In Good Company: How Social Capital Makes Organizations Work. - Review - book review

HR Magazine, April, 2001

By Don Cohen and Laurence Prusak Harvard Business School Press, 2001, 224 pages,

List Price: $27.50

ISBN: 0-87584-913-X

More organizations are learning that the social interactions and relationships we have at work are part of the "invisible glue" that makes it possible to get work done. Authors Don Cohen, a freelance writer and editor of Knowledge Directions, and Laurence Prusak, executive director of the IBM Institute for Knowledge Management, define "social capital" as the "value inherent inhuman relationships and connections." They use this concept to explain what makes an organization more than just a collection of individuals.

What is an organization with high social capital? One example is a company like UPS, where employees are well known for their "trust, understanding, connection and a sense of membership." When suspicion, rivalry, chaos and rapid turnover reign, organizations have low social capital. HR professionals preparing for a merger or acquisition may find this book particularly helpful because high social capital is crucial to the success of a merger. An internal examination of British Telecom's failed merger with MCI found that problems with human dynamics and interactions were the source of the failure, not poor business strategy.

Social capital is particularly important today, the authors argue, because knowledge sharing is critical to business success. In the past, tyrannical companies could thrive despite their low social capital, particularly if most of the work was repetitive or mechanical. In today's fast-paced business world, success depends on "responsiveness, inventive ness, collaboration and attention."

Creating a climate where social capital will thrive requires commitment on the part of top executives and of human resources to ensure that the commitment is not hypocritical. For example, calling everyone "associates" when very few people are allowed to make decisions will only increase, not lower, employee cynicism. Trust is critical, and the authors devote a chapter to explaining how a company builds trust. Other ingredients for increasing social capital are:

* Giving employees the space and time for "social talk," thereby authorizing conversation.

* Preference for face-to-face conversations.

* Broadening the definition of useful talk to include "chat."