Social Capital: How to Understand and Grow Yours

Labels clarify, organize and structure information in a coherent way. At least, that’s what they’re supposed to do. So why do labels often get in the way of comprehension and action?

Social capital is a classic example of a clear, intuitive idea that is muddled by a confusing label.  Once you grasp the concept, you can measure and grow social capital at your company.

Trust: The Foundation of Social Capital

Social capital is the idea that social relations have productive benefits. Sound a lot like trust? We think so. Most people agree that trust has a financial impact on their company’s long-term profitability. So why does social capital get left out of the equation?

It’s easy to see “capital” in the form of a tool or factory. You invest money in a tangible good in order to make more money. While concrete investments, like widgets, are easy to count and quantify, that doesn’t lessen the value of intangible forms of capital. Like plant, property or equipment, social capital is essential to growing your wealth.

Integrating Social Capital in Your Business

Sustainable business practices offer one of the most efficient frameworks to grow social capital. As a socially and environmentally responsible business, you’ll find more opportunities to focus on the three key activities behind social capital: bonding, bridging and linking:

• Bonding – Strengthen your “strong ties”
  • Strengthen your strong ties by nurturing a company culture based on openness, trust and transparency. For example, empower employees to develop the framework for a sustainability strategy in collaborative, cross-functional teams. Recognize their work and act on their suggestions
• Bridging – Connect your “weak ties”
  • Introduce people and ideas outside of your company, industry and specialty. Connecting “weak ties” often results in the cross-pollination of ideas and a spring well of innovation. For example, create regular sessions where experts from diverse fields speak to your employees. Encourage your employees to return the favor and speak to others about their work.
• Linking – Leverage partnerships for greater change.
  • Join forces with institutions and organizations that have a mutual interest in the success of your social and environmental initiatives. You’ll likely find that you can be more effective together than apart. For example, Patagonia, a leader in environmental stewardship, is helping Walmart green its supply chain.

Build it Before you Need It

You can’t buy social capital when you need it most. It takes time to grow and dedication to nurture. But taking the first steps toward sustainability, from a recycling initiative to volunteer days for employees, you’ll start building the kind of social capital that benefits all parties.

Can you think of any other areas where you could develop social capital? Where have you seen it used most effectively? Have you seen any cases of its failure?

How to Restart your Stalled Sustainability Project

Success is measured by what you finish, not by what you begin. There’s plenty of advice on how to start making your business more socially and environmentally responsible. But how do you get sustainability re-started once your momentum falters?

Ingredients for Sustainability: Perseverance, Endurance, and Resilience

When it comes to rebounding in the face of defeat, nobody does it better than Mother Nature. Hurricanes, volcanoes and droughts – the ecosystems inevitably find a way forward.

In launching your sustainability initiative, take inspiration from nature’s resilience. Commit yourself to pick up the pieces and rebuild your vision regardless of the obstacles.  After all, it’s better to crawl toward the finished line than it is to give up with the goal in sight.

4 Steps to Restart your Sustainability Project Today

1. Identify and Reflect on Problem Causes
   • Failure is often a symptom of the unique circumstances you face. Reflect on what went wrong where and decide how you can tailor social and environmental goals to better fit your particular situation.
2. Re-Motivate Yourself
   • If you can’t picture success, you’ll have difficulty motivating others to join your team. View your past troubles as the price for renewed wisdom and personal growth. Imagine how success will feel and spread that vision with conviction.
3. Engage Detractors Early and Often
   • Who was your biggest detractor for your last project? Bring them on board for a new perspective on what went wrong and why. You may not like what you hear, but at least you know what you’re up against. Greater engagement and transparency may even win a convert to your cause.
4. Simplify and Aim High
   • What can you realistically achieve in the short term? Are there any salvageable results from your previous attempt? Can you identify quick wins that build to big goals? By keeping expectations in line with reality, you’ll gain the support necessary to drive the larger, long-term sustainability program to completion

What challenges have you experienced in launching your sustainability projects? Were you able to overcome the obstacles?

Sustainability: More Familiar than you Realize

What stops action faster than a planning committee? Fear of the unknown. A little familiarity goes a long way when it comes to getting buy-in on a problem. By connecting past experience with present problems, you can steer your leadership to a more environmentally and socially responsible way of doing business.

Connect past experience with present challenges

If you look around your company, chances are that you’ll find someone who experienced the rise of Information Technology or Total Quality Management in the workplace. At the time, business leaders had difficulty justifying investment and changing attitudes for as-of-yet unproven benefits. Sound familiar?

Having faced these now familiar issues, business leaders feel more comfortable and confident to tackle similar problems.

Business, Environment & Society

If you think sustainability is a fringe fad, think again. From food and worker safety to your company’s environmental impact — today’s consumers, shareholders and governments expect more than short-term profits. And we believe this BusinessEarth approach will result in significant long-term shareholder value.

Sustainability: Have we met before?

In the Harvard Business Review article “The Sustainability Imperative”, authors David Lubin and Daniel Esty describe sustainability as the next Megatrend:

“Sustainability is an emerging business megatrend, like electrification and mass production, that will profoundly affect companies’ competitiveness and even their survival.”

Other megatrends included the shift to IT in the 1970s, Total Quality Management in the 1980s and Lean Manufacturing in the 1990s. While most every company eventually adopted these practices, visionaries at the leading edge claimed a competitive advantage for years to come.

Past is Present: Get visionary

When cost cutting was all the rage, Toyota focused on maximizing quality. In the 1970s, the immediate returns weren’t that obvious. But leaders believed in it and continued to take incremental steps toward systemic change.

Swimming against the current is always difficult. However, if you paint a picture of the rewards awaiting bold leadership, you’re much more likely to make a departure from business as usual in a way that proves profitable for all.

3 steps to engage your leadership in sustainable business

1. Explore the past – Ask decision makers how they handled past Megatrends. Listen closely so you can find parallels to today’s movement toward socially and environmentally responsible business.
2. Connect past to present – Ask leadership if they can see any modern-day equivalent to their past experience. Ask leading questions so that the “sustainability epiphany” can be theirs. This ownership will increase their dedication to a successful outcome.
3. Tailor to your situation – Some leaders possess a bias toward action AND strong perceptive skills. If you’re lucky enough to find both in your decision makers, great. If not, ask yourself where you need to tailor your approach to fit the specific needs of your industry and company.

Once you’ve opened the door to engagement, work together to form a vision that leadership can share with the rest of the company.

Did we miss anything? How have you used past experience to help others make sense of present-day problems?