What Is Social Capital, and Why Should You Care About It?

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    What Is Social Capital,and Why Should YouCare About It?

    This book is a guide to social capitalwhat it is, how to eval-uate it, how to build it and use it. This chapter defines so-cial capital and explains why social capital is so important.

    Social capital refers to the resources available in and throughpersonal and business networks. These re s o u rces include infor-mation, ideas, leads, business opportunities, financial capital,power and influence, emotional support, even goodwill, tru s t ,and cooperation. The social in social capital emphasizes thatthese re s o u rces are not personal assets; no single person ownsthem. The re s o u rces reside in networks of relationships. If youthink of human capital as w h a t you know (the sum of your ownknowledge, skills, and experience), then access to social capital

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    depends on w h o you knowthe size, quality, and diversity ofyour personal and business networks. But beyond that, socialcapital also depends on who you d o n t k n o w, if you are indi-rectly connected to them via your networks.

    Capital emphasizes that social capital, like human capi-tal or financial capital, is productive: It enables us to create value,get things done, achieve our goals, fulfill our missions in life,and make our contributions to the world. But saying that socialcapital is productive is an understatement: No one can be suc-cessfulor even survivewithout it. But many people believethey should be able to get along without social capital; they mis-take going it alone as the prescription for success. Others pre-tend to thrive without social capital, using it secretly as if it wereimproper or even unethical.

    These beliefs and attitudes are rooted in the myth of i n d i-v i d u a l i s m : the cultural belief that everyone succeeds or fails onthe basis of individual efforts and abilities. This myth is so pow-erfuland such an obstacle to achieving success through socialcapitalthat Ill address it head on in the first section of thisc h a p t e r. Despite the myth of individualism, social capital is anessential part of achieving personal success, business success,and even a happy and satisfying life. Next, I build a businesscase for social capitalthe scientifically proven benefits of re l a-tionships for people, groups, and firms in the world of business.And Ill even go beyond the business case to consider the linksbetween networks and the greater concerns of lifehealth,longer life, and a sense of meaning, fulfillment, and the abilityto contribute to the world.

    Ill conclude the chapter with a thorny issue: the ethics ofusing social capital. These thorns are imaginary. We cant a v o i dmanaging relationships; our only choice is h o w we managethem. Managing our networks consciously is an ethical dutyand the prescription for personal and business success.

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    Reconsidering Success: The Myth of Individualism

    What does it take to be successfulto achieve career and lifegoals? When I pose this question to my consulting clients, audi-ences, and students, I get a variety of answers. The source of suc-cess is natural talent, intelligence, education, or effort. It mighteven be sheer luck. Whatever the source, the unspoken assump-tion behind these answers is always the same: Success is an in-dividual matter. Every person succeeds or fails on the basis of hisor her own individual efforts and abilities. This assumption is sopowerful that when I suggest an alternative viewsuccess de-pends on our relationships with others as much as it does on our-selvesthe usual reaction I get is denial. This reaction getss t ronger when I suggest that pay, promotion, and accomplish-ments are largely determined by the stru c t u re and compositionof ones personal and business networks. And the last straw ismy suggestion that it is our ethical duty to deliberately managerelationshipsand that anyone who doesnt is unethical.

    Psychologists would say that the denial response comesf rom the need to maintain a positive self-image. Denial of the ro l eof relationships, for example, preserves the self-enhancing illu-sion that we are masters of our own fates: we get all the credit forour successes. This psychological response might be real, but thereason for denial is much deeper. Every society is org a n i z e da round cultural myths that give meaning and purpose to life.One prevalent in this culture is the fiction that success is an indi-vidual matter. To suggest that ones fate depends on re l a t i o n s h i p sruns counter to one of the dearest American values: individual-ism. Individualism is one of the nations founding principles;Americans are born into a culture that teaches and celebrates in-dependence, self-reliance, self-suffic i e n c y, s e l f - i n t e rest, and self-determination. The American hero is the rugged individualist.For example, everyone knows (and is inspired by) Horatio A l g e r

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    talesrags-to-riches stories of individuals who achieve gre a tsuccess on the strength of their own efforts. Americans re v e rethe go-it-alone mentality, the frontier spirit, the lone wolf thriv-ing without others. This myth has many names but the messageis always the same: Success is an individual enterprise. To suggestotherwise is almost un-American.

    But that is my messageindividualism is a myth. JamesColeman, one of the most influential social scientists of the lastfifty years, called individualism a broadly perpetrated fic t i o nin modern society. This fiction is that society consists of a setof independent individuals, each of whom acts to achieve goalsthat are independently arrived at, and that the functioning of thesocial system consists of the combination of these actions of in-dependent individuals.1 This fiction or myth gets in the way ofunderstanding how the world actually works. And in doing soit lowers our chances of success, depresses our pay, limits ourp romotions, decreases the value we create, reduces our abilityto get things done, and even jeopardizes our health, happiness,and welfare. And it closes off all the great possibilities of life. Byunderstanding the role of relationships, however, we can taphidden re s o u rces that will enable us to be much more success-ful in all areas of our liveswork, family, and community.

    Everyones first task is to unlearn the lessons of individ-ual achievement.2 The place to start is by considering the role ofnetworks in the individual attributes people love to claim: nat-ural talent, intelligence, education, effort, and luck.

    Natural Talent

    Physical and mental talents depend on genes, but inherited abil-ities explain only part of a persons performance; the enviro n-ment is as importantif not more so.3 Natural talent is expre s s e dand developed via relationships with others. Why, for example,did the U.S. womens soccer team win the World Cup in 1999?

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    The team included highly talented individuals. But their indi-vidual talents had been spotted, honed, and nurtured by score sof coaches, teachers, and trainers. The players mastered theirskills through many years of organized team play. Several mem-bers of the U.S. team had played together for years (including atthe Olympic Games). They had the good fortune to be born at atime when a soccer infrastru c t u re existed that provided oppor-tunities to play and develop. America never had a world-classteam before simply because the infrastru c t u re to develop onedidnt existnot because the nation lacked young women withnatural talents for playing world-class soccer.

    But soccer is a t e a m sport, you might object, and so ofcourse individual success is interrelated with the performancesof others. What about an individual sport, like golf? Considerthe visual interplay between Sergio Garcia, the young pro golferf rom Spain, and top-ranked Tiger Woods on the last few holesof the 1999 PGA Championship at Medinah, Illinois. Garc i a sdashing play (including an eyes-closed chop that scooped theball out of exposed tree roots) whittled Woodss lead to nothing.Woods (and the commentators) didnt miss the bold, challeng-ing look Garcia cast at him from one hole to the next. Wo o d sused this challenge to rally, rescue his lead, and win the tourna-ment. Garcia finished second, right on Woodss heels.

    Think of one of your gifts of natural talent. Who helped ton u r t u re it? What role did your relationships with family, friends,coaches, teachers, trainers, teammates, and others play in thediscovery, development, and expression of your natural talent?

    Intelligence

    Intelligence, like natural talent, depends on inherited genes. Butagain, thats only part of the story. At one time, it was believedthat intelligence was fixedthat we are stuck forever withwhatever level of intelligence we may have at birth, notes Ya l e

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    psychologist Robert Sternberg. To d a y, many and perhaps mostre s e a rchers in the field of intelligence believe that it is mal-leablethat it can be shaped and even increased through vari-ous kinds of interventions.4 The home environment, availabilityand quality of schooling, and other factors play major ro l e s .Early childhood interventions such as Head Start raise intelli-gence and achievement score s .5 A nurturing and stimulating pre-school home environment (interactive caregivers, organized andvaried activities, appropriate play materials, and so on) mattersmore than other factors, such as socioeconomic conditions. Iso-lation, neglect, and deprivation crush intelligenceto the pointof mental retardation.6

    The malleability of intelligence illustrates the diff e rence be-tween the brain and the mind: Everyone is born with a physicalb r a i n ; but a human m i n d develops only through re l a t i o n s h i p s .Indeed, the human brain evolved neurologically in response toan increasingly complex social environment, developing a spe-cialized organic (hard w i red) ability to perceive social eventsand human interactions. The mind arises in a social context thatd e fines its form and fig u re; consciousness, self-aware n e s s ,a w a reness of others as mental selves, and the emotions are allre l a t i o n a l .7 N e u roscientists call this the social mind to em-phasize that the mind is communal in its very nature: It cannotbe derived from any single brain in isolation.8 Indeed, ongoinghuman contacts are necessary for physiological and emotionalwell-being.9

    Education

    The fact that you and I are communicating through the writtenw o rd is testimony to the many relationships involved in humaneducation. We learn language through observation of and inter-action with others. If I had been born in Beijing, for example, Iwould be writing in Baihua, the modern written vernacular of

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    s t a n d a rd Mandarin. Literacy is a function mainly of educationalopportunities. We read and write because othersparents, re l-atives, teachers, tutors, older siblings or friendstaught us how.Education is an important component of human capital. In-vesting in ones human capital by going to college, earning ad-vanced degrees, and making learning a lifelong process is acritical element of success. But making this personal investmentis possible only through relationships with others; indeed, so-cial capital facilitates the creation of human capital. For exam-ple, a high school student is much more likely to stay in schoolif both parents are present, the student has few siblings (and sothe parents can concentrate their attention and other re s o u rc e s ) ,the parents expect their child to attend college, and the familydoesnt move often (residential stability facilitates re l a t i o n s h i p sbetween the students parents and teachers and the parents ofschoolmates, and between the student and teachers and otheradults in the community).10

    Effort

    Everyone knows people who succeed even though they are n tthe most talented, the cleverest, or the best educated. They sim-ply never give up. Effort is clearly related to success, but is it ap u rely individual trait? Clearly, there are natural variations inphysical and mental energ y. But the fields of org a n i z a t i o n a lbehavior and psychology demonstrate conclusively that theamount of effort expended varies tremendously with the socialcontext. Fast runners prefer to compete against other fast ru n-ners (called a fast field) because it elevates their individualperformance. Some work settings are motivating; others are de-motivating. A person is more likely to work harder in a high-p roductivity workplace than in a low-productivity workplace.Good managers know how to motivate people by setting explicitand specific goals (do your best doesnt bring forth as much

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    e ffort as a specific target), providing timely and useful feedback,and by artfully using re w a rds and incentives. They understandthat the social environment greatly influences effort.

    Even the goals we choose are defined by the culture inwhich we live. The goal of monetary success, for example, is cen-tral in American society.11 Yet this devotion to making money isu n p recedented in history. Up until a few hundred years ago, thecontinuous pursuit of pro fit for its own sake was a sin, charg i n gany interest on a loan was illegitimate (usury), and a conceptsuch as maximizing shareholder value would have been consid-e red evil.1 2 The goals we choose are influenced by those aro u n dus. As mentioned earlier, a student whose parents expect theirchild to attend college is more likely to go to college than onewhose parents re g a rd college as unnecessary or inappropriate. Ateacher or mentor may encourage us to set higher goals than wewould otherwise; a role model inspires us to achieve them.

    Luck

    Chance and happenstance are ingredients of success. For exam-ple, accidental discovery is responsible for a host of scientific andtechnical bre a k t h roughs: penicillin, insulin, dynamite, Te flo n ,Post-it notes, plastics, and many others. Some people seem tohave a knack for being in the right place at the right time. Ye tthis kind of luck is not accidental; it is cultivated. Studies showthat lucky people increase their chances of being in the rightplace at the right time by building a spiderweb stru c t u re of re-lationships that catches lots of diff e rent bits and pieces of infor-m a t i o n .1 3 They increase the chances of beneficial accidentalencounters by living in a zigzag, not a straight line. Cre a t i v i t ycan be managed. For example, creative types boost their luck bybouncing their ideas off others, learning from others, helpingothers, and so on. Some science labs have even changed thephysical configuration of their labs and offices to encourage ran-

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    dom i...

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