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What Is Social Capital? What Every Business Leader Should Know

Discover four ways to boost your team’s social capital, and five tips for increasing your own.

Social capital refers to social relationships that have productive benefits. For nonprofits and corporations, social capital can be the key to success. Organizations with high social capital have employees with good interpersonal relationships. Their teams have shared values, they cooperate and collaborate well, and they trust each other. According to Harvard Business Review, “Every manager knows that business runs better when people within an organization know and trust one another—deals move faster and more smoothly, teams are more productive, people learn more quickly and perform with more creativity.”1


As a leader, improving your organization’s social capital is a great goal that can positively impact the bottom line. But how do you do it? Here are four ways to use your leadership skills to increase social capital.

1. Encourage teamwork.
Find ways for employees to work together, even if they’re on different teams or in different departments. Lead a brainstorming meeting where all ideas are good ideas that gives employees in a variety of different roles the opportunity to think and talk about a new project or product. Encourage employees to shadow or be shadowed by a peer in another department to learn more about their workday. Another idea is to provide whiteboards to employees on which they can note the projects they’re working on and invite comments.

2. Foster personal communication.
For employees to get to know each other, they need to talk about more than just the project at hand. You can provide opportunities to connect by doing something as simple as giving your team a chance to chat informally about their weekend plans before diving into the meeting agenda. Or you could provide a company-sponsored snack break once a week to give employees the opportunity to get to know one another. Another option is to allow employees to leave early once a month to enjoy happy hour together. Even if a team works virtually, intranets and electronic meeting rooms can provide online spaces for people to learn more about each other.

3. Reduce volatility.
Social capital withers in an atmosphere of unpredictability. Constant restructuring, a revolving door of employees, and inconsistent promotion practices reduce retention and decrease social capital. Focus on retaining good employees, promoting from within, and communicating early and transparently about any upcoming changes to your organization’s structure.

4. Connect with the mission.
In addition to employees supporting one another, they need to support the organization. This goes deeper than just posting a mission statement on the wall. Ensure that employees understand the mission and how their role supports it, then align new projects with the mission. Doing so will help your team understand the big picture and realize that everyone, no matter their role, is working toward the same goal.

And be sure that you work on improving your own social capital, too! Here are five quick tips.

  • Support your peers, your team, and your boss when they need input or support.
  • Offer to connect co-workers to people who may help them, whether you recommend an intern for a work project or a contractor for a home improvement project.
  • Actively participate in meetings when you have something to contribute.
  • Take time to chat while making your lunch in the kitchen or before a meeting gets started.
  • And always be honest—with your team, your boss, and yourself.

By taking these steps, you’ll be seen as someone who is trustworthy, well connected, and valuable to the organization, and your social capital will increase as a result.

Another way to increase your value to your organization is to earn a graduate degree. An MS in Nonprofit Management and Leadership from Walden University can give you the opportunity develop the skills to lead a nonprofit, increase its social capital, and positively change your community. Walden offers other online graduate degree programs as well, including an MBA, a well-recognized management degree that prepares graduates for business management and consultant positions.

Walden is an accredited institution offering bachelor’s, master’s, and doctoral degree programs online. Expand your career options and earn your degree in a convenient, flexible format that fits your busy life.


Walden University is accredited by The Higher Learning Commission,