Hubs, Connectors and Other Plays to Improve Social Capital

 In a forthcoming book, “Social Capital at Work,” Burrows and Rachlin provide compelling examples of when social capital succeeds and a lack of that capital can lead to disaster. Most business books focus on financial capital and intellectual capital—and a person’s physical capital and maybe spiritual capital. But there’s a growing sub-genre of leadership treatises that deal with organizational leadership, dynamics and so on—a corporation’s social capital. Especially in a post-COVID age, when remote work peaked and all employees are struggling with how to be connected remotely, or onsite again or a hybrid of work locations. The plethora of team dynamic apps is also a new element for those generation of workers who are in their second, third or fourth decades of a career..

The authors describe eight “game plays” to grow and capture the benefits of social capital. They start with investing in people (just as you might invest in financial instruments or other capital assets). They end with notes on Artifical Intelligence. Each chapter gives you moves and action items to make for yourself and your team and your organization. It is a playbook. And as such you will learn how to “run” the play of drawing network maps to identify hubs, connectors, your “posse” and so on.

While they give voice to the importance of trust, they don’t provide a playbook for building trust. Without understanding the dynamics of trust and laying its foundation, all these plays may appear manipulative and backfire on the leader, sabotaging meaningful connections between coworkers. If the leader isn’t trustworthy, this book will not work.

Also, the reader using this book needs to dig deeper into solid corporate communication techniques. Burrows and Rachlin don’t spend time on the need for spaced repetition of aligning, mission-driven messages: repeat a thousand times and just when you’re sick of saying “it” that’s when the team will finally get “it.” Also, audience members singly need to hear different perspectives on the same message: the analytical background for the analyticals, the security and acceptance of failure in attempting change for the amiables, the immediate and intermediate action plan for the activators, and so on. They also need different media and different venues (large group, small group, one-on-one) in order to feel comfortable asking questions and expressing buy=in of the plan.

The book assumes an open door policy, but most leaders investing in social capital need to practice open tours: get out of the office and into your team’s work spaces to be available and to learn what they do, what they know, what successes and obstacles they experience. Perhaps if a social capital leader had practiced “open tour,” the stark, horrifying opening incident could have been avoided. A woman died at work and wasn’t discovered for several days. A team leader should have been making the rounds, or calling family to check on the employee. Besides the woman’s isolation at work, it’s also apparent she didn’t have social capital with anyone outside of work, where a frequency of communications (e.g. texts) and the lack of answer would have alerted a friend or family member that something was wrong. There’s more to this unfortunate accident than a lack of social capital at work. And don’t get me started on the ignorance of undercover bosses suddenly learning what the work is like in their organizations because they’ve never driven with one of their truck drivers, or waited tables in one of the restaurants or stocked shelves in their convenience stores.

For those who need to get new ideas in how to reap the rewards of investing in social capital, this book is helpful. If you’ve built trust, your teams will appreciate the new efforts.

I’m appreciative of the publisher for providing an advanced copy of this book.

Who are the Main Street Millionaires? Extensive Compiled Data

 In a forthcoming book, “The Everywhere Millionaire: Who is Really Rich in America…,” Zidar and Zwick balance data and anecdotes to reveal who the Mainstreet Millionaires are, and how they came to be. It’s an enthralling take on the hidden wealth of business owners, mostly those with S-corporations, LLC or Partnership ownerships: the “pass-through” population of businesses that are not taxed at the corporate level but the income is taxed when it “passes through” to the individual owners. These businesses are in the service industry, car dealerships, restaurant franchises, smaller healthcare operators (dentists, doctors, chiropractors, et al.) and so on. Unless they spend in “conspicuous consumption” (Veblen’s Theory of the Leisure Class), most millionaires, mega-millionaires and sometimes billionaires from Main Street could be your next door neighbor, driving a mediocre vehicle and living in a regular house (not a mansion). 

The authors had access to enormous income and tax data, which allows them to discuss the business practices, origins, demographics and composition of some of the wealthiest individuals in the US that you’ve never heard of. They also note the policies that accelerated the increase in wealth—tax policies and such—as well as some of the owners’ mechanisms for sharing their wealth with the people who help make them successful: profit sharing, Employee Stock Ownership Programs (ESOPs) and political candidate support. 

While providing helpful analysis of the data—e.g. just who makes up the top 0.1 percent of wealthiest people in the US—they also show that entrepreneurs are not the Stanford Business School or Harvard Business School grads most of us think it takes to start a successful business. You don’t launch with a brilliant idea and sell out in a year for millions. Along the lines of David Sax’s “The Soul of an Entrepreneur,” Zidar and Zwick emphasize that most start with their own capital (sometimes meager, unless it’s inherited), pour profits back into the business to keep it growing and struggle with having time for family and friends in the initial phases of growing the business. These business owners recognized a need they had or their community had and filled it.

This book is a bit too heavy on the anecdote side. While the numbers reveal financial condition, the anecdotes try to put some stories behind the numbers. The danger is thinking that the anecdotes are guaranteed recipes for success. There may be millions of other entrepreneurs who did the same things and didn’t make it. Most businesses fail in the first five years. Did they do exactly what the featured business owners in this book did? Perhaps, and maybe so, and most likely. So is business success like playing the lottery? Your numbers just have to be randomly selected to win. We won’t know. The authors didn’t track the business owners of “pass through” corporations that disappeared and exactly why they disappeared.

Still this is phenomenal addition to the entrepreneurial studies. I would recommend it as a must-read for any entrepreneurial classes in universities.

I’m appreciative of the publisher for providing an advanced copy.