The 4 Elements of Social Capitalism

by Jay Deragon on 09/14/2010

All of us have been enabled to use social media as the means to build social  capital that enhances  our individual and our collective  economies.

Each of our benefits can be significantly enhanced if the “system” of social media is continuously improved. Improvement will only come if we all learn to use appropriate and relevant knowledge to improve the value social media affords us.

For our individual and collective “economic systems” to improve each of us must learn to  apply methods that improve our social currency as we chart our course aimed at results we want to produce. Improvement of any system requires knowledge.

The elements of knowledge required to improve the use of  social media  are:

1. Look at social media as a “system”.

People must understand the system he or she is attempting to manage. Without this understanding the system can not be managed or improved. A system cannot understand itself or manage itself. Optimization of the parts does not optimize the whole. Collecting followers or connections does not improve your system, it only clutters it.

System optimization requires coordination and cooperation of the parts which requires cooperation. Improving a system requires ongoing feedback. Social media accelerates feedback and enables individuals to seek and find the knowledge they desire. Conversations are feedback loops to those that know how to communicate effectively and efficiently with the right audience. Organizational coordination and cooperation starts internally and then is designed to reach externally. In essence we are all part of a “social organization” made up of people and places that are relevant to our individual goals and objectives.

2. Understand variation and its impact on cost and relationships.

Engaging in social media is not the proposition that creates value for people, the exchange of knowledge is the primary value.  Connecting with others is a process of communicating and sharing new knowledge. Knowledge is the attractor, chatter isn’t.

Variation in communications causes waste and rework. How can we learn new knowledge if we have to waste time avoiding advertisement, marketing schemes and nonproductive conversations. Learning to focus and effectively communicate reduces variation and the related cost of not communicating appropriately.  Wasted communications only produce further waste of time and productivity.

3. Gain an understanding  of  new knowledge.

Knowledge depends on theory. Information is not knowledge. Experience teaches nothing without theory. Practice makes permanent, not perfect. Copying examples does not lead to knowledge. The landscape of social media promises to bring some interesting dynamics yet to be understood but in constant observation. Observation requires ongoing learning from the experiences, the data and ultimately from the market fueled by social currency.

4. Understanding how people will use social media requires  an understanding of psychology.

We must understand human behavior to motivate, coordinate and enable people to optimize the system.

Human behavior is predictable and definable as it relates to use of social media. Enabling people to connect, produce value, share, create and enhance each others lives is a rewarding process. However human nature migrates to positions of expectation.  If relations do not deliver the expected experience or input  then there is disappointment and frustration. Continues disappointment and frustration does not make for healthy relations.

Understanding peoples expectations and consistently meeting them is the economic foundation of any marketplace. The human networks expects a human response, not an institutional response. The human network now has a collective and individual voice which reflects the sentiment of the human network.

The relationship economy is driven by meeting and exceeding human expectations. . The four elements of social capitalism are transforming markets, institutions and life as we know it. Why? Because people are meeting and exceeding each others expectations for information, knowledge and wisdom. Brands and institutions ought to  notice  the wisdom of crowds (the human network) and what makes the network interact efficiently and effectively.

The trading of social capital, expectations, intents and knowledge, is the foundation of social capitalism.


{ 10 comments }

bsak (Barbara R. S.) September 15, 2010 at 5:05 am

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The 4 Elements of Social Capitalism [link to post] via @simbeckhampson #socialmedia #smm #scrm #e20

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AronStevenson (Aron Stevenson) September 15, 2010 at 5:03 am

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The 4 Elements of Social Capitalism [link to post] #socialmedia

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holtcomm (Holt Communications) September 15, 2010 at 4:06 am

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This was interesting The 4 Elements of Social Capitalism [link to post] #socialeconomy

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SocialCRMExpert (SocialCRM) September 15, 2010 at 4:05 am

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#scrm [link to post]

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ILSTUPRSSA (ILSTU PRSSA) September 15, 2010 at 4:04 am

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RT @sm_times: 4 elements of knowledge required to improve the use of social media [link to post]

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gonzifroni (Gon Zifroni) September 15, 2010 at 4:03 am

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RT @bsak: The 4 Elements of Social Capitalism [link to post] via @simbeckhampson #socialmedia #smm #scrm #e20 http://tinyurl.com/2w3..

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_kevinrowe (kevin rowe) September 15, 2010 at 4:02 am

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RT @bsak: The 4 Elements of Social Capitalism [link to post] via @simbeckhampson #socialmedia #smm #scrm #e20

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atesadam (atesadam) September 15, 2010 at 3:18 am

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The 4 Elements of Social Capitalism | The Relationship Economy [link to post]

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Sanjeev Kumar September 14, 2010 at 6:58 am

Thanks for illuminating thoughts and ideas. From the perspective of an individual, there are three aspects to being social – social wisdom (collect/analyze/learn), collective influence (bargaining, empowerment), social capital (reap benefits as an insider).

AchieversNet (Achievers Network) September 14, 2010 at 5:12 am

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The 4 Elements of Social Capitalism: Brands and institutions ought to notice the wisdom of crowds (the human net… [link to post]

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