Memo to the CEO: Why we need an annual report for technology

This lead into an article in The McKinsey Quarterly caught my attention:

“Memo to the CEO: Why we need an annual report for technology

Although most companies realize that business units and the technology organization must be much more integrated, many don’t know how to make this happen. Business leaders sometimes have only a vague sense of technology’s value, while technology executives often fail to address issues in terms that businesspeople find meaningful. In a hypothetical memo to a CEO, a chief technology officer proposes a solution: an annual report for technology, analogous to the annual report for investors and the broader market.”

The article goes on to succinctly capture a point that I think is true for IT and, as I have been trying to point out, even more of an issue for those evangelizing the adoption of social media and other manifestations of the broadband networked era we are moving into …

“The basic problem is a lack of shared understanding. Our business unit leaders … just see bits and pieces and don’t seem to grasp the interdependencies. It’s understandable that they get upset when things go wrong, but it’s less understandable that they hesitate to invest time and energy to sponsor solutions. Our technology leaders, for their part, often fail to address issues in ways that businesspeople find meaningful and therefore lack credibility … “

Well, the idea of an “annual report” is dead.  We would be looking for something that can be updated frequently or reported in real time.  And, despite a good effort to tackle a major problem, McKinsey’s language still highlights the chasm in thinking.  Taking a org chart and process approach to management instead of a network view leads to compartmentalization instead of integration.  Increasingly, the “value the technology organization delivers” is not somehow distinct from the value that the entire organization is delivering.

In any event, their point is spot on.  There is a need for tighter integration between day to day business and the technology that is already available.

As we have completed the Design Phase proposal of a research and development program that will test Social Capital Value Add in three to five Fortune 100 companies, I have had a chance to talk in depth with others for the first time about some of the far reaching implications of the method.

Social Capital Value Add does not try to measure all of the social capital of a company.  It zeros in on this new form of scaled up social capital that is attributable to broadband empowered individuals.  In this way, it is a leading indicator of how corporations are integrating broadband and the associated applications into their operations to postion themselves to maintain stable earnings and achieve breakthroughs in productivity and innovation.

Craig Newmark – Hilton sisters, Hot or Not? CluetrainPlus10

Okay, so do you find Craig Newmark and the Hilton sisters hot or not?

Hilton Sisters, Hot or Not

This post is my contribution to the CluetrainPlus10 project, in which 95 bloggers are commemorating the 10-year anniversary of the Cluetrain Manifesto by reflecting on the 95 theses of this seminal social media marketing work.

thesis #70. If you don’t impress us, your investors are going to take a bath. Don’t they understand this? If they did, they wouldn’t let you talk that way.

Corporations (for profit) are a pretty incredible form of human organization don’t you think?  It seems to me that they were originally formed to enable groups of people to take actions together in ways that were previously not common.  The corporate form let groups enter into contracts, own things and most importantly it enabled people to treat risk differently.  Leverage.  Scale.  Risk is a big part of innovation.  It is related to rewards.  It is how we get ahead, isn’t it?

This form of organization has proven to be very effective at creating wealth.  It is responsible for lifting more people out of poverty than any other approach.  Even still, eventually we end up asking how is this wealth creating form of organization accountable to the rest of us?

The call for regulation is getting attention these days.  Does anyone think that any group of policy wonks is going to get in front of a mammoth like Google and many corporations like it that are way around the curve on investing in and understanding the power of data and networks?  Regulation is important but don’t you think it addresses practices after giant shifts have occurred and there is a new status quo to code into the system?  I think a more important and achievable check at the early stages of new practices is developing greater accountability to markets.

Being accountable to customers is one form of market accountability.  But all boats rise in a flood.  If a company is fortunate enough to be doing enough of the right things and it is connected to the context of an inexorable global trend they can grow like crazy and ignore their customers.  Or they can completely disregard all of their potential customers and new streams of revenue and just hang onto the ones that come easily. Nice little business.  Everybody is happy, except the folks at Tribune.

It could be worse, one could be totally free of direct responsibility for production of product or service and still able to live off of the spoils of corporately created wealth and the attention and power that access to capital affords (are they hot if they are not heiresses?).

In any event, some people at the top of Tribune, the banks and a lot of other major corporations lost the plot recently, but does anyone feel like these corporations are not accountable to the market?  They seem to be getting hammered by the market the last time I checked.

Looking back over the last ten years and reflecting on thesis #70, we now have many examples that investors suffer when companies do not adjust to the network era.  But do investors fully understand this and reflect it in their analysis of the future prospects of a company?  I think the answer is no.

I think this is a big part of the problem at the heart of the #smfail thread that recently evolved out the of the Business of Community Networking  conference in Boston and Web 2.0 Expo in San Francisco.

Howard Lindzon has part of the answer. He says, “it’s time for some Venture Capitalist’s and founders with balls to take some real chances and lead change.”

For whatever reasons, folks like Bill Gates and Clark/Andreesen and Jeff Bezos engaged with public markets, became poster children for embracing change for all of us, created a lot of wealth for a lot of people, scaled to the global challenge/opportunity and they changed what investors look for in a company in the process.

A Twitter, Facebook or Craigslist IPO would have similar effects IMHO.

But I don’t think that the real answer is “out there” with other people.  It is not the responsibility of a few to provide leadership for the rest of us anymore.

Any so-called social media expert can help stop the Web 2.0 Swan Song.

1.  Stop selling social media as a cheap alternative to television advertising.  If something is better it is worth more.  If a television campaign is worth $1-million then doing social media right is worth $1.2-million.  Go after those deals and you will quickly find your self sitting across the table from senior executives, rather than junior managers. (Real quote within last month, from real director level employee in Canadian operations of a brand you know and trust: “We are not adopting social media, and if we were that decision would not be made here, it would have to come from a senior level executive in the US office.)

2. Stop waiting and advocating for some sort of “executive buy in”.  Yes, leadership from the top will help, but it will be the little success stories or implementations that start small but spread memetically that draw in the senior execs as champions.  Who is hosting corporate changecamp in NYC?

3. When you do get into the CEO suite, don’t propagate the “Giving Up Control” myth.  Telling a middle-aged executive who has fought half of their life to get where they are that they need to give up control is quite the “conversation” killer.  Worse – it is not the truth.

4. Let’s put an end to the arrogance of looking down on the way corporate types speak.  Excessive PR is one thing but let’s recognize that if we want investors to understand the imperatives of the new economic model, we need to make the effort to convert our “conversation” into terms and language that they can act upon.

The shift to common perception shaped by broadband empowered social networks is accelerating and the dominant source of shared perceived value for the last 50 years, broadcast media, is in rapid decline.

Ultimately the ability to maintain margins is dependent on a shared perception of sustainable difference in value between price and costs.  That means that brand value, around 50% of big company corporate valuation, is at risk of evaporating.

Broadband connectivity is set to triple every six months and it is the key driver.  The broadband trend, along with mobile communications & GPS integration is eliminating the boundary between the virtual worlds & the so-called real world, establishing the link between broadband empowered people and stable future earnings.

Should the “conversation” go something like that?

Part of the problem is that a cross-disciplinary solution is required.  It really takes collective input from a variety of experts to arrive at a satisfactory answer.

With a seed investor and a few precedent setting corporations we could all get involved in an open source approach to making the business case to investors in a meaningful way.  Call me if you have $200K and want to get started.  I will send you the proposal.

Read the other posts in the CluetrainPlus10 project.

1. Markets are conversations. Christopher Locke, Mystic BourgeoisieEntropy Gradient Reversals, @clockerb

2. Markets consist of human beings, not demographic sectors. Simon Kendrick, Curiously Persistent@curiouslyp

3. Conversations among human beings sound human. They are conducted in a human voice.Keith McArthur, Rogers Communications, keithmcarthur.ca @keithmcarthur

4. Whether delivering information, opinions, perspectives, dissenting arguments or humorous asides, the human voice is typically open, natural, uncontrived. Shel Holtz, A Shel of my Former Self, @shel

5. People recognize each other as such from the sound of this voice. Dave Fleet, Davefleet.com, @davefleet

6. The Internet is enabling conversations among human beings that were simply not possible in the era of mass media. Jose Leal, wikiDOMO Blog, @jaleal

7. Hyperlinks subvert hierarchy. Chris Brogan, Chrisbrogan.com, @chrisbrogan

8. In both internetworked markets and among intranetworked employees, people are speaking to each other in a powerful new way. Mitch Joel, Six Pixels of Separation, @mitchjoel

9. These networked conversations are enabling powerful new forms of social organization and knowledge exchange to emerge. Neville Hobson, nevillehobson.com, @jangles

10. As a result, markets are getting smarter, more informed, more organized. Participation in a networked market changes people fundamentally. Ed Lee, Blogging Me, Blogging You, @edlee

11. 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. Andy Beal, Marketing Pilgram, @andybeal

12. 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. Dan York, Disruptive Conversations, @danyork

13. What’s happening to markets is also happening among employees. A metaphysical construct called “The Company” is the only thing standing between the two. Lauren’s Library Blog @laurenpressley

14. Corporations do not speak in the same voice as these new networked conversations. To their intended online audiences, companies sound hollow, flat, literally inhuman.  C.C. Chapman, CC-Chapman.com, @CC_Chapman

15. 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. Tom Ewing, Freaky Trigger, @tomewing

16. Already, companies that speak in the language of the pitch, the dog-and-pony show, are no longer speaking to anyone. Steve Dodd, B2B Selling with Social Media Technniques, @steve_dodd

17. Companies that assume online markets are the same markets that used to watch their ads on television are kidding themselves. – Jason Griffey, Pattern  Recognition, @griffey

18. Companies that don’t realize their markets are now networked person-to-person, getting smarter as a result and deeply joined in conversation are missing their best opportunity. Ivan Croxford, The Fumoir, @croxy

19. Companies can now communicate with their markets directly. If they blow it, it could be their last chance. Kyle McInnes, BlackBerryCool.com, @blackberrycool

20. Companies need to realize their markets are often laughing. At them.Tom Nixon@tomnixon

21. Companies need to lighten up and take themselves less seriously. They need to get a sense of humor. Jay Moonah from Wild Apricot, Media Driving, @jmoonah

22. Getting a sense of humor does not mean putting some jokes on the corporate web site. Rather, it requires big values, a little humility, straight talk, and a genuine point of view. Colin McKay | Canuckflack | @canuckflack

23. Companies attempting to “position” themselves need to take a position. Optimally, it should relate to something their market actually cares about. tamera kremer, (3i), @tamera

24. Bombastic boasts—”We are positioned to become the preeminent provider of XYZ”—do not constitute a position. Anthony Power, Power Points, @apowerpoint, Post here.

25. Companies need to come down from their Ivory Towers and talk to the people with whom they hope to create relationships. @sclapp, Sharon Clapp, librarywebhead

26. Public Relations does not relate to the public. Companies are deeply afraid of their markets.  Heather Yaxleygreenbanana, @greenbanana Post: http://greenbanana.wordpress.com/2009/04/28/public-relations-does-not-relate-to-the-public-companies-are-deeply-afraid-of-their-markets/

27. By speaking in language that is distant, uninviting, arrogant, they build walls to keep markets at bay. Karen Russell, Teaching PR, @KarenRussell

28. Most marketing programs are based on the fear that the market might see what’s really going on inside the company. Brenna Flynn, com.motion, @b2therenna, Post: http://www.causeacommotion.com/2009/04/cluetrainplus10-project-most-marketing.html

29. Elvis said it best: “We can’t go on together with suspicious minds.” Post: Elvis was right Pete Burden, www.peteburden.com, @peteburden

30. Brand loyalty is the corporate version of going steady, but the breakup is inevitable—and coming fast. Because they are networked, smart markets are able to renegotiate relationships with blinding speed. Kevin MacKenzie, mack-musings.blogspot.com. @mackenstuff

31. Networked markets can change suppliers overnight. Networked knowledge workers can change employers over lunch. Your own “downsizing initiatives” taught us to ask the question: “Loyalty? What’s that?” Blake Medulan, blakedot.blogspot.com @thebdot

32. Smart markets will find suppliers who speak their own language.@debworks http://debworks.blogspot.com/2009/04/cluetrain10-number-32.html

33. Learning to speak with a human voice is not a parlor trick. It can’t be “picked up” at some tony conference. Bob LeDrew, Flacklife @bobledrew

34. To speak with a human voice, companies must share the concerns of their communities. Keith Burtis, keithburtis.com@keithburtis

35. But first, they must belong to a community. @LizStrauss – Successful-Blog.com

36. Companies must ask themselves where their corporate cultures end. Matt Moore engineerwithoutfears @innotecture happy endings

37. If their cultures end before the community begins, they will have no market. Farah Qasemi, The Burgundy Rants, @efcue

38. Human communities are based on discourse—on human speech about human concerns. Mathew Ingram, http://www.mathewingram.com/work/2009/04/28/cluetrain-human-speech-human-concerns/ @mathewi

39. The community of discourse is the market. Tim Walker, hooversbiz.com, @Twalk

40. Companies that do not belong to a community of discourse will die. Toby Greenwalt, theanalogdivide.com, @theanalogdivide

41. Companies make a religion of security, but this is largely a red herring. Most are protecting less against competitors than against their own market and workforce. Maddie Grant

@maddiegrant  [post coming soon]

42. As with networked markets, people are also talking to each other directly inside the company—and not just about rules and regulations, boardroom directives, bottom lines.

43. Such conversations are taking place today on corporate intranets. But only when the conditions are right.

44. Companies typically install intranets top-down to distribute HR policies and other corporate information that workers are doing their best to ignore. Nancy Dowd, The ‘M’ Word.

45. Intranets naturally tend to route around boredom. The best are built bottom-up by engaged individuals cooperating to construct something far more valuable: an intranetworked corporate conversation.

46. A healthy intranet organizes workers in many meanings of the word. Its effect is more radical than the agenda of any union. Connie Crosby Intranet Apocalypso http://crosbygroup.ca/blog@conniecrosby

47. While this scares companies witless, they also depend heavily on open intranets to generate and share critical knowledge. They need to resist the urge to “improve” or control these networked conversations.

48. When corporate intranets are not constrained by fear and legalistic rules, the type of conversation they encourage sounds remarkably like the conversation of the networked marketplace.

49. Org charts worked in an older economy where plans could be fully understood from atop steep management pyramids and detailed work orders could be handed down from on high. Mark Federman What is the (Next)  Message?

50. Today, the org chart is hyperlinked, not hierarchical. Respect for hands-on knowledge wins over respect for abstract authority. Michael Stephens, tametheweb.com, @mstephens7 http://tametheweb.com/2009/04/28/hyperlinked-libraries-org-charts-the-human-voice-ten-years-of-the-cluetrain-manifesto/

51. Command-and-control management styles both derive from and reinforce bureaucracy, power tripping and an overall culture of paranoia. Omar Ha-Redeye, LawIsCool, @OmarHaRedeye

52. Paranoia kills conversation. That’s its point. But lack of open conversation kills companies. Malcolm Bastien, Open Mode, @MalcolmBastien

53. There are two conversations going on. One inside the company. One with the market.    http://bit.ly/CluetrainWizard – “CluetrainPlus10 and The Wizard of Oz”, John V Willshire, @willsh

54. In most cases, neither conversation is going very well. Almost invariably, the cause of failure can be traced to obsolete notions of command and control Michael Karesh @TrueDelta

55. As policy, these notions are poisonous. As tools, they are broken. Command and control are met with hostility by intranetworked knowledge workers and generate distrust in internetworked markets.

56. These two conversations want to talk to each other. They are speaking the same language. They recognize each other’s voices.

57. Smart companies will get out of the way and help the inevitable to happen sooner. – Mike Russell, PlanetRussell.net/blog, @planetrussell

58. If willingness to get out of the way is taken as a measure of IQ, then very few companies have yet wised up.  Helene Blowers, LibraryBytes – The secret is in letting go @hblowers

59. However subliminally at the moment, millions of people now online perceive companies as little more than quaint legal fictions that are actively preventing these conversations from intersecting. Andrew Goodman, Traffick.com & Page Zero Media, @andrew_goodman

60. This is suicidal. Markets want to talk to companies. Danny Whatmough @dannywhatmough

61. Sadly, the part of the company a networked market wants to talk to is usually hidden behind a smokescreen of hucksterism, of language that rings false—and often is. Nancy White @nancywhite

62. Markets do not want to talk to flacks and hucksters. They want to participate in the conversations going on behind the corporate firewall. Andrew Cherwenka, Trapeze, @andrewcherwenka

63. De-cloaking, getting personal: We are those markets. We want to talk to you. Ian Capstick, MeidaStyle.ca, @iancapstick

64. We want access to your corporate information, to your plans and strategies, your best thinking, your genuine knowledge. We will not settle for the 4-color brochure, for web sites chock-a-block with eye candy but lacking any substance. Aerin Guy @aeringuy

65. We’re also the workers who make your companies go. We want to talk to customers directly in our own voices, not in platitudes written into a script. Kate Trgovac mynameiskate.ca @mynameiskate

66. As markets, as workers, both of us are sick to death of getting our information by remote control. Why do we need faceless annual reports and third-hand market research studies to introduce us to each other? Tom Demers WordStream Blog @tomdemers

67. As markets, as workers, we wonder why you’re not listening. You seem to be speaking a different language. monica levy. http://www.monicaonmarketing.blogspot.com. @mjlevy

68. The inflated self-important jargon you sling around—in the press, at your conferences—what’s that got to do with us? San Antonio Byline Blog @clgoodman

69. Maybe you’re impressing your investors. Maybe you’re impressing Wall Street. You’re not impressing us. Tony Goodson www.tonygoodson.com @tgtips

70. If you don’t impress us, your investors are going to take a bath. Don’t they understand this? If they did, they wouldn’t let you talk that way. Michael Cayley www.socialcapitalvalueadd.com @memeticbrand Craig Newmark – Hilton sisters, Hot or Not? CluetrainPlus10

71. Your tired notions of “the market” make our eyes glaze over. We don’t recognize ourselves in your projections—perhaps because we know we’re already elsewhere. Doc Searls @dsearls

72. We like this new marketplace much better. In fact, we are creating it. Joe Kraus, @jokrausdu, http://www.nuthingbut.net/2009/04/we-like-this-new-marketplace-much.html.

73. You’re invited, but it’s our world. Take your shoes off at the door. If you want to barter with us, get down off that camel! mr heretic, @mrheretic

74. We are immune to advertising. Just forget it. Jane Shkolnik @jshko www.blurtheline.ca

75. If you want us to talk to you, tell us something. Make it something interesting for a change. Duane Brown, Creative Traction, @duanebrown

76. We’ve got some ideas for you too: some new tools we need, some better service. Stuff we’d be willing to pay for. Got a minute? Michelle Sullivan, Michelle Sullivan Communications, @msullivan

77. You’re too busy “doing business” to answer our email? Oh gosh, sorry, gee, we’ll come back later. Maybe. Gina Lijoi, http://wordondigital.blogspot.com, @ginalijoi

78. You want us to pay? We want you to pay attention. Eden Spodek, Bargainista, @EdenSpodek

79. We want you to drop your trip, come out of your neurotic self-involvement, join the party. Sarah Prevette, @sarahprevette

80. Don’t worry, you can still make money. That is, as long as it’s not the only thing onyour mind. Beth Robinson, Inventing Elephants, @bethrobinson Response posted at http://www.inventingelephants.com/beyondmoney.html

81. Have you noticed that, in itself, money is kind of one-dimensional and boring? What else can we talk about? Rebecca Leaman, Wild Apricot, @rjleaman

82. Your product broke. Why? We’d like to ask the guy who made it. Your corporate strategy makes no sense. We’d like to have a chat with your CEO. What do you mean she’s not in? Michael O’Connor Clarke, Uninstalled, @michaelocc

83. We want you to take 50 million of us as seriously as you take one reporter from The Wall Street Journal. Ged Carroll (@r_c, renaissance chambara) posted here and here

84. We know some people from your company. They’re pretty cool online. Do you have any more like that you’re hiding? Can they come out and play? Dan Wilson, @wilsondan wilsondan.co.uk

85. When we have questions we turn to each other for answers. If you didn’t have such a tight rein on “your people” maybe they’d be among the people we’d turn to. Reid Givens @reidgivens reidgivens.com

86. When we’re not busy being your “target market,” many of us are your people. We’d rather be talking to friends online than watching the clock. That would get your name around better than your entire million dollar web site. But you tell us speaking to the market is Marketing’s job. Danny Brown, danny brown – social media pr and marketing for the conversation age@dannybrown. Post now live: “We’re Your People Too”.

87. We’d like it if you got what’s going on here. That’d be real nice. But it would be a big mistake to think we’re holding our breath. Joe Buhler, buhlerworks, @jebworks Post live on Marketing on the Smart Web

88. We have better things to do than worry about whether you’ll change in time to get our business. Business is only a part of our lives. It seems to be all of yours. Think about it: who needs whom? Nick Gadsby @nickbjorn of Lawes Consulting READ MY ENTRY @ Dark London

89. We have real power and we know it. If you don’t quite see the light, some other outfit will come along that’s more attentive, more interesting, more fun to play with. http://hessiej.wordpress.com/2009/04/28/cluetrainplus-10-thesis-89-we-have-real-power-and-we-know-it-if-you-dont-quite-see-the-light-some-other-outfit-will-come-along-thats-more-attentive-more-interesting-more-fun-to-play-with/, http://twitter.com/hessiej

90. Even at its worst, our newfound conversation is more interesting than most trade shows, more entertaining than any TV sitcom, and certainly more true-to-life than the corporate web sites we’ve been seeing. David Berkowitz, Inside the Marketers Studio, @dberkowitz

91. Our allegiance is to ourselves—our friends, our new allies and acquaintances, even our sparring partners. Companies that have no part in this world, also have no future. Kurt Cagle, Metaphorical Web, @kurt_cagle

92. Companies are spending billions of dollars on Y2K. Why can’t they hear this market timebomb ticking? The stakes are even higher.  Sally Falkow Proactive http://falkow.blogsite.com Now live http://falkow.blogsite.com/public/item/231350

93. We’re both inside companies and outside them. The boundaries that separate our conversations look like the Berlin Wall today, but they’re really just an annoyance. We know they’re coming down. We’re going to work from both sides to take them down. Morten Blaabjerg, When The Garden Walls Come Crumbling Down Kaplak Blog

94. To traditional corporations, networked conversations may appear confused, may sound confusing. But we are organizing faster than they are. We have better tools, more new ideas, no rules to slow us down. Robin Hastings@webgoddess

95. We are waking up and linking to each other. We are watching. But we are not waiting.  Leigh Himel, http://leighhimel.blogspot.com/2009/04/cluetrainplus-10-thesis-95.html – @leighh

#smfail, Why Social Media Fails: The Experts Weigh In @ #w2e

Thank you to @sagenet for turning me on to the #smfail twitter thread that was streaming out of today’s Why Social Media Marketing Fails  – and how to fix it panel at the Web 2.0 Expo.  Industry thought leaders – Peter Kim (Dachis Corporation), Charlene Li (Altimeter Group), and Jeremiah Owyang (Forrester Research) led the discussion.  UPDATE:  Thanks to Peter, Charlene & Jeremiah for linking to this post.

My comment on a post by @miaD on her Marketing Mystic blog has turned into this post here.

Mia reported “Keeping true to the spirit of social media, Peter Kim invited input for this session before the show, on his blog where folks respond to what they wanted to see at this session. Not surprisingly, it was standing room only for this brilliant panel of former and current Forrester analysts.”

Here are my thoughts along the themes established by the panel:

1. How to get culture to adopt & get C level buy in:

Demonstrate the link between corporate value & social media the way that the link between brand & corporate value was established in the late ’80s.  Brand value is now the 3rd most monitored benchmarks by CEOs (can someone help me find the link to where I read this factoid?).

2. How to make “campaigns” work:

I agree with the panel, the campaign model is wrong.  It leads to the wrong metrics (CPMs, web analytics), wrong strategy, etc.  However, cycles of activity tied to a good strategy are required.  “Campaigns” will work if they are part of corporations mobilizing their internal & external networks toward the creation & defense of enduring value … not about going viral, not about views or meaningless registrations.

3.  What Measures Matter (are right for social media):

Measures should be derived from the academic work that has been done in quantifying social capital.  Nan Lin’s network theory of social capital is a good place to start for a definition.  Social network analysis is also an important place to look for meaningful measures (see @barrywellman and INSNA for more).

4. Does social media matter?

Oh yes.  It is very critical.  That is like asking is it important that major American corporations maintain market share that is disproptionate to population as China, India and the developing world begin to project their power into global culture.  The shift to common perception shaped by broadband empowered networks is accelerating (as opposed to broadcast networks).   Broadband connectivity is set to triple every six months and it is the key driver.  The broadband trend, along with mobile communications & GPS integration is eliminating the boundary between the virtual worlds & the so-called real world, establishing the link between broadband empowered people and stable future earnings.  Ultimately the ability to maintain margins is dependent on a shared perception of sustainable difference between price and costs.  So yes – social media matters, very much, to every publicly traded corporation … in fact to everyone & it will only continue to increase in importance.

Here are some of the other recaps of the panel …

And Kate Brodock did a good wrap up of the Business of Community Networking conference where we covered similar issues last week in Boston.

Value Network Analysis Workshop: Optimizing Business Performance

Below is the news release from Value Networks. I am looking forward to this event. Thanks to John and team for making the trip to Toronto a reality.

San Francisco, CA (PRWEB) February 19, 2009 — ValueNetworks.com® — a leader in organizational network visualization and analysis applications — announces the Value Network Analysis Workshop: Optimizing Business Performance.

The Value Network Analysis Workshop will be held at the MaRS Collaboration Center in Toronto, Ontario, Canada, on 20 March 2009. This workshop develops leadership, fluency and visualization expertise for value networks. It offers a hands-on introduction to social, organizational and value network analysis (VNA) application technology.

http://www.vncluster.com/YYZ09.htm

Value network analysis is a superior method for understanding, visualizing, optimizing and leading complex organizations and businesses. It applies to both internal and operational value networks as well as industry value networks and business webs. Value networks fundamentally expand and redefine the scope, value and importance of networks to business, economies and civil society.

Value network tools are redefining operations, tactics and strategies in the smartest organizations. They provide a powerful road map to the network-centric future. Value networks and value network analysis are becoming commonplace in top global firms. Value networks drive improvements in resource utilization, productivity, innovation and bring sharp business results overall.

Firms like Wal-Mart [NYSE: WMT] have discovered the spectacular business advantages of transforming from a supply chain mentality to sustainable value networks mindset. “Value Networks aid our understanding and ability to address key issues and opportunities in our business,” says the Wal Mart Corporate Website.

Giant ERP vendor Oracle [Nasdaq: ORCL] is urging customers, “…to evolve their companies’ supply chains into value networks…”

SAP AG [NYSE: SAP], the central nervous system of 47,000 companies worldwide is leading dozens of industry value networks. Dr. Henning Kagermann, Chairman and CEO of SAP, is transforming the firm and its software offerings to master, “…not only value chains but entire value networks.”

Value networks are popular in diverse institutional settings such as the European Commission, Geneva-based NGOs, the Red Cross and global health organizations.

The Value Network Analysis Workshop is sponsored only by participants. The workshop tuition includes a full-privilege, 90-day subscription to ValueNetworks.com™ Professional Edition. It provides a foundation for immediate application of value network methods to everyday business issues. It is designed both for people who are new to value networks and for those who would like to expand their methods and tools.

The venue is the stunning MaRS Collaboration Centre in downtown Toronto.

The Value Networks Analysis Workshop is open, low-cost, practical and conversational. It is for executives, directors, experts, researchers, scholars, consultants and practitioners having immediate needs for improved performance, greater effectiveness, faster innovation, customer delight and mastery of network-centric business models.

Pricing and Availability:

Registration for the Value Networks Analysis Workshop is open and available now. The event tuition, 90-day subscription to ValueNetworks.com™ Professional Edition, meals, refreshments, parking, materials, and registration is $499.00. Secure online registration in advance required. All are welcome.

Visit: http://www.vncluster.com/YYZ09.htm

Contact:

Sarah V. Jones, Event Director
ValueNetworks.com®
1072 Folsom Street, #386
San Francisco CA 94103
(978) 468-0267
http://www.valuenetworks.com/

379 entries from 48 countries … good news! SCVA is a finalist.

I received a little good news last week. Social Capital Value Add was selected as a finalist by WeMedia from a field of 379 entries from 48 countries. Details here: http://www.changemakers.net/en-us/competition/powerofus

Thank you to everyone who supported my entry. Don’t forget to let me know if you clicked through. You might win the ticket.

I know that the rules say that the judges make the selections, not the voters but feel free to try to add comments or rate my entry here: http://www.changemakers.net/en-us/node/14479

@BeCircle tweeted this about the SCVA entry:

“@memeticbrand only after reading this http://bit.ly/14kAM did I ‘get’ SCVA. SCVA.com needs this front and center”

You see competition can make things better.  I will amend the “about” page here to incorporate the language from the submission.

They gave Al Gore more than 12 minutes when he took the WeMedia stage, but then again that was before we knew it takes just 4 minutes. :)

Is anyone else going to be in Miami for February 24th to 27th?

Enterprise 2.0 and Innovation

I discovered this slideshare presentation by the folks at Acando via a tweet by WeaRo. Its a good one …

Following Robin Teigland … Leveraging Social Networks for Results

I just started following Dr. Robin Teigland on Twitter.  Get ready to be blown away … check out her slide share presentations.

She is an Associate Professor at the Center for Strategy and Competitiveness at the Stockholm School of Economics (SSE) in Sweden.  For more than ten years, she has researched and lectured on social networks and their relationship with strategy and performance.

You MUST take your time and view this presentation.

I just posted her presentation of Fad or Future: Second Life & Virtual Worlds over at www.memeticbrand.com.  It is spot on.

IAM or “Social Media Man”

One of the central concepts of Social Capital Value Add is the Individual as Medium (IAM).  I also considered using the more anthropological “Social Media Man” but wanted readers to steer past the buzz words and/or gender concerns.

Which one do you like better?  I don’t care what you call it, as long as the dog brings back the bone.

I am realizing that the IAM concept may not come across very strongly in the e-book.  I dripped references to IAM throughout the e-book.  Let me try to draw them together in this post.

Perception is reality.

Shared perception requires some form of media.  I.e., thoughts must be communicated through some form of artifact whether fleeting or more resilient.  Examples include gestures, words, text, audio and visual … anything that can be sensed among parties.

For most of history, our ability to communicate was relatively geo-spatially limited.  We could communicate as far as our voices could be heard (town criers) or our eyes could see (smoke signals). Perception was very locally oriented.

Then along came technologies that Marshall McLuhan taught us to understand as Extensions of Man.  The printing press, radio and television are a few of the biggies.  These are essentially one way, broadcast forms of media. The telephone is another biggie, it is interactive & reaches far, but does not scale well to large audiences and requires synchronous connection.

McLuhan explained to us that “the medium is the message. This is merely to say that the personal and social consequences of any medium – that is, of any extension of ourselves – result from the new scale that is introduced into our affairs by each extension of ourselves, or by any new technology.”

He also said, “Our conventional response to all media, namely that it is how they are used that counts, is the numb stance of the technological idiot. For the ‘content’ of a medium is like the juicy piece of meat carried by the burglar to distract the watchdog of the mind. The effect of the medium is made strong and intense just because it is given another medium as ‘content’. The content of a movie is a novel or a play or an opera. The effect of the movie form is not related to its program content. The ‘content’ of writing or print is speech, but the reader is almost entirely unaware either of print or speech.”

When digital media started to really emerge with the introduction of the browser in the mid-1990s, it naturally incorporated many previous forms media.  But bandwidth, computing power and storage were still scarce and expensive.  A lot has changed since Netscape came along.

We have arrived at a point in history where the effect of IAM has been made the strongest and most intense form of media we experience because it has been given all other media as its content. The movie, the play, the opera, the newspaper, the television, the radio, commercial music, print and photographs, even the brand (a broadcast concept), have all been given over to the Individual to be reincarnated as the YouTube video, the prosumer indie, the blog, the blog comment, the forum, the Tweet, the IM chat, rating & review, the Flickr album, the podcast, the viral email and the mashup.

Real world social networks (and social network applications like email and MySpace that facilitate) are the infrastructure of these new forms of media that emit from the Individual.

SCVA argues that the effect is a new scale of social capital that marks a point of inflection for business and it is this new scaled-up version of social capital that SCVA is determined to highlight the value of.

Whereas, the network infrastructure to shape shared perception could be rented with great flexibility in the broadcast era (i.e. the 30 second spot), access to social networks is a function of social capital.

This new scale social capital is a critical corporate asset.

I spent the first half of the e-book illustrating how these entirely new scales of social capital are evidenced by new scales of the intrinsic elements of social capital which are individual assets (remember, the corporation is a form of individual).  These include: information flow, exertion of influence, certifications of social credentials and reinforcement of identity and recognition.  These are observations that are consistent with Nan Lin’s network theory of social capital, whose approach enables us to link the thinking to social network analysis and economics.

Technologies have evolved and mapped so tightly to the way humans transact, form relationships and create self-identity that it is time for business management to adopt the thinking of leaders in social network theory, such as the University of Chicago’s Ronald Burt.

Like it or not, the shift from broadcast media to IAM has implications throughout the corporate ecosystem.

Almost all of the changes highlighted in the illustration above have occurred exponentially, which is why we experience them as a sudden shift.  The “more of the same”, “everything that changes, stays the same” mentality will not derive competitive advantage from change like this.  It may not even survive change like this.

Does it not seem natural? Project and scale up the power of the individual, and that value of human connection of which we are all so instinctively aware, emerges in amplified forms as well.

In addition to the new scales of intrinsic social capital elements examined in the e-book, I would like to study further the extrinsic variables of social capital that aggregate into collective assets such as trust and network structure.  I am sure that there is similar evidence of new scale that would shed more light on social capital formation, access and use.

The GM Solution

This is a guest post authored by John Maloney, you should check out all of his work …

Last month I agonized though a lofty lecture on “Change Management.” It was from a slick consultant who assured us with his shiny loafers and PhD. Problem was, it was positively identical to one I heard at Ford Motor in 1988 while participating in a senior management offsite. It was extremely painful, wrenching, and, well, foolish. Ironically, even after a generation, change management hasn’t changed!

Change management is the biggest management and development farce ever known to business. If you have ANY change management or often worse ‘cultural change’ programs in your organizations immediately kill them or resign your post. They won’t work and you will be badly victimized.

Here, for example, is GMs response to change. It is from the BW Article below, ‘The GM Solution: Life Boats, Not Life Support.’ http://tinyurl.com/5qpk7o

And in 2007, with over a million unsold cars in inventory, Mark LaNeve. GM’s head of North American sales and marketing, protested the need for change. “It’s not like we have some crisis,” he told the Wall Street Journal in its Feb. 9, 2007 edition.

If you ever hear the specious change management change mantra, ‘senior management sponsorship,’ run, don’t walk for the exits. If you hear the dopey, ‘change is the only constant’ calmly pick-up your notepad, pen and find a new role.

Change does not originate from the top or the middle. Please. These structures were specifically invented to eliminate change.

(Years ago I rallied against command and control. I was ostracized. GM is now headed to the ash heap of history on their confident rails of command and control.)

Begin to recognize loopy change management experts lament the failure of change management that THEY perpetuate! Woo-hoo! What a $$$ racket…

Here is how friend Shoshana Zuboff in says it in Business Week this week, exactly concerning GM.

“None of this is exactly “rational” behavior, but it tracks with what institutional economists have observed: The more a practice is institutionalized (history, legitimacy, interdependence, codification), the more it is taken for granted, the greater the energy that goes into maintaining it, and the more relentless the resistance to change. In 2006, GM’s CEO Rick Wagoner responded to the call for “new blood” in GM’s leadership with this screed in Newsweek: “These are sophisticated problems with historical tails that run back 80, 90 years. The chance of someone coming in and understanding our business…is absolutely microscopic.”

Today, business and economics is in a headlong flight to value networks and network intangibles.

Toyota, Nissan and Honda get it and helped invent it vis-à-vis TPS & Lean. See: http://valuenetworks.com/public/item/209498

The focus on value and network intangibles allows the new “Big 3” to account for 52% of the US car market. Flatly rejecting the vulgar UAW makes them produce products that are  enormously popular and profitable. Toyota’s annual profit is more that GMs market capitalization!

Here is a reinforcement of network intangibles from Shoshana.

The car is becoming an expression of identity, values, and personal control in ways that move far beyond traditional segmentation and branding. For example, fuel efficiency will be only one consideration for a socially responsible vehicle (SRV). What percent of the parts are recyclable? What is the vehicle’s total carbon footprint? Are there child labor inputs? Toxic paints, glues, or plastics? How transparent is the supply chain? Is the seller accountable for recycling? What methods are used? Are fair labor practices employed?

The new demands for an individualized driving experience at an affordable price require a fundamentally new business model—a discontinuous shift from economies of scale and push marketing to distributed networks of enterprises that cluster around individuals. The single most important factor for competitive advantage will be a brand’s ability to forge durable intimate relationships with customers based on trust, dialogue, and transparency. Similar skills will be needed at the enterprise level, as carmakers collaborate with other entities to support diverse customer needs.

Value networks and VNA are highly instrumental in defining this new business logic and putting in-place “…distributed networks of enterprises that cluster around individuals..”

Sure, it is possible to kick-back and not activate in value evolution of business and the economics of intangibles. That will only prolong and perpetuate our dire situation and put all solidly on the path to oblivion like GM.

Here is the article link. Please read and comment, here and at Business Week.

http://tinyurl.com/5qpk7o

Can’t really say ‘happy reading’ at the moment. Rather, it is time to act decisively.

(Note:  John, thank you for this guest post.  You are a real leader in this movement.  All – please go to the BusinessWeek article and add your comments. sincerely, Michael)

Social Capital Inside the Enterprise: Steve Golab