Not only do we now have intangible assets, but we also have social capital. Now organisations have to account for them too. By Ken Parry
We must audit for the social capital of our organisations, just as we audit for economic capital. Investing in social capital is the challenge of today, for the nation and for our organisations. Not only is it right and just, but it helps the bottom line.
Social capital includes:
- Social networks that help a society to function effectively.
- A level of voluntary association that provides linkages between people.
- A sense of connectedness between citizens.
Social capital requires trust, voluntary association between groups and individuals, and opportunities to meet and discuss. As such, social capital is usually considered to be external to an organisation, is viewed as a process, and is about community development.
Internal social capital
These component parts of social capital are present in our organisations and in the wider society. The social capital of organisations is reflected in:
- Social processes: the linkages, interactions and outputs over time of social interaction that are crucial to an understanding of effective leadership.
- Organisational citizenship: willingly doing more than is expected for the good of the organisational community.
- Transformational leadership: behaving ethically, generating trust, being a role model, encouraging performance beyond expectations.
Such concepts are frequently mentioned in the leadership literature, because leadership is largely about investing in the social capital of organisations. Leadership is probably the major means by which social capital is invested in organisations.
Leadership and the bottom line
Leadership improves the bottom line because it improves the social capital of organisations. Social capital, in turn, enables our organisational citizens to be more effective in their day-to-day work.
An organisation must meet its social-capital goals as well as its bottom-line output goals for three reasons. First, meeting social-capital goals indicates that effective leadership exists. Second, social capital is important in its own right. Third, investing in social capital helps to ensure the achievement of bottom-line goals further down the line.
The danger of just concentrating on bottom-line output goals means that outputs might be achieved because of short-term and unsustainable actions, and in spite of an investment in social capital. For example, many organisations have pursued restructuring and downsizing strategies that have an immediate and quantifiable effect on the accounting bottom line. However, the loss incurred to the social capital of the organisation has often outweighed any short-term financial gain.
Audit social capital
For the above reasons, we must audit the social capital of our organisations.
There are a number of dimensions of social capital that organisations can audit:
- Organisational citizenship. Citizenship is crucial to the social capital of organisations. An organisational citizenship questionnaire (OCQ) exists to measure this important aspect of social capital.
- Level of follower commitment. The level of organisational commitment of followers can be measured with the Organisational Commitment Scale.
- Nature of organisational culture. Culture may be functional or dysfunctional. The Organisational Description Questionnaire (ODQ) can be used to measure organisational culture.
- Degree of understanding of organisational vision. Vision uptake can be identified, though not easily measured.
- Nature of leader values and of follower values. They may or may not be congruent. They may or may not be ethically defensible. The presence of a set range of validated values measures can be determined with, for example, the Rokeach Value Survey.
- Perceived leader integrity. Employee perceptions about leader integrity can be measured with the Perceived Leader Integrity Scale (PLIS).
- Perceived follower integrity. Perceptions about the integrity of followers or colleagues, can be measured with the Subordinate Integrity Rating Scale (SIRS).
How not to
How not to write a novel
The Edward Bulwar Lytton prize is awarded every year to the author of the worst possible opening to a book. This has been so successful that Penguin now publishes five books-worth of entries.
Some recent winners:
“As a scientist, Throckmorton knew that if he were ever to break wind in the sound chamber he would never hear the end of it.”
“Just beyond the Narrows the river widens.”
“With a curvaceous figure that Venus would have envied, a tanned, unblemished oval face framed with lustrous thick brown hair, deep azure-blue eyes fringed with long black lashes, perfect teeth that vied for competition, and a small straight nose, Marilee had a beauty that defied description.”
“Andre, a simple peasant, had only one thing on his mind as he crept along the east wall: Andre creep … Andre creep … Andre creep.”
“Stanislaus Smedley, a man always on the cutting edge of narcissism, was about to give his body and soul to a back-alley sex-change surgeon to become the woman he loved.”
“Although Sarah had an abnormal fear of mice, it did not keep her from seeking out a living at a local pet store.”
“Stanley looked quite bored and somewhat detached; but then, penguins often do.”
“Like an overripe beefsteak tomato rimmed with cottage cheese, the corpulent remains of Santa Claus lay dead on the hotel floor.”
“Mike Hardware was the kind of private eye who didn’t know he meaning of the word fear, a man who could laugh in the face of danger and spit in the eye of death: in short, a moron with suicidal tendencies.”
And, the best of all:
“The sun oozed over the horizon, shoved aside darkness, crept along the greensward and, with sickly fingers, pushed through the castle window, revealing the pillaged princess, hand at throat, crown asunder, gaping in frenzied horror at the sated, sodden amphibian lying beside her, disbelieving the magnitude of the frog’s deception, screaming madly, You lied!”
How not to label a product
The following actual label instructions on consumer items speak for themselves.
On a blanket from Taiwan:
“Not to be used as protection from a tornado.”
On a helmet-mounted mirror used by US cyclists:
“Remember, objects in the mirror are actually behind you.”
On a Taiwanese shampoo:
“Use repeatedly for severe damage.”
On a New Zealand insect spray:
“This product not tested on animals.”
In some countries, on the bottom of Coke bottles:
“Open other end.”
On a packet of Sunmaid raisins:
“Why not try tossing over your favorite breakfast cereal?”
On a Sears hairdryer:
“Do not use while sleeping.”
On the top of a British flavored milk:
“After opening, keep upright.”
On a bag of Fritos:
“You could be a winner! No purchase necessary. Details inside.” (A shoplifter special!)
On a bar of Dial soap:
“Directions: Use like regular soap.” (And that would be, how?)
On Tesco’s Tiramisu dessert (printed on bottom of box):
“Do not turn upside down.” (Too late! You lose!)
The slithershanks* file
Emotional Intelligence has become one of Slithershanks favorite concepts, for the simple reason that he has no idea what it is. But it does mean that, when he is being dumb, he can say he is being “emotional” and, when he is being insensitive, he can say he is being “intelligent”. An all-purpose excuse. We hear all about the concept in Daniel Goleman’s book Emotional Intelligence:
“A repository for everything we feel about what we experience, the amygalda constantly signals us with this information. Whenever we have a preference of any kind, whether for ordering a risotto rather than the sea bass special, or a compelling sense that we should dump our shares in a stock, that is a message from the amygalda. And via the amygalda’s related circuitry, particularly nerve pathways that run into the viscera, we can have a somatic response literally a gut feeling to the choices we face.”
Slithershanks looks forward to all of this, and simply wonders whether substance abuse will help the experience along. And whether there is an amygalda for pay increases. And if so, where he can buy one.
(*Slithershanks: verb. To talk management jargon.)