Invest in Social Capital and Reap High Returns

4 Strategies Not to be Ignored

Naturally, forging relationships, making connections, and networking are essential to successful business. Positive bonds made between employer and employee, between company and customer, and between people in the industries are crucial to the inner workings of successful companies.

Social capital, the relationships among employees and groups is as indispensable as the financial capital needed to run your business. Maybe even more so.

Social capital is KEY to running a successful company.
 Social capital is KEY to running a successful company.

Executives, managers and employees alike should monitor and guard social capital carefully, as they would any other asset.

In their book from Harvard Business School Press, Don Cohen and Lawrence Prusak explain why social capital is so important: “Social capital exists in every organization, but in widely varying amounts. It can be depleted or enhanced, squandered or invested in.” Their book, In Good Company: How Social Capital Makes Organizations Work, makes the argument that social capital generates economic returns and, without social capital, organizations simply cannot function. The economic returns of protecting social capital include better knowledge sharing, lower transaction costs, low turnover rates, and greater coherence of action.

The research is hard to argue with; if I’ve learned anything in my years of matching high-level professionals to successful companies, I’ve learned that people factor of business can be the volatile X factor in a company’s success.

A study by Joris J. Ebbers published in Entrepreneurship Theory and Practice, quantified that “entrepreneurs that spend more time on networking activities are more likely to identify potential alliance partners.” It’s true that the more connected you are, the more you’ll reap the benefits of your network.

So, before you leave your new job, tell off an annoying co-worker, or simply not do your very best, realize this: just like a Charles Dickens’ novel, minor characters in your life will resurface and could play a major role in your success or stagnation.

That guy you made fun of in an email and accidentally hit “send to all”? He’s now in Human Resources at the company where you’re applying.

And, the woman you called incompetent in a meeting? She now makes the purchasing decisions for a prospective client.

Employers, managers, take note: your reputation follows you through every employee who walks out your doors. Don’t be the joke of your industry because you are eternally hiring. Stop hemorrhaging talent by figuring out what’s broken in your organization and fixing it.

 

Make a Fabulous Last Impression

 

Conventional wisdom tells us you never get a second chance to make a first impression. (Or was that just a dandruff shampoo commercial?) But advice just as important is to make a great last impression. Why? Because last impressions matter.

Last impressions aren’t usually the last interaction you’ll have. In business circles where it’s all about networking and contact and who knows who, last impressions are the impressions that stick.

Whether you’re an employee who’s been laid-off or leaving for greener pastures or you are an employer handing out the pink slip or accepting a resignation, remember that the parting scene will be replayed in both people’s memories.

Even if you part with a less-than-rosy history between you, end the final scene on a positive note. Part with a kind word. Give encouragement. That last feeling, the vibe, the karma at a job’s ending will follow you.

And, even if it seems like it’s an irreparable bad break, be polite! You may not have kept a solid bridge between you, but it would be nice to maybe leave a thin 2×4 to cross in the future if need be.

 

Nurture Your Business Relationships

 

While treating supervisors and employees with respect is a given, don’t forget to tend to past business relationships. Be sure your intentions are mutually beneficial: don’t simply call your network when you need help, reach out to them by sharing tips, leads, and job prospects. Interactions on LinkedIn, Holiday cards, and simple phone calls keep you fresh in your contacts’ minds.

Nurturing your business relationships–investing in social capital–is key to running a successful organization. Your social network both within your organization and outside of your company is like having a Swiss Army. At any given time, you have multiple contacts you can call upon, allowing you to put creativity and collaboration to work for you.

And don’t discount the importance of nurturing social capital in today’s digital environment. Whether it be digital or face to face, you’re still building relationships. If you have employees who telecommute, make the same effort in supporting the relationship as you would with employees who show up to the office. If you are a work-from-anywhere employee, don’t neglect the significance of contributing to the culture of the organization.

The nature of relationships that you build over the years is truly something to think about. The bridge that you build along the way can be re-crossed at many stages. Situations and people change. Over time, my clients have become my candidates and candidates have become our clients. It is simply fantastic how positive bonds can be strengthened over the years, and how business relationships can even develop into valued friendships.

As you interact with your employees, co-workers and networks, I offer you these tips for maximizing your business relationships:

 

Always Give Your Best Effort

 

It should go without saying, but I will say it anyway: do your best at every job. It doesn’t matter if it’s a short-term commitment, a position below your skill or education, or you are contracting. If you said you’d do the job, do it with enthusiasm and commitment. While the position might not be your destination, the people you meet may become valuable references and the tasks you fulfill may add important experience to your resume.

Employers hiring contract or consultants should also take this advice to heart. If your company hires contractors, train your managers and staff to be friendly, treat them respectfully, and help them with the orientation and resources they’ll need to be successful. Remember that contractors network and talk about past positions with their peers; keep your company’s reputation glowing.

 

Treat Every Relationship with Care

 

I can’t stress this advice enough: treat every relationship with care. There is a recursive nature about the people in our lives because industries and networks intertwine. It’s a journey and the reward along the way are smoothly run projects, more efficient operations, lower turnover rates, and great relationships.

Whether you are an employee or employer, you’re always building your references.

And don’t forget the SOCIAL part of social capital; it’s about leadership, opportunities, and most essentially, people. As you nurture your business relationships by treating every interaction with respect, Continue reading “Invest in Social Capital and Reap High Returns”