Social capital in organizations builds through everyday interactions.
There is a growing and justified concern about a looming "human capital" crisis in government. About half of the federal workforce can retire during the next five years, and government is having difficulty recruiting and retaining quality entry- and midlevel employees to bring new skills into the system.
Because the crisis is especially severe in information technology, we don't always realize it extends beyond IT. But, as a recent National Academy of Public Administration report on the government's IT skill shortage makes clear, making government an attractive place to work involves many issues beyond salary.
It requires making government a high-performance workplace, for the sake of the citizens government serves and for a workforce that might be attracted to government by jobs that are personally satisfying and professionally rewarding.
Those thinking about creating a high-performance workplace should consult a new book called "In Good Company: How Social Capital Makes Organizations Work," by Don Cohen and Laurence Prusak. Social capital means norms and social relations that enable people to coordinate actions for mutual benefit. "In Good Company" applies social capital ideas to designing organizations.
Social capital is important in organizations for the same reasons it's important in societies. Trust, along with friendship, makes people more inclined to share knowledge essential to doing a good job.
The authors' argument is that social capital in organizations builds through everyday interactions. Rather than keeping people away from the water cooler or cutting conference travel every time a budget flattens, managers should see time spent in informal social interaction as an investment in creating social capital.
Sometimes "work"—narrowly conceived—gets done at such occasions. But more importantly, social capital gets built, which pays off when people need answers to tough questions or work together as teams. For this reason, Cohen and Prusak are not friends of innovations such as telecommuting (which they see as reducing interactions that build social capital), the growing private-sector practice of "hoteling"—which deprives employees of permanent offices—and even video.conferencing, which tends to make interpersonal inter.actions center too narrowly on "the business at hand."
A basic message of this book is that many practices done in the name of bringing greater efficiency to a workplace are penny-wise and pound-foolish.
A high level of social capital won't create a high-performance workplace by itself. It needs to be combined with expectations of high performance on behalf of the organization's mission, which in turn drives people to use the trust and ties they've developed to help the organization. But — especially as a remedy to the kind of tough disciplinarianism that often presents itself as good management in government—the insights in this book are a good place to start.
Kelman, administrator of the Office of Federal Procurement Policy from 1993 to 1997, is Weatherhead Professor of Public Management at Harvard's John F. Kennedy School of Government.
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