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Missing The Whole Point Of Value

pile of money Old business models paid people to work not for the value delivered but for the stated task performed. Paying people to work on a job defined by the organization misses the whole point of creating valuable economic transactions.

A transaction means an economic flow that reflects the exchange, creation, transfer or transformation of economic value. A valuable economic transaction is one where both the buyer ans supplier of whatever is being exchanged get more value for the exchange than was expected.

The economics of social engagement is more about enhancing human capital than economic capital.  The transformation of economic value is relevant to understanding the changing dynamics of economic growth.

Economics is the social science that analyzes the production, distribution, and consumption of goods and services. “Social science” is commonly used as an umbrella term to refer to anthropology, archaeology,criminology, economics, linguistics, law, communication studies, history, political science, sociology, human geography, psychiatry, and psychology. Now put the definition in light of what value is created from social engagement and you’ll understand the difference between old economic transactions and new ones.

The New vs. The Old Transaction Models

Old economic transaction models were driven by the “supplier”. The mind set was based on old mental models that came out of the industrial era. The mental models of the old compared to the new looked like this:

old vs new transactions

 In order to create economic gains from transaction in the Social Era you have to understand the new transaction model that creates an economic exchange.  In order to understand the change you have to learn to think in terms that describe “social engagements”.  Social engagement is all about “transactions” that create meaningful value.

Creating meaningful value is the economic engine of the Social Era. That engine is fueled by intangible capital that creates tangible results,  Afterall, social engagement mimics economy activity because it is  about creating and exchanging value from human capital. That is what sustainable economic transactions are created from in the Social Era.

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