Jennifer Rice

The Physics of Social Capital

I just came across this old post of mine (circa 2005) and wanted to republish as I've been thinking quite a bit recently about interbeing: the state of connectedness and interdependence of all phenomena. I'm finding that I now have a deeper understanding of what I wrote three years ago... funny how that works.

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I've been thinking about "brand as connection" and doing a bit of research on the subject. Most of us view the business world through a component lens (customers, technology, products, departments, etc.), but it's interesting to take a moment and look at the world through a connection lens: what are the connections between these components, and how can they be strengthened?

Robert Putnam, author of Bowling Alone, focuses on a similar concept called social capital.  A few definitions:

Whereas physical capital refers to physical objects and human capital refers to the properties of individuals, social capital refers to connections among individuals – social networks and the norms of reciprocity and trustworthiness that arise from them. (Putnam 2000: 19)

Social capital refers to the institutions, relationships, and norms that shape the quality and quantity of a society's social interactions... Social capital is not just the sum of the institutions which underpin a society – it is the glue that holds them together. (The World Bank 1999)

Social capital consists of the stock of active connections among people: the trust, mutual understanding, and shared values and behaviors that bind the members of human networks and communities and make cooperative action possible. (Cohen and Prusak 2001: 4)

There is considerable evidence that communities with a good 'stock' of social capital are more likely to benefit from lower crime figures, better health, higher educational achievement, and better economic growth. (infed.org)

Too often, we view creation of social capital as the domain of non-profits and government. Corporations can wield significant influence in this arena, but physical and financial capital (ie components)  hold the attention of business leaders. Social capital (connections) can't be quantified and listed on financial statements, so it's usually not acknowledged or effectively managed.

This thought reminds me of another interest of mine, quantum physics. There's an interesting new theory called the zero point field... this might seem to be a random tangent on the subject of social capital, but bear with me. Here's an overview of the ZPF written by Bernhard Haisch, staff physicist at the Lockheed Martin Solar & Astrophysics Laboratory:

...electric and magnetic fields flowing through space oscillate like a pendulum. At every possible frequency there will always be a tiny bit of electromagnetic jiggling going on. And if you add up all these ceaseless fluctuations, what you get is a background sea of light whose total energy is enormous: the zero-point field. The "zero-point" refers to the fact that even though this energy is huge, it is the lowest possible energy state. All other energy is over and above the zero-point state. The fact that the zero-point field is the lowest energy state makes it unobservable... Since it is everywhere, inside and outside of us, permeating every atom in our bodies, we are effectively blind to it.

Matter resists acceleration not because it possesses some innate thing called mass, but because the zero-point field exerts a force whenever acceleration takes place. To put it in somewhat metaphysical terms, there exists a background sea of quantum light filling the universe, and that light generates a force that opposes acceleration when you push on any material object. That is why matter seems to be the solid, stable stuff that we and our world are made of.

So everything's not only interconnected but made of the same stuff. The visible is influenced by the invisible.  And no matter how hard we try to control each element of business, there's always  some "socio-magnetic" jiggling going on. One could view social capital as the ceaselessly fluctuating energy that either resists or facilitates the movement of physical and financial capital. Business is simply a vast network of human connections and transactions; everyone is exchanging energy (materialized as money, products, communication) to the benefit of all parties.   But since, like the ZPF, social capital is everywhere, it somehow becomes unobservable to us. We are blind to it, like fish unable to see the medium in which we are swimming.

Just as physicists are now starting to factor ZPF into their equations to arrive at a more accurate model of how the world works, so too can business leaders factor in social capital into how their business works. If we see the world not as isolated components but as a vast unified and interconnected system, we also see that the more pathways formed (ie. connections between departments, customers, partners, etc), then the more energy flows and the more the system is unified and strengthened.

The advent of new connection tools like blogs, wikis and podcasting is helping to facilitate the shift from component to connection view.  Artificial barriers are beginning to drop. For example, we can no longer treat internal and external branding as if they are different things... the brand is the entire system, of which employees and customers are a part. Brands are people and the connections between them. Even if we're talking about a product like an iPod, we're still talking about people having a sense of belonging to the iPod community, sharing playlists, evangelizing to non-participants, etc.  As Hugh says, "branding is a spiritual exercise, and the market for something to believe in is infinite." We want to feel a part of something bigger than ourselves.

Think about your business ecosystem, including all employees, departments, outsourced labor, partners, stockholders, etc. This is your social capital. This is the singular energy that powers your business. Is it strong or weak? How connected is everyone? Do they feel like they're part of a big community of shared interests? Or are they isolated in stagnant clusters of matter that experience friction and resistance? It's time to open up. Be transparent. Reach out. Drop the walls. Stop trying to control every conversation. Permit creative chaos. Allow customers to talk to anyone in the company, not just to the guy sitting in a call center on the other side of the world. Form more connections, stronger connections, between every element in the system. When we acknowledge and maximize the power of social capital, our world becomes a powerful place.

Brand Humanity: From Processes to People

Both the blogosphere and traditional media are buzzing about “customer focus.” You can’t go a day without reading about word of mouth, the power of blogs, the shifting balance of power to customers, importance of customer service, and so on. Trendwatching identified "Customer Made" as the next big thing.  Andy Sernovitz, President of the Word-of-Mouth Marketing Association (WOMMA), rightly declared, “The weight of consumer opinion is greater than our advertising power.” And yet it doesn’t seem like anything’s really changing. The most lively discussion board about Comcast is the comments section of my “I hate Comcast” post. Last week Jake posted a complaint letter that he'd sent to American Airlines.

Do we think if we talk about “customer focus” enough, something miraculous will happen? Are we trying to convince the laggards? I don’t believe they’ll be convinced until they start going out of business. One would think that every smart business executive would be working furiously to improve customer service and product quality. There are enough examples, case studies, books and articles making a pretty compelling case that this stuff works.

So why aren’t all businesses noticeably moving towards customer-centricity? They’re either holding on because the old way of business is the only thing they know… or the current organizational structure doesn’t support the new way of doing business… or there’s something else that needs to happen first.

Here’s what I think is going on: contrary to popular belief, there’s no such thing as a product company, a telecom company, a consulting company or a retail company. All companies are people companies. People make products for people. People serve people. People work with people and for people. I’d venture a guess that the root cause of business problems is not financial, not product-related, and not structure-related. Businesses live and die by its executives' and employees’ talents, levels of empathy and ability to play well with others… and by their willingness to listen and acknowledge that customers just may have some valuable input. If a business is rife with internal politics, fiefdoms and one-upmanship, I doubt that it will be successful in this new customer-relationship era. If a company’s employees aren’t successful in their personal relationships at home, it can’t become a successful people company.

The current sea-change is problematic because the necessary solution is not a new business practice; it’s a new people practice. We don’t need a new ad campaign or a new org chart. There are no quick fixes. The skill sets needed in today’s times are not management consultants or word-of-mouth marketing specialists. If we’re all really honest with ourselves, what we really need are psychologists and coaches and relationship experts. We’re talking about real customer connections, not a personalized direct mail piece. And this is why blogging and other social technologies have exploded onto the scene. Evelyn Rodriguez writes,

With everything you might have heard you’d think the blogosphere is anti-business. And it’s scary for businesses. That’s not exactly true. But, yes, it is a response to the depersonalization - the dehumanization - of commerce."

Over the past few decades, we’ve lost the humanity in business. With the advent of mass produced cars and org charts and relocation and nuclear families, we’ve forgotten our ability to relate and connect. How do we expect a company to build relationships with customers when most Americans have difficulty making genuine connections with anyone? In Bowling Alone: The Collapse & Revival of American Community, Robert Putnam notes that social and family ties are loosening and we're increasingly withdrawing into ourselves:

• In the past 3 decades, participation in government, local clubs and organizations dropped by up to 50%.
• Job instability, churn and the increasing numbers of independent contractors have resulted in a measurable decline of social connectedness in the workplace.
• Americans are entertaining friends at home 45% less frequently now than in the mid-70s; the number of picnics declined by 60% in the same time period.
• The fraction of married Americans who say that their family 'usually dines together' has dropped from 50% to 34%
• The number of families who vacation together dropped from 53% to 38%; watch TV together from 54% to 41%; sitting and talking, from 53% to 43%
• Reported charitable giving dropped by almost 20% from 1980 to 1995.
• The percentage of those who feel that "people in general today lead as good lives -- honest and moral -- as they used to" dropped from 50% in 1952 to 27% in 1998.

So we can keep talking about the importance of customer focus, authenticity and co-creation. But we’ll never get there until we recognize that it’s not that easy to overturn decades of societal depersonalization. We may have to make some difficult choices: letting go of talented employees who are more focused on being right than being empathetic; moving to a new job at a company that fosters a relationship culture; taking a risk and going out on your own. I’m sure that part of the free-agent trend stems from a rebellion against the dehumanization of business. Evelyn continues in her post:

"Blogs harken back to an era before…

Megaphones. Before Super Bowl ads. Before celebrity-studded concert-format megachurches. Before Ryze, Friendster and LinkedIn.

To a time of community marketplaces, bazaars, neighborhood shops and pubs where everyone knew your name, and town squares. And going back further still to trading posts and tribal campfires.

We know this stuff. Perhaps conversing is nearly a lost art. But it’s fundamentally human too. Basic building blocks of humanity."

So yes, let’s keep talking about customer focus. But let’s also focus on what we can do in our own sphere of influence. Let’s start where we are.

Community discussion

We're having a fun discussion about "defining community" over at Corante's Brandshift. Come over and weigh in.

Co-creation defined

We're having a great dialogue over at Corante's BrandShift on Co-creation.  I'd love for you to join the party!

What is co-creation?
More on co-creation...

Enterprise as Publisher?

Great observation from Tom at SiliconValley Watcher:

...blogging will enable effective and honest communications. Companies will communicate with their communities of customers.

The future is about the enterprise as publisher/publication.

Here is some proof of this trend, I've been sitting on this one for a while because it is so hot: Did you know that Cisco Systems' highly regarded online magazine, [email protected], gets more hits than several of the largest US business and computer trade publications?!

I can step you through this one if you want ... but I think you already know what this means.

I see where he's going and it's an interesting thought. Customers want information, not just products. But instead of "enterprise as publisher," I prefer "enterprise as communicator." We need to listen before we speak. The Cisco news site is currently a one-way information street... yet the company is well-known for being close to customers. It shouldn't take long (operative word: "shouldn't") before their news site becomes more of a community with two-way dialogue. Cross fingers.

Side note: I'm curious as to why this Cisco example was used in a post about corporate blogs (they do have RSS on their news feed, which is a good start). Tom, if you read this, can you comment?

Blurring the lines

In a great example of blurring the lines between company and customer, Google just  launched a program that gives developers greater access to its search-based advertising system.

"There are a lot of things Google hasn't thought of that people could do with their ad campaigns," said Nelson Minar, a Google software engineer. "One of goals is to enable advertisers and third parties to create tools for their own purposes."

I also recently heard about The Lego Factory from Jake, where kids (and grown-ups) use a Digital Designer to make digital models and submit them to weekly competitions. This is where Lego gets a lot of its ideas for new models.

So instead of thinking they know best, or paying for customer research, these two companies are getting free product development by their customers. More connections, better conversations, stronger brands. Good stuff.

Artificial distinctions

John Porcaro writes about employees blogging about their experiences within a company:

Funny that there's still this black and white distinction between the people who work for the company, and the company itself.  Among bloggers (or any who's caught a clue-train), we know that a company is made up of individuals--indeed, it's humans who made every single aspect of any successful (or unsuccessful) product or project.

Amen. In my last (very theoretical) post on connections, I mentioned artificial distinctions such as internal versus external branding, or employees versus customers. And as John points out, we even have a distinction between company and employees, as if that could even exist. It's all rather silly when you think about it.