Broker Check
What is the Impact of Weak Social Capital?

What is the Impact of Weak Social Capital?

June 21, 2023

Social Capital

Social Capital, or company culture, embraces the people. How they communicate, what they believe in, and how they operate internally and externally are key components of a company’s culture. 

A negative culture yields in-fighting, politicking, gossip, inefficiency, lack of team play, unhealthy competition, and absenteeism.” 

“Poor culture or even toxic culture hurts the business in a myriad of ways. But perhaps the single most important is that companies with poor culture look inward. Employees focus on what’s happening within the company rather than what’s happening outside the company. If you’re not servicing customers and partners, or addressing the competition, you’re eventually going to fail.” 

The way you do business is a refection of your culture. If your team is connected to your vision, they will be more passionate, more creative, and more committed.  

An owner’s business is only as valuable as their ability to share their brand story and purpose with the correct audience. There is more to a brand than company colors and imagery. Branding is an organization’s outward projection of its core values, passions, vision, and mission. 

What are your non-negotiable values? If you go one or two levels down inside your company, can those employees article your values? If there is a gap between senior leaders' understanding and expression of values and the front-line employees, there is lost performance. 

When determining how to improve the value of an owner’s Social Capital, work through the following checklist. 

  • Does your company have expressed and written Core Values that are lived out daily by every member of the organization? 
  • Do you foster a community feeling amongst the employees through collaboration and creativity?  
  • Does every aspect of your work have your unique “stamp” on it that your customers could easily identify as your business?  
  • Do you encourage communication between all levels of employees and is employee feedback considered and accepted? 
  • Does your organization have strong social capital that builds transferrable value for potential buyers?