Social Performance model (Bernardez & Kaufman)

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In order to turn social capital into value-adding social, organizational and individual performance we must consider four key steps: establishing a shared vision among all stakeholders, measuring and reporting the value added -or subtracted- by social capital and building a supportive social ecosystem.

Step 1: Establishing a shared vision with all stakeholders[1]

Defining a common purpose among all stakeholders is the most critical step for turning social capital into value-adding social performance. Using Roger Kaufman's Minimal Ideal Vision- Table 1 - all stakeholders in the ecosystem can reach an agreement in a common vision for their shared future, identifying and prioritizing needs -defined as gaps in results- and focusing efforts in all three dimensions. For each one of the MIV elements, stakeholders can identify gaps between the current and desired level -"what is" against "what should be"- and agree on their priority.

 Table 1: Minimal Ideal Vision[2]

There will be no loss of life or elimination of the survival of any species required for human survival.  There will be no reductions in levels of self-sufficiency, quality of life livelihood, or loss of property from any source including:	“gaps”  between  what it is and what it should be
q  war and/or riot and/or terrorism, and civil unrest
q  shelter
q  unintended human-caused changes to the environment including permanent destruction of  the environment and/or rendering it non-renewable
q  murder, rape, or crimes of violence, robbery, or destruction to property
q  substance abuse
q  disease
q   pollution
q  starvation and/or malnutrition
q  child abuse
q  partner/spouse abuse
q  accidents, including transportation, home, and business/workplace.
q  discrimination based on irrelevant variables including color, race, creed, sex, religion, national origin, age, location
q  Poverty will not exist, and every woman and man will earn as least as much as it costs them to live unless they are progressing toward being self‑sufficient and self‑reliant
q  No adult will be under the care, custody or control of another person, agency, or substance: all adult citizens will be self-sufficient and self‑reliant as minimally indicated by their consumption being equal to or less than their production.
Consequences of the Basic Ideal Vision: Any and all organizations--public and private--will contribute to the achievement and maintenance of this Basic Ideal Vision and will be funded and continued to the extent to which it meets its objectives and the Basic Ideal Vision is accomplished and maintained. People will be responsible for what they use, do, and contribute and thus will not contribute to the reduction of any of the results identified in this basic Ideal Vision.

Roger Kaufman's Vital Signs - described in Table 12 - provide a common framework for helping diverse stakeholders find common ground and agreement about shared goals. Using Vital Signs as a guiding star communities (Level 1) and organizations (Level 2) can establish the needs - defined as gaps in results - to be addressed and prioritized and their corresponding requirements of social capital.

Table 2: Vital signs

Vital Signs (Kaufman)[3]	Social capital requirements -examples-
First level: basic survival for all people q  Self-sufficiency - Poverty will not exist, and every adult person will earn at least as much as it costs them to live unless they are progressing toward being self‑sufficient and self‑reliant	q  Organizational capital: self-sustainable business ecosystem, viable productive organizations providing jobs
q  Zero pollution - no permanent destruction of the environment	q  Institutional capital: effective rules and governance of common pooled resources
q  No deaths or permanent disabilities from what is delivered	q  Institutional capital: consumer protection rules and institutions q  Organizational capital: safe products and services
q  No starvation/malnutrition resulting in incapacity	q  Organizational capital: self-sufficient organizations, sustainable jobs, efficient healthcare systems q  Relational capital: family and community care, effective healthcare and education (higher HDI levels)
q  No partner or spouse abuse resulting in incapacitating physical or psychological damage	q  Relational capital: stable, well integrated families, family life, community support
q  No disease or disabilities resulting in incapacity	q  Relational capital: family and healthcare support
q  No substance abuse resulting in incapacity or dependency	q  Relational capital: family and support groups (AA, church)
q  No murder, rape, crimes of violence, robbery or destruction of property	q  Institutional capital: rule of law, property and civil rights, effective law enforcement q  Organizational capital: self-sustainable business providing jobs above poverty level q  Relational capital: community engagement and participation, family support, high HDI levels, turning around "anti-social" relational capital
q  No war, riot, terrorism or civil unrest resulting in incapacity of individuals or groups	q  Institutional capital: rule of law, property and civil rights, effective law enforcement
q  No accidents resulting in incapacity	q  Organizational capital: safe products and services
q  Citizen quality of life	q  Institutional capital: rule of law, property and civil rights, effective law enforcement
Second level: Organizational survival 1.       Continued funding based on measurable positive return on investment	q  Organizational capital: effective, competitive organizations providing superior client experiences, products and services, high DBR and IEF levels q  Institutional capital: rule of law, protection of contracts and investment
2.      Programs, projects, activities and operations that meet all performance objectives while adding value to first tier requirements	q  Organizational capital: strategic alignment, Mega-focus

Step 2: Measuring social capital's value added: making a double bottom line business case[4]

A wide variety of indicators such as the market price of mailing lists, sales referrals, brand names or multi-billionaire social networks IPOs can provide a glimpse of the mostly underreported and under-measured value of intangible assets such as social capital. Our performance-centered approach brings this intangibles into the social and organizational balance sheet by using social and organizational performance results as dependent variables for measuring and analyzing the social and economic impact of different forms of social capital interventions considered as independent variables.

At the microeconomic level, organizations and communities can monetize the value added or subtracted in a double bottom line business case by social and antisocial capital factors and interventions - from improving communities' civic engagement, quality of life, employment and rule of law, to customer and stakeholders' relationships to organizational culture, effectiveness and responsiveness - at three different levels of performance: value added to society (Mega level), to organizations (Macro level), and to products and services delivered by social capital interventions (Micro level)[5].

This performance-centered approach links and aligns social capital interventions to specific and measurable social and organizational results, accounting for its value as an asset or liability in double-bottom line business case. Using this methodology, governments, organizations and communities can monitor and manage the effective utilization of new and existing social capital and control the progress and return on investment on turning around "anti-social" capital.

The double bottom line business case – see Table 3 for a generic example - has three top lines: 

(1) a Mega top line - reflecting value added to consumers, shareholders, environment and community -, 

(2) a Macro top line - reflecting revenue, cost savings and assets appreciation (and reduction of liabilities) for organizations - and 

(3) a Micro top line - reflecting the number of products and services delivered, the time and work involved - in interventions to create social capital or turning around antisocial capital.

The indicators included in each category of the three top lines described in Table 13 summarize a wide variety provided by current research[6]. 

They might not be present or vary on each specific case -as we will see in the three practical cases discussed later in this chapter-, depending on the specific metrics that apply. In specific applications, generic indicators -such as increased revenue or reduced negative impact- can (and should) be broken down in more customized metrics[7] -such as tourism revenue or reduced damage to property- in order to increase traceability and keeping managers and officers accountable.

Table 3: Double bottom line business case (example)

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In the Table 3 example, Micro-level interventions are measured in different units - DBR or IEF rating points, employable workforce, direct and indirect jobs, housing units, reduced crime and incarceration rates - that can be translated into economic impact based on available local research - such as the cost of incarceration, the amount of property lost to crime or the increased business and community revenue generated per point of improved DBR rating or per average new investment.

The business case for social capital presents two bottom lines: the first or conventional bottom line ( reflects the net result for organizations: . The second or social bottom line ( factors also the net result for consumers, shareholders, environment and communities .

Mega-level indicators such as jobs, health, housing, self-sufficiency, and unemployment are monetized using existing social research – such as the impact of demographic changes, institutions and relational capital in societal and organizational performance and costs - and economic data – such as average wages, economic multipliers, social costs of “non-quality” such as welfare, unemployment insurance or damage to property or environment.

When a direct indicator of an “intangible” is not available, the business case can use “proxy” metrics –like the wage cost of down time provoked by preventable illnesses[9].

A low or negative social ROI indicates that the social capital intervention may actually subtract value to its intended beneficiaries, -as in the case of failed welfare and foreign aid programs[10], while a low or negative conventional ROI indicates that the social capital intervention is not economically sustainable.

Used as a research framework, the double bottom line business case facilitates collecting and monitoring all critical variables data for testing each social capital intervention turning a 5-year social capital development process into a experimental design with controlled variables allowing the application of time series analysis and other advanced research methods[11]. Using the double bottom line business case as a common scoreboard, different stakeholders can track and align their goals and metrics.

Step 3: Align and organize social capital factors in an effective social ecosystem[12]

The experience of successful creation of value-adding social capital -from Silicon Valley to Singapore to China's Special Economic Zones to India's digital cities around the Indian Institutes of Technology- shows that positive social change comes faster in smaller, entrepreneurial ecosystems operating as innovation's "greenhouses" with supportive institutions that can more rapidly showcase results, inspiring emulation rather than imposing change.

Entrepreneurial ecosystems can be designed and developed addressing and complementing the three dimensions of social capital with specific subsystems[13]. Intellectual Capital and contracts protection, infrastructure and common pooled resources (CPR) management can provide adequate institutional capital; market, finance and logistics support supply organizational capital; security, education, housing and community development foster relational capital (Figure 2)

Figure 2: Managing social capital through business ecosystems

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Multiple social capital factors and interventions can be aligned by developing a shared vision among all stakeholders[14] based on the perspective  of the shared "costumers" of their social and business ecosystem[15] - such as residents, visitors and patrons of multiple businesses in the community.

Using this integrated framework, multiple organizations and institutions in Colon City, Panama, coordinate interventions for improving the city's social capital and turning around "anti-social" capital - from recovering and turning gang members into tourist guide and waste management jobs to involving former squatters into re-housing and hospitality projects.

Using a cross organizational flowchart as shown in Figure 3 multiple business can organize in  value chains serving shared customers. Each organization participating in a value chain providing part of the products and services required for a common customer -in the case of Colon City,  visitors and residents- can visualize how their products and services must contribute to the shared customers' experience in coordination with others.

The cross-organizational flowchart tracks the economic flow, tying residents' income, jobs and organizations and investors revenue and ROI to shared customers consumption and spending. Multiple organizations can also visualize their participation in one or more value chains supporting the customer experience.

Figure 3: Aligning social capital interventions in Colon City, Panama

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References

• Bernardez, M. & Kaufman, R. (2010) Turning Social Capital into Social Performance. NOVA