Entries in social capital (12)


Book recommendation: Frugal Innovation

Navi Radjou, an innovation and leadership strategist and friend of Catalyst, has co-written a new book that we recommend wholeheartedly.

Frugal Innovation proposes a breakthrough approach to solving some of the most complex issues of our global economy as it empowers human beings to use their creativity to generate economic and social value while preserving the environment.

In this work, the authors set out to explain:

  • How to achieve mass customization, using low-cost robotics, inexpensive product design and virtual prototyping software.
  • How consumers and other external partners can help develop products

  • How to implement sustainable practices, such as the production of waste-free products

  • How to change the corporate culture to become more frugal

In my view, this is must read for thought leaders and practitioners worldwide.


-- Bruno Roche


Technology, time horizons, and global growth

A recent article by Gillian Tett in the Financial Times profiles the contrarian views of a UK fiscal policymaker  regarding innovation, technology and growth. Contrary to the conventional wisdom, that is, as captured by McKinsey and others that promote unfettered innovation as the ultimate solution to the challenges facing worldwide economic expansion.

Andrew Haldane, chief economist for the Bank of England, sees things differently. In a speech entitled "Growing Fast and Slow," Haldane examines the past 250+ years and concludes that innovation is only part of the reason for the rapid growth the globe has experienced in that time. There are additional factors that are critical: rising levels of human capital (educated people), social capital (trust), and a shift in cultural attitudes towards the future (from a focus on short-term gains to planning for the long term).

Further, while innovation can enable greater growth, Haldane worries about the current direction that digital technologies are taking us. He warns that the digital revolution is increasing income inequality, and may be reducing our time horizons--making us less capable of the patience required to make the investments needed to achieve sustainable long-term growth.

Fast thought could make for slow growth."

--Andrew Haldane

Haldane ends his speech with a warning about the cross-winds associated with increasing innovation on the one hand and decreasing social development on the other. If we are not careful, global growth could end up "suspended between the mundane and the miraculous."

We appreciate an analysis that accounts for human capital, social capital, and considers the merits of a long-term perspective. What do you think about Mr. Haldane's observations?

-- Clara Shen


Can you have too much team cohesion?

A recent study out of Ryerson University questions the conventional wisdom that the performance of workplace teams always increases as their social bonds grow. Instead, the relationship between team cohesion and performance looks more like a classic bell curve -- rising significantly at first, but peaking at a certain point and declining beyond that.

One reason for the previously undocumented decline in performance at the far end of the spectrum could be that "groupthink" hampers innovation and dampens a team's urge to challenge the status quo, according to an article in Strategy+Business. The risk of teams aligning their analysis with senior leaders has been explored in the past, but those posed by intra-team social ties less so.

There are benefits to team cohesion, including higher levels of job satisfaction, fewer conflicts, and less turnover, but the implications of the study seem to be that a balancing act is required. Team leaders and managers should try to find that optimal level of social ties that promote high performance, and to monitor and make adjustments if the risk of stagnation and groupthink starts to grow.


Image: Example team connection maps. Source: Baylor University

-- Segundo Saenz, Bojan Angelov


Reading List: The Digital Disconnect

The Internet is eroding free responsible journalism, and capitalism often works at counter-purposes to democracy.

Capitalism, democracy, the media, and the internet revolution are the subjects of Robert W. McChesney's most recent book, Digital Disconnect, How Capitalism is Turning the Internet Against Democracy. McChesney, a professor of communications at the University of Illinois and author of Rich Media, Poor Democracy (2000), believes that most people fail to grasp the relationship between capitalism and the "political economic context" of the internet.

The tremendous promise of the digital revolution has been compromised by capitalist appropriation and development of the Internet.”

McChesney posits that the current American version of capitalism does not, in practice, live up to its stated purposes of allowing free competition among equal participants. Instead, he claims fewer than 1% of Americans are able to compete in this way, and economic mobility is becoming more difficult. Turning his attention to how this plays out across the media and the internet, he argues that the public should champion net neutrality, and governments should treat the “electromagnetic spectrum as a public resource” to counter the trend toward media becoming a monopolistic domain.

As we explore what it means to build a truly mutual economic system--and particularly how we measure the performance of that system--the evolution of the media, and how it impacts political and social capital, are of keen interest to us. McChesney’s economic analysis and societal explication as interesting food for thought.


-- Bruno Roche



Solving yesterday's solutions: A history of management theory

The idea that management practices can be studied, with lessons learned and distilled into theories, has been with us for decades. Short vignettes such as A Message For Garcia by Elbert Hubbard (1899) and The Go Getter by Peter B. Kyne (1921) have extolled employee virtues, and Alfred P. Sloan's "Organizational Study" memo to GM (1920) is considered a foundational work of corporate management theory.

Of course the business environment changes over time, with corresponding shifts in the theories of what management practices work best -- often based on the (reported) recipes used by the success stories of the day. It would be useful to chart these theories and their changes over time in order to ask: Are there consistencies across eras? Can we observe, and perhaps predict, cycles of in best practices? Do certain practices have a "shelf life," beyond which we can expect them to become obsolete?

We enjoyed Nicholas Lemann's recent piece in the New Yorker,When G.M. Was Google” precisely because he takes this long view and

addresses these questions. Among the changes Lemann notes is the decline in the social vision of the corporation, as well as the shift from viewing “bureaucracy” as a solution to attacking it as a problem.  Indeed, on the later point he notes:

What managers consider a problem is typically what their predecessor considered a solution.”

He also finds enduring similarities in the recipes for success over time, notably an attention to consumer/user needs, and corporate cultures that don’t just foster innovation inside the company—they attract the brightest and most innovative minds from outside and draw them in.

Image source: The New Yorker

--Clara Shen