We have moved …

I’ve moved this blog over to self-hosted wp site … I hope you check us out at http://www.socialcapitalvalueadd.com.

The eBook is available there too.

thank you!

Michael

Signal of Altruistic Type and Corporate Motivations

Collin Douma, the real Johnny Cash of social media, started this train of thought rolling with a worthy request.  He is a great guy and his sister is doing something cool.  Check it out!

I explored memetic branding and altruism in this post over at www.memeticbrand.com.

But the implications of signal of intention are not limited to the branding of a corporation and/or product or service in this era of broadband empowered individuals.

Adoption of Social Capital Value Add ushers in the possibility of new motives for corporate social responsibility. Not only will the corporation be asked to be more accountable for its actions, perhaps the corporation can be encouraged to invest in ways for its social connections – consumers, suppliers, employees, investors, owners, analysts and value added resellers, etc – to move beyond feel-good CSR tactics towards a relationship in which the opportunity is seized by each forging identities based upon greater social contribution.

As I have noted before, there are implications throughout the corporate ecosystem.

“Clarity of shared purpose and principle”, “mission statement” (which is a term that has been around for a while), community values … there are many ways of describing the need for self-organisation through unity of purpose that is characteristic of the era that we live in.

Dee Hock, former CEO of Visa has elaborated the vision of Chaordic Organizations which I think is aligned with this view in his book One From Many.  I have not read the book but I did check out this outline. (thanks to John Ringland for bringing this reference to us).

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Mike Gotta’s Brief History of Social Networks & Network Analysis

Social Capital Value Add is designed to link the work of the leaders Mike covers to value based management.

Thanks Mike! Great work! Hey everyone please follow the link and Digg It!

See “Brief history of social networks and network analysis” by Mike Gotta.

http://mikeg.typepad.com/perceptions/2008/04/analysis-of-soc.html

The money quote,

“It should be noted that many social network stories we read about today give the impression that they reflect recent developments arising from consumer sites or from technology vendors. In some instances, certain topics are even hailed as original thought (e.g., the social graph). I think it is important, and respectful, that we understand (and learn from) historical precedents in the field of social network analysis. Much of the ideas and concepts presented today can trace their lineage back to the remarkable work and accomplishments of earlier researchers.”

http://mikeg.typepad.com/perceptions/2008/04/analysis-of-soc.html

Mix in Marshall McLuhan, “Understanding Media: The Extension of Man”, Nan Lin’s network theory of social capital (to distinguish “assets or resources”, like say SOCIAL MEDIA, from social networks and Value Based Management and you are headin’ down the highway of Social Capital Value Add.

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Where will co-creation lead us?

I have been seeking some constructive feedback on “Introducing Social Capital Value Add” at a leading forum “Serving the Quantitative Finance Community”.

There I have learned that I am “not a kook” and that “Your writing sucks. In a world of people with no incentive to tell the truth, I am giving you the gift of honesty.”

Tough crowd, eh?

Golly gee whiz, I guess that the quant finance set hasn’t heard that its time to come together Web 2.0 style?

I am still hopeful that the discussion there will improve “Introducing Social Capital Value Add”.

One post has been helpful and noted “This manifesto only speaks about demand-side social capital. A more complete theory would estimate internal social capital, supply-side social capital, and government social capital.”

Most of the examples that I use in the paper focus on “demand-side social capital” but I do point out that the change in media paradigm from broadcast to the Individual as Medium has implications throughout the corporate ecosystem:

click for link to slides

click for link to slides

A link showed up in my inbox a few days ago through an investment banker friend (investment bankers are so much nicer than those quant finance folks!) and the McKinsey quarterly newsletter that provides some good examples of these effects playing out in product development, etc.

It is entitled: Where will co-creation lead us?

Check it out here: http://www.mckinseyquarterly.com/Information_Technology/Networking/next_step_in_open_innovation_2155

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“Introducing Social Capital Value Add” is 8th most demanded proposal in ChangeThis history

Thank you to everyone who voted for the “Introducing Social Capital Value Add” proposal at www.changethis.com and to the conference organisers, twemes, friends and connections who tolerated many appeals over the last month.

“Introducing Social Capital Value Add” topped the list for the month with 380 votes.  That is almost 200 more than the second place idea and it is the 8th most demanded manifesto proposal in ChangeThis history.

If everything goes well, the “Introducing Social Capital Value Add” ChangeThis manifesto should be released to over 20,0000 “influencers” in September.  Sign up to the SCVA email list or grab this blog’s RSS feed to help develop SCVA thinking and get a copy of the manifesto upon release.

I had more than one person tell me that voting for the proposal felt a lot like voting in a national election, “I don’t really know what I am voting for, but I am voting because <insert name> told me to.” 

Anywhoo, I am grateful for the support.  It ain’t like winning America Idol er somethin’, eh, so I don’t want to come off as makin’ too much fuss about this, but to be honest it does mean a lot to me.  From the moment I headed off to Paris last summer I have been dedicated to taking this idea as far as I can.  Now I am working to follow this idea as far as I can.

I am developing SCVA case studies with publicly traded corporations.  If your company or client is interested in collaborating on this please get in touch.

The fact that many of the votes came through personal connections is a very pure illustration of the value of social capital. 

At the same time, getting to the right metrics to measure social media and social network valuation are very hot topics right now.  Technology’s most influential blogger, Mike Arrington, made a post over at TechCrunch a few days ago entitled, “Modelling the Real Market Value of Social Networks” and has received over 160 comments.  There are hundreds of messages flying around on these topics in the list serves and forums that I visit and at least part of the support for my proposal may evolve out of a need for corporations to get a handle on the risks to earnings associated with social media and a general desire to make the corporate form more socially motivated.

So we shall see where this all goes …

Again, I hope that I am not coming across as making too much of all of this.  If you want to do something really meaningful please hit this link and click up a few votes on the Harvard Business Review List of Breakthrough Ideas for 2008 in support of “Sick Transit Gloria”.  Mark Kuznicki, Eli Singer, and Jay Goldman have evangelized the “camp” approach to collaboration that started here in Toronto.  You can read more about that here.  It is working to improve the transit experience in Toronto and can be applied to any challenge.
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Mark Zuckerburg: looting block party or catering service?

Nic Hodges has a thoughtful post up down under.  Thanks to John Maloney for flagging it.  Nic says,

“If Mark Zuckerberg turned up to your neighbourhood and started throwing you crazy block parties, while at the same time mining your backyard for gold, wouldn’t you want a cut of that gold?”

I agree with and have explored many of the same concepts Nic touches upon in his post. 

I agree that social networks are not owned.  But social network software services like Facebook are privately owned so there is a transaction: service for terms of service.  A problem can emerge when companies like Google and Facebook and others are becoming so entrenched in social networks and our old watchdogs like government and journalists are not motivated or equipped to help us bring the implications into focus.

I believe that the most important thing that we can do to cope with these potential problems is to establish the link between social capital and corporate valuation, to motivate corporate competition, bring into light the true sources of value and make them accountable to investors, markets and users/consumers.  Then the regulators and press gallery will be all over it.

Social networks can not be owned.  Agreed.  That is why I think it is very useful to distinguish social capital from social networks.  I think social capital, i.e. the resources that are embedded in social networks are intrinsicly individual assets.  (Note: the corporation is a form of individual).

By investing in a connection with you, I get flow of information, the exertion of influence, certifications of individual social credentials and reinforcement of individual identity and recognition.  Hey! Smells like social media to me.  That is why I think of social media as a new, scaled up form of social capital that has emerged since 2004 when broadband overtook slow connectivity in the USA.

Aggregation of individual returns result in collective assets and properties such as trust, norms, reputation, authority, sanctions, culture, network structure (open, closed, density, clustering, diameter, average path lengths, degree distribution, bridges, weak ties, betweenness and other forms of centrality, etc.) and location (structural holes, structural constraints, etc.), which are extrinsic variables that contribute to the formation, access and use of social capital. 

This is the stuff that we need to zero in on developing, measuring and valuing at this point – not just page views, unique visitors, CPMs which are all broadcast paradigm metrics.

P.S. I love Michael’s comment over on Nic’s post, “We are all becoming Paris Hilton”. 

Check out Lin, Nan, “Building a Network Theory of Social Capital” ©1999 INSA, Connections 22(1):28-51, see pp.28-31 for compact history of social capital.
 
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Web 2.0 Swan Song?

If you are reading this post you likely already understand that social media is “game changing”. The challenge ahead is to make this case to seasoned decision makers in boardrooms globally.

Perhaps it is because I watched as the public relations profession worked over the last 20 years to attempt to tune the corporation into being more socially motivated. Perhaps it is the lingering fear of the first Internet bubble. But every time I read a blog post about what is better Twitter or Plurk or see a debate raging about whether one has to be a blogger to “get” social media, I hear Johnny Depp as Hunter S. Thompson and this song in my head (sorry – not every time and minus the first 51 seconds, heh, heh).

I don’t want this second wave of the internet coming to crest before crashing through the boardroom door. The prospect of changing the dialog about Web 2.0 and social media is what prompted me to start down the the path of writing “Introducing Social Capital Value Add” last May.

SCVA is a management method rooted in accepted financial theory that connects the pioneering intellectual enterprises of social capital and social network analysis to value based management and the priorities of marketers. SCVA proposes that we establish the link between social media and corporate valuation, in a way similar to the connection made between brand and corporate value in the late 1980s.

Investors and managers need to access the risks to future earnings and stock value associated with social media. When we evangelize Web 2.0 and social media in these terms … risk, future earnings and stock value … the focus will change from saving a few thousand dollars on a web campaign and the quest for that elusive viral story. This is the opportunity to stress the commitment, investment and special management methods required to develop the social capital that underwrites long term success in the networked age.

Over the last month many people have joined in to support the idea of “Introducing Social Capital Value Add” at www.changethis.com/proposals. Thank you very much. It is not over yet. Voting closes sometime, probably end of day, June 19th. It might not come together tomorrow.

The odds are against this prospect of changing the dialog. I must admit though, the process of engaging as many people as I can about these issues and the response has been inspiring.

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