Invest in Social Capital
A time to go big, not small
Disruption is not fun. It really isn’t. It’s like being Harrison Ford in The Fugitive. One day you’re an award-winning Doctor, next you are running for your life. Looking over your shoulder constantly not knowing if you’ll survive another day.
Who wants that!?!
Cabcharge (the main Taxi operator in Australia) didn’t want it when Uber arrived. And, Uber didn’t want it when Lyft, Ola, and many others arrived.
None of us want this, but it is happening, and disruption will happen again – guaranteed.
Post-911, Chip Conley, the San Francisco hotelier (Joie de Vivre Hospitality) had to weather a serious downturn in tourism. His response was to pay himself nothing, keep on the people at the bottom of the Org Chart, and get out there. He met with key accounts, staff, managers, and everyone connected to the business. In his book, Peak, he writes,
“Too many people take the opposite approach: they create a bunker mentality with senior leaders providing no face time to the troops or customers.”
Conley calls this an investment in Social Capital. Where the time and energy spent to support stakeholders of a business are banked for longevity. Where leaders show people how important they are to them. Considering that over 90% of buying decisions are ruled by emotion rather than logic, we can easily see how critical it is to go big in this area rather than to shrink our time and energy into people.
At the heart of building Social Capital is asking “what I can do to make your life better?”. And showing care and attention to your people through action. This strategy uses empathy and humility to instill trust and connectedness. And, in times of uncertainty, this is a currency more valuable and stronger than cash. Not only does this help people continue to do business together during downturns, it also grows business once the trough has passed (and makes for a stronger business when the next disruption hits!)
Interestingly, we don’t tend to spend many resources in this area. John Seely Brown, researcher, and author of The Social Life of Information found that Companies invest 95% of their resources on business processes and only 5% go towards supporting human capital. The tangibles of processes overrule the intangibles of people.
This makes complete sense to me as we can invest thousands of dollars in communication training and not really know if it is working. Let’s face it – building relationships and human-to-human skills are really hard to get right. As opposed to investing in a new software system that either works or doesn’t.
But, if we can keep it in front of mind that our relationships are our business we can take action to expand our service rather than retract them. Easier said than done, but a practical approach may assist here. Some first steps may include…
Picking up the phone twice as much. Prepare your 2-3 questions. Keep it practical. Keep it supportive. Do it often. Be consistent.
Checking in to understand the stresses clients/staff are under, builds connectedness while gaining insights to make better decisions on how to serve them.
Cutting back on luxuries, not people. Conley didn’t pay himself at all during his crisis. Leaders could take pay cuts, reduce luxury expenses like lunches, and forgo bonuses. These are acts that have far more influence than the mere balance sheet of a business.
How do your people want to be communicated to? Text, email, vlogs, daily updates, website portal, or video call… Being clear on this will help maintain effective communication.
Their agenda is more important than yours. If you are calling to get the deal you need to keep your business going, they’ll smell it. Be prepared, be structured, and hold the stage for the other people to be listened to and cared for. They’ll remember it. This applies to staff too.
Discounting is transactional. Restructuring offers and tailoring solutions is service. Making someone feel special or important (which they are) is hospitality. This can be done in any context. If it's only about the cash, the Social Capital will remain low.
Your boss and your peers need your support and connectedness too. Call them, serve them, share insights, ideas, and initiatives.
We are in a situation where the instinct is to lower investment and retract. Yet, expanding our service and our care for our stakeholders is a clear opportunity. Social Capital is powerful because people remember. And people remember how you made them feel. Focusing on Social Capital may be the shrewdest business move one can take right now and will prepare us for the next inevitable disruption in the future.
