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

02 13th, 2008

An average commuter will drive 60 miles a day which equates to $21,098 in cost a year per person commuting. This cost continues to rise as the cost of fuel goes up.The average worker spends in excess of 50 hours a week away from home. As businesses try and get leaner the demands on workers go up and to keep the job more is expected which means more time on the job doing more. People discuss these issues, one to one to millions daily. The conversations are abundant.

The current credit crunch and subsequent long tail effects could cause significant shifts in the “credit economy” with ripples being felt globally. Already new home housing stats are indicating a slow down in residential real estate and the bankruptcy rate is on the rise.  The conversations are abundant.

Consumer debt is at an all time high and the rate of late and default payments is increasing. The gurus of economics converse over whether this is just the beginning or the end of bad economic news. The conversations are abundant.

The debate over global warming continues and there is no denying that we are consuming more of the earths raw materials faster than they can be replaced. The push to conserve natural resources and find alternative energy sources is a global conversation which is and will continue to impact the future eco-system we all live in. The conversations are abundant.

The debate over the war on terror continues to capture our attention and that of global leaders. The different positions on the war continues to polarize people, parties, institutions, religions and governments. The conversations are abundant.

The state of our “relationships” with each other are showing signs of decay. Divorce rates are up, teenage suicide is up, criminal incidents are on the rise, employee turnover is on the rise and medication therapy for our ills is exploding with every new kind of psycho labeled malady being diagnosed and treated with yet another medication that promises to “help” us get through our mental and emotional anguish. The conversations are abundant.

The media feeds us with these stories which only sparks more conversations, responses and concerns as to what we individually need to do to cope with the issues that impact our life. The conversations are abundant.

The current political debates within the U.S. are all centric to these issues and each candidate “promises” to have the answers hoping to appeal to the masses and win their votes. The current conditions of the American landscape of issues and the possible outcomes are part, if not much, of the thread of conversations globally. Each of us and everyone of us are seeking answers to the complex problems that exist in our worlds. The conversations are abundant but the solutions are not.

Are These Abundant Conversations Converging Around Chaos?

We’re not trying to predict doomsday rather we’re only trying to illustrate what subjects are dominating today’s conversations. Subsequently what potential outcomes could come from all this chaos being discussed could indeed become part of the solutions.

Chaos is the complexity of causality or the relationship between events. This means that any ’seemingly’ insignificant event in the universe has the potential to trigger a chain reaction that will change the whole system. A well known saying in connection with this issue is “A butterfly flapping its wings in one part of the world can cause a hurricane on the other side of the earth.” This is also known as the “butterfly effect“.

The issues that are dominating today’s conversations are very real and threaten to disrupt the eco-systems we live in. If one or more of the issues accelerate at the same time the convergence could create chaos that impacts our lives and subsequently forcing changes unexpected, unpredicted and adaption to these changes will be required.

In any chaotic event, remember 911, the foundational forces that create calm and adaption to unknowns is relationships and conversations.  When society feels collective stress we turn to our relationships and converse about the issues at hand and the solutions to anything that directly impacts our individual eco-systems.  When 911 occurred we reached out and conversed with those closest to us. We took time off from work and thought about the possible implications. We stayed glued to the media waiting to hear “What Next?”. We felt the need to get closer as families, communities and as a nation. Relationships became paramount and the conversations abounded.

Considering all the current issues the social web may actually become the backbone of society’s need to relate, converse and find solutions to perplexing issues facing our world, its eco-system and our communities, one to one to millions.

If the chaos of the moment forces us to spend more quality time with our relationships engaging in problem solving conversations what could the outcomes be? Self governed and self organized could we solve problems better than those who govern and attempt to organize us now?

What say you?

www.relationship-economy.com 

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

In business, you want to have the best employees working for you. If your team is made up of high quality people who have the skills and traits to succeed, your company will grow faster, quicker, and easier.

It’s those times that you have key employees holding your company back from this growth. I’m sure you’ve seen it countless times in your career. Those employees who aren’t motivated to work, gossip, or just don’t have the right skill set to succeed in your business.

Workitect.com has studied the characteristics and skills of high performing employees and what makes them stand apart from the rest. This type of research can help you understand the type of people you need to higher within your organization to help the business succeed.

What’s important to point out is just because a potiental employee isn’t suited for a certain position, it doesn’t mean that they aren’t suited for a different position within the company. Workitect has done a lot of research on certain job competencies and the qualities and skills those people should have to succeed in the position.

If you’re looking for a new job, this would also be a great way to access your own skills and see which types of jobs you would be best at. I know when I was younger, I bounced from one job to another until I found the one that I was highly successful at. If I would have had this type of information in my early 20’s, I wouldn’t have wasted so much time throughout my career trying to “find” the perfect job.

Businesses that want to succeed should incorporate some sort of competency models into their hiring process. It would save them a lot of time and money on hiring the wrong person for the job. As you go up the corporate ladder, it becomes even more important to hire the right person the first time.

Featured post by Jay Deragon from LinkToYourWorld.com

“You’ll have ten minutes to explain the virtual world of social networks.” That was the instructions from a global corporation who asked us to dial into the proverbial Monday morning executive meeting and discuss social networks.So how does one educate business executives about the value of conversational relationships with a ten minute limit set on the conversation? You can’t!In another example, a Fortune 500 company had engaged us to research their specific niche market as it relates to what the market was doing with social networks and what opportunities could they pursue to create market differential as well as improve customer and employee satisfaction.

Upon finishing the research we began to write the report and send drafts to the appointed project manager within the company. Our first draft was ten pages long. The appointed project managers first response was “we have a rule around here and that is our executives will not read anything longer than two pages.” The essence of the message was “we don’t need to know why and how to do something rather simply tell us what to do and do so quickly.”

Does the “how and why” impact what the final results will be?

Many, if not all, employees of any corporation will relate to the two examples above. Pressed by deadlines and an abundance of task businesses thirst for the “one minute answers” and then when the answers are implemented but do not produce the expected results the blame game begins. Subsequently “pointing fingers at who is to blame” becomes a cultural norm when the “what” answers contained in the two page summaries or ten minute presentations do not produce expected results.

Dr. Charles (Kalev) Ehin, Professor of Management Emeritus and the former Dean of the Gore School of Business at Westminster College writes: ” Have you ever wondered how things actually get accomplished in most organizations despite all the obstacles continuously encountered by the people who perform the day-to-day activities? I’m sure you have unless, of course, you are one of those rare individuals who is independently wealthy and has never worked for someone else. Not surprisingly, all of us have our own individual theories about why businesses survive in spite of the seemingly unworkable systems and processes they frequently employ. Just in case you may have, for a moment, forgotten what those obstacles are let me list just a few of the most common:”

• Unclear goals and objectives
• Ambiguous or unexplained policies and procedures
• Unrealistic deadlines and budgets
• Pressure to do more with less
• Lack of cooperation and teamwork
• Poor and uninspiring leadership
• Lack of open communications and trust

“Can you imagine what gains in wealth, creativity, and social responsibility could be realized if enterprises discovered how to leverage the hidden but powerful attributes that allow firms to make a profit in spite of these barriers? The possibilities are boundless. And think as well about how much more successful mergers and change initiatives in general would be if they could tap into these attributes. Essentially, my focus will be on the nature of the emergent systems or informal networks present in all social entities and what leaders must do to “allow” the tremendous energy and creativity inherent in these systems to support the overall organizational vision and objectives.”

Successful Social Networks are more about the How and Why

The innate power of relationships is the learning element that we adults seem to have forgotten. Part of the element of learning is conversational and without taking time to have a conversation learning is being limited. Half of a conversational process is listening and maybe it is the most important part. If business leaders don’t have time to listen or engage in conversations how will they learn the inherent power of social networks?

I have a five year old son whose constant response to any conversation is “why” which is indicative of human natures desire to learn. Even when you respond to his first “why” he’ll naturally follow up with another “why” until he thinks he’s gained an understanding of the subject matter being discussed. Ironically when he thinks he truly understands something he’ll be the first to correct his father in future conversations relative to whatever he thinks he now understands. Sound familiar?

Business thinking and subsequent institutional behavior has created deficits in learning capacities and capabilities. Finding quick answers to market movements, short term profit pressures and institutional maladies is a repetitive process that robs peoples ability to learn the how and why. Do business leaders really think they have learned enough to simply ask for what without understanding why and how? If we truly found time to have conversations with employees, suppliers and customers what would we learn?

A ten minute presentation or a two page summary may not be enough to understand the power behind a major social movement. Are we so connected to business that our relationships have become disconnected?

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

Featured post by Jay Deragon from LinkToYourWorld.com

Based on the ebb and flow of the social web in 2007 this new year promises to bring more disruption facilitated by the cascading conversations of individuals, one to one to millions. We are likely to experience significant adoption of the social web by businesses representing every market segment and industry.

The force that fuels significant growth will be the “noise” created by cascading conversations at velocities never imagined or experienced. Conversations are markets and unless businesses learn to engage they will loose their market positions, some slowly and some overnight.

A cascading conversation is a consecutive series of organic conversations which often proceed via social networks, one to one to millions. It allows the conversational synthesis of topics from a single user’s creation to spread at the click of a mouse and with no geographical boundaries or other limitations as to who chooses to engage in the conversation or who is touched or influenced by the cascading affect.

The cascading conversation contains many functional streams that take part in the conversation’s transformation one at the time. Often another cascading conversation is generated from a previous conversation. The social web accelerates cascading reactions from conversations due to the dynamics of one to one to millions conversing about anything and everything, including businesses.

Cascading conversations carry an idea forward in ever-broadening circles. The very nature of cascading conversation implies, “the conversation creates the results.” The social web creates the medium to engage thousands…then millions…of people. These people create conversations centric to topics of interest and issues of affinity with others who have migrated to groups–commonly known as swarms.

The Social Web: A Conversation-driven Process

The social web created a two way conversation between people. At first its appeal attracted the younger generation looking to be heard and wanting to converse. Now more and more adults are finding satisfaction from the conversational web. Whether engaging for personal or professional reasons, adults are finding the creativity of the social web and the dynamics of virtual relationship appealing. The subsequent cascading conversations have fueled global conversations about business, politics, causes, opportunities, knowledge and any other thing which one would classify as adult conversational topics. People are connecting in the virtual world and finding ways to help one another, including finding jobs, finding friends or finding stimulating conversations.

What is the effect of these conversations on businesses?

The essence of any business is primarily about conversations. Business leaders spend most of their time engaged in communication. Whether face-to-face with their teams and customers or alone in their offices dealing with memos and e-mails, these are all conversations about the business—its brands, strategies and effectiveness. At its simplest, the role of leaders is to have the right conversations with the right people in the most effective and efficient manner.

However, experience has shown that conversations can also be the cause of many organizational ills. Individual conversations may poorly engage the work-force; fail to reflect reality; fail to focus and align people; and stifle individual and business transformation. A common failure of business conversations is they can be one sided and lacking a learning exchange. Business success is simple: increasing or accelerating the organization’s effectiveness requires changing the organizational conversation. Cascading conversations can accelerate business transformation whether planned or not.

Cascading Conversations Can Transform Markets

Markets have historically relied on traditional media to carry their messages to the masses. Using multiple forms of media, businesses have tried to reach consumers with advertising messages aimed at getting consumer attention through product or service appealing images. Consumers have been surrounded by messages appealing to the human senses, needs and desires.

Slick advertising campaigns, sponsorships and a host of other media techniques have been used to create affinity and attract consumers. These methods have been used for years and advances in technology and media have simply increased the creativity of the messages and the means. Conversations between people have become the media and the cascading effect is gaining power and momentum. Businesses are just now beginning to pay attention.

Some businesses are following the social web because that is where the people are migrating. IBM has developed social networks for businesses. The likes of Wells Fargo, American Express, Bank of America and Nationwide Insurance to name a few have recently engaged in using the tools of social media to reach their customers. Many businesses either do not know what the social web is or they have underestimated it and discounted it as a fad. However the wave of cascading conversations will grow at exponential rates throughout 2008 and the collective voices of the people will only get louder. Businesses will follow the noise even if business leaders do not understand how to engage in conversations.

The new business leaders of tomorrow will understand the value of conversations and subsequently we will then begin to see the evolution of a new dynamic called social commerce. Today these are just ripples in the ocean of the social web. Tomorrow these ripples could create a wave of change again at velocities never before imagined or experienced.

Substantial issues regarding the effect of cascading conversations need to be considered going forward.

Are your people having the right conversations? Are business leaders focused on the impact of cascading conversations? Could business be more effective at conducting or leveraging cascading conversations? Are business leaders listening? Will business be transformed or will it lead the transformation?

What say you?

Jay Deragon

www.relationship-economy.com