2: Why Social Skills Matter

The author discusses the notion of skills - specifically, there are four different types of skills (physical, informational, emotional, and social) - each of which is valuable, but in order to be successful in any undertaking, it's important to know which skills to apply. A person with excellent skills in one regard will find it difficult to succeed if the problem requires an entirely different category of skills to solve.

The author outlines the skills as being products of various "ages." Primitive society valued brute strength, industrial society required more analytical skills, etc. (

EN: I don't know if I quite buy this. It's a decent way to isolate and illustrate the skills, but it implies that some skills are "outdated" when, in reality, it has more to do with the nature of the task than the "age". While I'm criticizing, I'll also posit that I don't accept these four as a comprehensive categorization, and feel there is some overlap among them. It's a bit sloppy, but I'll follow the author's lead rather than proposing a different schema at this time.)

Physical Skills

The physical skills include attributes such as brute strength and dexterity. They are applied in any action that can be witnessed by virtue of its impact on physical reality: something tangible is reshaped.

On an organizational level, physical skills are highly valued by manufacturers - those that make physical objects. The product may be the result of a single craftsman, acting alone, or it may be the organized result of multiple people doing different tasks (such as assembly line work).

Desirable employees to a PS company are those with great physical abilities, who put in significant effort, for long periods of time.

In summary: physical skills emphasize hard work, are focused on production, and thrive within a bureaucratic organization.

Informational Skills

Informational skills largely pertain to the power of the mind to understand and create intangibles: specifically, knowledge and ideas.

The value produced by informational skills is insight or ideas that can be used to generate value. Computer software may be an example of the result of informational skills, as could a report that analyzes trends in the prices of stocks. Publishing is another example: the value of a book is not in the physical properties, but in the information it contains.

In summary: informational skills emphasize intellect, focus on analysis and interpretation, and thrive within a loosely-structured organization,

Emotional Skills

Emotional skills pertain to the ability to create a one-on-one relationship with another individual. Value is produced by leveraging the relationship to cause the other party to behave in a way that is valuable to the individual who influences them.

Examples of professions in which emotional skills are dominant are sales and professional services (travel agent, stockbroker, realtor).

In summary: emotional skills emphasize people, focus on motivation, and thrive within an unstructured organization.

Social Skills

Social skills involve interacting with people in large numbers to interact, not only with the individual who influences them to interact, but also with other parties.

In a sense, social skills are similar to leadership skills, specifically in terms of facilitation: the SS practitioner gets people to begin interacting, then steps back to enable them to interact freely with one another.

In summary: social skills emphasize networking, focus on facilitating, and thrive within an organization whose structure will vary.

Overcoming Risk Aversion

The notion of physical and intellectual skills is very comfortable for most people, in that both deal with phenomena that are largely safe and predictable - objects and ideas. The emotional and social skills are not so comfortable, as they both involve risk - in the form of other people who may or may not react to the same stimulus in consistent, predictable, and logical ways.

(EN: I'd like to object to that, observing that "predictability' depends on a person's education and experience. Anything a person doesn't understand causes them fear and uncertainty. But in fairness, psychology is far less precise than chemistry - so now matter how much you study and observe about human behavior, the outcome of interactions remains far less predictable than in the physical sciences.)

It's also noted that there is an inherent bias in business to value what is most easily observed, hence business activities that have physical results (manufacturing and logistics) are considered "critical" to the success of the business. Never mind that without intellectual (product design), emotional (salesmanship), and .social (advertising) contributions, there would be no point in manufacturing anything at all.

(EN: This is of particular frustration when it comes to lobbying for budget dollars for certain activities. The manufacturing area can easily cost-justify the expense of a new machine that will make product faster - but selling the value of a well-designed product, or the value of establishing a social network, is very difficult to ascribe a value that business will accept.)

It's also noted that businesses are slowly coming to accept that "the business" itself is not the sum of its physical assets, nor even of its intellectual property. Neither of these will produce a penny of profit on their own, without the interaction of social networks: the people who are the firm's customers, employees, and others in its distribution and value-creation chains.

It's also noted that the era of operational excellence - in which companies gained competitive advantage by making things others could make, or making them better or cheaper than others - is quickly coming to an end. In the present age, anyone can make any product and, after a certain point, their relative efficiency at doing so results in a negligible price difference. Going forward, competitive advantage will be achieved through relationships with people.

(EN: Ultimately, the author doesn't get around to a clear indication of how to convince traditional executives of the value of social skills. There are many good reasons they ought to, but it remains a tough sell, and my sense is that many of the companies who are pulling ahead in this regard have made a great leap of faith.)