Are We Headed for a Train Wreck?

by Jay Deragon on 01/02/2008

Is Business Headed for a Train Wreck?Today’s social networks are “train cars” of conversations.

People connect to people they perceive as “headed in the same direction they desire to pursue”. The subsequent conversations reflect common threads of interest. The different train tracks represent different conversations, different platforms, different affinities and different transactions.

We’ll define a transaction as an agreement, communication, or movement carried out between different people, entities or objects, often involving the exchange of items of value, such as information, goods, services and money. Today’s social networks are fundamentally connecting people and enabling open conversations, transactions of informational exchange.

The evolution of these transactions will be enhanced through the convergence of technological advancements to “networks” which enable people to increase the value of these transactions economically. The “train cars” are fueled by today’s conversations and they are building speed, momentum and the attention of business. The velocity of these train cars, running on multiple tracks, are moving faster than anything in history and most businesses are not even aware that “the train is coming“.

Will there be a wreck at the intersection of people and business?

Doc Searls writes: “Think of markets as three overlapping circles: Transaction, Conversation and Relationship. Our financial system is Transaction run amok. Metasticized. Optimized at all costs. Impoverished in the Conversation department, and dismissive of Relationship entirely. We’ve been systematically eliminating Relationship for decades, excluding, devaluing and controlling human interaction wherever possible, to maximize efficiency and mechanization.”

With all the attention being given to “social networking” much of the underlying dynamics that drive the adoption of the “networks” are misunderstood. Businesses, analyst, markets and the media again are focusing on the results rather than understanding the systemic nature that produces today’s results. The attraction of over a half a billion individuals engaged in today’s “networks” is a business attraction motivated by economic possibilities. While the economic possibilities are significant the understandings of the dynamics which are creating the possibilities is critical to capturing the economic gains.

If you reflect on Doc Searls comments above you will see a systemic failure of “business” to make progress in the fundamentals of human interaction, relationships. People produce business results and businesses produce relationship results. If we measured the “relationship results” of businesses the scorecard would likely create a failing grade. Businesses have been consumed by financial measures as dictated by public and private markets that measure economics. The social web is creating a new measure of business based on the fundamentals of relationships. The people have known and continue to know how “business has failed them”. It has never been a secret rather business environments have simply controlled the conversations that speak to the relationship issues.

John Maloney, Founder, KM Cluster; Global IT Architectures says: Social networks and SNA are excellent research tools for academics and scientists. They are excellent at showing and understanding relationships. However, from a purely practical sense, a business and economic sense, for driving growth, they fall down badly. Why, again academics, scientist and businesses are measuring and analyzing the wrong thing, results.

Measuring and reacting to results is like trying to play tennis by watching the scoreboard. The results of “social networking” is nothing more than a scoreboard indicating “something is driving people to engage, exchange and connect”. If businesses want to succeed in a “social network” they must engage, exchange and connect with people in order to reap any benefits of social commerce.

The momentum of a train is based on speed and mass. The faster it moves with greater mass the harder it becomes to stop it and anything in its way simply gets run over.

What say you?


Sibylle September 8, 2010 at 11:02 am

I’m agree with you when you define transaction. It’s a really good report.

Jessica July 11, 2010 at 4:23 am

Lot of points you made seem like taken right out of my mind. The way you have related things to a train wreck is pretty amazing. Enjoyed the post.

150cc mopeds May 2, 2010 at 1:58 pm

Impressive report,I recently subscribed to your rss.

free magazine websites April 29, 2010 at 6:39 pm

Superb report,I count on many more post from you.

oceanic January 25, 2010 at 3:24 pm

Omg! haha.?

dave davison January 11, 2008 at 6:02 pm

JAY: your post and Daniel’s reply stimulated to dig deeper. Here is my somewhat longer comment Thoughts Illustrated: The Great Train Wreck of Social Networks – can we be saved?

dave davison January 11, 2008 at 1:10 pm

Jay’s post aboujt the trainwreck, the link’s and quotes of both Doc Searls and John Maloney and the cogent commentary degine for me the remarkable power of a good blog.

For me, Daniel Robles comment above is probably the most insightful response to Jay’s post. “lots of sky -no place to land” is as useful as the train wreck metaphor to describe the dilemma of our overabundance of information in the environment of attention scarcity.

HIS pathway from information to knowledge to innovation is a “takeoff” ( no pun intended) on Russell Ackoff’s diagram depicting the path from data to information toknowledge to understanding to wisdom shown here in our 1997 monograph The Knowledge Channel.

As Daniel says, “Web 3.0 will be predictive. A percentile search engine will calculate and combine strategic combinations of knowledge assets (from an computer enabled inventory) in infinitly unique and creative ways. Each combination will represent a business plan at a known probability of success.”

I am in violent agreement with Daniel.

Daniel Robles January 2, 2008 at 1:47 pm

The problem is that nobody has made a tangible connection between information, knowledge, and innovation – the current myriad of definitions made by important people are flat out wrong if not dangerous. Information is facts and data, knowledge is the rate of change of information with respect to time, innovation is the rate of change of knowledge with respect to time – end of story, end of story, end of story, please. The “in-crowd” still argues that you cannot measure knowledge and innovation directly. They fail to see that you can, however, measure the rate of change of information as a proxy for knowledge (first derivative) and the second derivative of information as a proxy for innovation. Whoever still thinks that knowledge is ‘intangible’ is living in a world that no longer exists. This is what Web 2.0 is teaching us.

The internet is like an airplane, it carried people to someplace else so those people can interact with other people. A crash would obviously fail in this second object of aircraft. This is the primary hinderance to the innovation economy today – lots of sky, no place to land.

There is nothing mysterious about markets. All markets must have a currency of trade, and inventory system, and a vetting mechanism. First; Intellectual Capital, Social Capital, and Creative Capital are the currencies of trade in the new world. Second; the resume system must be scrapped – is the single most rediculous knowledge transfer tool in existance. We’ll be laughing at ourselves in a few years. The “resume” must be machine readable and allow boolean logic – The Universal Decimal Classification System, for example, would be VASTLY superior knowledge inventory tool. The knowledge inventory must exist in the form of a quanty and a quality (so that knowledge can behave like a financial instrument). Finally, Communities of Practice MUST stop playing around and become local accreditating agencies – like airports – where people can touch ground safely to exchange information readily and accurately.

Then and only then can we expect to see a true innovation economy – Web 3.0 will be predictive. A percentile search engine will calculate and combine strategic combinations of knowledge assets (from an computer enabled inventory) in infinitly unique and creative ways. Each combination will represent a business plan at a known probability of success. People will own knowledge assets and have perfect information regarding the inventory. Hey, this is how a financial market works – only run amok like airplanes with no place to land.

Charles Ehin January 2, 2008 at 12:27 pm

Well said, Jay. As I’ve said before, “Organizational Innovative Capacity is driven by the level of overt self-organization which directly affects implicit coordination (individual attention and influence), the intensity of social capital development, tacit and explicit knowledge sharing, and the vitality of organizational core competencies.” Until businesses understand that we may be headed for a train wreck.

Carter F Smith January 2, 2008 at 10:28 am

You noted “The social web is creating a new measure of business based on the fundamentals of relationships.” Are there new rules for developing these relationships? Do the folks that are doing business in the social network space know what the rules are?

This morning on ABC’s Good Morning America, there was an article that suggested “Sites like Facebook, LinkedIn and MySpace that were once exclusively for social purposes are now increasingly being used for recruitment — and that will blossom even more this year. Employers are using these sites to promote their job openings, their corporate cultures and even their benefits all in an effort to encourage you to apply.”

First of all, I realize that Linked in wasn’t used exclusively for social purposes. Let’s move beyond the obvious . . .

Many corporations and recruiters use these sites, but are the sites accomplishing anything for those seeking jobs? In other words, corporations spend loads of money elsewhere promoting their brand to potential customers and employees, are these sites just another venue? Are they effective? And, what does the individual job-seeker get from all this?

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