Playing dumb: Why social capital is more important than human capital alone.

By Jerry Ash

As the story goes, a bright young man was hired by Bethlehem Steel as a management consultant, because of his reputation as a leading light. Almost immediately the young man realised that, as he was not a relative of anyone on the board of directors, he had been hired primarily as an ornament. So, he wore his golf shoes to the board meetings and practised his golf swing. When asked what he was doing, he said that, until he was allowed to perform, he would keep practising golf.

In effect, Bethlehem Steel, then Bethlehem Iron Works, had hired a smart person but expected him not to infiltrate the gangs, families or individuals who ran the business for themselves, sharing power only with those who saw things their way. The young man was eventually fired, an early victim of an attempted ‘dumbing down’ of a smart person. The year was 1901, and the man was Frederick W. Taylor, who ten years later became the architect of scientific management, the standard for command-and-control management for nearly 100 years. Today, Taylorism is vilified as one of the chief impediments of managing shared knowledge and decision making.

Ironically, Taylor was not only the victim of dumbing down, but his philosophy was misunderstood. He believed the secret to productivity was finding the right challenge for each person, then paying the person well for increased output. Neither Taylor nor the management standards of the industrial era can be blamed for today’s practice of dumbing down. Dumbing down is the modern-day fault of the deliberate and the inept.

In the US, the CIA had extensive intelligence on al-Qaeda. The FBI knew some suspicious fellows were taking flight lessons and asking for advanced courses on piloting big jets. Multiple intelligence agencies were sure there were weapons of mass destruction in Iraq. Twice NASA knew there were serious risks for shuttle flights that both ended in tragedy. Andersen knew what was going on at Enron.

Sometimes otherwise smart people start thinking alike. Michael Heaney, director of Benchwhistler Associates, has an interesting view of ‘groupthink’, which is the poor cousin of collaboration. “In groupthink,” Heaney says, “we see the redundant paths that repeat the same message again and again. Groupthink happens easily in an echo chamber.” Ron Burt, a sociology professor at the University of Chicago Business School and a leading network expert, explains that a tightly closed network “amplifies predispositions creating a structural arthritis in which people cannot learn what they do not already know”. He continues: “Once these tight clusters form, it is difficult to communicate across them, especially if you try to extract a few central players from one group and put them into a room with a few central players from another.” For example, a sudden meeting between the launch team and shuttle engineers, who have data indicating the O-rings might fail in cold weather, might result in a clash and miscommunication, because there would be no social connection.

Lack of diversity within a group is yet another cause of dumbing down. Often teams and networks are formed based on homogeneity. For efficiency, homogenous groups work better, but if the objective is sense making, a diverse group is better. And for innovation, diversity wins. Valdis Krebs, founder of Orgnet.com and an expert on organisational-network analysis, says, “Diverse groups may avoid groupthink because each subset of a group probably has an outside group as a reference.” Thus, they are not confined to an echo chamber.

Krebs also says dumbing down shows why a focus on mere human capital is not enough. “I have seen plenty of intelligent people whose great knowledge was not available to the organisation for various reasons, and most were being paid as though it were. If knowledge were as simple as managing it,” he says, “then NASA surely would not have launched Challenger on that cold morning. The right human capital was in place, but it was not connected by social capital.”

While human capital is essential, social capital, Krebs says, is the activator. “The difference between the good and the great is determined by the social capital of individuals, groups and organisations as a whole.”

As in sports, it is not the stars that win championships. It is the well connected team with good players who pull together, share and support each other. They do not depend on the star to pull them through and they don’t blame their losses on something called ‘Taylorism’.