I ask this question only because I was recently speaking to an ex-colleague from another institution that works at an “exceptionally relational campus” (his words). After some deliberation, the core of the discussion became about the relationships and social capital for getting things done that the traditional hierarchy could not; therefore, making the Social Capital the true essence of power & authority and not titles or structure. Determining how to lead in such a culture got me thinking, while no one can argue that social capital exist in all organizations, what if it becomes the dominant source of influence in an organization?

Organizational management literature confirms that such a culture becomes more prominent and effective than established hierarchy when manifested in an organization where shadow management is a common practice.

The idea of social capital is and has been used in a wide range of social phenomena, with focused attention on the role of social capital as an influence in the development of human capital, and firm growth”.

As such, social capital becomes the power structure and decisions are not necessarily based on research or hierarchy but how much social capital one has.

The relational dimension of social capital concerns the kinds of personal relationships people have developed through a history of interaction”.

So the ability to accomplish new initiatives without social capital in such organizations, which is commonly earned through length of stay and personal relationships at many institutions, become quite a challenge for newer employees that do not have “THE” social capital. For example, two individuals may occupy equivalent positions at an institution, but if their personal relations with other members differ, their actions and results are likely to differ. The individual with a higher degree of trust and truthiness can leverage such relationships to her or his advantage – regardless of the facts or position.

Consequently, the view that social capital is more than just a structure or network but that it also includes many aspects of social context:

Such as social interaction, social ties, trusting relationships, and value systems that facilitate the actions of individuals located in a particular social context”.

Therefore, the high value of social capital to the decision-making process in such organizations could impede the organization’s ability to acculturate its new employees, regardless of their rank and authority. Such an impediment causes reduction in performance and effectiveness as new employees work on gaining social capital rather than their intended purpose.

Such a culture in my opinion impedes: 1. Human capital – as new employees leave due to frustration before acquiring the social capital needed to be effective. Such behavior is evident when you see a gap in years served at an organization where employees clustered by either tenure of less than five years of employment, to over 15 years of employment, with little to no employees in between… hmm? By the simple fact that the turnover for employees who have worked between 1-5 years is exceptionally high, while the next jump in longevity is approximately 15 years or greater, should be cause for pause.. No?. 2. Organizational growth – as high turnover and lack of implementation of new initiatives keep the organization from reaching its true potential.

I recommended to my colleague that for his organization to change it behavior, based on the above, he has to create drivers for the shift into managing and leading effectively in the realm of a flattened organization, and I referred him to to Bass’s work on how he can successfully lead in such a culture by:

Idealized influence by showing respect for and trust in those he works with both new and old.
Inspirational motivation by displaying honesty, enthusiasm, and optimism, and by instilling confidence in those around him… No decision should be made that affects an individual’s area without their explicit involvement
Intellectual stimulation by encouraging innovation and creativity… let all his employees know that they have a role in the organizations future, not just the new hires.
Individualized consideration by being aware of and supportive of the developmental needs of those around him and actively engaging in coaching

Does anyone else work in an environment where social capital trumps facts, data or hierarchy? If so, is it a positive or negative experience?