Social Capital and Innovation Analysis of the E100 -
Part I: Foundations & Assessment Overview

By Xenia Stanford, Editor-in-Chief, KnowMap and President, Stanford Solutions Inc

This Social Capital and Innovation Analysis (SCIA) case study of the E100 network will be divided into 3 Parts as follows:

Part I: Foundations & Assessment Overview
Part II: Assessment & Lessons for the Future
     Part II-A: Leadership & Relationships
     Part II-B: Organizational Culture and Sustainability
Part III: Social Capital Assessment Tool (SCAT)

Part II and III will follow in future issues of KnowMap.

The ENTOVATION Network

Debra M. Amidon has created a social network that numbers somewhere in the thousands. It spans 90 countries and has been converted into a business intelligence system for global learning. For this reason Amidon along with her network became a finalist for the top Competia Award: Competitive Intelligence (CI) Champion of the Year.

From her network she has taken what she calls a diagonal slice for the ENTOVATION 100 (E100), one of the most successful virtual organizations in the world. As such she is a master in the art of creating collaborative advantage through social capital.

A pioneer in the knowledge economy before and with her book, The Ken Awakening, her influence has been inspirational and her expertise sought throughout many nations - from students to knowledge experts and even prime ministers. Her books have been translated into several languages spreading her words of wisdom across the world.

Always a leader she has been described as "keeps moving the finish line… appears to know where things are headed". As the Chief Knowledge Officer (CKO) of this virtual organization, Amidon shows she is an expert in global innovation strategy. As such and through her network spanning these many nations, she has built up both social and innovation capital.

What is Social Capital?

Various organizations and individuals have devised different definitions of social capital. Here are some I find useful:

• "a combination of networks together with shared norms, values and understandings that facilitate co-operation within or among groups". (OECD)
  
  
• "relationships, networks and norms that facilitate collective action". (Isuma)
  
  
• "…social organization, such as networks, norms, and trust, that facilitate coordination and cooperation for mutual benefit". (Fountain)
  
  
• "Social capital refers to the institutions, relationships, and norms that shape the quality and quantity of a society's social interactions". (Robison, Schmid and Siles)

What Social Capital Is Not

Social capital is not information capital warns Fountain. Further I add that it is not intellectual capital or even necessarily all of what is covered under human capital. Human capital can be considered as encompassing both intellectual and social capital.

The difference is that intellectual capital is based on knowledge usable to the organization. Social capital is based on relationships among humans in social groupings whether those are at work, at home or in other communities.

Social capital can both add to and detract from intellectual capital. The strength is dependent upon the value of the social interactions. Negative relationships can degrade the value of social capital and thus negatively impact the use and growth of intellectual capital.

Conversely strong and positive social networks can increase knowledge sharing and foster the growth and usability of intellectual capital. However, mere sharing of information, such as through the Internet and documents, does not lead to social capital.

Social Capital Is More

Social capital is much more than the sharing of information and the growth of knowledge.

Social capital encompasses not only shared access to vast amounts of timely information but many positive properties of interdependence: shared values, goals, and objectives; shared expertise and knowledge; sharing of work, decision making, and prioritization; shared risk, accountability, and trust; and shared rewards. (Fountain)

Benefits of collaborative and well functioning social networks include understanding who has specific knowledge and who will benefit from that particular knowledge. Again in the words of Jane Fountain:

It also involves screening information for accuracy, importance, and implications. Collaborative networks perform this critical screening function. Social capital increases the ability to build and use informational capital because trustful relationships increase information flows and bring richer meaning to information. (Fountain)

Social Capital and Innovation

How does social capital enable innovation? It can do so through one of these means but only if the social network is working well:

1. Leadership - clear, visible and shared leadership with little hierarchy allows sharing of ideas throughout organization and encourages innovation.
   
   
2. Participation - shared participation in decision making, willing contributions made by and accepted from every member with support throughout allows innovation on what has been called the shop floor - those who implement and use the designs.
   
   
3. Culture - group has rules, norms and fulfillment of obligations where risk-taking behaviour is encouraged, which can drive innovation, while socially destructive actions are handled swiftly though fairly.
   
   
4. Sustainability - specific capacities of the organization with the formulation and handling of demands means the network can work through issues, build a cooperative group, develop an organizational memory and create a future vision empowering the network to survive and thrive beyond the ups and downs that are natural in any social group.

Cornerstones to Success

To turn the social network into innovation capital it must remain leading edge. It must not emulate best practices but reach beyond to new and better ones.

The mere existence of a network does not immediately mean success. Many are embroiled in dispute, lack visible leadership, do not collaborate and have no empowering means of decision-making. Further, teams must have methods to encourage successful behaviours while reducing sabotage and promote risk-taking with necessary controls to avoid destructive actions.

This alone is a tall order. Combine that with the necessity for knowledge sharing and collaborative advantage to connect those who need to know with those who have the knowledge.

Fountain in her study claims well-built face-to-face social networks have a powerful positive impact on innovation. However, she continues to comment that in spite of the celebration of technology on making distance and time meaningless constraints, there has been little empirical evidence to date to show that virtual social networks can do the same.

Social Capital Assessment

To assess with empirical measures whether or not the E100 measures up to this challenge, I used the critical success factors Fountain notes are needed for networks to build social capital and lead to innovation. These were built into a Social Capital Assessment Tool (SCAT) for the assessment.

The SCAT questionnaire was adapted from one developed by Krishna and Shrader. Although the population polled was small, trends can be seen according to the four categories presented above.

The results are as follows:

All of the categories demonstrate a higher than 50% score for the E100 network. This means it is already succeeding as a social capital network and with the lessons learned from the study, it has the ability to work toward even more collective innovative advantage.

Organizational Capacity and Sustainability

The strongest score for subsets of the above categories was in the Sustainability area labeled Formulation of Demands. This rated 80% while the other subset of this same category, Specific Capacities, ranged from very high to adequate.

Only the ability to resolve problems or conflicts with other organizations or social actors rated as deficient under Specific Capacities. This makes sense as a network must become cohesive and solve internal problems first before it can tackle difficulties with external agents.

Increasing evidence shows that social cohesion is critical for societies to prosper economically and for development to be sustainable. Social capital is not just the sum of the institutions [that] underpin a society - it is the glue that holds them together. (Robison, Schmid and Siles)

Thus although the overall (rather than average) score of 59% for organizational capacity and sustainability was mediocre, the network does show it has very high chances for prolonged sustainability.

Participation

Other high scores were found in participatory decision-making where involvement of members and use of viable processes scored 75%. This can be attributed to Amidon, the Virtual CKO, as she delegates decision-making to members and uses methods that make for solid and supported ones.

Inclusion of women in the membership ranked very high, while involvement of members from a more impoverished economy rated as average. The average rating for those from impoverished countries is not only very understandable it is very commendable in consideration of their lower access to computer and communications technology.

What is disappointing is that the lowest score (40%) for participation was found among the more elite (those highly successful in business) members of the network.

Since the network is still constantly reinventing itself with the addition of new members and new joint projects, it is not surprising the scores in some areas are not higher. However, the E100 has proven that it has the structure and credibility to become even stronger, build more social capital and increase innovative capacity for reaching the market place.

Works Cited

Amidon, Debra M. Innovation Strategy for the Knowledge Economy: The Ken Awakening. Boston: Butterworth-Heinemann, 1997. (See Review)

Fountain, Jane E. "Social Capital: A Key Enabler of Innovation in Science and Technology" in Investing in Innovation: Toward a Consensus Strategy for Federal Technology Policy edited by L.M. Branscomb and J. Keller. Cambridge: The MIT Press, 1997

ISUMA: Canadian Journal of Policy Research. Montreal, QC: Les Presses de l'Univerisité de Montréal, on behalf of Canada. Policy Research Initiative. http://isuma.net/summaries_e.shtml

Krishna, Anirudh and Elizabeth Shrader. "Social Capital Assessment Tool", Conference on Social Capital and Poverty Reduction. Washington, DC: The World Bank, June 22-24, 1999.

Organisation for Economic Co-operation and Development. The Well-Being Of Nations: The Role Of Human Capital In Supporting Economic And Social Development. Paris: OECD, 2001.

Robison, Lindon; A. Schmid and Marcelo Siles. "Is Social Capital Really Capital?" in ProvertyNet, World Bank Group. (Published: October 1, 2000) http://poverty.worldbank.org/library/view/8527

End Notes

For more on the Global Learn Day IV event, see www.entovation.com/whatsnew/learn-day-entovation.htm

Further information on the Entovation International Ltd., the ENTOVATION® Network and E100 can be found at www.entovation.com/

For membership of the E100 see the Global Knowledge Leadership Map at www.entovation.com/kleadmap/

For more Debra M. Amidon, the founder of the E100: see www.knowmap.com/contributors/amidon.html

Read Part II-A: Leadership & Relationships

Read more about Xenia Stanford.

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