UPS – Masters of Social Capital

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The United Parcel Service (UPS) hires people who fit its culture, full stop.

Tall order for a company that employs 500K+ UPSers in over 220 countries.

Customer-first, people-led, hard-working, cooperative, and committed employees comprise its workforce. Hiring managers are entirely willing to sacrifice experience in favor of shared values.

There was once even a historic company rule that forbade hiring managers from rehiring anyone who left the company. And while it has since been amended, that rule remains a testament to how seriously the company takes commitment, and how important social capital is.

Social capital refers to networks of people, the trust that binds them, and the resources and benefits they gain and transfer by virtue of being connected.

It’s what helps people realize the value they contribute to the bigger picture of their networks and teams. And a high level of social capital is what enables those networks of people to work so well together.

Organizations are social entities. Success depends on a group’s ability to:

  • Establish relationships
  • Share a sense of identity
  • Abide by norms and values
  • Cooperate, reciprocate, and trust

UPS is a seasoned master at maintaining a high level of social capital. It has been deliberately fostering and strengthening social capital in every facet of the organization and within employees’ interactions with each other, since its humble beginnings over a century ago.

Double Down on Culture

On the surface, this might all seem simple. Maybe your thoughts echo what Dan Cohen and Lawrence Prusak wrote in the preface to In Good Company: How Social Capital Makes Organizations Work:

“We should praise people who contribute to the organization. We should involve employees in decisions to increase their stake in the business.”

But the authors quickly acknowledge something, and so should we: this basic truth is all too often ignored, and companies suffer because of it.

Today we’ll take a page out of a 115-year-old learning organization’s book on the importance of social capital in simply making companies work and retaining skilled and passionate employees that embody a culture of continuous learning.

Remember those examples about UPS’s hiring preferences and how it reinforces high social capital? Well, UPS goes further, putting employees in charge of orientation programs to transmit values and demo skills, processes, and procedures to teammates, from a relatable perspective.

No outside trainers need apply.

Leaders at UPS have always championed a strong promote-from-within policy and empowered distributed decision-making from all employees and teams, reinforcing an ever-growing sense of participation and membership.

holding paper cutout of stick figures holding hands
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image courtesy of Andrew Moca on Unsplash

George Smith, a former UPS CEO, said it best:

“It is considered desirable to have authority for decisions and actions as far down the line as possible, in keeping with the needs of the job, which have a better chance of being known where and when the needs occur.”

When companies trust employees’ judgment, social capital rises.

Stock ownership is part and parcel of its social capital-minded employee-owner concept, something its leaders have deemed vital to the success of a global business since 1927. All employees who have been with UPS for at least 30 days can purchase stock.

Another way UPS fosters high social capital is by maintaining “legacy books” and policy books containing history, employee experiences, and thought leadership extending all the way back to original founder Jim Casey’s ideas. Employees still discuss these texts during an annual “Jim Casey Night.”

Talk about keeping the company culture alive!

“We are not a memo kind of company”

These are the words of a senior manager at UPS.

While UPS has surely stepped into the 21st century in terms of its operational systems, modes of delivery, and data management tools, it is still largely a face-to-face, ‘conversational’ organization, and it’s held together by individuals’ personal contact with each other.

Employees at UPS make important decisions and form relationships as collaborative members of a tight-knit group. Activities and benefits that encourage a high level of social capital (like what we’ve discussed above) prove more effective than one-off “team bonding” retreats, picnics, or other exercises external to the flow of work precisely because they’re ingrained in the fabric of UPS teams’ daily work and interactions.

Functional, successful teams grow through practice. While those bonding activities can help to create situations of togetherness and collaboration, what truly moves the needle is when a group forms because of the activities and values they already share. They cannot be managed into existence.

group of people uniting with hands in a pile
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image courtesy of Hannah Busing on Unsplash

Regarding UPS’ work on communities and its demonstrations of knowledge management, Cohen and Prusak explain that the company promotes,

“a kind of managerial intervention that encourages natural development, that orients rather than orders, that provides nourishment rather than blueprints…

Some use the analogy of gardening or husbandry, the stewardship of an ecology as opposed to the construction or maintenance of a machine.”

The act of maintaining high social capital is not meant for control freaks. It takes a light touch to let things develop on their own, allowing things to occur that might not fall neatly into your original plans.

Risky Business

Companies risk a lot by ignoring the social capital aspect of knowledge management.

Just about every managerial decision affects social capital; decisions are junctures at which managers can either invest in or damage social capital (think hiring, firing, issuing promotions, using new tech, establishing new goals, setting budgets, etc.).

The opportunities to prove “what good looks like” are right under your nose.

The most glaringly obvious risk is losing good people and the knowledge they possess. Social capital is a primary driver of longevity; it exists in the same vein as continuous learning. People who are not enticed by the connections within their job to stay can be convinced to leave at the sight of a higher salary, or an environment with higher social capital.

Another risk of low social capital is building inefficient networks for knowledge transfer, with information flowing along relationship lines characterized by mistrust and misunderstanding. This can severely curtail knowledge management efforts and rally against collaboration, when that was always the intended goal.

standing at a crossroads
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image courtesy of Jon Tyson on Unsplash

Atop all of this, companies that ignore social capital have to deal with the hassles and expenses of hiring, training, and monitoring employees, when those worries are all but dissolved in high-trust, high-social-capital organizations.

And at the very end of the line, customers are the ones that ultimately suffer from a company’s choice to ignore social capital and the quality of relationships among its employees.

Conclusion

UPS has a remarkable level of social capital and has for years. And even back in 2001, when Cohen and Prusak published their book, UPS began to adjust to the world’s impending reliance upon electric communications and shared electronic workplaces to boost and maintain social capital.

UPS hires people who fit its culture, full stop.

This may seem like a harsh statement without context. After reading this article, hopefully, you’ll have a better understanding of why this sentiment is exactly what makes UPS an industry leader.

UPS has a single vision curated over the course of a century. Values determined in an entirely different era still hold true today.

Each employee is part of a legacy that began with 2 teenagers and a $100 loan. It took a hundred dollars to shape an entire industry, and to create a company culture that has stood the test of time.

Take a moment to reflect next time a package appears at your doorstep.

UPS driver sitting on the UPS truck footboard
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image courtesy of Grant Thomas on Unsplash
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