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by Rik Nemanick, Ph.D.
One of the more valuable assets possessed by both leaders and organizations is social capital. Social capital can be thought of as the benefit created by leveraging network of relationships to achieve positive results. Individuals can be said to possess social capital based on the scope and the strength of their personal networks. Organizational social capital is the sum total of the number and strength of connections that exist among the people within the organization. Unlike other forms of capital, social capital is not depleted by use, but in fact depleted by non-use (“use it or lose it”). Additionally, unlike physical assets, social capital is more difficult for competitors to see and to imitate.
It isn’t hard to think about times organizations have suffered from a lack of social capital: when conflicts develop across company silos; when action is delayed because a key stakeholder was left out of the decision making; or, when an employee with high potential leaves because she doesn’t see the career options at the company that others could have shown her. The fact that the impact of social capital in these instances is not obvious is what makes it so valuable. Each of these situations could have had a number of causes, but each may have been different had a stronger network of connections existed within the organization.
Strong social capital benefits the organization by facilitating the flow of information and resources, especially across silos. By easing the flow of information, organizations more easily identify and react to opportunities and threats, facilitate change, and create a more cohesive teams. When the volume of social capital is low, information can pool within certain parts of the organization, but fail to flow to other parts where it may be beneficial.
Leaders benefit from social capital through their ability to influence others, to collect information that is important to them and their teams, and to communicate across organizational barriers. Individuals benefit from the information and ideas that flow to them and from them, connecting them to the larger network within the organization.
There are two basic components in the measurement of social capital. First, is the sheer number of contacts in your network and second is the relative strength of each of those network ties. In his book, The Tipping Point, Malcom Gladwell describes the benefits of both a large number of “loose ties” and a small number of “strong ties”, where each can add value depending on how they are used. A leader with lots of loose ties can tap his network to locate important information or important decision makers. A leader with a small number of strong ties can engender more trust and make larger requests of those in her network. A particularly useful tool in the measurement of social capital is the sociogram (shown at right). A sociagram depicts both the number and strength of network ties that an individual possesses. Sociograms can also be enhanced to show the strength of the social capital in an organization (you can read work by Rob Cross about his network analysis framework for studying social networks).
Some leaders build their social capital naturally and use it to accomplish goals without thinking about it. Others fail to recognize how their lack of social capital inhibits their ability to get things done. Leveraging social capital requires individuals to expend effort to acquire the capital and attention to maintaining the capital once it is acquired. To improve your use of social capital, it is helpful to examine your network of connections with the following questions in mind:
The last point is important to think about, especially for leaders and mentors. One of the best ways to leverage your own network is to help others tap into it. Opening your network to others can engender reciprocity and strengthen ties with those you help.
If you want to enhance your social capital, start by thinking about which strategy fits better with your style: a large number of loose ties or a smaller number of strong ties. Then, consider the state of your network to identify what you need to do to strengthen it. Next, decide what you need to do to reinvigorate your network (e.g., take someone to lunch you haven’t seen in a while or sending an e-mail update to a portion of your network who haven’t heard from you lately). Finally, consider what you can do to help grow another’s social capital, as these investments can pay some of the greatest dividends.
Leadership in Practice: A conversation with Greg Kozicz, Ph.D., President, Alberici
Q: Can you give me a 2 minute synopsis on how you got where you are now?
A: After completing a Ph.D. in international relations and working in the Canadian Foreign Service, I was approached to be chief of staff for the Federal Minister of Science. When that assignment was winding down, I made the shift to the private sector with a large development company that was getting into the privatization of public infrastructure. The privatization projects always involved complex relationships and an understanding of how government worked, so that brought me into the infrastructure development and construction world. After a short period of time with that company, I was offered a role in a publicly traded construction company. That was the official transition from government, to privatization of public infrastructure, to construction. I was with this construction company in Canada for just about 8 years. I joined Alberici in 2001 as President of the Canadian division. In 2004, I became president of Alberici US.
Q: Thinking back over those years, can you think of ways that your leadership style has changed? What have you learned?
A: In the foreign service, I was a pretty low-ranking diplomat, but was fortunate though to be involved in arms control negotiations for a couple of years. In that role, I got to observe and learn from a number of great leaders. These great leaders always had three things in common. One, they were very good listeners. They always listened for intent—for what was not being said. Two, they were always prepared with detail and data for any meeting or negotiation session. And, three, they were great communicators, able to tailor the spoken word for any audience without compromising the message.
I have tried to emulate those three traits in my leadership style. Early on in my career, my impatience and competitiveness sometimes caused me to stop listening after hearing only one or two opinions on an issue. Today, I know that it is worth taking the extra time to listen to the opinions of everybody that will be affected by a decision. It takes a little longer but you make better informed decisions and build support for the decisions once they are made.
Q: Are there any critical experiences you can point to that informed or shaped your approach?
A: In 1998, I was assigned to lead a large construction division that had been struggling through most of the 90s. Cash flow was bad, customer satisfaction was bad, and profits were nonexistent. Our board decided not to shut it down (against my advice!) instead, they assigned me to turn it around. I worked with a team over a six week period to develop a recovery plan. The first step in the plan—survival. In the short term, survival meant a drastic reduction in costs. I remember that we gathered the employees to announce that we had laid off half of the company, and they were the remaining members of the company that we were going to go forward with. In the first 2 minutes of that presentation, I noticed nothing but blank stares in front of me. I don’t know what I expected, but I at least thought I would get that knowing look—that look that says “Yes, this is tough medicine, but we understand it was necessary.” But they didn’t understand and the looks the employees gave me they had no clue, no context to understand why we had taken such a dramatic action. And so, right then and there, I stopped the presentation and asked the question, “Does anybody know how much money we have lost in the last 10 years, how bad our cash position is or what our clients think of us?” They didn’t know. I realized that the most important members of the team going forward had no clue. There had been a real lack of communication of critical information over the years that employees required to do their jobs and to understand how they made a difference. So what I said was, “I will commit to you that every month the senior management of this company will brief you on all the critical information: client satisfaction, safety, profit, and cash. For the next three years, we have never missed a monthly or quarterly “briefing.” I have been president of Alberici Canada, Alberici US, and now CEO of the Corporation and have never missed a quarterly briefing since 1998. These are great two-way sessions that always include significant time for Q&A.
Q: What role does mentoring play in your approach to leadership?
A: First, I start by realizing that my experience has gaps and this limits my range as a mentor. So, I encourage my direct reports to attend at least one leadership development program each year. In addition to this outside leadership development, my mentoring tends to focus on two areas. One area is operations and specifically what authority and decisions to delegate and which ones not to. The second area deals with succession and deal with those members of my leadership team who are anxious to have additional leadership within the team, at the company, and ultimately are interested in my job. For these executives, I ask permission during our performance reviews to “subject” them to a higher level of oversight that is really intended to make them succession ready. This higher level is all about advancing the leadership culture at Alberici. When I am working with an executive who wants to get to the next level, I am like that coach in high school or college who you respected (I hope!), but got on you about all the little things. It is critical to work hard with these future leaders on little things because they are the ones who will preserve and advance the culture of the company.
Q: How would you describe that leadership culture that you are trying to establish or maintain?
A: I expect the senior executives to be great listeners and observers. I want them to use these skills to develop “headlights” to see around corners at what is happening in the marketplace. I expect them to be hands on detailed people. I expect them to be great written and verbal communicators so that they are able to communicate the way we do business. And, the communication is critical because you always want to tie it back to where we are going as a company. When you have people spread out across the United States, Canada, and Mexico and on some day when you don’t have a formal leader present, you want your people to do the right thing by instinct because the values are so ingrained through the communications process. When those right things are happening across the company without the direction of formal leaders that tells you your culture is not only being preserved but it is prepared to be advanced.
Q: So what sort of impact then do you think that culture has on the business?
A: With a culture of listening and observation, you are able to see large patterns and future opportunities emerging in the marketplace, you are able to put the company and the team in front of opportunities. The disciplined, roll-up-your-sleeve culture makes sure that you harvest those opportunities in a very consistent and disciplined way.
Q: Do you have anything else you want to add about leadership at Alberici or just your experience with it?
A: I think Alberici learns a lot from its mistakes. I believe our current leadership team understands that when we have failure, it can always be traced back to two things—a process and/or people flaw. So today’s leadership team at Alberici is always working to improve all of our processes and we are also very disciplined about how we recruit, develop, reward, and retain our people.