Social Capital... the Key to Success in the Connected Age

In the knowledge economy, knowledge and content are no longer sufficient – everyone has access to many sources of content and knowledge. You cannot compete on what everyone knows. As you move up the hierachy, it becomes more difficult to compete on individual competency – everyone is highly skilled and experienced at the top. It is hard to compete when everyone is so similar.

You cannot compete on what everyone knows.

The new advantage is context – how internal and external content is interpreted, combined, made sense of, and converted to new products and services. Creating competitive context requires social capital – the ability to find, utilize and combine the skills, knowledge and experience of others, inside and outside of your organization. Social capital is derived from employees’ personal and professional networks.

In the diagram below is a large U.S. company they has great local social capital (good connectivity within each regional office) but poor social capital between regions/offices. This is a typical pattern in so-called "siloed organizations."  Both the network map(on the left in the diagram) and the network metrics(on the right in the diagram) reveal this ineffective pattern.  

Innovation happens at the intersections -- innovative organizations have many more intersections of diverse thinking and approaches than we see above.  Competing effectively in the connected economy is based on combining (and re-combining) unique knowledge from different parts of the business ecosystem (both within and outside of the organization). 

Innovation happens at the intersections!

Does your organization have the connections for both implementation and innovation?  Does your organization's human network provide both internal knowledge and advice, along with external ideas and possibilities?

For more, read this original article by Valdis Krebs.