Right, Wrong and What Matters

by Jay Deragon on 10/22/2013

Ext viewToday the rules of the marketplace are not driven by what was right or wrong for the organization but by what matters to the stakeholders. All the rules and the rulers are being questioned and held accountable to their words and the justification for their rules as it relates to whether such things matter anymore.

The markets have become smarter and are redefining the rules and the roles of rulers not simply through the intellect but through the dynamics of the mind, heart and soul of the human network. This is scary for institutions, organizations and people who do not understand these issues because it is not about what is right or wrong but more importantly what matters.

What Matters Isn’t Tangible

What is scary for an organization is not knowing what matters because it places ambiguity and uncertainty at the center of the organization. Not knowing what to do creates perpetual experimentation followed by exhaustive strategic studies which value intellectual arguments seeking to optimize profits for stockholders over common sense approaches that satisfy stakeholders. What matters is in the middle.

The challenge of business in the 21st century is to balance the interest of stockholders with the demand for value from stakeholders. The middle represents the difference between tangible results required to satisfy stockholders and the intangible capital required to create value for stakeholders. To find that difference is a matter of being able to measure what matters.

Business leaders have learned to measure performance in terms of gathering tangiblele evidence to decide what is or isn’t working that impacts bottom line results.  While many still measure each part of the system as a silo some actually measure the inter-relationship of the parts and the efficiency and effectiveness of the system.  All of these tangible measures are designed to correlate to financial performance of processes, people and ultimately profitability.  All of which are part of the architecture of an accounting system for keeping track of results in the form of income, expenses and capital.

The modern manager uses financial performances as the final scorecard at the end of each month. In between the beginning and end of each month managers have learned to develop critical process (efficiency), product (sales and profitability), people (productivity) and customer (satisfaction) accountability (budgets) measures to insure that the results will be as predicted. One hundred percent of the time the predictions are wrong.

This is an old “system” of measures that starts with inputs and ends with outputs, results. Both ends of the “system” are driven by tangible evidence but highly influenced by the intangibles influences.  Nobody measures intangibles because somebody once said such things were invisible so everybody simply assumed such things were not measurable or important.

And then social technology connected human capital, emphasized relationship capital which empowered strategic capital and structural capital enabled observations to be collected which made intangible capital visible.  Then the rulers set new rules to monetize the social activities without understanding what actually influences the intangibles.

If you chase the monetization of something you don’t understand you end up chasing the wrong thing because the right thing doesn’t matter to you and everyone can see that accept you.

What matters to the human network is more about the intangibles than the tangible.  If you don’t think so consider what matters most to your family and friends. Your heart, mind and soul or your wallet? The answer should be self-evident and such things are now measurable for Smarter Companies who care about what matters.

If you don’t care about what really matters then no social media campaign or marketing message can fake it for you.  Get it?

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