Let’s talk about social capital – and why it’s one of the most valuable resources you can build for your long-term professional goals.
Social capital is basically the value of “goodwill” you’ve accumulated across your entire network.
In other words, how confident are you that you could pick up the phone and call somebody in your network who could actually help if you were in need of skills, advice, capital, an introduction, etc. ?
I don’t want to imply that the value of social capital is tied to charity. Or that it’s limited to transactional relationships. It’s much more than that.
Social capital is the store of value you’ve created for others.
Similarly to a bank account, it accumulates the more deposits you make. And it dwindles as you make withdrawals.
Here’s why it’s valuable:
As you go through your career, it’s useful to have people you can call on to help you out.
For instance, when you’re trying to win a new opportunity and you need a reference. Or an introduction.
Or when you launch your own business and need an attorney or banker or CPA or expert marketer but you can’t yet afford to hire out for it.
Or when you’re trying to put a deal together and need one more check to raise the funds to buy a business or property.
And countless other scenarios.
When you’re in need is hardly the time to ask for favors – especially favors you haven’t earned. You can’t expect for people to help you out if you have zero social capital on deposit.
The value of building social capital
The purpose of social capital isn’t about building a list of people who owe you favors.
But if you focus on creating value for other people, social capital will be a natural byproduct. People you’ve been valuable to will want to be valuable in exchange.
It’s not a given. Social capital isn’t exactly a debt to be repaid. (And if you treat it this way, you’ll surely find yourself running low on people who can help you out when you need it most.)
Personally, I like to think of social capital as a warehouse of value stored in my personal network. And when I have a particular need, I know I can turn to my network first.
For example, currently I have a variety of “social capital” on deposit across my network:
Everything from graphic designers, copywriters, and sales people whose careers I helped launch; investment bankers I’ve made introductions for; founders and CEOs I’ve built sweat equity with; and hundreds of former co-workers with plenty of unique skill sets with whom I’ve built a strong reputation.
At any point in time, I know I could reach out (or those people could reach out to me) and we’d help one another out.
That’s the value of social capital.
How to build social capital
The best way to build social capital is by offering value to other people (whether or not you get anything tangible in return).
Social capital isn’t something you have to build for free, though. It’s possible to accumulate it even on-the-job.
For instance, you could build social capital with a boss or your peers – even though you’re being paid to perform a job. You could do that by going above and beyond in your role, always exceeding expectations, always being the first person to volunteer to help, and so on.
In short, you can start building social capital wherever you are today by becoming reliable and indispensable.
Over time, that “excess value” you create above and beyond your pay will begin to accumulate. First in the form of your reputation among others, and eventually in the form of social capital – that you can draw on down the road, should you need a letter of recommendation or the like.
Another useful and easy way to build social capital is by helping people reach their own goals.
For example, you could help someone promote a new book or product they’ve launched. Or make an introduction between two mutual connections. Or create marketing collateral for an entrepreneur or business owner.
There are countless ways you can be valuable to other people. And if you focus on being valuable first, eventually, that value will accumulate across the network you build.
Go be valuable today.