Chris and the importance of social capital

Chris joined the company in the seventies as a young QS. He was quick, bright and an early adopter of what we now call information technology. Throughout the eighties he did most of his own work on a computer, creating and joining up spreadsheets into a system that made his job easier. Slowly, at first, his colleagues started to use his system then over time it spread and became the company’s commercial system.

Whenever commercial staff had a problem they would contact Chris and he would sort it with a few lines of code or by patching in another programme.

Over the years the system grew and became more complex as did the company. Chris also grew and became more skilled and moved into the IT Department where his job was to develop and support this commercial system.

By 2010 the company was doing £1bn turnover and Chris was thinking of retirement. Worried about losing Chris’ ‘know how’ his boss asked him to write down all he knew about the commercial system. It didn’t happen; forty years’ worth of know how is difficult to articulate!

What we ‘learn by doing’ over time is called tacit knowledge – it is unstated, implied, not written down. Most knowledge is tacit and it only surfaces in the course of ‘social’ interaction.

Chris has huge human (individual) capital so do you and I, though to access it we need social capital – the collective value of what we know and what we will do for each other. Social capital is like the mortar in a brick wall or the invisible glue that binds together a successful company.

Tacit or implied knowledge is difficult to announce, formalise and communicate – try writing down how a cyclist achieves and maintains balance! Explicit knowledge, the stuff that is written down, can be shared through the weak ties of a sparse system – people simply need to look it up or Google it.

Most of a company’s knowledge is tacit and unlocking it requires dense ‘people’ ties and a cohesive network and that is social capital and why it is so important. An absence of social capital makes it impossible for people to think and speak openly, conversely social capital increases efficiency and reduces transaction costs.

You can improve your company and we can transform the construction industry by building social capital – that’s my mission.