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Organisations must build social capital to deal with complexity

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?Organisations must focus on building their social capital, internally and externally, to deal with complexity

Speaker and author Margaret Heffernan gave the opening keynote at the CIPD annual conference in Manchester. She said the growing complexity of the world means problems can no longer be solved by a “superman or superwoman”, but need to be solved by teams of diverse people sharing information freely and collaboratively.

“Successful businesses have immense amounts of social capital,” she said. “Social capital outperforms financial capital if you invest in it, because it compounds with time.”

Social capital is what builds “collective intelligence”, she added, and is achieved by people in organisations simply spending more time together (during coffee breaks for example), working collaboratively rather than competitively, and being “helpful” by sharing useful information and contacts.

“The power of helpfulness is that it’s fast, efficient, safe and means people have a higher level of confidence,” she said. “It’s about people sharing information. There are ‘nodes’ in every organisation – people who seem to know everyone. The more nodes there are the more information flows.

“If you want to measure the health of an organisation, measure how fast it takes information to flow and the number of nodes you have. Take the concept of social capital seriously.”

On what makes teams successful, Heffernan cited research that found three main commonalities: higher levels of empathy, everyone participates fully, and more women.

“Successful teams are about what happens between people,” she added. “Perhaps we’ve spent so much time examining the bricks [the individuals] when it’s the mortar that really counts.”

She called on HR teams to “remove things that act as blockers and stop people sharing”, such as forced rankings (which instil a sense of competition), bureaucracy, and strict hierarchies, and to instead champion diversity.

This agenda is so urgent now, Heffernan said, because it’s impossible for businesses to predict ahead with certainty. This means facilitating the sharing of information is critical, otherwise things may not get done or people will stay silent on key issues.

“It would be a mistake to conclude that complexity is chaos,” she said. “It isn’t. Certain mindsets will allow you to get more out of it.” These mindsets include listening “well and to everyone” and giving people the “opportunity to get outside of their own expertise”. She said that complex problems are often solved by people without expertise in the area.

“This is the unused capacity we have within our organisations,” she added. “How do we get this fantastic thinking out of these fantastic people who are stuck on their square of the chessboard? What’s stopping people achieving their potential, which then stops the organisation achieving its potential?”

Heffernan also called on businesses to be more open to experimenting and learning from mistakes. “We need to be honest and fearless in understanding our mistakes,” she said. “In a complex unpredictable world we are going to make mistakes. We have to see them as learning and be able to do so in a climate of safety.”

When it comes to recruiting for social capital, she advised hiring managers and HR to look for “really great learners who are enthusiastic about learning”. Her killer interview question is: 'who helped you get here?' “If they can’t answer that don’t hire them, as no one gets anywhere on their own,” she said.

“If we are going to build institutions people can trust then we have to recruit people who are prepared to invest in each other, are curious about each other and understand the only way for an organisation to grow is for its people to grow.”