aids in increasing the efficiency and productivity of employees.
Hands on training: The new employees are given hands on training from their experienced senior colleagues and higher-ups. Thereby they learn the ropes faster and also build networks through the organisational hierarchy. Training on broader lines ensures that the employee’s knowledge is not limited to his department and improves his understanding of the larger context in which the organisation functions.
Encouraging creativity: The top management takes a keen interest in fostering creativity in the work force. They personally interact with the staff to remove roadblocks that hinder creativity. This gives them access to best growth ideas, which the staff would have otherwise hesitated to communicate to their superiors.
Share ideas: They organise forums to bring together people from different departments. This gives the employees an opportunity to share ideas, understand the complete picture of the organisation and to build personal networks with other employees.
Strong on values: Social capital thrives when organisational values are shared by one and all. For this to happen the top management should lead by example and communicate a clear set of values to its employees. Work force with common values is much more efficient and focused.
Job security: Employee lay-offs during bad periods erode social capital. Making employment a long-term commitment has many advantages. Employees with stable jobs can concentrate better as they feel secure. They work harder to pull the organisation through difficulties.
Promoting from within: The policy of promoting from within leads to lower attrition and the company enjoys the benefits of leadership continuity and creation of an in depth knowledge repository.
Common mission: The organisation can generate social capital as employees identify themselves with the company’s mission and share its vision. The employees who take pride in the company’s mission work and strive to accomplish its goals and objectives.
The advantages from creating social capital manifest in myriad ways. Firms that emphasise on social capital create a competitive work force. People learn to work together and share common goals. So occurrence of conflicts are minimised and even if they arise they are resolved amicably and quickly. Trust is an important aspect of social capital. Managers trust their employees to do the right things. The employees are given freedom to fix problems without waiting for instructions. Managers can concentrate on more important matters than micro managing staff. Knowledge and idea sharing help in quick problem solving. Learning agility and flexibility acquired through mentoring by superiors helps employees adopt changes quickly.
Innovative solutions inspired by a creative work environment offer a distinct edge over competitors and enable the company to grab new business opportunities.
Social capital does not appear on an organisation’s balance sheet, but its impact on the bottom line is more than obvious.
N. PURNIMA SRIKRISHNA
faqs@cnkonline.com
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