My mother always used to say to me “What goes around comes around”. As a young boy she would say that to me every time I felt used by a friend or taken advantage of by someone. The older I got the more I witnessed how true this was and we truly do reap what we sow, sometimes immediately and sometimes it takes years.In business and personal relations a negative action can create a chain of reactions that center around a negative thread. We enter into personal relationships never expecting things will go wrong. However sometimes they do and the “wrongs” become defined through our personal filters of what the “rights” should be. What usually ensues is arguments over who is right and who is wrong with neither party seeking to understand before they can be understood.

Rarely do such arguments end in a win win solution but when they do it is evidence of both parties ability to set aside differences while agreeing to both respect those differences and focus on the common values of the relationship.

Is This True in Business Relationships?

Business conflicts usually arise out of broken promises and expectations not being met. The fuel that drives conflict is centric to economic gain or loss by either party. However, the essence of conflicts start and end with the dynamics of the relationships.

When we form business relations it follows the model of either a supplier, employee or a customer of the business. Businesses need suppliers and employees in order to serve the end product, service or message to their customers. When things go “wrong” anywhere in the supply chain or the delivery chain, whether it be with the product or service, relationship conflicts arise and much time and money is spent trying to resolve the “wrongs”.

When a wrong carries significance, either economically, emotionally, physically or mentally the magnitude of loss determines the degree of pursuit to be made “right”. In business the larger the perceived wrong the more likely that a legal process will be used as the means for conflict resolution. As soon as any conflict gets to the legal stage the cost of resolution goes up and damage to the “relationships”, or in a larger sense markets, becomes extremely difficult to repair or even salvage.

Then there are business conflicts which never end up in legal disputes but the cost of these conflicts can sometimes be larger than those pursued through the legal system. Historically these kind of conflicts were buried in the hearts and minds of those who have loss something as a result of the “wrongs”. Everyone simply walked away and the offenders hoped the issues would never arise again and that “word of the conflict” would not spread too far. Some businesses, not all, tend to take advantage of both there size and economic muscle, power, in resolving conflicts by leveraging the offending parties inability to fuel the cost of a legal dispute. Many consider these tactics a win and will leverage these dynamics any day of the week.

Will Conflicts Now Trickle Down or Up?

The social web creates transparency to both the wrongs and the rights of suppliers, employees and customers. The transparency of collective conversations are open to discovery by anyone, anywhere about anything and everything. Today’s media is quick to report “news” formed by either major business announcements or collective conversations facilitated through the social web. A wrong or right can trickle down to the masses very quickly.

The term “trickle-down” comes from an analogy with a phenomenon in marketing, the trickle-down effect. Some economist support “trickle-down economics” and “trickle-down theory,” and propose that it works best for a collective society. Conversational rivers flow through the social web and trickle down to the point of influence over people, businesses and markets.

Given these dynamics business owners, shareholders and entire markets may need to rethink how they deal with conflict resolution in the future. Focusing on the value of good relations may mean the past tactics of conflict resolution need to be reconstructed around enhancing good will with people rather than leveraging power against them for the wrong purpose.

The alternative is that the conversational rivers of the people become a negative influence over your business, your markets, your suppliers, your customers and certainly not least, your employees. In the old days conversations and the subsequent objectives trickled down. Today the conversations may trickle up.

What goes around comes around.

What say you?

Business leaders collect data and subsequently when confronted with the aggregate analysis the typical reaction is to create organizational change aimed at improving the negative results highlighted in the data.

The subsequent change initiatives consume internal resources, already overloaded with work, and typically involve outside consultants who make their living trying to help organizations gain from implementing change. Lots of time, energy and money is spent simply trying to align an organization with customer and market preferences.

The game is being better than competition at delivering on or exceeding the expectations of the customer and the entire market an organization serves.

So the challenge for business leaders is to organize people, processes and products/services that consistently and continuously deliver beyond what is expected and prepare for future expectations.

The two points of critical measurement are 1) “the voice of the system” (internal people and processes) and 2) “the voice of the customer and markets” (customers and suppliers aggregated as a market).

Where are these voices?

The social web’s interactive nature and ability to facilitate real conversations between real people, where there is common interest, is the phenomena driving voice of the customer analytics. Customers have real needs, companies offer real solutions. Voice of the customer research is driven by this common interest and a sincere desire to share and listen. Customer driven organizations are the result of technology used to forward the idea that ‘the common good’ can be explored best through democratic systems. A democratic system must be lead and by the “voice of the system”.

The “voice of the system“, internal people and processes, is very similar to the “voice of the customer” in that the common element which provides the most valuable input and influence is the people.

What Are The People Saying?

Chief Marketing Officer (CMO) Council’s recently released a study called “Profitability from Customer Affinity“. A high level review of the most significant and noteworthy research findings included:

• Fifty-six percent of vendors perceive themselves as being extremely customer-centric, but only 12% of customers agree.
• An overwhelming majority of vendors—85%—are convinced that they are getting better at responding to customer needs, but 45% of customers disagree.
• More than half of customers surveyed described their relationships with vendors as “dependent and captive,” “struggling for common ground,” or “combative and adversarial.”
• When asked to describe their relationships with the channel, 45% of customers surveyed evaluated their channel relationships similarly.
• More than 30% of customer respondents said they would terminate relationships with companies that fail to gain their trust; 62% would scale back existing engagements, while 7% would no longer consider the vendor for future business.

The flyer we received for the report states “The full Profitability from Customer Affinity” report will help you rethink how you embrace, interact with and respond to your customers. The complete report is available for purchase for $299.00 by simply clicking here. .”

Notice how big the “gap” is between the voice of the customer and the voice of the system? Just maybe the root cause is a lack of listening by business leaders combined with the inability to effectively initiate top down changes within their organizations.

Ironically when you look at employee survey results the data pretty much reflects the same as the “voice of the customer”.

Maybe we can save a ton of money by simply paying attention to the blinding flash of the obvious. Then again leaders would have to let go of their control so that the people can fix the obvious. The rules of the game have changed and now business rules have to change.

What say you?

In the old days when the conductor of the train was ready to leave a station the whistle blew and he shouted “All Aboard!”.Yesterdays presentation at the SAP Anniversary session of The Cluetrain ignited the blogosphere with conversational rivers that will likely swell for weeks. Doc Searls presentation ripped open minds and made us all think about today’s social web realities and what seems to be the “blinding flash of the obvious” when presented as only Doc can present.

Labeled as provocative, radical and disruptive the comments were aimed at the existing institutional and corporate mindsets that continue to create barriers to the very conversational freedoms afforded us by the enabling technologies of the social web.

Doc’s comments flew through the web as if it were a giant copy machine and bloggers added to the commentary largely in agreement but with an awoken spirit motivated and with passion. The copies magnified, flourished and the conversational rivers turned into a sea full of waves roaring with enthusiasm and energy.

Doc’s says “Groundswell - a social trend in which people use technologies to get the things they need from each other, rather than from traditional institutions like corporations. Companies sees the one-to-one communication, can’t measure it, but now there are ways to do this at scale. CBS Jericho TV show - what happens after a nuclear bomb goes off near a town. Jericho message boards were active, show went on hiatus came back placed against American Idol, same audience, show canceled. Shaun Daily, on BlogTalk radio, would not accept the cancellation. Collaborated with Nuts online, asked people to send nuts to Nina Tassler at CBS, had 20 tons of nuts that were delivered to the show. Saw that the decision to cancel Jericho was a mistake.”

CBS announced the comeback of the show on the CBS fan message boards, said that they will count on the fans to rally their friends - PS, stop sending us nuts Jericho Wiki, Jericho Widget - things are very 2.0 now. Companies don’t really understand that markets are conversations, but understand that the groundswell is there and that they have to manage it.

Revolutionaries Create Change, Radicals Create Upheaval.

If the social web had a constitution it would read “We the People of the Social Web, in Order to form a free exchange, establish free conversations, insure seamless transactions, provide for the common voice, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our community, do ordain and establish this Constitution for the Seamless Web“.

The subsequent articles would address the powers of self governance, self organization and freedom of expression. In essence such a constitution exist in the minds and hearts of those that not only agree with much of what Doc says but desire to unite in one voice and together break down the barriers with our collective influence.

Consider the comment Groundswell - a social trend in which people use technologies to get the things they need from each other, rather than from traditional institutions like corporations”. How much more productive could we be, could our world be, if we united together and applied influence towards mindsets that try and control our conversations with archaic rules and power plays. Consider what happen when Robert Scoble’s Facebook incident created a groundswell of support from other users. Facebook changed their rules. Examples abound that united we stand, divided we fall.

When Cluetrain first came out in 1999 it did indeed create a river of conversations but the flow of these conversations were constrained by the technology of the moment. Ten years later the technology has advanced, the people are smarter, more adaptive and are embodied in the power of social influence. The empowerment has been self assumed and as mentioned in Doc’s recent speech, Leadership is needed. The definition and assumption about leadership of the past implies one. The past is behind us and the new definition of leadership is many. However to lead one must be willing to stand up united and be heard so that the conversation unites many others and provokes leadership actions.

Based on the ebb and flow of the recent Cluetrain conversations sparked, copied and distributed is seems that the train is getting ready to leave the station and the conductor is yelling “All Aboard The Crazy Train!”. Are you aboard or will you stand by and watch the train leave hoping that the people reach their destination but leave the “nuts” along the way?

What say you?

www.relationship-economy.com

Doc Searls, co-author of The Cluetrain Manifesto, did a anniversary presentation at the SAP offices in New York City today and his comments were summed up by Charlene Li on a blog post at Social Media Today that is worth sharing. Charlene writes : “Doc Searls started talking about the genesis of The Cluetrain Manifesto. This was fascinating to me. He started with reflections of the overblown 90’s (Push, Pointcast). “Customers treated as plankton.” A reaction to the overblown venture investments in “capturing eyeballs” in the 90s.”

“The genesis of a lot of those ideas as he described (e.g. 95 theses, “markets are conversations”) sounds as if it wasn’t all that thoughtful. And didn’t take that long to write. But what made these ideas so fresh and powerful (my opinion here) is that it was obvious to them long before anyone else was even thinking about it. The cluetrain authors were unafraid to talk about it frankly. And — this is important — they had each other to bounce things off of.”

“Does it hold up after 10 years? Rereading it — and listening to Doc — it does. The strident tone seems a bit “of its time” — that is, they were screaming about things you don’t have to scream about any more. But the content seems as true as it did when it was written.”

“But Doc has remained way out in front of what’s happening, rather than consolidating the gains we made in getting to the Cluetrain world.”

“I love Doc’s take on Web 2.0. He implies that O’Reilly’s emphasis on the software is misplaced — and wants to know why he uses advertising as his first example. I concur. The real change is about people and how they relate to business — software is the enabler. Fascinating, as Doc points out, that Google search “Web 2.0? search yields ads about Advertising.”

“He’s still got a problem with advertisers and advertising — including on Facebook. Searls’ updated theses (numbering is not a mistake — he skipped a few)”

1. Advertising as we know it will die.

2. Herding people into walled gardens and guessing about what makes them “social” will seem as absurd as it actually is. (Facebook is his example.)

3. We will realize that the most important producers are what we used to call consumers. (Yup.)

4. The value chain will be replaced by the value constellation. (Many connections.)

5. “What’s your business model?” will no longer be asked of everything. (What’s the business model for your kids?)

6. We will make money by maximizing “because effects”. (”Because effects” are what happen when you make more money because of something than with it.) E.g. search and blogging.

8. We will be able to manage vendors at least as well as they manage us. (Agreements between companies and customers shouldn’t be skewed in favor of the companies.) At Harvard Law they call this VRM — vendor relationship management — which is what Searls is working on (projectvrm.org).

10. We’ll marry the live web to the value constellation. (The Live Web isn’t just about stars. Relationships of anybody to anybody.)

Examples: The personal RFP — find me what I need (driven by buyer not seller) I should be able to manage my own health care data. I should be able to inquire and relate to whole markets on the fly. I think Doc is still a radical — a bomb-thrower, a provocateur. But to create real change, you have to be a revolutionary — someone who engages with the powers that be to create major change. We need radicals. But we need revolutionaries too.

We’ve come to know Doc personally and all we can say is his mind sees the obvious while the masses see and engage in the clutter of the moment. Doc’s heart is as deep as his mind is broad and his perspectives are worthy of attention to those wishing to lead rather than follow.

Seeing things as they are and speaking to the obvious is frank, honest and given his reach and influence his perspectives are disruptive. Disruption is what we need to maximize the social web benefits in front of us by letting go of the paradigms behind us.

What say you?

www.relationship-economy.com 

The internet is free. The tools are free. Content is free. Social networks are free and users have gained the freedom of expression and connectivity without constraint for free.The only factors of user and producer cost is time, attention and trust.The “free” model doesn’t fit well with traditional business models and mindsets. People have a hard time figuring out how to convert “free” to earnings. Most everyone considers the social web as a primary point of distribution for advertising and view advertising as the only means for converting free to earnings.

This paradox boggles the minds of many and most conclude that the social web does not contribute to earnings thus lets not spend lots of time, attention and resource engaging in all this “social activity”. Sound familiar?

Most Businesses Currently Provide Numerous “Things” for Free:

1. Customer support is free although a bad experience may cost plenty.
2. Slick & expensive marketing materials are free although over hyped promises may cost plenty.
3. Communicating is free although many types of communications cost plenty.
4. IT support, internal and external, is free although unresolved problems may cost plenty.
5. Mediums that provide interaction with customers and suppliers are free although most are poorly designed and cost plenty.

There are a number of other “free” things that business builds into a product or service offering and the cost of “free” is built into the overhead to run the business. However, the cost of poorly designed “free things” and the subsequent impact on relationships, i.e. customers, suppliers and markets, is rarely measured or itemized on financial statements or shareholder reports.

The gurus of industry have always proclaimed the value of good relationships with customers, suppliers and markets yet the organizational designs and collective actions tend to but up barriers and create consistently poor experiences that alienate relationships with customers, suppliers, employees and entire markets.

Lets talk about two real time examples. Previously we had written a post about a very poor experience with Verizon’s customer support system which is touted as “free”. Just last week we spent over eight hours on the phone with our bank, Bank of America, trying to tract down a trasnaction.

After dealing with numerous phone prompts to get through numerous instructions we ended up being passed around to nine, count them, nine different people and to make matters worse none of these people could provide an answer as to where the payment went.

To fuel the frustration further every time we were put on hold the automated messages kept repeating “Your business is important to us and we value our relationships. Please stay on the line until our customer service representative can assist you. The next customer service representative will be available in NINE MINUTES!”.

In between this repeated message was “Have you tried our free online banking service? Bank of America provides its customers with free online banking to serve all your personal and professional needs“.

To further aggravate this situation none of the real people we talked to were allowed to give us their full name, direct phone number or email address. Go figure, just how important or valued is my relationship? Actions speak louder than words but words spread on the social web can indeed create actions.

Will This “Free” Message Be Copied and Create Influence?

Kevin Kelly writes: “The internet is a copy machine. At its most foundational level, it copies every action, every character, every thought we make while we ride upon it. In order to send a message from one corner of the internet to another, the protocols of communication demand that the whole message be copied along the way several times. The digital economy is thus run on a river of copies. Unlike the mass-produced reproductions of the machine age, these copies are not just cheap, they are free.

There are a number of qualities that can’t be copied. Consider “trust.” Trust cannot be copied. You can’t purchase it. Trust must be earned, over time. It cannot be downloaded. Or faked. Or counterfeited (at least for long). If everything else is equal, you’ll always prefer to deal with someone you can trust. So trust is an intangible that has increasing value in a copy saturated world”.

This blog has received 180,000 pages views since Jan.1 by over 30,000 “connected users”. Those users have second degree connections of over 3 million people. The social web magnifies peoples experience with business, good and bad. Bad experiences can be remedied by simply following the basics of creating good relationships. However, the very systemic design of many businesses are not friendly to establishing and maintaining good relations rather the “relationship experiences” are anti-social to say the least. Most people who read this post will relate and pass the message on, one to one to millions.

The social web is indeed free but the cost can be very high to those businesses that don’t understand the power of free. How good or bad you are at free could influence how much you earn.

What say you?

Featured post by Jay Deragon from LinkToYourWorld.comThe social web is creating a reversal in the process of managing customers. People learn from people and subsequently are avoiding influence from institutions rather the conversations of people, one to one to millions, have become the power of influence.These conversations are creating “social markers” on brands. “Social markers” is a term created by Hugh MacLeod whose blog, GapingVoid, defines social markers as “ a prime form of social shorthand, that people use to STAKE OUT the ecosystem they’re occupying”. A brands social marker can be either good or bad. It is tagged by the conversations of those that have experienced the brands product, service or culture.

Every business has an ecosystem forming within the social web. The ecosystem is driven by the people who have experience with your brand. Whether suppliers, employees or customers the relational experience with your brand is what influences your brands “social marker“. The social web is an “ecosystem” that enables conversations to spread like wildfire and the more conversations the more attention the conversations create.

If your brand is a positive “social marker”, within this ecosystem, you will have a competitive advantage on the other hand if your brand is a negative social marker well just think about the implications.

Is Social Markers creating a Shift?

Theo Papadakis wrote a post which first appeared in the 2nd Online Customer Engagement Survey Report, and his ending comment states “The first questions for would be customer-engagers should not be “what technology should we deploy?”, nor “how can we engage our audience?”, but instead: “What is it that our customers are currently doing, where are they doing it and what do they want to achieve.” And guess what – the best person to ask is … your customer.”

While agreeing with the context of Mr. Papadakis post the train may have already left the station. The train we’re referring to is a shift in control from the brands desire to engage the customer to the customer taking control over the engagement.

Today business relies on CRM products designed to facilitate customer needs into a framework designed by the supplier. It is like telling your spouse or children “I want your feedback but only within this context”. The feedback system is not designed to listen rather to control the context into “frames” the supplier thinks are important to us rather than “open conversations” that are important to us, the customer. Most corporations would consider the thought of having “open conversations” with a large audience of customers a nightmare of uncontrollable cost. When they consider the “technological tools” of the social web they think of it as tools to control and manage, the customer.

The flaw in this thinking is that people would rather simply be heard than managed. Managing and acting on the intelligence gained from conversations is a much more effective way of building stronger relations. The outcomes should scream “I heard you” and subsequent actions should demonstrate that we’ve changed or learned something as a result of what we heard. Automated conversations are not real conversations.

The Old Methods Have Failed The New is in Control

People are now empowered to influence brands by the reach and influence of conversations, one to one to millions. These conversations are becoming social markers. Frustrated by brand promises not fulfilled, old sales and marketing tactics, dysfunctional corporate cultures, the people are speaking out and are managing, creating and influencing markets. Instead of businesses managing customer, customers will influence how businesses are managed.

Which method are you prepared for? The old or the new?

What say you?

Featured post by Jay Deragon from LinkToYourWorld.comBusinesses are shaped and built around markets, existing or created. Whether the proposition is a product or service, for a business to survive it has to have a market that wants or needs its product or service.Business follows different methods to build and deliver to the masses. Creating market differential aimed at specific markets is the means for creating market movement. Think of the Apple IPhone as an example of creating and delivering market differential and thus movement.

What and Where are the Markets?

A market is a social structure for exchange of rights, which enables people, firms and products to be evaluated and priced. A market allows buyers and sellers to discover information and carry out a voluntary exchange of goods or services. It is one of the two key institutions for organizing trade. In everyday usage, the word “market” may also refer to the location where goods and services are traded, or in other words, the marketplace of transactions.

Business is a Web of Conversational Transactions

A conversational transaction is an agreement, communication, or movement carried out between separate entities or individuals. These conversations often involve the exchange of items of value, such as information, introductions, knowledge, services and sometimes money. These conversational transactions evolve into relationships based on an affinity defined between two parties then thousands of individuals collectively forming a “swarm” of transactional conversations centric to affinities.

These collective relationships then form into markets being defined by the “collective parties engaging in conversations“. Think about how customers thrilled or disappointed with a new product or service converse with others thus creating a web of conversations that influence others. Think about employees disappointed with employers and the influence the subsequent conversations have when promulgated into the marketplace of people. The marketplace is where the conversation are occurring, the conversational transactions are the influence on the marketplace, any marketplace, your marketplace.

The Social Web is the Marketplace of Conversations

The social web is the new marketplace fueled by conversations and relationships formed at the intersection of people and technology. Web 1.0 was about delivering information. Web 2.0 is about enabling conversations which in turn create transactions. Thus the appropriate label of the “social web”.

Doc Searls book, The Cluetrain Manifesto, and on his blog often and regularly he refers to three categories of activity which are fueled and enabled by the power of the web. These are: transactions, conversations and relationships. Doc writes “In too many markets the mix of the three is warped and strained. Too much of the conversation is insincere, preachy, hollow or otherwise bullshit. And the current methods used by businesses pollutes both conversation and relationship.”

“Networked markets are beginning to self-organize faster than the companies that have traditionally served them. Thanks to the web, markets are becoming better informed,” Some of Doc’s key points are:

• These networked conversations are enabling powerful new forms of social organization and knowledge exchange to emerge.
• As a result, markets are getting smarter, more informed, more organized. Participation in a networked market changes people fundamentally.
• People in networked markets have figured out that they get far better information and support from one another than from vendors. So much for corporate rhetoric about adding value to commoditized products.
• There are no secrets. The networked market knows more than companies do about their own products. And whether the news is good or bad, they tell everyone.
• What’s happening to markets is also happening among employees. A metaphysical construct called “The Company” is the only thing standing between the two.
• Corporations do not speak in the same voice as these new networked conversations. To their intended online audiences, companies sound hollow, flat, literally inhuman.
• In just a few more years, the current homogenized “voice” of business—the sound of mission statements and brochures—will seem as contrived and artificial as the language of the 18th century French court.smarter, and more demanding of qualities missing from most business organizations.

The Social Web of Business

Business is about markets, methods and masses. The markets are the relationships, people. The methods are about the conversation and the masses is about the reach of the transactions. To win in the relationship economy a business must have solid market relations, honest, open and frank conversations which in turn fuel the transactions, results.

The Relationship Economy is about people, one to one to millions, transacting in the form of conversations but openly, honestly and at velocities never before experienced. These transactions enable new relationships to be formed with a global reach and formed within what we have come to call the social web.

These conversations are about anything, everything, anybody and everybody. These conversations are nonstop able, fluid, frank and with no hierarchy of control, they are free and without constraint. This represents a movement of markets and unless business understands the methods they will loose the masses and the subsequent transactions.

It is that simple yet hard for business to grasp considering the current state of mind. “It” requires a different mindset, a focus on human factors and understanding the value of “real” conversations.

What say you?

Featured post by Jay Deragon from LinkToYourWorld.com

The great historian George Santana once said “Those who forget the past are condemned to repeat it.”The history of social movements have demonstrated the human desire for independence while the “portals of power” have always tried to make people dependent on the power structures.

More and more people are becoming dependent on social networks for multiple purposes. These dependencies are flying in the face of the basic human desire for independence. Consider the resent Robert Scoble story about being banned from Facebook.

E-Week reports: Facebook on Jan. 3 reinstated Robert Scoble’s membership one day after banishing the high-tech blogger for testing a Plaxo tool that imports contact information from Facebook to the Plaxo Pulse service.

Facebook’s servers detected the automated script, which a representative told Scoble resembled the same type of script used to commit malicious attacks and send spam and shut the account down earlier Jan. 2.

Scoble promptly blogged about how he was cut off from his 5,000 Facebook friends, triggering an outcry from supporters in the blogosphere that is renewing the debate about who has the right to control data on a social network—its users or the network.

Facebook has very clear rules that the data on its network is under its purview; users would like to export their data to other social sites so they don’t have to re-enter data on multiple social networks. When Facebook banned Scoble, it provided a reason for users who want to control their data to reignite the fire.

While the historical conflict of dependence vs. independence has been between the people and the powers that govern the people there is now an evolving conflict between the people and the technology. The intersection of the matrix.

Doc Searls wrties: “Independence is a value that has run like a river, not just through the Open Source movement, but through the Independent Developer movement, the Free Software movement, and through hacker culture for the duration. Its origins are in value systems that recognize the transcendent virtues of personal freedom. Including the freedom of assembly that results in social groupings — especially those that are inherently elective. To be free is to opt in, not just out.”

“Scoble should be able to take his personal data, his social data, and his business, anywhere he likes. Our ability to associate and communicate and work out “social networking” should be independent of Facebook, LinkedIn, or any company’s walled garden.”

“The problem is, we have not framed what we want, and what we invent, sufficiently in terms of independence rather than dependence. We have not started with ourselves and worked outward and otherward from there. Instead we’ve waited for the Facebooks and Orkuts and Friendsters of the world to prototype our “social networks” for us. Which is fine, as far as it goes. But that’s like letting AT&T or Apple some other company contintue to define operating systems for us. With BSD and Linux we stopped doing that, and started making for ourselves.”

“We need to do the same with social networking. We can choose to serve as batteries in the Matrix that is Facebook (and every other “social network” that serves as a world-like habitat). Or we can choose to be free. That’s it.”

The battle between the people and the technology is just beginning. As Doc says, we can choose to depend on the matrix and thus become dependent or we can choose to be free. The choice is ours and if history repeats itself we’re in for a battle regardless of the choices we make.

Independence actually has a set of dependencies. The dependencies are at the conversational intersections between and among people. One to one to millions. The power of these dependencies is when the conversations become united and stand together on common principles that enable independence.

Facebook reinstated Robert Scoble’s membership because the people spoke up in swarms but did they change the rules of the matrix?

What say you?

www.relationship-economy.com

Jay Deragon

Featured post by Jay Deragon from LinkToYourWorld.com

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 runs over.

What say you?

Featured post by Jay Deragon from LinkToYourWorld.com

Many of the conversations in 2007 were about whether social networks will become centric to conducting commerce, B2B, B2C and P2P.While social networks continue to grow exponentially the next growth curve will be driven by the holy grail of economics“, social commerce. Social commerce may actually become the dominant development in 2008 and subsequently turn business models upside down and inside out.

One might ask why?

Simeon Simeonov writes “Consider for a minute how gargantuan the social shopping/merchandising market opportunity is: the current US retail market (excluding home and automotive) is around $4+ TRILLION/year and is supported by $150+ billion in advertising, the bulk of which still goes to TV for immersive, emotionally impactful ads. Capturing the proverbial 1% of that total market would represent over $40 billion/year in transactions which is huge!”

“So, clearly, whomever figures out how to get paid to unlock socially-driven product discovery and merchandising is going to make an astounding amount of money and have a huge impact on net culture.”

Is there consensus on this opportunity?

We recently asked the following questions aimed at adults throughout numerous social networks, “Will businesses and people conduct commerce using social networks?” We asked 2,000 of our contacts the question and received responses from 623 which created a 31% response rate as of December 31, 2007. The responses are still coming in as of the writing of this post. The responses carried many comments, some of which we will be sharing in future post, however the majority, 72%, said absolutely Yes. Obviously these responses are influenced by people who are engaged with the social web and see the opportunity.

On the other end of the spectrum

We were recently at a meeting with executives of a Fortune 500 company and the discussions were centric to the social web. The issue of social commerce was brought up and the opinions of the executives were that people wouldn’t buy things through their social network profiles and businesses wouldn’t engage is making purchases with other businesses via a social network.

When asked how many of the executives were active participants in social networks 100% answered they were not and 40% didn’t even have a profile on Linkedin. When asked how many of their employees (in excess of 20,000 employees) were active in social networks their answers were “We don’t know”.

How can business executives draw conclusions with no experience or understanding of the dynamic of the social web? The answer is they do and they will continue to, right or wrong. The awakening will come when markets move, when competition leads the movement, when executives engage with people who find satisfaction and benefit from engaging with other people, when the world shifts and an alarm ripples through the executive suites.

What are the factors that will drive social commerce?

• Consumer as communication channel: viral in its purest form just carries over a many to many channel an essentially one to many message from a business to its audience.
• Consumer as message author: recommendations and referrals are where the ‘consumer’ is already an ‘employee’ of the business, effectively working for the Marketing department and generating the message in addition to carrying it.
• Consumer as a transaction participant: where the business has found a mechanism to engage the consumer in more than just passing a message, in ‘closing the sale’, processes orders and (why not) takes PayPal payments.
• Consumer as co-creator of the product: from participation in product design R&D with feedback, ideas and recommendations, particularly where the ‘product’ is the message he spreads. Two more jobs: in the R&D and in the Production department of our business.
• Finally, consumer as Investor: already an insider of our business, he confidently buys our stock (and recommends that, too). Clever companies find ways to engage them even better in the share ownership through dedicated schemes.

There’s been a lot of progress made in 2007 in social commerce and 2008 will see new players, new technology and lots of money thrown at the solutions. Social commerce can encompass and influence a wide array of points on the purchase process, both before and after, and markets will move where money moves. Stay tuned for The Emergence of the Relationship Economy!

What say you?

www.relationship-economy.com