Eric Nehrlich, Unrepentant Generalist » Blog Archive » Social capitalist

Social capitalist

Posted: June 19, 2008 at 12:15 am in management, people

I’ve been playing with this idea for a few weeks, and it’s not quite coming together, so I’m going to ramble for a bit and see whether it starts to solidify as I go.

It started with a quip I made to a friend last month where I claimed that the winners of the last ten years were defined by technology (e.g. Google), but that the next ten years would be defined by social connections (e.g. BJ Fogg on why Facebook is bigger than you think). This is partially an extension of Nicholas Carr’s book Does IT Matter?, where he argues that IT will be commoditized (something that is starting to happen with services like Amazon’s Web Services). In a world where technology can be outsourced (heck, where even intelligence is outsourced), the only remaining differentiator will be the strong social connections necessary to more effectively and efficiently outsource tasks and thinking.

I was having coffee with a friend today, talking about the importance of trust. As a manager or coworker, I can’t outsource work to another coworker unless I trust that they will deliver what is needed. Otherwise, I have to micromanage the coworker to make sure the task gets done, and the delegation takes more total time (mine and the coworker’s) than it would have to do it myself. Outsourcing is ineffective without developing trust and a social bond.

Okay, so now let’s imagine a completely free agent world, where all services are available from a consultant. What differentiates a successful company from an unsuccessful one? It’s not the technology or the talent, as those are available to everybody. It’s the companies that are most successful at building strong social trust with others, so that effort does not have to be duplicated, and management on both sides can be kept to a minimum. Admittedly, we’re not in that world yet, but that seems to be where things are headed. People that learn to build those social bonds will have an advantage as that world takes shape.

In such a world, investing in social relationships is as valuable as investing in financial relationships, hence the quippy title of “Social Capitalist” (as opposed to venture capitalist) for this post. Social capital will be a valuable commodity, and one that can’t necessarily be bought with money (although Jofish and I once had an interesting conversation about the conversion of social capital to financial capital and vice versa). It takes the investment of time and trust, and that is a commodity where we all start equally – nobody has more than 24 hours in a day. We may take different approaches to building those relationships, but in the end, it comes down to whether one can rely on others to help advance one’s agenda.

What does it mean to invest in social relationships? To take one model, let’s look at the world of professional sports, which is truly a free agent world. Professional agents often start following potential stars as early as middle school. They cultivate relationships with these kids, talk to their parents, work for free on their behalf, all to lay the groundwork that the family might choose them as an agent when the kid goes pro. They have to invest in the relationship before the athlete is already successful in the hopes of having a stronger bond of trust when that success happens.

I wonder if a similar model would work in the coming world – investing in bonds of trust and friendship for the sake of helping the other person in the hopes of later being able to build on those bonds in a professional relationship. This is one of the reasons to go to an elite university – the bonds created there can benefit one throughout life, as they are built on social capital that was generated long before there was a financial incentive.

What traits make for good “social capitalists”?

  • Reliable – one has to be trustworthy and always deliver on promises, and preferably go above and beyond.
  • Selfless – one has to be genuinely interested in helping others. Quid pro quo may work in a cut-throat capitalist world, but in a social capitalist world, trust can’t be earned if one is keeping score.
  • Understanding – one can’t be helpful unless one understands the problems of others. Building social capital requires empathy and an ability to see things from the other’s perspective.
  • Likable – we tend to trust likable people. If I’m a negative cynic, I’m not much fun to be around, and that reduces the time I have to build trust with others. If I’m a happy optimist, people want to spend time with me, and that increases the chances I have to build trust.
  • Ability to prioritize – we have limited time and social energy, so we need to invest that time wisely. So we need to recognize people that have the most potential (you’ll note that agents are rarely doing favors for families of 5’5″ basketball players). This may seem Machiavellian and at odds with previous traits, but it generally works out naturally. As one of my friends noted recently, if I’m meeting a new person, the new person has to be more interesting and fun than my existing friends who I already don’t have time to see for he or she to make it into my “regular rotation”. Or as another friend noted when I lamented that an ex-coworker wasn’t that interesting, “Remember that your standard of “interesting” is very high.”

Huh. Looks a lot like the list of traits for being a good friend (except for the last one). Funny that.

As I noted at the top of this post, I’m still noodling around with this idea of what it means to invest as a social capitalist, so I’d be curious to hear what other people think.

P.S. I keep on meaning to post more, but I keep on getting interrupted, this time due to attending the wedding of AWESOME last weekend, and then trying to see lots of people while I’m here in the Bay Area.

7 Responses to “Social capitalist”

  1. seppo Says:

    Uh… dude? Would you mind getting OUT OF MY BRAIN!?!?!?


    Seriously. It’s crazy. A huge portion of my day today was about trying to break the team’s bad habits, trying to build new good habits/relationships.

    I can’t talk about it in a whole lot of detail (see? I learn lessons from past experiences sometimes!), things are extremely dysfunctional at work and they’re not *talent* problems. The team’s extremely, dare I say, extraordinarily talented. But the company culture and the social framework within which everyone works ridiculously broken, and the source of most, if not all of our problems.

    I would never have thought, five years ago, that I’d even care about this *type* of problem, but here I am trying to be the kick in ass that starts things in the right direction.

    In my industry, the skill of a few phenomenally talented individuals can have a huge impact. But the quality of the end result depends on the team as a whole, and without the chemistry, without the shared passion, and without the shared personal investment in the product, that product will never be what it needs to be.

    If you can get a team like that, you have value that money can’t buy.

  2. Jason Says:

    intresting … one of brain cells fired on this and thought about the disapperance of Jim Gray

    When you start to read about the man you get to see the social capital idea working.

    see this NYTimes post for the love of the man who always had time for you.

  3. Eric Nehrlich, Unrepentant Generalist || Social technologies || June || 2008 Says:

    […] up on yesterday’s post and Seppo’s comment, another topic that has been coming up in my conversations is the idea of “social […]

  4. BJ Fogg Says:


    Thanks for your mention of the Fast Company article. For a slightly different but related take on social networking, here is a link to my paper on Mass Interpersonal Persuasion. It was just recently presented at Persuasive Technology 2008 in Finland and published by Springer.

    BJ Fogg
    Stanford Persuasive Technology Lab

  5. Eric Nehrlich, Unrepentant Generalist || Living in the future || July || 2008 Says:

    […] example is a phenomenon that BJ Fogg is calling mass interpersonal persuasion in a comment he left on my post. It’s the idea that the tools of persuasion are being democratized, that anybody can create […]

  6. Eric Nehrlich, Unrepentant Generalist || A Whole New Mind, by Daniel H. Pink || July || 2008 Says:

    […] friend Wes recommended this book to me after my social capitalist post where I claimed that we were moving from a world defined by technology to one defined by social […]

  7. Eric Nehrlich, Unrepentant Generalist || Whuffie and social capital || August || 2008 Says:

    […] in a publicly visible easily adjustable way. You can see why this concept would interest me, given my social capitalist post from a couple months ago. In the circles of society where I typically hang out, it matters less how […]

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