THE SOCIAL CMO

Social Media Capital: New paradigm for Value Creation, Learning & Leadership

For anyone who has “seen the social media light” there is no longer any doubt that the social media genie is out of the bottle and never going back. Regardless of which tools, sites and plumbing are in favor today or in the future, it matters little, there is now a collective will to communicate and mobilize people in this manner and thereby create greater value for all.

We are now swimming in the social media evolutionary swamp and more and more citizens are diving in every hour. Some who don’t immediately “get it” may jump back out, but those who stay find it increasingly difficult to go back. If you don’t believe the level and speed of growth, check out Gary Hayes social media web counter below.

First off, let’s ignore all the spammers, schlock marketing and porn folks who are currently polluting the social media stream, there will be a solution for this someday. Instead let’s focus on those using social media for legitimate B2B, B2C and cause related value creation purposes.

Everyone starts off from the same basic account creation point with all of the social media tools out there. The secret is what you then do with them that differentiates you, your company or cause and the value that can be created.

Beyond all the basic blocking and tackling of setting up your accounts and profiles as effectively as possible, the real value is then generated based on the participative interactions, collaboration and ultimately action enabled by the medium. Take everything you do in conventional networking and translate it into the social media context, but now leveraging the speed, evidence and knowledge displayed by other users to accelerate this process.

So getting to the point, how do you classify and measure the value of what is created for both individuals, companies and society through the use and application of social media?

“Social Media Capital” as an extension from “Social Capital” is the approach being suggested here. The term “social capital” first appeared in L.J. Hanifan’s 1916 article regarding local support for rural schools in reference to social cohesion and personal investment in the community. I will not expand on this here, but much more history, background and linkages of this stream of sociology can be found through the Social Capital page on Wikipedia, The Social Capital Gateway and The Social Capital Foundation.

Apologies in advance to the academics involved as they will likely see all of this as a gross oversimplification of their work, but as a practical and pragmatic point this does need to be simplified to bring it into mainstream awareness if it is ever to be acted upon in any meaningful way.

From the perspective of the individual what are the potential value creation opportunities available through participation in social media? A recent article “On Twitter and in the Workplace, It’s Power to the Connectors” by Rosabeth Moss Kanter published in the Harvard Business Review in November 2009, suggests that the network effects of social media are a legitimate source of increased individual power within organizations.

“The significance of Twitter is yet to be determined; it is a simple, impersonal, and transient application of technology. But very real network effects are a new source of power in and around organizations.”

From an organizational perspective the application and widespread use of social media seems poised to have significant impacts on both service delivery and facilitating all types of internal and external communications. Companies such as Cisco (video) and Best Buy (video) are two that come to mind as leaders in the development, deployment and use of these tools/methods and my personal expectation is that these network effects, hybrid leadership models and instantaneous communications capabilities will deliver serious future competitive advantage to those companies who embrace them.

Another positive network effect which can be introduced and even more effectively implemented in the social media enhanced firm is Peter Senge’s vision of the “Learning Organization“.

“…organizations where people continually expand their capacity to create the results they truly desire, where new and expansive patterns of thinking are nurtured, where collective aspiration is set free, and where people are continually learning to see the whole together.”

The requirement for such organizations is due to the fact that we are in times of rapid change and only flexible, adaptive and productive entities will survive and deliver exceptional performance. According to Senge this will require companies to ‘discover how to tap people’s commitment and capacity to learn at all levels’.

It will not be long before methods of quantifying “Social Capital” and “Social Media Capital” emerge and both the current social media ROI work and perhaps even the cap & trade dollar valuation of carbon, will assist in this process. There will indeed also be political ramifications to the changes social media interactions bring to the forefront by providing citizens with a way of making their voice heard and the rapid means of collective organization and action around any issue.

One interesting dichotomy this quantification of social capital may ultimately also begin to address are the perceived weaknesses of both capitalist and communist social models. One persistent criticism of the capitalist model is that it doesn’t have a heart or values and is only growth driven by the singleminded pursuit of the almighty dollar to the detriment of all else. And on the flipside, without the competitive capitalist spirit and an absolute measurement system to support a mode of social capital valuation, communism was always doomed to fail based on the apparent state of prescribed sameness and mediocrity it generated.

Social media is only just emerging into the mainstream and represents exciting opportunistic prospects for the ongoing, quantifiably measured advancement of global business in a sustainable and socially responsible manner.

Jeff Ashcroft