Tuesday, 6 May 2008

Gaining social capital by losing good people

A bit late on this but there was a really interesting article on some research into social capital in April's Harvard Business Review.

We know that moving to a new organisation will generally increase an individual's social capital (if they retain contacts with their last employer / colleagues). And that this should mean the new employer's social capital also increases.

But did you know that the old employer's social capital may rise by the employee leaving as well?

"An inventor who switches companies obviously brings previously acquired knowledge the new employer. We also found, though, that after an inventor moves to a new firm in a different country, subsequent patents from the inventor's old firm are 36% more likely to cite patents granted to people at the inventor's new firm than to cite patents granted to people at other comparable companies. In effect, the old firm gains knowledge from the new firm. However, this phenomenon is not evident for inventors who move within the same US metropolitan region or the same foreign country. That's probably because in those circumstances, the old country and the new firm are likely to have other existing ties, such as shared customers, suppliers and acquaintances."