The More You Give, The More You Get

You’ve heard of financial capital, but do you know about social capital?

Financial capital is the material wealth, whether money or property, that is accumulated by individuals and businesses and used, or available for use, in the production of more wealth. This is the standard definition in economics.

Social capital is the accumulation of resources developed in the course of social interactions, especially through personal and professional networks. These resources include ideas, knowledge, information, opportunities, contacts and, of course, referrals. They also include trust, confidence, friendship, good deeds and goodwill.

Like financial capital, social capital is accumulated by individuals and businesses, and is used in the production of wealth. Unlike financial capital, social capital is intangible; but it’s every bit as real as financial capital. Although it is difficult or impossible to measure precisely, it can be even more powerful than financial capital in terms of eventual return on investment.

Social capital is built by design, not by chance. According to Wayne Baker, author of Achieving Success Through Social Capital:

Studies show that lucky people increase their chances of being in the right place at the right time by building a “spider web structure” of relationships that catch information  . . .  Success is social: All the ingredients of success that we customarily think of as individual–talent, intelligence, education, effort and luck–are intertwined with networks.

Thus, a key way that social capital is acquired is through the process of networking. Successful networking is all about building and maintaining solid professional relationships. The trouble is that we don’t live as they did on Little House on the Prairie anymore, so we no longer have these natural community-like business relationships. Many people hardly know their own neighbors, let alone the businesspeople who run the shops and stores down at the local strip mall. Yet, more than ever, networking is critical for an individual’s success in business.

6 thoughts on “The More You Give, The More You Get

  1. Good Morning!!! networking.entrepreneur.com is one of the best innovative websites of its kind. I take advantage of reading it every day. I will be back.

  2. I recently came across your blog and have been reading along. I thought I would leave my first comment. I don’t know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.

    Alena

  3. Thank you, I enjoyed reading the blog.
    I think the contradiction between the financial and social
    capital is frustrating. Their value differs a lot and is even a fact in traditional proffessions. The “hard” goods is often higher valued than the “soft” ones and is still a question for equality. I welcome this readings and works that lift the discussion from this angel.
    Best wishes for 2010,
    Elinor

  4. The theory of social capital or relational capital is what will define business in the coming years – it is without the doubt the key to lasting business success.

    Excellent blog.

  5. Agree with the worth of “social capital”. Enjoyed the post.

    Here is my list of what a successful social media strategy needs to do –

    1)Start with a one to one engagement
    2)Share till you are bare, believe in the mantra of “sharing is the new marketing”
    3)Facilitate conversations
    4)Form relationships based on trust
    5)Continuously nurture and foster relationships to get to threshold critical mass (may be as low as 100).
    6)Start generating ROI

    What would you add? What would you change?

    Thanks,
    Prince

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