Democratizing social capital through digital transformation

For most of us, life is hard enough

My wife and I have two kids, a five-year-old and a three-year-old. Like most parents, our morning routine getting the kids out of the house can look like this.

By the time we get to work, we are already mentally exhausted. Even when we didn't have kids, personal pursuits and interests consumed our time. As our children get older, we will continue to invest time with them - doing homework, going to extracurricular activities, and just helping them deal with whatever challenges they might be facing in life.

The spectrum of responsibilities we have expand beyond our families. We all have responsibilities towards our extended family and broader community. We exist in human networks that define our identities and help us pursue our life goals. This is reflective of every employee in the workforce and our networks extending into the workplace, define the human capital that organizations can tap into. 

The work we do is hard, how we get it done shouldn't be

Human capital is the greatest competitive advantage that organizations can have. As individuals we need to be empowered so we can perform at our peak potential. When our individual performance is enhanced through teamwork within human networks, it has a multiplier effect. A key question to ask yourself or anyone in your organization is:

When it comes to work, how equipped are you to make the best use of your time and perform at your peak potential?

This is a question that should be top of mind for every leader out there. How are you empowering your employees to be their best? Not everyone will be a high potential leader as Ram Charan frames it in Coaching High Potentials, but all of us can and should foster a growth mindset. This helps in taking ownership of your own personal development. Life is too short to not have a good answer to the question: why are you here and not somewhere else? Answering questions like this can bring meaning to the work you do. 

Work can be aligned to our personal development goals. A sense of purpose can be achieved if we remove the friction and hierarchies that make working within teams and organizations demoralizing and seem like this:

Human networks in the modern workplace

Social capital is important to getting things done inside and outside of work. When a person has social capital within their networks, they are able to traverse silos of thought and find answers that aren't obvious to those around them. This reduces the friction in the way they work. Brokerage and Closure are key components in the definition of social capital from Ronald Burt's book Brokerage and Closure: And Introduction to Social Capital, paraphrased below:

Network Brokerage, is about the value of increasing variation in a group. Informal relations form a small world of dense clusters separated by structural holes. People whose networks bridge the holes are brokers. Information is more homogeneous within groups such that people who bridge the holes between groups are at greater risk of having creative ideas and more likely to see a way to implement ideas.

Network Closure, is about the value of decreasing variation in a group. Closure increases the odds of a person being caught and punished for displaying belief or behavior inconsistent with preferences in the closed network. In so doing, closure reinforces the status quo. It protects against decay in new relations between friends of friends, and amplifies strong relations to extremes of trust and distrust. Facilitating the trust and collaborative alignment needed to deliver the value of brokerage, closure is a complement to brokerage such that the two together define social capital in a general way in terms of closure within a group and brokerage beyond the group. -  From Burt, Ronald S.. Brokerage and Closure: An Introduction to Social Capital (Clarendon Lectures in Management Studies) (p. 7). OUP Oxford. Kindle Edition.

Digital transformation in the modern workplace can democratize and enhance social capital. This is because technology allows us to leverage our innate abilities as social creatures to self-organize into functional networks. Whether you take a closure or brokerage approach to networking, the modern workplace makes your networks even more responsive. This allows knowledge to travel much faster. As the individuals who make up an organization learn and adapt through the increased velocity of this feedback loop, so too does the organization they are a part of. Leading to a competitive advantage through culture that can be leveraged to achieve overarching organizational goals. Valdis Krebs summarizes it succinctly in Social Capital: the key to Success for the 21st Century organization: "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 the organization. Social capital is derived from employees’ professional and business networks."

I have seen this first hand in my own organization, our team was assembled over a year ago with a new charter inside of Microsoft. At the core team level, we had to work very closely and share our learnings with each other. We've had a growth mindset and lean startup approach to our work: experimenting and leveraging feedback loops to improve the work we do.

At the organizational level, we needed to do the same and connect with our peers across the globe who were tackling similar problems, but from a completely different context. The only way we have been successful is by having a more inclusive and frictionless approach to collaboration. Information and knowledge flow more freely across our organization, formally and informally. We're more easily able to assemble around ideas and common goals in the work that we do. We easily leverage each other's work and expand on it to fit our own context. The social capital of each group member as they leverage closure and brokerage within their networks allow us to traverse silos of thought, ingest new ideas quickly and iterate on them to suit our needs.

This post for example is the byproduct of the free flow of knowledge within the human networks I engage with at Microsoft. I've had the idea to write it for some time, but it wasn't until I engaged with content with those in my network that the vision became clearer, especially some of the charts and visuals I have used. From an attribution perspective, I am willing to reference these individuals inside and outside of my company: Joseph Baksha, Paul King, Sarah Joshi, Andrew Hitchcock, Gina Hoffman, Andrew Wilson, Gayle Townsend, Jeff Gettis, Rishi Nicolai, Matt Malstrom, Kensington Schmidt, Ron Burt, Ram Charan, Uzma Sattar, Valdis Krebs, and many more. To be honest, I've never met most of these people face to face. That just shows the power of social capital within human networks, which has allowed me to engage with their ideas and leverage them towards my own context. 

How we work

At Microsoft, we democratize social capital by framing communication and teamwork within the concept of an inner and outer loop of collaboration. The inner loop is the best way to engage with those you work shoulder to shoulder with. For example, your project teams and people you can easily walk up to in the office to strike up a conversation. The outer loop is best for engaging with colleagues who you might never normally interact with, for example an all hands meeting being hosted by your CEO. It's easy to see how the inner loop aligns to the concept of closure and the outer loop to brokerage within human networks. To be clear, they are not mutually exclusive because you can still have brokerage within the inner loop and closure within the outer loop.

Below is a more concrete example of team collaboration. This is truly the tip of the iceberg in the way we work, but it will give you some perspective on "how" we work.

I must admit, it's not perfect, but anyone looking from the outside-in would deem this a success. We are able to leverage social capital to accelerate the work we do. Our needs as a team and organization are not different from your own. We are not the only organization that is trying to be agile. With the right approach and tools, anyone can do this in a way that is meaningful and impactful. Life is already a struggle, work and collaborating with your team shouldn’t be. 

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Below are additional readings and guidance on social capital within human networks and the tools in a modern workplace that can democratize and enhance them. 

Tools in action

Transform your workplace with Microsoft 365

What's new in Microsoft Teams, the hub for teamwork  

Whitepapers on making it real and getting it done

Accelerating Modern Workplace Productivity Adoption

The New Culture of Work

HBR - The Workplace Evolution 

Research and publications around human networks in the enterprise

Brokerage and Closure: An Introduction to Social Capital by Ronald S. Burt

Maximize your social capital, a new guide to networking by Ronald S. Burt

Neighbor Networks, Understanding the power of networks by Ronald S. Burt

Social Capital: the Key to Success for the 21st Century Organization by Valdis Krebs

Managing the 21st Century Organization by Valdis Krebs