Friday, October 21, 2005

The Virtuous Circle of Social Capital / The Endowment of Social Capital

As mentioned in the introduction to this series, the social entrepreneur's initial endowment of social capital is his/her network of relationships and contacts that are tied together by shared values and interests.

It is out of this pre-existing network of contacts that Charles Leadbeater suggests the aspiring social entrepreneur must forge new links that will ultimately lead to the 'physical, financial and human capital needed to get the show on the road.'

Leadbeater's counsel to social entrepreneurs when simplified is: build your network. Social entrepreneurs who fail to network effectively may not have access to needed physical, financial and human resources. Leadbeater's advice, though easy to grasp, in my experience, often proves difficult to implement.

The root of this difficulty is explained by Joel Podolny*:

We are all familiar with Kant's categorical imperative to treat people as ends and not means [only]. . . . this imperative holds special significance for the social entrepreneur who seeks to cultivate social change. For the social entrepreneur, the imperative frames both the dilemma and the solution as to how to mobilize a network behind the change agenda. . . . I can foreshadow where I am going with two simple observations:

Observation #1: what people are willing to do for you is strongly influenced by how much they believe you care about them and their values - that is, how much you regard them as ends.

Observation #2: there are few times that a person appears as self-interested as when that person is building a network in pursuit of a goal. Think about the last time that an individual told you he or she was going "to network" or do some "networking". Few words or phrases convey more strongly the idea of treating others as means.

Hence, the dilemma: We know - from experience and from years of sociological research - that networks are critical to the success of social change efforts. We know that in order for a social entrepreneur to bring about social change, the social entrepreneur depends on the experience, time, resource of a large number of others. Yet, we also know - from experience and from years of research - that when an individual attempts to build a network in support of a goal, that individual converts relatively few to act on behalf of the cause for which they were not already acting. The experience, time and resource flowing back from others is comparatively weak - in large part because few want to be the means to someone else's ends. The entrepreneur experiences this weak support from his or her network as a significant barrier to social change.

Bootstrapping social entrepreneurs who work (effectively) at expanding their network of relationships with like-minded individuals improve on their venture's odds for success. It is essential, in my opinion, that social entrepreneurs aquire network building skills. With that in mind, I intend to explore the how and why of networking in greater detail in my next entry on 'The Virtuous Circle.'

Please feel free to share any insight on network building that you have in the comments section of this blog.

*I first met Joel Podolny when he delivered the Clarendon Lectures in Management at Oxford University's Said Business School in 2004, and then again when he spoke at Oxford's Skoll Centre for Social Entrepreneurship in March of this year. The material I have quoted in this post is taken from his Skoll talk 'Social Networks As Ends Rather Than Means'.

At that time he was the Novartis Professor of Leadership and Management at the Harvard Business School. Recently, Joel has moved to Yale where he is now Dean of the Yale School of Management. That's good news for Yale, and I hope for Joel.

In conversation he is gracious. As a scholar he is profound. Our conversations have roamed from business to baseball and Shakespeare. His range and depth of knowledge is impressive. I would urge social entrepreneurs to become acquainted with his work.

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