The Relationship Economy……

With all the emphasis on social media ROI you would think that companies believe that social media is a production line in a factory.This mentality is reflective of how management thinking is still in the industrial era.

Production thinking is about producing something for consumption by the masses. The results of “production” are reflected by subtracting the gross revenue from the cost. Thus the emphasis is placed on selling more to make more. To enhance sales opportunities companies adopted marketing strategies and tactics.

The process of marketing has been focused on reaching the masses using numerous forms of media.  Marketing has been designed to create attention and awareness of an offering targeted to a specific audience.   Marketing followed “production thinking”. The more we market the more sales we’ll “produce”.

The model of “production thinking” creates environments in which “people” are used to “produce more” at less cost. The aim is to make  profits from producing more and production is enhanced by optimizing people, processes and technology. Management methods to optimize production evolved around measuring anything and everything with the aim of finding out how effective people, processes and technology are at producing a results. The problem is the “production model” is that the people part has changed while the model for using people has not.

Now Measure Social Media Production

The internet has changed a lot of things for people and business. Every evolution of the internet creates yet another change and business tries to apply old management methods and thinking to these changes. The problem is that most of the changes brought on by the internet are centric to how people and markets interact.  These interactions are changing how business ought to manage people and markets. People and markets are no longer for use rather both are now the users. The change from being used to being the user means “production models” for business are no longer viable rather the model for has shifted to a “conductor model”.

The term conductor means a person who directs an orchestra or chorus, communicating to the performers by motions of a baton or the hands his or her interpretation of the music. Conductor also means a substance, body, or device that readily conducts heat, electricity, sound.The “conductor model” for business is more about enabling people to conduct commerce, internally and externally, rather than management trying to “produce” commerce with a “production mentality”.

Now reflect on what the social web, and all this social stuff, is creating.  The fundamental change  is that people are being empowered to “conduct” their own commerce, whether buying, selling or simply conversing. The term commerce  deals with the exchange of goods and services from producer to final consumer.   The social web is self organized orchestras formed by conversational threads that readily “conduct” ideas, information and knowledge threaded throughout the internet and propagated on most any device.

The optimum business model is one of embracing the “conductor” function aimed at providing people with “ideas, information and knowledge” they in turn can use to produce what they want with their community of friends and followers. Giving people the “right instruments to create their own orchestras” of conversations will ultimate lead to the creation of commerce.

To adopt the “conductor model” for business means you have the recognize that measuring social media ROI is more about measuring your ability to enable people, internally and externally, to use you rather than you using them.  Measuring your ability to be used is a lot different than measuring how you use people to use your stuff.  To optimize in a world gone “social” it is wiser to think as a conductor rather than a producer.

Conductors measure the synchronization of  efforts aimed at giving the audience of people more than they expected. They don’t measure the results of people producing rather what they produce for the people.

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The emergence and adoption of social technology represents the formation of a new highway filled with human capital.

Why lies between our ears, the sum of our experiences and the collective creative thoughts about the future is the fuel to economic value. In the past economic development was fueled by era’s of machines and information and subsequently models of organizations were built around “producing things repetitively” which were then put out into the market of consumption.  Today the masses are producing a new kind of product for consumption, knowledge.

Knowledge is this funny intangible (as some say) thing that most organizations do not know how to measure, manage or leverage into something consumable. Consider the ongoing obsessesion with the ROI from social media. Fundamentally social media is a new and powerful communications channel used to share information and knowledge for consumption by others.  Today the marketplace is primarily using social media as a marketing vs. a knowledge channel. You could say that marketing is a knowledge channel if you frame as a tool of awareness. However knowledge is a lot more than awareness rather it is the root of innovation to those that know how to use it correctly.

A New Economic Era Fueled by Capturing Innovation?

Innovation is a process of leveraging knowledge, new and old, to create new value for consumption. Leveraging knowledge comes from numerous points of input. Social media is the channel of “points of input” that enables people and organizations to leverage collective input and subsequently create new value.

Dan Robles writes: Does the Merchant Class allocate land Labor and Capital to the a great extent in an Innovation economy? The accepted statistic is that 70% of a company’s value comes from human capital and the creative solutions that they produce.

Conversational Currency is defined in terms of new Economic Paradigm because that the road toward monetization is not paved upon on the road map of the industrial revolution:

In order to leverage knowledge one must know where it is, how to capture and leverage it for creation of new value. Then and only then can one expect to create new economic value. What say you?

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While we witness the on-line buzz, people connecting to others from around the globe and marketers pulling people from everywhere one must wonder whether social media will change local dynamics.

The last mile of any conversation or transaction is local. Where do you buy gas? In Africa? Not likely unless you live in Africa. Where do you actually interact with relations most? Locally!

Dan Robles writes: Sure Bro…Facebook, Twitter, and Linkedin are great for broadcasting across the Ocean, but how good are they for meeting your neighbors? As wonderful as all this global chatter appears, nothing tangible happens until the rubber meets the road.

Don’t Worry, Be Neighborly…

The following video describes how the components of the next economic paradigm must act locally, but share globally. For anyone wondering what to do next or where the great opportunities are, think about building out the Last mile of Social Media.

As Dan says the last mile is where the greater opportunities really are. Right in front of you without clicking a mouse!

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With more and more people conversing on the web marketers are trying to create ways in which to sell our conversations. There is a proliferation of tools aimed at tracking, aggregating and influencing conversations. The increased demand for monitoring our conversations means that the value of conversations is going up. The question is who truly captures the value creation obtained from and with conversations?

On the other end of the spectrum marketers are trying to learn how to sell their goods and services through conversations, theirs and ours. While all things social appear to be a medium to extend a marketing message the reality is that “all things social” really represents a much bigger dynamic of change than just a change in the way brands and merchants market to buyers.

The Bigger Dynamic of Change

Just recently The Economist came out with a feature article titled “A World of Connections: A special report on social networking“. The article states “Online social networks are changing the way people communicate, work and play, and mostly for the better, says Martin Giles. The ultimate goal, he wrote, was to come up with something that, ?first and foremost, would make it easier for people to collaborate with one another.”

“This special report has argued that social networks have already done much to achieve  that  goal.  They  have  created trusted online venues where people can meet up using  their  real  identities.  They have  provided  ?rms  with  new ways  to reach their customers and those who inf?uence them. They have reduced friction in the labour market by allowing employers and  prospective  employees  to  connect more  easily  than  ever  before.  And  they have speeded up the ?ow of information within companies.”

“All  of  these  are  impressive  achievements. But  arguably the most  important contribution that the sites have made is to off?er a free and immensely powerful set of communication and collaboration tools to everyone  on  Earth  who  has  access  to  a broadband  internet  connection.  This  democratisation of technology is driving the socialisation of the web and fundamentally changing the way that people interact with one another, as well as with businesses and governments. ”

Beyond the Obvious

While the article in the Economist will in fact continue to raise the awareness of possibilities from a connected world it would seem that the conclusions in articles like these are a flash of the obvious rather than insight into changes fueling the obvious. At the end of the day social conversations are and will continue to change everything.  The Economist article ends with This  democratisation of technology is driving the socialisation of the web and fundamentally changing the way that people interact with one another, as well as with businesses and governments. ”

When people are unleashed from traditional constraints of interaction, collaboration, creativity and communications they become empowered to change the world around them.  People begin to learn that the world of possibilities isn’t what we’ve been taught to think rather it is whatever we can think and create together.   This dynamic unleashes creativity, innovations, beliefs and knowledge never before tapped rather untapped by what we’ve been taught to believe.

Social conversations are in fact selling change. But the change isn’t from the markets rather it is from the people, those that buy into the change. The social wave is building momentum and when it hits your landscape you won’t understand it unless you let go of what you think you understand.

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On the fringes of conversations lies innovation. Innovation is what changes dynamics, markets and human behavior. While we may think of innovation being a product or service in reality innovation begins with thinking which then is transformed into words.

Words carry power when the exchange of words creates new thinking which begets new action and a change in behavior.  If you haven’t notice social media represents an exchange of thoughts communicated in words, images and video’s which creates actions from the crowd.  The crowd then vets the thoughts expressed in multiple forms of media and then decides which “thoughts” are worthy of future consideration”.

Future Considerations Come From  the Fringe Factors

A large percentage of  “0n-line conversations” can be categorized as chatter about existing things. A small percentage of conversations can be categorized as things yet existing but possibly existing with the right thinking and subsequent actions. Before social technology, which wasn’t long ago, the masses really couldn’t exchange at the rate which exist today. Today nuggets of innovation rest in the smaller percentage of conversations that are discussing and observing how social media is changing dynamics, behavior and entire markets.

So what are you considering? If you are thinking from the inside your considerations are relevant to what is not what could be. If you are sitting and thinking on the fringes of the outside you are thinking what could be then making what could be a reality by collaborating with the crowd of others seeking what could be rather than what is.  All this social stuff merely accelerates the communications which stem from the thinking of the few rather than the many.

So unless you consider the fringe from the outside you will never be able to get out from the inside. Get it?

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Everyone is chasing “social” as if it was the cure all and end all. Whether you’re a brand, a non-profit, a politician or a small business the lure of social media is being applied in many different ways.

Over the past several years the stories of how people are using social media has dominated the web and is now bleeding into main stream media. How? People and organizations are creating eye-opening stories about how they applied social media to accomplish an objective.  Scott Brown’s win in the Massachusetts senate race is but one example and when you examine the factors that created his win social media stands out front and center.

There are inspiring lessons from the BIG and small stories of how people and organizations successfully applied social media.  The irony of these stories is that most people who actually used social media to achieve and objective don’t understand “why” social media actually influenced the outcomes.

Lessons From Use

Social media is in its infancy stages and current usage is organic growth of a message propagated to the masses. A simple message from one person or organization  can “catch the crowds” attention in profound ways that previously was not created by traditional media.   The lessons from usage illustrate the simplistic yet profound nature of viral communications whose reach and richness has accelerated due to the internet. Some lessons to consider:

1. Enable consumers and constituents  to be the influence, not your ads or your marketing but rather your message that appeals to the masses.
2. Innovate the message with the medium even if you don’t understand why or how. Barack Obama leveraged social media to get elected into the highest office in the nation. His party doesn’t understand “why” this worked and neither did Scott Brown. All they know is that it worked. Now both parties are jumping into the use of social media but neither understands why or how it works.
3. Social media reaches outside the traditional market and taps into people who have an affinity to your message, your product/service and you individually regardless of geography or traditional demographics that have defined your market.
4. Leverage social technology with relevant and relative media. Relevant and relative media is different than traditional media because it is relational rather than institutional. Social technology enables relational media to spread like wildfire because of the distributed power of reaching hearts and minds.

We live in a world of unprecedented change, increasing globalization, and the explosive influence of distributed communications fueld by this thing we call social media. Innovative uses of social media is the central driving force for any business, any cause or any nation  that wants to grow organically and succeed in the new economy. This is a game-changing dynamic which will evolve rapidly as will the influence and impact on everything.

The game has just begun. There are no spoken rules rather the rules are hidden in the fiber of human relations and only spoken to the hearts and minds of those participating in the game of change.  A game changes when people learn “why” people play the game and not necessarily “how” they play the game today.  The rules of the game change when we learn why which then changes how we use something as simple yet profound as the ability to “connect” to and with the human network like never before in the history of mankind. The crowds learning why are the game changers.

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There is a swelling wave of social technology that is indeed changing the business landscape. From Twitter, Facebook, YouTube and the host of other social platforms conversations from the masses, both on-line and off-line have become mainstream.

The subsequent impacts initially have a lot of people wondering what all this means while a few think and create where it is going. For businesses the critical issue remains one of “what will you do” as a result of all this on-line and off-line activity fueled by peoples interest in this thing called “social media“?  To properly answer the question smart companies are stepping back from all the chatter and thinking through what is the best strategy for leveraging all this “social stuff” for the long term. At the same time most organizations are simply jumping in without thinking through the strategic implications and subsequently all they are doing is fueling the chatter with meaningless content.

A Social Wave Strategy?

Waves are formed by systemic shifts under the ocean and initially they are not seen by the human eye. Similarly waves of change in market shifts begin with small ripples of change in the way people and businesses interact with market intentions. Small ripples become waves when more and more people use instruments of change. The more people that use the instruments the bigger the wave becomes. Swelling with momentum social media is indeed causing changes in how markets operate and people communicate. Most businesses cannot see the size of the wave building but they can see and hear something in the distance.

The social wave is indeed swelling and advancing technology will accelerate the size and impact of the wave. The closer the wave gets to your business landscape the more visible it will become. However, when it becomes visible it may be to late for you to prepare for its impact.  To not know that the “social wave” is building means you are not looking at the movement of the landscape in front of you. Not knowing and not preparing means that the “social wave” may displace the landscape that you are currently standing on. This means you will be displaced by those who can see the “social wave” coming and are prepared to ride it with the intent to remove you from the buyers landscape.

The “social wave” isn’t about following social media  and all the related technology today rather it is about thinking and planning strategically with the intent to create your own wave tomorrow.  To do so you must rise above all today’s ” meaningless chatter” and think about creating meaningful value that fulfills the markets of intent.  What are markets of intent? What is a “social wave strategy”? Watch the slide show below.

Want a more detailed presentation? email me: jay dot deragon at gmail dot com

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Searching for people and things has come a long way over the last five years. The utility of being able find relevant people and things helps improve personal and professional productivity. But search still has a long way to go.

Ken Mallon and Duncan Southgate write at Advertising Age: Where Digital Marketing Is Heading in 2010 and one of their predictions was Search evolves, but not everyone notices.

“Social media will affect search in two ways. Firstly, search will become increasingly real-time as users take advantage of Google and Bing search results, including Twitter and Facebook updates, or use Twitter search as a standalone application. Secondly, the meshing of search and social will be embodied by the arrival of Google’s Social Search option, where you can see the information posted by people within your online social circle.

Major search providers, including Google, MSN and Yahoo are all focusing heavily on the new .mobi search domain. Travel and hospitality brands in particular will be interested in this new development as it fits well with the behavior of their target customers. Rapidly improving mobile applications such as map-based search and Google Goggles’ picture-based search will encourage more consumers to search on the move.”

Reversing the Intent of Search

Brands and merchants are just discovering that unless they can be found buyers are not likely to “engage” with them.  Social media is increasing buyer awareness given the massive propagation of offerings on sites like Twitter and Facebook. However, most of the awareness is really coming from friends of friends rather that from brands and merchants.  Search is relevant when people are looking for someone or something. But search by itself only increases awareness while attention, attraction and transactions come from buyer experiences shared with others.

The intent o search is to be found. Once found the subsequent experiences determine whether buyers will give you any time to consider your proposition.  Buyers spend time and attention looking for things. Buyers come ready made to transact but the process is what kills most transactions.

A day in the future buyers will not need to search for people or things rather all they will need to do is inform the marketplace of what and whom they are looking for. Responses for things and people will come back to the buyer rather than buyers having to go find them. This reversal to search will change everything. While we think social media is disruptive we haven’t seen anything yet compared to when buyers will be enables to simply make a request to the marketplace for people and things. This will change market dynamics, brand and merchant marketing models and consumer behavior beyond anything seen to date.

While many think social search will indeed change things the real change will be when the function of search is designed with the buyer, not the supplier, in mind.

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There is lots of chatter on the web relative to the ROI from social media. As we start a new year  more and more people and organizations will become consumed by defining the ROI.

The Rising Tide of Expectations

People and businesses don’t like spending time and money without defining the return on their efforts.  At the same time people and businesses engage in non-productive activities without even considering an ROI on those activities. So one must ask why do they think  social media activities will produce an ROI? The reason is that social media has become in vogue and everyone seems to want to capture value from it rather than with it.

Now Social Media ROI is in Demand Connie Bensen predicts for following trends for 2010 as it relates to this ambiguous thing called social media ROI.

1. Companies will expect ROI from their Social Media efforts.
2. The Social Media Specialist (Community Manager) position will become mainstream.
3. Cultural shift inside of companies.
4. Social Media Monitoring will be a necessary component
5. Agencies and companies will hire data analysts
6. Integration of platforms and processes will be critical.

Connie’s predictions are sound and the market activity in 2010 will likely follow form.  I have my own take on social media ROI. My take is there is no ROI from social media. Watch the video below and give us your thoughts.

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Most organizations attempt to improve performance by changing management methods that are more collaborative and in tune with cultural dynamics of the modern work force.

Management methods have evolved but their is a generation moving through the ranks which will demand a revoltion vs. evolution in management methods.  You could say that the modern organization is learning to become a “social organization” which reflects current market dynamics. The old organizational structure had a boss. The modern organization had a leader but the new social organization has a “builder“.

Umair Haque writes: Here are the ten principles of Constructivism (contrasted with these principles of leadership).

1. The boss drives group members; the leader coaches them. The Builder learns from them.
2. The boss depends upon authority; the leader on good will. The Builder depends on good.
3. The boss inspires fear; the leader inspires enthusiasm. The Builder is inspired — by changing the world.
4. The boss says “I”; the leader says “we”. The Builder says “all” — people, communities, and society.
5. The boss assigns the task, the leader sets the pace. The Builder sees the outcome.
6. The boss says, “Get there on time;” the leader gets there ahead of time. The Builder makes sure “getting there” matters.
7. The boss fixes the blame for the breakdown; the leader fixes the breakdown. The Builder prevents the breakdown.
8. The boss knows how; the leader shows how. The Builder shows why.
9. The boss makes work a drudgery; the leader makes work a game. The Builder organizes love, not work.
10. The boss says, “Go;” the leader says, “Let’s go.” The Builder says: “come.”

So the question is this: are you merely managing an organization, just leading an organization — or are you building an institution? 99.9% of the world’s leaders are, well, just leaders. But today, leadership alone can’t get you from the 20th century to the 21st.

The Transition from Leader to Builder

Corporate leaders like  being the leader. Being the leader means higher pay, maximum authority, higher profile and the final decision maker. However society has changed and people now expect to be involved in “leading” by being enabled to build innovation and pride into their work. The empowerment to build doesn’t need a leader for everyone becomes a leader when they are empowered to build vs. follow.  While people need direction the direction of a builder is a series of “questions” that are answered by the crowd, internal and external. Questions that promote continuous learning and desire to innovate without restraints.  Questions such as what, where, when, why and how does what we do, what we sell fulfill the intent of buyers?  How can we fulfill buyer intents beyond their expectations?

A builder simply ask the right questions and lets the “crowd” find and execute on the answers. Answers centric to continuously improving “people’s experience”, both internal and external, so that the organizations overriding intention is one of attraction. Attraction of the right people, the right markets and last but not least the right thinking that creates the right behavior.

So ask yourself, no ask your people are you considered a boss, a leader or a builder.  If the answer is the first two then you must make the transition to become a “builder” or you will not be able to build an attractive organization.

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