The Relationship Economy……

There is clearly a divide between businesses who understand the “shifts” happening and those that don’t. Whether a Fortune 500 or a small business owner the divides in understanding will separate the winners from the losers.

Consider These Conversations

Tim Leberecht writes: “In a panel on “Business Innovations that are Changing the World,” Google Chairman and CEO Eric Schmidt said: “Let’s not forget that the fundamental goal of any corporation is to change the world and not just to satisfy the interests of particular stakeholders.” Indeed, this was the overarching theme of an economic summit that was all about social: social innovation, social media, social networks, social web, and social capitalism. What once was a noble mission is now a mandate for CEOs: the future of business is social, both in terms of raison d’etre and modus operandi. Companies that open themselves up to promoting and fully leveraging the social dimension of human beings in order to create smarter and more effective solutions for social problems will be the winners of this new social economy.”

Brian Morrissey writes: For Tony Hsieh, CEO at Zappos, meeting up with a customer at a bar in midtown Manhattan was perfectly natural. Most execs with 1,600 employees and doing over $1 billion in annual sales would probably pass on having drinks with an individual customer, but Hsieh is not your typical CEO. In the past week alone he had given away shoes on Twitter, sent out an open invitation to a company barbecue and solved a service problem a customer left in a blog comment. If this seems exhausting, Hsieh sees it as part of a larger strategy to build Zappos into a brand on par with Virgin.

“We think our brand is going to be different because we want people to feel there’s a real person they’re connecting with, whether it’s when they call us or through Twitter or any way they come in contact with us,” he said.

“All we do is try to respond to what users are asking for,” he said. “That’s how we set our priorities. Users aren’t asking us to run ads, so it doesn’t come onto our radar.”

At the heart of these decisions is a simple fact of life with the Internet: Everyone is connected, and hiding behind glossy images won’t work when a Google search can turn up the good, bad and ugly of your company. In the analog world, it was different. Haque believes brands thrived on how difficult it was for people to get information. Logos, spokespersons and slogans combined to give consumers a way to make choices. But now, the Internet has turned that on its head. “The entire economic rationale for brands is gone,” Haque said in an interview. “Interaction is too easy now for brands to have power.”

Professor Henry Jenkins of the Comparative Media Studies Program at MIT articulates a world in which young people have a very different relationship with media consumption. This is the migration from consumption as an individual practice to consumption as a networked practice - which I might add is voluntary. Convergence Jenkins argues is also a culture phenomenon rather than a technological one Culture Jenkins argues is today Participatory.

Clay Shirky writes a very philosophical piece about culture/media and participation. His assessment is that social computing is a major shift in consumer behavior and market influences. He presented at Web 2.0 Summit in April and you can view his insightful presentation here

Jonathan Schwartz at Sun said “Our 1000 bloggers at Sun have done more for this company than a $1bn ad campaign could have ever done.”

And the Other Side Says

1. This is just a fad

2. We don’t want our employees participating in social media

3. We don’t want to give our customers too much power

4. You can’t make money using social media and social networks for business

5. That stuff is just for kids

Which side is closest to reality? An ancient Chinese proverb says: “Tell me and I’ll forget; show me and I may remember; involve me and I’ll understand.”

People like to be engaged, participate, discover and explore. The people have been limited but now they seem to be set free.

What say you?

With so many demands vying for our time and attention, sometimes even a simple, uninterrupted phone call seems to be a stretch of the imagination. Cell phones, personal digital assistants (PDAs), instant messaging, pagers, faxes, emails and the list goes, on all contribute to information availability and overload.

In Western society, we have been trained to “want what we want, when we want it - five minutes ago.” Microwave ovens, cell phones, “instant” potatoes, lightning-speed internet searches, 24-7 news channels, all have conditioned us to get things done faster. We’re all chasing time as a value that drives us to either save or gain more of it.

Our attention is really the driver of the use of time. Time and attention are the factors to getting massive personal and professional leverage; by capturing the attention of someone, you are more likely to get their time. Learning how to leverage time is the means of getting more peoples attention while saving your own time.

The web is becoming the means which enables massive personal and professional leverage, you can reach the masses, or swarms rather than reaching a few. Those who can accomplish the greatest mass of personal and professional leverage will be those who gain the most use of time. Those who adopt, or more appropriately, transform their thinking, and learn how to use the web effectively and efficently, will perpetuate value faster than ever before. The dynamics we are all facing becomes the Paradox of Choice, or where should we spend our most valuable asset – time?

Is the Web a Time Transport Mechanism?

In transport economics, the value of time is the opportunity cost of the time that a traveller spends on their journey. In essence, this makes it the amount that a traveller would be willing to pay in order to save time, or the amount they would accept as compensation for lost time. Isn’t the web nothing more than a highway of transportation?

One of the main justifications for improvements to the web is the amount of time that people and businesses will save. Using a set of values of time, the economic benefits of any improvement can be quantified in order to compare them to the costs (thus forming the basis of cost-benefit analysis).

The value of time varies considerably from person to person and depends upon the purpose of web usage, but can generally be divided into two sets of valuations: working time and non-working time. This division is appropriate because the value of working time (i.e. time spent on the web in the course of work) is calculated differently from the value of non-working time (i.e. time spent on the web outside work).

Where are People Spending Their Time Today?

People are spending twice as much time online as they are watching TV, a new study of consumer behaviour by analyst firm IDC has found.

Silicon Republic writes: “The study found that the average amount of time spent online is 32.7 hours per week, compared with 16.4 hours spent watching TV.”

“The time spent using the internet will continue to increase at the expense of television and, to a lesser extent, print media,” said Karsten Weide, programme director, digital media and entertainment at IDC.

When Will The Web Give Back Time?

People have little patience with poor performance. While we are experiencing emerging web developments daily much of it is a distraction and robs us of time. However when we consider the converging activities in today’s marketplace and initiatives such as VRM it won’t be long before the web will become the utility of choice for enhanced personal and professional productivity gains. Then the attraction will magnify and draw masses faster than ever before and we will experience the dawning of The Relationship Economy fueled by Socialutions never before anticipated or experienced.

The time factors will become the market factors and those who understand “how to” will gain back time. Commerce will accelerate and new markets for businesses prepared will pull and attract consumers from old markets.

What say you?

Social networking technologies develop a momentum of their own which takes individuals beyond the point of counter productivity at which they become self-defeating.

While the phenomena of networking technologies appeals to some of our basic human needs it also appeals to human weaknesses and reveals our insatiable appetites for “new”.

The Hidden Game Appeal

Many adults are intrigued by the phenomena of social networking and will spend countless hours engaged in the game. It is a game when you consider what operators know and users do not. Operators understand the appeal of new technology when it is designed around “ basic human needs” for relationships, significance and wanting not to be left out of the “latest and greatest”. Knowing this operators launch new networks aimed at targeted consumer interest, new features to intrigue the masses, new functions that promise new efficiencies and network growth that promotes being able to reach more people.

The masses follow the appeal and the cycle of intrigue is designed to keep the masses engaged. Network operators are motivated to establish technological relationships with their customer with the aim of drawing in the masses so the networks economic value increases. The economic value of the network is aimed at satisfying the shareholder, not the users.

What is unique about technological advancements is that some people become enslaved by the technology while others figure out ways to be enabled. Those that create the technology do so with a purpose. Much of the marketing buzz about technology promotes its benefit but never do we see the scope of our cost for adopting the latest and greatest technological advances.Technology can become a detriment to our time, our relations and our economic standing if you aren’t investing mindfully with a view to a financially viable outcomes.

Technology can also become and enabler of opportunities to leverage the medium for our own individual or business gains. Our gains must be definable and useful to our individual or business purposes. Providing clear definitions and purpose will ignite a new wave of adoption from those on the sidelines wondering what is the purpose.

Our purpose should be grounded in relationships which produce different outcomes. Enrichment comes in many different forms but the basic tenant of enrichment across all forms starts with a relationship. The Relationship Economy is about leveraging technological advances that enable us to enrich our lives economically, relationally and in many other forms. Until we unite as users and collectively create one voice which defines and removes the constraints to our purposes then the “game” will not evolve to enable us to accomplish our purpose.

Revolutionary changes are required to facilitate “networking objectives” with a purpose. Reducing the learning curve will require education and removing the barriers to “trade” will require cooperation. Cooperation must be lead by the users and that is the purpose of Link to United Relations.

Operators aren’t likely to cooperate until the collective customer base creates enough force to facilitate change either from within or outside the current eco-system.

What say you?

The value of a relationship is not driven by how many networks your networking with them on rather it is simply the fact that they are part of your network. 65% of my network is also networked with me in other networks! What is the point?

Technology creates different expectations and maybe we think one platform is better at enhancing our relationships yet we don’t stop and think about defining the cost benefit of networking with the same people in different networks. Time, attention, distractions keeping up with approving “friends” through different networks, emails, notification and the list goes on…..are you feeling the pain?

One may argue that my relationships are enhanced because a different network enables me to share more media with my friends, more information sharing capability, expanded profiles of my friends capabilities, more groups of topical discussions etc etc. One may also ask how many different physical social clubs to you join with the same friends? How many golf clubs are you a member of in which you golf with the same people? How many different churches are you a member of in which you fellowship with the same people?

In our previous postings, “Show Me The Money“, “The Paradox of Choice“, “The Attention Factor“ and a host of others we’ve addressed factors that collectively are resulting from the proliferation of all this networking with different networks. The current state of the networking market can be categorized as “Chaotic” and the Chaos Theories have long been established and proven:

In mathematics and physics, chaos theory describes the behavior of certain nonlinear dynamical systems that under specific conditions exhibit dynamics that are sensitive to initial conditions. As a result of this sensitivity, the behavior of chaotic systems appears to be random, because of an exponential growth in the initial conditions. This happens even though these systems are deterministic in the sense that their future dynamics are well defined by the initial conditions, and there are no random elements involved. This behavior is known as deterministic chaos, or simply chaos.

So scientifically there is some order in all this chaos but if we wait for the network operators to create the order our expectations are in the wrong place. On the other hand if, and only if, we the people unite our relations into a force then we can bring about dynamics that shape the chaos into better meaning and value for us and our network. This will be the tipping point for the Relationship Economy and the tipping points starts with you, one to one to millions.

Join others and bring others to the united relations movement so we can create our own chaos. Get it?

What say you?

As brands and people flock to the web the rate of change grows exponentially on a daily basis. From the Big courting Mergers and Acquisitions to the little creating new applications, new communities and new ideas, the conversations are swelling like rivers.

This collective attraction is creating a passion for the future, the next BIG thing and new ways to connect, collaborate, converse about anything and everything. The key word here is passion which has been missing from the workforce and in May cases our individual lives.

Does Passion Matter?

Passion is an individual and collective emotion that drives people to accomplish and do great things. Passion defined as (emotion), feeling very strongly about a subject or person, usually referring to feelings of intense desire and attraction

Max Kalehoff, of Online Spin writes in his article titled Why Passion Matters “Think of the places in your business where the presence of passion really matters — making you stand out beyond the rest, or sink into mediocrity. It’s about approaching things with the utmost thought and care, versus doing anything less.”

“In my experience, there are a few places in business especially sensitive to passion:”

• ? Listening and understanding your customers and the market.
• ? Innovating based on your market insight and intuition.
• ? Building your product with quality and speed.
• ? Ensuring the highest aesthetic and usability.
• ? Refining your product over and over and over again, until it’s better and better and better.
• ? Paying attention to all the details and signals that comprise the experience.
• ? Inspiring your employees, customers, investors and other stakeholders.
• ? Engaging and collaborating with customers.
• ? Fixing things quickly when they go wrong — and then making them far better.
• ? Using your product yourself and recommending it to friends because you truly believe it’s the best.

Now imagine a business environment where all the people are ignited with passion at serving the needs of the customer, both internal and external. To accomplish this the organizations would have to adopt Socialutions as its management methods and start fresh with a new perspective about the business, their business.

What say you?

The marketplace is buzzing with the new way of solving problems.

Though is hasn’t been posted at Dictionary.com or Webster.com (yet) “Socialutions” is defined as people, communities and organizations leveraging technology to interact with people for the purpose of solving problems; the act of working together with others to create new solutions to old paradigms of communications and interaction without boundaries and with limitless reach.

The irony of starting with a definition lies in our use of contemporary tools. In order to provide an easy way to use their product for more searches, Google has a relatively simple code that allows us to type in “define: the word you want to define.” So I typed in “define: socialutions.” Though this may change by the time you read this, here’s what I got.

Note that Google, as they often do, tries to be helpful when they find nothing based on your typing . . . and they relate socialutions with associations!

So how is Associations defined? Dictionary.com has a head start on this one, where they have the definition as: An organized body of people who have an interest, activity, or purpose in common. Coincidentally, that’s exactly what it will take to implement solutions . . . an organized body who have interests and purposes in common.

Does that define today’s organizations?

In the proposed definition, we identify the need for organizations working together with others to create new solutions. What could possibly stop this from happening?

Personal agendas, political grievances, a lack of agreement . . . all wrapped up in the culture of the organization, that’s what!

Why is the culture a problem when it comes to implementing socialutions? Inherent in the suggestion that a solution is in order is the implication that there is a problem. Most of us, organizational leadership included, want to hear anything but that. The existence of a problem rarely means that everything has been done well. It often means someone has missed something, and that someone may be us or someone who works for us. Usually, problems mean added costs, and that can’t be good.

But socialutions doesn’t need to indicate the existence of a problem. It can be used to define a paradigm. The suggested paradigm is one of problem solving and finding innovative solutions through social exchanges. Many leaders understand the problem solving part, it’s the innovation part there’s difficulty with. As has been noted already, the paradigm means: Engaging the organization’s employees, customers and suppliers for innovation, problem solving and breakthrough ideas, changing the marketing focus, removing barriers, and leveraging technology and social media to increase response time by listening and learning. The end result can only be a changed paradigm, with a cultural transformation where everyone is engaged.

So, look around your organization . . . envision a Corporate Socialution!

What do you think?

As we watch developments across the web we try and look ahead as to where and when the functions and features will converge. Features such as video, micro blogging, networking, blogging, feeds, search etc. etc.

Functions like user centric controls for all their web activities and interfaces. Last but not least, how users and brands can monetize all these activities with user centric controls and ease of use.

Mary Meeker of Morgan Stanley says ” Moving on to video and then wrapping it up with monetized. This is the data of Cash Logic that I shared a little bit earlier. Peer-to-Peer file sharing traffic was 66 percent of Internet traffic in 2004. Video was the major portion of that at about 60 percent. The momentums for online video has continued to build these two next slides are eye sore with intent. In October of 2005 when the crew at Disney associated with Apple for the download of Lost and Desperate Housewives that was a bit of an eureka’ moment for the online video industry as the other major players realizing they needed to figure out an Internet strategy. This is the 27 events that have happened last year kind of culminating with Google’s acquisition of YouTube.”

“Online video has been out there, it has been largely available on peer-to-peer sites and increasingly it’s becoming tagged, findable and easy to search. If we look at usage of video specifically, we believe that, this is again comScore data, that minutes’ growth on the Internet it continues to outpace page view growth. We think a lot of that has to do with usage of video.”

“Last point almost, 10 years ago if we had asked everyone in this room, a lot of very smart people, who would be the top 15 Internet retailers in 2005 we wouldn’t have this list. We might have voted Amazon at the top of the list. We wouldn’t have had Newegg at number 10. We wouldn’t have had a group of offline retailers dominating the other 13 spots. Our question for the media companies is “Why shouldn’t the media companies be in the same spot for the mother load of video if they have the opportunity of monetize it?”

”Google and Yahoo account for about 60 percent of US online advertising revenue, per IB data. In turn, they share 30 percent of that with their partners and affiliates. That’s a lot money shared with a lot of other players. Eric talked about yesterday on his Google presentation we think the opportunity is there is on the video side.”

How About an All In One Application that Floats?

GoYodeo lauched a “floating web” application today. The application enables users to create and distribute video by channel, micro-blog, rate, network and search all within one application. The application floats in that it goes with you wherever you go on the web. The application is viral in that your friends can follow your broadcast and other web activity right on your app or interface you into their own app.

Now given the users pain points relative to todays web it would seem that GoYodeo is attempting to resolve those pains plus add functions and features that users want. Just maybe GoYodeo has moved the game to the next level.

What say you?

Every business has a Public Relations machine. The definition of Public Relations (PR) is the managing of internal and external communication of an organization to create and maintain a positive image.

Public relations may involve popularizing successes, downplaying failures, announcing changes, and many other activities; but ethical P.R. practitioners can also convince companies to work more closely with its various publics and form win-win relationships.

Notice the emphasis on “managing communications to create and maintain a positive image”. Now note the extended definition: ethical P.R. practitioners can also convince companies to work more closely with its various publics and form win-win relationships. The social web presents both significant opportunities and threats to the historical definition and practices of PR.

Given that the web is the “big social copy machine in the sky” corporate performance and communications with customers and employees has become transparent. This transparency increases the demand on quality in terms of service or product performance levels as well as promises to keep expected experiences at “must be, more than and delighted” levels. This new dynamic is and will continue to increase the demand for quality management practices required to produce the performance expectations of employees and customers.

What Can Management Do?

Quality gurus created a revolution in past management practices and brought about such terms and practices as TQM, SPC, Six Sigma, Balanced Score Card, Re-engineering and the buzz words became the corporate mantra of the day. After 20+ years of indoctrination the practices and the responsibility for quality performance and all the jargon and practices has been delegated down from the top of the organization to the bottom. Leadership has delegated its responsibility to shareholders, suppliers, employees, customers and markets to others who do not have the authority to change or improve anything. If the numbers aren’t good leadership simply screams “Change something or else!”

Driven by fear and the desire to gain favor and power management pursues solutions to problems aimed at creating better “numbers”. The people are ordered to execute new changes while they, the people, know very well the change won’t work. The culture is not social and thus rarely does the organization understand the truths behind the problems and thus the solutions never really address root causes and create permanent fixes that changes “the peoples” experience to the better. The problems remain even when attempts to change the numbers, create spin control or focus the conversation elsewhere are used as a public relations effort. PR became spin control to influences the masses.

Game Over?

The old game of PR spin is over and there is a new “game” in town. The new game is called Socialutions and it is about adopting a new philosophy about “how” businesses can not only improve the satisfaction of all “the people” it serves but rather exceeds “the people” expectations and turns “all the people” into “the biggest PR machine in the sky” that fuels win win relationships. A win win relationship starts by listening and ends with needed changes identified by the conversations, open, honest and with no spin.

The alternative is to simply continue to let “the peoples” leverage their new influence against your inability or unwillingness to change. However, businesses must recognize that the power of the people has been enhanced significantly and their PR machines is and will continue to be bigger and better than anything you can create by yourself. Get it?

Oh, one last but critical thing. The fundamental change required to succeed with Socialutions is a transformation in thinking my leadership and a change in practices by management, the culture. The people have already changed and are simply waiting for you to change.

What say you?

Pombriant, D. (2008, May 7). The Dawn of Social Networking 2.0., ECT News Network – Tech News World. Available at http://www.technewsworld.com/story/web20/62896.html?welcome=1210165490

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Mary Meeker, of Morgan Stanley, overview of the internet economy from the Web 2.0 summit is up. The big coming trends were online advertising growth (of course), local momentum and video monetization.

From the transcription on Oreilly:

If we look at the five most highly capitalized Internet companies of the world; Google, Yahoo, eBay, Yahoo Japan and Amazon.com, their market value today is 46 percent higher than it was at the march 2000 NASDAQ peak. That is largely due to the massive appreciation in Google.

[...]

If we look at advertising revenue per user for some of the top sites on the Internet, Google gets about $13; YouTube gets less than $1. We think that help us to get a sense of what the monetization upside is for some of the other sites with Google as a benchmark at that level.

Last point almost, 10 years ago if we had asked everyone in this room, a lot of very smart people, who would be the top 15 Internet retailers in 2005 we wouldn’t have this list. We might have voted Amazon at the top of the list. We wouldn’t have had Newegg at number 10. We wouldn’t have had a group of offline retailers dominating the other 13 spots. Our question for the media companies is “Why shouldn’t the media companies be in the same spot for the mother load of video if they have the opportunity of monetize it?”

Read more.