Social and Human Capitals Pay Real Dividends

The Caux Round Table has recently tried to draw more attention to the contributions of social and human capitals to the success of wealth accumulation of individuals, firms and communities.

The most recent issue of the Harvard Business Review, by coincidence, has several articles which substantiate that thesis.

One article proposes that success in business negotiations is enhanced by certain human capital skills: the ability to recognize that “the gains to be shared are the additional value the agreement creates over and above the sum of the two sides’ best alternatives.  This negotiation pie should be divided equally because both sides are equally essential to creating it.”

A second article proposes that innovation is enhanced by the application of decision-making skills.  “Businesses need to strengthen and speed up their creative decision-making processes by including diverse perspectives, clarifying decision rights, matching the cadence of decisions to the pace of learning and encouraging candid, robust, conflict in service of a better experience for the end consumer.”  Such a decision-making process is a form of social capital, resting on specific human capital skills and dispositions.

On the individual level, a third article points out that people who transition to new roles in the organization or in a new organization often have a hard time doing so successfully.  Successful transitions employ five ‘fast mover’ practices: surge rapidly into a broad network, generate “pull” by energizing new connections, identify how to add value and who can help them fill skills gaps, use the network to expand impact and prioritize relationships that enhance their workplace experience.”

A fourth article proposes that innovation can be enhanced by avoiding certain psychological traps that arise from fear: “consult your future self; use red flags as teaching moments to refine your ideas; dissect causes of failure after setbacks; reframe rejections – focus on what was not negative or left unsaid; don’t get distracted when the time for action arrives; do what you are good at and leave the rest to others.”