The Future of Social Capital Standards
Why Trust-based Networks Need Measures and Management
Here’s a thought: Twitter and Facebook don’t actually produce much in the way of real social networks at all. What they do produce is more accurately described as transactional networks, or put more cynically, pretty pictures of a “collection” of contacts. Real social networks—i.e. people connected by trust-based relationships sustain or undermine the hierarchical structures of companies and countries. Karen Stephenson, President of NeForm Inc and Associate Professor of Management at the Rotterdam School of Management, argues that it is high time we measure and manage these kinds of networks.
Amid the cacophony coming from Twitter, Facebook and other social media, we have lost sight of the fact that networks are about trusted relationships between people, read emphasis on: trust & relate. More specifically, a social network is an aggregation of people connected by reciprocal trust-based relationships (through shared ideology, values, disciplinary interests, hobbies, etc). Trust is critically important because it mediates and moderates the uncertainty or ambiguity that often accompanies information exchanged in person-to-person communication. Diddling with the relatively new technologies of LinkedIn, Facebook, Twitter and admiring the pretty pictures of the transactional networks(1) they produce is a far cry from the real power of a social network(2).
How? At any time a social network can undermine, overthrow and push aside hierarchical structures which may belong to companies or countries. Trusted social networks continue growing organically, unabated and in plain sight of all this social media. So while China and Saudi Arabia are attacking technology and the U.S. keeps producing it, it’s really the trust based networks we should be concerned about. Why make this distinction between transactional and trusted networks and why should we be so concerned about the latter? Let me explain.
There is confusion in the collective mindset about the terminology of the word “network” because there is no good taxonomy for detecting and classifying it. By way of example, a trusted network’s best camouflage is to thrive in the shadow of hierarchy, on the doorstep of a church(3) or university and welcome you inside. As such, when these networks are discovered for the true structures they are, they are either deemed harmless and friendly or dangerous, but nothing in between. Such unthinking oversimplification is profoundly misleading. Any trust network, whether it belongs to a terrorist cell or your grandmother’s bridge club, is neither good nor evil. What determines a network’s value in society or in a moment of time is how the network behaves in its environment amid other sensory/economic factors. Every network is a living social collective that absorbs, interprets and dispenses information through its connections. So if you are an unsuspecting member of a “harmless” professional trust network how can you really be sure about the AAA ratting of the information you are receiving from your colleague? You trust that information because you trust that person in your network. But the real answer is that you can no more be sure of that person than if Al Qaeda was sitting in front of you telling you the same information. No one can -- and that is why trust networks are not to be taken for granted but respected and brought under the light of measurement. If we don’t measure these types of networks, we are doomed to be managed by them or at best, second guessing them.
If networks are so omniscient and powerful, then why aren’t they measured? This has been a question I have been asking companies, communities and countries for several decades now. In utter exasperation, I have even stooped to chastising companies and governments for not being more proactive in measuring networks. In fairness to them, the initial reason networks were not measured was that we didn't know how to do it. Once rudimentary technologies such as social network analysis became more sophisticated and wide spread in the last 5 years, the measurement issue has been largely, although not completely resolved. But the elephant in the room for why metrics elude networks is that the idea of measuring trust is a new and innovative idea. But here is precisely where my test case work for the last 10 years in the United Kingdom provides an answer. My own brand of measuring the networks as a way of assessing the effectiveness of public-private partnerships has been so successful that it has been adopted as one of five government measures. I believe that if one could institutionalize (read: standardize), the measurement of networks as a “social capital” metric, then network measures could be integrated with other human capital performance measures such as 360s or other routine management measures. I am haunted by the fact that if we had been measuring networks in the first place, we would have “seen” Bernard Madoff for the snake oil salesman he really was. We would have seen ENRON. We would have detected the financial fraud before the collapse. Post forensic network analysis of these networks has pointed a way to do this.
I am certain that if we incorporate these measures systematically across companies and industries, we will be able to reduce the number of surprises. The answer is not “more government regulation” - that just elevates the surprise up the chain of command; it doesn’t extinguish it. The real answer is to systemically enforce a uniform social capital standard to measure human connectivity as part of any person’s contribution to the work force. Why the work force? Because, we can’t measure every aspect of society, but we can surely measure the workforce because the idea of measurement has always been a part of a larger industrial policy - the social contract of work, if you will. Performance measures are already instituted, they are just incomplete and need to include the social capital component. After all, we don’t pay people unless they perform according to certain standards and we have instituted policies to measure that performance and to justify the standards. So why not round out the picture and measure the informal work networks, the missing link of the performance equation? In this way, the workplace can be made more transparent and accountable and the silent killer, nefarious networks, extinguished or at the very least, better controlled.
I’m an anthropologist and empirical scientist by training. There is an abundance of evidence that when tribes were really really local, trust enabled our primordial ancestors to cooperate and overcome overwhelming odds. But as humans evolved, we have become increasingly more globally interconnected, particularly with the adoption and acceleration of internet connectivity. We have become so co-dependent on technology that it has trumped the more traditional trust-based brand of connectivity. As the world continues to shrink, interdependencies silently and organically multiply in ways that supersede our ability to see and technology’s capability to moderate or regulate. In my opinion, trust is an over-utilized and under-measured connective tissue, and one we continue to dismiss because we assume it is naturally occurring, as natural and as good as the air we breath. What else could explain why the topic of trust isn’t a priority at DAVOS or TED conferences. The air there is ripe with testosterone and technology but the only occurrence of trust is what is blithely and implicitly occurring amongst its members, completely unmeasured. I’d be worried about that, wouldn’t you?
A 3-star admiral told me, “I can lead men and women into battle, but I am a prisoner of war in my own organisation.” The reason for his frustration is that U.S. military leadership rotates and U.S. senior service civilians don’t. Military leaders are regularly frustrated in their attempts to change military culture because they are rotated before they get a chance to understand what is really going on. That’s the primary reason why U.S. military has such a “stable” culture - not necessarily a good thing if you are trying to change it. But the military isn’t alone with this challenge. Look at the private sector. CEO’s come and CEOs go, but corporate culture remains the same. Or look at education. Parents have been attempting for years to get school systems to change, ousting principles and presidents. Yet very little progress has been made because the core cultural values are held in place by the underlying networks among the constituency. Terrorist networks are no different. In the aftermath of 9/11, I provoked controversy by saying that it mattered little whether Osama Bin Laden was captured or killed because the “head” of a culture is immaterial. The real strength of a culture lay in its constituent and invisible networks, invisible because they are not tracked and not measured.
Which brings me to why I am writing this preamble, part of a larger body of my research - trust is a non-random pattern of connection that links corporations, governments and communities and can produce a myriad of unintended consequences. Connection by technology without trust is cheap and cheerful and in the end, merely traffic. Trusted connection without technology is subject to “locality” constraints. For humans to survive in a small, hot crowded world, we need both technology and trust, but not at the expense of the other. Trust and technology help humans connect across geographical distances or reach across a continental divide of cultural differences. So let’s use the very technology that connects us to measure us and thereby better manage the intended and unintended consequences of that connection. Trusted connection can be a good and glorious thing, knitting us into the warp and weave of the social fabric. But in my world I also see the dark side of trust in destructive cliques (read: terrorism, street gangs, bullying clubs and white collar crimes). Let’s not leave trust to chance and good will. It’s a nuclear force far more powerful than any arms race.
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The problem with accessing social capital for individuals is that they have uncommon goals. On the other hand, corporations have roughly the same goals, so I think we could develop meaningful insight with standards for accessing corporate social capital that could have quite profound implications for the ways corps are managed and held accountable.
I have proposed such a method called Social Capital Value Add and you can read about that here: http://bit.ly/13u91z
Thanks for this comment. Using NetForm SNA will allow for individual variation within the general goals of the company in which the individual is hired. I find that social media is too broad and loosely coupled to be of much value in producing a reliable Social Capital metric for a company. After all, people choose to be with a company based on pay, shared goals, etc. They hopefully can meet their individual goals while satisfying corporate goals. But people are hired to further corporate goals first, their individual goals second.
I suppose what I am wondering about is social capital as resources embedded in a network that may be mobilized for a purpose.
Individuals have different purposes. Each individual has different purposes in different contexts. For example, any two people may have very similar socio-economic context but they may have very different purposes. Even an individual may in one instance have mating as a primary purpose and another "becoming President".
Wouldn't each instance require another assessment of social capital even if the approach was standard?
I am not discounting the value of individual social capital assessment. It can provide great insight for personal development.
I suppose that I am overly focused on the need and value of using social capital to compare.
Can we and/or do we need to meaningfully compare individuals? If I access my social capital and account for my connection to you, is that not the insight that is valuable to me rather than knowledge about your social capital for your purpose? (Unless one was considering marriage, I suppose?).
My thought is that developing standards to access corporate social capital can be meaningful across society because corporations are all roughly committed to the purpose of profit. Therefore, we when we compare assessments, we are comparing apples to apples (or Apples to Dells as the case may be).
The upshot maybe that we amend the corporate profit "algorithm" to include dramatically more social accountability.
I am optimistic that given our individual and collective social sensibilities that could be a very good thing, effectively realigning corporations, perhaps our most potent form of human organization, to greater social good.
Social media, I think, is itself a scaled up form of social capital (i.e. a resource embedded in social networks that may be mobilized for a purpose) but is perhaps most useful as a previously unavailable indicator of connections that enables meaningful assessment on a much more detailed and far reaching scale.
It is also increasingly the source of shared perception, which is in turn, the basis of margins (i.e. the difference between price and costs), so is a mission critical factor for corporations to assess and manage.