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For the past decade or more, HR professionals have dedicated much of their efforts to optimizing human capital strategies in an effort to win the war on talent-building out comprehensive talent management systems, validating leadership competency models, and designing the best possible leadership development programs. In more recent years, emphasis has turned to enhancing employee engagement, refining performance management systems, and leveraging people analytics. While it is hard to argue against the need for these human-capital-centric strategies, new research raises questions about whether they are as effective as currently believed. In particular, research suggests that HR professionals need to more strongly consider social capital strategies in driving both performance and innovation within complex organizations.
By definition, social capital refers to the competitive advantage that is created based on the way an individual is connected to others. Two primary aspects of social capital-group cohesion and brokerage-are particularly relevant to HR practices. Group cohesion is best described as how connected an individual within a group is to others in the same group. Often referred to as clusters, groups are considered highly cohesive when they have many redundant connections within the group (see Figure 1). The benefits of cohesive groups are that individuals are able to quickly share information and typically demonstrate higher levels of trust than less cohesive groups (Fleming, Mingo & Chen, 2007). Brokerage represents the bridge connections from one cluster to another cluster (see Figure 2). It occurs as individuals, or brokers, act as connectors from one cluster to the next. For individuals, being in a broker role has three specific competitive advantages: wider access to diverse information, early access to new information and control over the diffusion on information (Burt, 2005).
High performers tend to be uniquely positioned as brokers in the organizational network (Mehra, Martin & Brass, 2001; Burt, 2004). These individuals generally perform better, get promoted sooner, and are better compensated than others. The implications of social capital are even greater when it comes to innovation. It appears that innovation is as much a social phenomenon within complex organizations as it is a technological one. Successful innovation in a social context requires a thorough understanding of the interplay between cohesion and brokerage. Despite this, routinely across organization only 50 percent of these...