Gary T. Hartfield is an award-winning serial entrepreneur, author, philanthropist and founder of Serenity Village Insurance & Consulting.
Sometimes, it’s not what you know but who you know—a saying that has withstood the test of time and still rings true today. Discerning entrepreneurs know their success would not have materialized without strategic connections, shared lessons and knowledge. Whether it be a college professor or a business partner, personal and professional relationships contribute to our wealth. Whether we can pinpoint a fiscal value or not, this is called social capital.
Social capital is the most valuable form of capital. The concept, which emerged in the 1800s, refers to the connections built and nurtured over time that may have beneficial professional implications. Social capital includes networks, associations and relationships. It consists of the networks of relationships among people who live, work and play in a particular society, enabling that group to function effectively.
From a business standpoint, social capital is the mutually beneficial connection between two individuals that help each other further their careers or an organization’s goals and initiatives. For example, professional references may represent members of your social capital catalog, people you trust to position you for professional growth success and people who trust you to do the same for them.
In understanding this concept, we must discuss the three forms of social capital: obligations and expectations, information channels, and social norms. Obligations and expectations refer to connections that require specific outcomes. An example is the relationship between a manager and a direct report. For this relationship to work, each member must meet particular expectations to fuel the relationship. Information channels refer to how social groups share resources or information. Social norms refer to the expectations that society and culture may have placed on the type of relationship you are developing.
Building Social Capital On An Individual Level
In a professional setting, our interactions shape how we connect and grow our web of social capital, building together as we climb. My network has contributed significantly to my success as a serial entrepreneur and investor. Whether I am supporting them on their journey or they are supporting me on mine, social capital is the most valuable form of capital in my professional career. These connections are genuine, honest and take time to build. They are more than just transactional.
To build social capital on an individual level:
Think about what you can offer. Rather than always seeking what can be gained from connections, consider what you bring to the table and how it can impact others around you.
Be genuine. Mean what you say and say what you mean. Rather than approaching new relationships like a sales pitch, encourage yourself and others to share meaningful experiences. If goals and experiences align, consider delving into a mutually beneficial relationship.
Surround yourself with success. Spend time with people you want to learn from. This will place you within arm’s reach of potential growth opportunities. Search professional groups and organizations to look for peers that are at your level or higher.
Building Social Capital On An Organizational Level
It is important to note that internal relationships are also considered social capital. There are three reasons social capital is the most important resource your business has: It establishes your organization as a thought leader, it fosters reciprocity, and it creates a solid internal company culture. The more you nurture and support your team, the more willing they are to bolster your vision and professional endeavors.
To create social capital within your team:
Learn your team. Learn your team’s personal and professional desires. What are your teammates’ goals and how can you support their endeavors? Understanding this can allow you to support them and for them to support you.
Create a safe space. Communication is key when creating social capital within your team. Foster a company culture that allows individuals to feel comfortable sharing their thoughts and opinions. This can lead to deeper, richer communication within your team.
Challenge one another. Social capital becomes even more valuable with the continued growth of those around you. Challenge yourself and your teammates to develop professionally and give them the tools to do so when possible. This creates an additional layer of trust and further benefits the strength of your relationships.
I cannot stress enough the importance of treating your team members well. However, transforming an employee or co-worker into a viable resource takes time and genuine interest in their professional goals over their position in the organization’s hierarchy.
Strong, internal social capital values inevitably spill over to benefit external relationships. Word-of-mouth travels quickly and, in my experience, one connection always leads to another; often in the form of recommendations or referrals. While measuring the exact return on investment may be difficult, social capital can help you grow leaps and bounds. The next time you build a relationship, reflect on how to transform that connection into one with far-reaching gains and returns!
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