What is social capital?

Similar to notions of physical, human and financial capital, Social Capital is a powerful resource. It refers to the things available to you through personal and business networks: resources like information, business opportunities, collaboration, sales leads, goodwill, trust and emotional support.

Social Capital is productive: it has value, it enables you to get things done, achieve your goals, fullfill your mission in life, and to make a contribution to your community and to the world¹

If you think of Human Capital as WHAT you know (your knowledge, skills and experience), then Social capital is WHO you know. But more importantly it's also - who knows YOU, so your ability to engage in networks is crucial to your Social Capital. These networks include;

• Business networks
• Personal networks
• Friendship networks
• Peer networks
• Family networks
• Political networks

The structure of these networks influences almost everthing you do - where you find resources, how you solve problems and how you get information. The ability to understand, influeunce, shape and interact with these networks adds powerfully to your ability to achieve. Without this ability, resources can remain hidden, out of reach or remote.

1. Baker, W Achieving Success through Social Capital (New York: John Wiley & Sons, 2000)

The power of generosity

The idea of 'givers gain' is based on the priciple of generalised reciprocity: the notion that you get back in kind what you give. If you are rude or dismissive to someone they reciprocate and are rude to you. However, if you give generously and assist people, resources, sales leads and revenue flow back to you in abundance - Therefore, the giver gains.

However, when you think it through to its conclusion, its logical to expect something in return for a favour given and to some degree, you might be disapointed or even offended if you weren't repaid in some way. But if you approach your networking with a plan to build Social Capital through cold-hearted, economic calculations of ROI and tit-for-tat exchanges, then the response you elicit will be much the same. This kind of behaviour is unlikely to lead to flows of any sort in any direction.

Helping another person simply because you can, with no thought of repayment, is a powerful investment in Social Capital. Generosity is the driver of reciprocity. Reciprocity is a powerful human social norm. An act of complete generosity generates the inclination in people to repay favours and good deeds well in excess of what they would be willing to give up in a tit-for-tat exchange. Not because they have to - but because they want to.