The Corporate Spark

Thank you to Social Capital Blog and @peterwmcmahon for bringing Frank Koller’s first book to our attention.  I am looking forward to giving a read.

Here is the Wall Street Journal’s review of Spark. How Old-Fashioned Values Drive a Twenty-First Century Corporation:Lessons from Lincoln Electric’s Unique Guaranteed Employment Program.

The Social Capital Blog and WSJ reviews focus on the issue of guaranteed employment because that is the tack that Koller has taken with the book.  But guaranteed employment is just one of James Lincoln’s four organizational pillars that remain in place to this day.

The others were a management advisory board made up of employee representatives; wages based on piecework, so that the quality and quantity of individual workers’ output can be monitored; and annual performance-based bonuses.

Here is the quote from Lincoln that inspired Koller to explore this story:

“The only way we’ll have any kind of widespread job security in today’s business environment is if we change our thinking as to what makes good management.

Instead of praising corporations that downsize, we need to look at their actions as admissions of failure.

We don’t need layoffs – we need creativity.”

It is easy enough to see why Koller has headed in the direction of job security and guaranteed employment, but I wonder if he zeros in on the wrong point.

It seems to me that Lincoln took his strategy to develop trust with workers.  The most important elements of the quote in my opinion are not the reference to job security but the call for a “change in thinking” and recognition that trust is a critical prerequisite to the organizational creativity needed to maintain sustainable competitive success.

In other words …

We must manage to optimize our enterprises for social capital to thrive in

the new economic model.

I am not interested in reading Koller out of nostalgia for “Old Fashion Values”.  I find it easier to relate to James Lincoln as a visionary, ahead of his time … which explains why so few have followed his example.

My interest in reading Koller’s Spark comes from the opportunity to learn more about experiments in maximizing corporate social capital.

On the other hand, if we need to look at Lincoln as a throw back to mystic better times to sell entrenched aging management, I am all in.

Social Capital underpins share values

Fabio Sabatini recommended Social Capital Blog and now I have added it to my blogroll. It is the handy work of Thomas Sander, Executive Director of the Saguaro Seminar at Harvard University’s John F. Kennedy School of Government.

He has a great post up entitled Economy dangling by the thin thread of trust that has some great links to some seminal and more recent contextual pieces on trust, the economy and the banking system.

I hung out because this vid that Thomas includes from “Its a Wonderful Life” kinda says it all …

These are painful times. I don’t know about you, but I find it difficult to focus on emergent value when practical, pressing concerns are breathing down my neck.

I am wondering about the differences and similarities between brands and financial products.

Are there similar factors at work in the debasing of traditional brand value and complex financial products? Aren’t both concepts some sort of derivative?

Will we emerge from this transition recognizing that it is the underlying relationships that contain value yielding assets not commodities like houses or oil or flavored water?

Mark Zuckerburg: looting block party or catering service?

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

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

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

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

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

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

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

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

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

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

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

Add to FacebookAdd to NewsvineAdd to DiggAdd to Del.icio.usAdd to StumbleuponAdd to RedditAdd to BlinklistAdd to Ma.gnoliaAdd to TechnoratiAdd to Furl

Thank You Canadian Marketing Association

A post went up today on the Canadian Marketing Association blog covering ChangeThis and making an appeal in favour of “Introducing Social Capital Value Add”.

Thank you to Jennifer Morozowich and to CMA for your support.

Add to FacebookAdd to NewsvineAdd to DiggAdd to Del.icio.usAdd to StumbleuponAdd to RedditAdd to BlinklistAdd to Ma.gnoliaAdd to TechnoratiAdd to Furl