Teams' social capital: an overlooked lever for industrial SMEs

Analysed source: sloanreview.mit.edu. For a leader, the value lies in the decision the analysis helps clarify.

The MIT Sloan Review article Develop Your Team’s Social Capital, Not Just Their Skills shows that high-potential employees in industrial SMEs are often assessed on technical performance, while social capital receives little attention. Study author James J. Areago emphasises that mobilising trust, credibility and networks directly influences leadership progression. Industrial leaders should rebalance development programmes by including social capital as an advancement criterion, or talented people risk stagnating in silos. Adding this criterion to the talent plan becomes a strategic priority.

MIT Sloan Review's finding: skills take priority over social capital

According to the report, organisations still prioritise experiences that strengthen operational skills and measurable performance. Training centres on know-how, while opportunities for cross-functional relationships are rare. Interviews with 21 people across different functions indicate that social capital — trust, influence and visibility — is rarely taught explicitly. Future leaders know how to do the work but struggle to communicate results beyond their immediate teams. explore flows and bottlenecks.

Why social capital matters in industrial strategies

Industrial SMEs increasingly rely on cross-functional projects and external partnerships. Accessing information, gaining support and influencing decision-makers beyond one's usual scope becomes a success factor. Social capital carries performance from a silo to those allocating resources and opportunities. Without it, initiatives remain confined, limiting innovation and critical-flow improvement. explore SEO and AI visibility.

The cost of inaction: silos and lost opportunities

Without investment in social capital, performance remains invisible to key stakeholders, reducing support for flow improvement or automation. Talented employees may feel unrecognised and seek environments that value their networks, increasing turnover. Missing influence networks also slow the spread of good practices, lengthening decision cycles and increasing the cost of critical projects.

Hypothetical scenario: a production manager builds an internal network

Imagine a line manager in a mechanical-parts SME who excels at reducing downtime, but whose achievements stay within the workshop. Following the study's recommendations, the manager co-leads a cross-functional working group on the decision-to-sprint flow, meeting R&D, procurement and finance. Over time, the manager gains decision-makers' trust, sees proposals adopted faster and receives support to automate production-indicator tracking. Their influence expands and performance improvements spread across the factory.

Five practical actions to build your teams' social capital

• Include cross-functional assignments in individual development plans, targeting projects across several functions.
• Set up experience-sharing sessions where employees present achievements and difficulties to a wider audience.
• Formalise mentoring that pairs high-potential employees with leaders recognised for their internal networks.
• Measure contribution visibility by tracking how often an employee's ideas inform strategic decisions.
• Encourage initiative in steering committees so each participant can exercise judgement and be asked for advice.

Next step: assess social capital

Leadership must decide how to include social capital in the talent programme. Start with an internal assessment mapping trust networks, sources of influence and friction points. This supports a tailored roadmap aligned with performance and innovation objectives, turning an invisible asset into a measurable growth lever for the industrial SME.