Looking for Leadership? Invest in Your Networks

by Michael Cayley & Jonathan Salem Baskin

Lincoln and Roosevelt are heralded as great American leaders in times of crisis, and their vision and fortitude are recognized as drivers of their historic accomplishments. However, we think their greatness had far more to do with their abilities to be catalysts for network effects.

UPDATE@Nov.20: More on Lincoln as master network weaver.

If we’re right, it reveals a very different interpretation of the calls we’re hearing for “leadership” to restore confidence in our economic system. In fact, there’s a good chance that no government policy gesture or announcement will mollify the worries of businesses and consumers, let alone stabilize the markets.

Confidence must emerge from the networks in which we all participate. We need to lead ourselves.

This raises intriguing issues and opportunities for corporate marketers looking to craft a way forward.

“In times of uncertainty consumers rely more on trusted relationships when making purchasing decisions,” says Dr. Brent Simpson, an expert at the University of South Carolina who specializes in understanding how social order is formed.

Stanford University’s Matt Jackson, a leading social network theorist, adds: “People’s friends and trusted social relationships are important in influencing their behavior, and people learn from and emulate their friends. Attitude certainly can play into that, especially in turbulent times.”

So what does this mean for businesses directly impacted by the financial crisis, like banks, brokerages, and insurance companies, as well as any consumer business facing the prospect of declining (or less profitable) sales?

First and foremost, you can’t brand your way out of it. You can’t rely spin doctors to declare your path through the crisis; your customers must see and verify it. While your hired guns are hatching ads and press releases to statically “position” the situation, your networks are trading information and defining it in real-time.

And that information, whether accurate or not, has absolutely nothing to do with how the brand has been envisioned, promised, or promoted. Every network is founded upon the tangible realities of action and reaction, just as the mechanism of their function is cause and effect.

How do you empower these networks to step up and lead?

* Know your networks. Invest in software to map connections between people and content.

* Move your enterprise closer to customers, employees, partners and investors. In the past we talked about flattening hierarchies; now it is time to integrate internal & external sources of value.

* Trust opportunities that emerge from the exchange (don’t just talk, and certainly don’t lecture).

* Make information a utility as ubiquitous as electrical light. If what you share isn’t affirmed and forwarded, don’t repeat it…instead, recast or reimagine it, and find new ways to prove it to your networks.

* Demand feedback and ideas.

* Stop looking for ‘home runs’ and play ‘singles and doubles’ by finding small wins, frequent trials. Make constant adjustments. Allocate resources towinners and abandon losers without blame.

The larger revelation of today’s various crises is that the era of symbolic branding is waning, if not over. The woes of the financial institutions have graphically illustrated to us why.

It was always untenable for lenders to ignore the details of weak/bad relationships and to expect instead that homes or property (i.e. commodities) would appreciate in value with no accord to the strength of home owners (i.e. the source of value that differentiated the commodity). Instead of accessing and fostering the relationship to make the loan a better product, the banker chooses to focus on the derivatives.

All businesses face similar risks. From toothpaste to software services, consumer brands invite significant downside threats when they focus on manufactured identify and perception, and not on the drivers of true business strength: connection, interaction, involvement, collaboration, consumption and the other aspects of human behavior.

There are no brands, or businesses, without the networks of people who make them real. It is in, and through, the behaviors of these networks that the Lincolns and Roosevelts for our business and social communities will ultimately arise.

Jonathan Salem Baskin and Michael Cayley met through the concurrent release of their manifestos in the 50th issue of ChangeThis.

Jonathan Salem Baskin recently released the book Branding Only Works on Cattle. This post also appears on Jonathan’s blog at http://dimbulb.typepad.com.

2 Responses to “Looking for Leadership? Invest in Your Networks”

  1. SoCap08: Is there a thread missing? | Social Capital Value Add Says:

    […] Looking for Leadership? Invest in Your Networks […]

  2. Angus Cunningham Says:

    I found this a thoughtful and practical set of recommendations. In social networking, authenticity and empathy are crucial, but what is authenticity and how is it recognized?

    Depending on whether you are interacting with another human being or you are the manadated leader of an organization you want to evince authenticity to its prospects, customers, and internally among its “membership”, you will have to frame different questions to plumb this practically.

    Here are two suggestions:

    1. Amazon Book review by the writer — “Authenticity: What Consumers Really Want” by Joseph Pine II & James Gilmore

    “At last, a book to illuminate with candour a hot but murky business communications topic, October 30, 2007
    As economic life incorporates more technology and its organization becomes more complex, customers and consumers are infusing their expectations of value from suppliers with assessments of the authenticity of prospective suppliers. How real or fake is the offering? How real or fake is the supplier? Authors James Gilmore and Joseph Pine explore these questions from the point of view of consumer marketing consultants advising the owners of enterprises and the leaders of institutions.

    We know, but often forget, that every action of a supplier either adds to or detracts from its authenticity in ways personal to each actual or might-be consumer or customer. And we know also, but forget also, that these often lightening-fast assessments trigger similar inferences for the value to be expected from the same supplier across the entire spectrum of traditional purchasing criteria such as reliability, availability, accessibility, and price. The authenticity of an organization is no longer a small matter to its owners and leaders.

    But what, practically, can leaders do about an organization’s authenticity? Gilmore and Pine have distilled a huge variety of mainly, but not entirely, consumer marketing experience into insights relating to how to earn the elusive epithet of “Really real!” in the minds of increasingly skeptical consumers. The book is not easy to assimilate, but this management consultant/coach in the development of executive authenticity nevertheless found the authors’ approach remarkably well organized for such an immensely significant but still mysterious subject.

    Advisors to the more determinedly honest of enterprise owners and senior executives will benefit from reading it carefully, although mastery will no doubt take time for the concepts are quite novel outside philosophical readings. Academics will also be pleased because the book gives referenceable credits to the authors of numerous professional and/or expert comments in the fields of both organizational and philosophical theory. In sum, “Authenticity” offers a conceptually rich and systematic approach to thinking about the issues of managing prospective and actual purchaser’s perceptions of the authenticity of one’s enterprise.

    For the most part, the voice of this book retains the professional’s pedestal. So would it be more authentic if the authors had used the words “we” or “I” a little more often? Well, it is not without humour and they do make a point — one very encouraging the many of us who are worried that the level of authenticity to be expected in our futures might only be diminishing: There is no substitute for honesty in the pursuit of business authenticity, for, even if one’s enterprise is in the business of fakery, one earns authenticity points from amongst one’s prospects by showing that one knows as much. So no, there’s no discernible fakery in this quite profound book. The authors are to be commended for making use of business vernacular not primarily to persuade, boast, or entertain, but instead to educate us wittily in a conceptually very subtle subject — one that is critical to the quality of a civilization in which exchange appears to be a relentlessly more pervasive context.”

    2. Essay by the writer: “Authenticity: A Learning Approach”, available at http://www.authentixcoaches.com/ACReadingMaterial3.html

    Now it’s up to your skills in studying and empathy!

    Sincerely,

    Angus

    Founder/President — Authentix Coaches

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