Introducing Social Capital Value Add eBook

> Follow The Yellow Brick Road Introducing Social Capital Value Add 1Share This The Blog

IntroducingSocial Capital Value Add

Value Based Management for the Networked Age

Proposed by:MichaelCayley,BPR, APMCP, MBA

Follow The Yellow Brick Road Introducing Social Capital Value Add 2< >Share This The Blog

Withinthefieldofsocialcapitalstudy,concernshavebeenexpressedthatdeviationsfromafundamen-talunderstandingthatsocialcapitaliscapturedfromembeddedresourcesinsocialnetworksmayreducetheintellectualenterprisetoacatchallfad(Lin,Cook,Burt,1999).

Thispaperisanargumentthatsometimein2004,whenbroadbandinternetconnectionsbecamemoreprevalentthanthoseoflesscapacity,individualsbecameempoweredasourmostintenseformofme-dia.ScaledupeffectsoftheIndividualasMediumincluding:

•increasedinformationflow,

•exertionofinfluence,

•expansionofsocialcredentialsandreinforcementofidentityandrecognition,

areconsistentwithanetworktheoryofsocialcapital.Corporationsareexposedtonewrisksandoppor-tunitiesduetothesescaledupformsofsocialcapitalandtheyrequirenewmethodstomanagethem.

SocialCapitalValueAddisintroducedassuchanewmethod,designedtolinkthepioneeringintellectualen-terprisesofsocialcapitalandsocialnetworkanalysis(SNA)tovaluebasedmanagementandthepriori-tiesofmarketers.AplausibleSCVAvaluationmethodisproposedtodemonstratehowtheselinksmaybearticulatedinawaythatismeaningfulforinvestorsandcorporatemanagers.

Abstract

Acknowledgements:

IwouldliketothankOlavSorenson,theJeffreyS.SkollChairinTechnicalInnovationandEntrepreneur-shipattheRotmanSchoolofBusinessattheUniversityofToronto.OlavprovidedtheguidanceandencouragementrequiredtopersistwiththeSCVAargumentandconductedthefirstthoroughreviewofthepaper.Inaddition,IgreatlyappreciatetheencouragementandaccommodationofmyMBAprofes-sorsandclassmatesandmyfriendsatContextCreativeInc.Allindulgedmewithflexibility,inputandthelatitudetoletsocialcapitalinvadeeverydiscussionandassignmentduringtheformulationofSCVA.

Contact:

MichaelCayley,BRP, APMCP, MBA

Principal,SocialCapitalPractice

www.socialcapitalvalueadd.commichael@socialcapitalvalueadd.commobile:647-407-9598office:416-462-1859ext.2SkypeID:mgcayley

Stanford’sMatthewO.Jackson,SethGodin,AlRies,MattIngram,EricHoffer,MarlaCranston,SuzanneWilliams,DougIreland,DeNelRehbergSedo,BrentKingandmywifeAndreaRedwayhaveallofferedideas,insightsoreditorialsuggestions,forwhichIamgrateful.TheonlinegroupsledbySethGodin,PaulWilmott,BarryWellman,FabioSabatiniandJohnMaloneyhaveeachprovidedhoursoflurkinganddozensofinteractionsthathavebeeninstrumentaltothedevelopmentofSCVA.ImetAdamHelweh,throughSeth’sonline“Triiibes”group.ThankyouAdamforreworkingtheeBookandmyblogs.Thestoryofhow“IntroducingSocialCapitalValue”hasbeendeliveredtoyouisagreatlittlecasestudyoftheideasintheeBookatwork.

Summary• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 5

Introduction • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 7

TheGreatOz:TheUseofSymbols• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 7

YellowBrickRoad“OnRamps”:SocialCapital,SNA&theCorporation • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 11

We’reOfftoSeeBetheWizard:TheRiseoftheIndividualasMedium••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••15

InformationFlow • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 16

ExertionofInfluence• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 18

CertificationsofSocialCredentials,ReinforcementofIdentityandRecognition• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 26

“Paynoattentiontothatmanbehindthecurtain.”:BrandandSocialCapital• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 31

OvertheRainbow:TheSCVAValuationMethod• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 40

1.FinancialAnalysis• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 43

2.SCxFactor(SCxF)• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 45

3.SCxInventory(SCxI) • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 48

FollowtheYellowBrickRoad:TheNeedforNewStructuralManagementMethods• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 51

C O N T E N T S

Sometimein2004whenbroadbandinternetaccessintheUnitedStatesbecamemoreprevalentthanconnectionswithlesscapacity,therewasapointofinflectionthathaschangedhowcorporationsmaycreateandpreservevalue.Thispaperpresentsanargumentthatnewmanagementmethodsarere-quiredtoguideinvestorsandcorporatemanagersintheireffortstounderstandnewrisksduetothesechanges,toidentifycorporationsthataremoreorlessqualifiedtodealwiththeserisksandtotrackspecificperformanceintheseareasrelativetoothercompanies,historyandprojections.

The argument is based upon the following points:

1.Broadbandinternetconnectionshaveempoweredindividuals,makingthemthemostdisruptiveandintenseformofmedia(i.e.,theIndividualasMedium);thereareimplicationsthroughoutthecorporateecosystem.

2.Thisresultsinentirelynewscalesofsocialcapitalasevidencedbynewscalesoftheintrinsicelementsofsocialcapital:informationflow,exertionofinfluence,certificationsofsocialcredentialsandreinforcementofidentityandrecognition.Thisnewscalesocialcapitalisacriticalcorporateasset.

3.Corporationsneedtoadopttheoriesandpracticesthataredesignedtohelpthemmaximizeformation,accessanduseofsocialnetworksandsocialcapital.Inresponse,anewtheoryofvaluebasedmanage-mentcalledSocialCapitalValueAdd(SCVA)isintroducedtolinkNanLin’snetworktheoryofsocialcapitaldirectlytocorporatevalue.

4.Symbolicbrand’sshortcomingsinbuildingcorporatevalueintheeraoftheIndividualasMediumandtherequirementsofmemeticbrandingfurtherillustratetheneedfornewmanagementmethods.

5.AnewmethodofSCVAcorporatevaluationisintroduced.Theplausibilityofthismethodfurthersupportstheargument.

Summary

MetaphorsfromtheWizardofOzhelptoillustratetheargumentandachievethepaper’saim,whichistolinksocialcapitaltheoryandsocialnetworkanalysiswithvaluebasedmanagementandtheprioritiesofmarketers.Anotherstylisticfeatureofthepaperisemployedtoachievethisaim.Itcontainsover200hyperlinksorhotareastoenablethereadertoquicklyexplorerelated,buttypicallyisolatedclustersofknowledgethataredrawntogetherinthepaper.Academics,financialanalysts,managersandmarket-ersmayeachdiscoverconceptshereforeigntotheirtypicalbailiwick.

OnAugust9,1995Netscape,thecompanythatintroducedthefirstgraphicalinternetbrowser,andwasfoundedbyatwenty-somethingkidnamedMarcAndreessen,wentpublicat$28ashareandclosedthatdaytradingat$58.25.1ByNovemberof1998thecompanymanagedasuccessfulsaletoAmericaOnlineInc.atavaluationof$4.2-billion.2OnOctober24,2007Microsoftboughta1.6percentstakeinFacebookfor$240-million,placinga$15-billionvaluationontheonlinesocialnetworkapplicationcompanythatlaunchedinaHarvarddormroomin2004.Facebookhadestimatedannualrevenuesofaround$100-million.3Atage23,Facebook’sfounderandCEOMarkZuckerberghasbecometheposterboyforthenextgenerationofcontinuous,fast-movinginnovationincommunicationstechnology.Meanwhile,An-dreessenisbehindNing,hisownentryintothesocialnetworkapplicationmarket.

ManyinvestorsandmanagershavecometotermswiththechangesassociatedwiththeintroductionoftheInternetbrowserinthemid-1990s.However,since2004,whenbroadbandInternetconnectionsintheUnitedStatesbecamemoreprevalentthanthosewithlesscapacity,newforceshaveemergedthathavechangedhowvalueiscreatedanddefendedinbusiness.AsInternetaccesscontinuestoacceler-ate,goesmobileandbecomesmoreubiquitouslydistributed,corporationsneedtoevolve.

The Great Oz: The Use of Symbols

Assymbols,thesetwoinnovatorsexemplifyextraordinarycorporatevaluecreation.Muchliketheterm,“Web2.0”,coinedbyO’ReillyMediafora2004technologyconference,theyaredefactobrandsthathaveemergedtorepresentverycomplexshiftsinthebusinessenvironmentincludingtechnologicalinnova-tion,changesincommunicationsandwinningbusinesspractices.Recognizingsymbolslikethese,taunt-ingandteasingthemformeaning,isamuch-needed,massivelypopularremedialmovementowingmuchtopopularjournalism,agencycampaignersandtheechochamberthatistheblogosphere.

Introduction

Social Capital

“Resources embedded in social networks”

Emerges as #1 factor of value

Enabling Technologies• cheap bandwidth/ broadband penetration• open IP standards• connectivity: WiFi, 3G, Firewire• RSS – Really Simple Syndication • XML – extensible markup language• desktop aggregators• (Google Reader, etc.)• flash memory• peer to peer

Corporate Value Inflection Point

2008 Market Factors

Social Factors• adoption of collaborative technologies (text messaging,

instant messaging, hypertext, social tagging, etc.)• consumer generated media (blogging, MySpace, etc.)• C2C trust > B2C trust• time constraints• multi-tasking

Individual as Medium• reach & frequency = or > broadcast • “roles” vs. work• rate, review & refer• demand for authentic exchange• foundation of trust• amateurs fill the void

Search• Google• Digg, del.icio.us • personal profiles (Facebook, MySpace, etc)

Mobile Communications Speed• globalization/dropping trade barriers• rapid product cycles• commoditization• cheap travel/shipping

Fig. 1

Focusingmanagementondeliveringresultsagainstmeaningfulperformancemeasuresintoday’sbusi-nessenvironment(SeeFig.1)isnotastrivial.

Thequestionaddressedinthispaperisthis:“Arenewsocialnetworkstructuralmanagementmethodsneededtodemonstratethevalueofsocialcapitalasanimportant—perhapsthemostimportant—corporateasset?”

Buildinguponexistingliteratureandtheoreticalrootsinseveralrelatedbuttypicallyisolateddisciplinesincludingsocial-economics,socialnetworkanalysis(SNA),finance/value-basedmanagement,

marketingandmedia,Iwillintroduceanewtheory:SocialCapitalValueAdd(SCVA).Thistheoryisin-tendedtoprovokenewinsightsandmanagementpracticesthatmaybeappliedtoawiderangeofcon-fusingphenomenathatchallengetoday’scorporations.

ThemethodofbuildingtheSCVAmanifestobeginsbyextractingrelevanttheoriesfromexistinglitera-turesandapplyingthemtobetterunderstandtrendsinbusinessvaluecreationanddefence.TheworkelaboratesthecomplexitiesofthemarketfactorsintroducedinFig.1,utilizingMarshallMcLuhan’svi-sionofUnderstandingMedia(1964)toassertwhatformerIntelchairmanAndyGrovewoulddescribeasa“strategicinflectionpoint”4thatisattributableto“arevolutionaryriseofsocialcapital.”5

Themarketing/communicationsmixhasforeverchanged.Broadcast’smonopolyonattentionisdead.Thesymbolicbrand,whichhasbeenthefastestgrowingsourceofcorporatevalueforthelastquartercentu-ryhasreacheditspinnacle.Itisbeingabsorbedandreplacedbythememeticbrand.Technologieshaveevolvedandmappedsotightlytothewayhumanstransact,formrelationshipsandcreateself-identitythatitistimeforbusinessmanagementtoadoptthethinkingofleadersinsocialnetworktheory,suchastheUniversityofChicago’sRonaldBurt.

ThestrategicshifttotheIndividualasMedium6(I.A.M.)frombroadcastparadigm,examinedthroughBurt’sStructuralHolestheoryofthesocialstructureofcompetition,bringstolightimplicationsthroughoutthecorporateecosystem.Moreimportantly,examininghowStructuralHolestheory(1992)buildsupontheworkofMarkGranovetter’s“StrengthofWeakTies”idealaunchedtwentyyearsearlier,but“cap-turesthecausalagentdirectlyandthusprovidesastrongerfoundationfortheoryandclearerguideforempiricalresearch”7isablueprintforunderstandingtherelationshipbetweenbrandandsocialcapital(i.e.,explicitcontentvs.networkstructuralassets;TheOzvs.TheYellowBrickRoad).

ThepaperculminateswithaplausiblefirstoutlineofSCVA’scorporatesocialcapitalvaluationmethod.Themethodisaderivativeofvalue-basedmanagementthatdependsuponatheoreticalequationbe-tweenacompany’sdigitalfootprintanditseconomicprofit.TheattemptistodistinguishI.A.M.orientedsocialcapitalwithinthetraditionalboundariesofcorporategoodwill.

Whatimpactmightafocusonsocialcapitaldevelopmenthaveonstrategicthinkingandcorporatedi-rection?Inconclusion,thepaperhighlightstheneedtoadoptstate-of-the-artthinkingaboutthechar-acteristicsandformationofsocialnetworkslikethatofStanford’sMatthewJackson.Recentlyreleasedresearch(October2007version)conductedatHarvardsuggestingthepossibilitythathighermarginsmaybesoughtthroughsocialnetworksandanassociatednewrationaleforcorporatesocialresponsibilityalsounderscoretheneedfornewsocialnetworkstructuralmanagementmethods.

Fortunatelypioneershavebeenlabouringinthefieldofsocialcapitalsinceasearlyas19808(Bourdieu).Thelineageofsocialnetworkanalysiscanbetracedbacktothreemaintraditions(sociometric/graphtheorist,cliqueformation,structureofcommunityrelations)withrootsinthe1930s,eventuallybroughttogetheragainatHarvardinthe1960sand1970s,whencontemporarysocialnetworkanalysiswasforged.9Thepaperisnotanattempttorevieworevenproclaimacommandoftheexistingliterature;itisdesignedtobuildbridgesbetweentheseknowledgeclusters,value-basedcorporatemanagementandthepriori-tiesofmarketers.

Aleaderamongthesocialcapitalpioneers,whoseworkbeganwithresearchintosocialnetworksinthemid-1960’s,isDukeUniversity’sProfessorNanLin.10ItisLin’scareful“structuralist”definitionofsocialcapital,“asaconcept,rootedinsocialnetworksandsocialrelations,andmustbemeasuredrelativetoitsroot”(Lin,1999,pp.35),thatisadaptedhere.Linnotes,“Thepremisebehindsocialcapitalisrathersimpleandstraightforward:investmentinsocialrelationswithexpectedreturns.Thisgeneraldefini-tionisconsistentwithvariousrenditionsbyallscholarswhohavecontributedtothediscussion(Bourdieu,1983/1986;Bourdieu,1980;Burt,1992;Coleman,1988;Coleman,1990;Erickson,1995;Ericson,1996;Flap,1994;Flap,1991;Lin,1982;Lin,1995;Portes,1998;Putnam,1993;Putnam,1995a)”(Lin,1999,pp.30-31).However,Lin’sdisambiguationofsocialcapitaliscriticaltothemissionofSCVA,whichistoempowerinvestorsandmanagementwiththeframeworktodifferentiatemorevaluablecorporateas-sets(i.e.socialnetworksmaximizedforsocialcapital)fromlessvaluableones,and,insodoing,enabletheestablishmentofmeasurablecorporategoalsandobjectives(inadditiontothecampaigndrivengoalsandobjectivesthatdominatecontemporarydiscourse11,suchasthebudgetaryterm“ROI”thatisoftenusedinamarketingcampaigncontext).

Lin’sanalysis(Lin,1999,pp.31-35)oftheperspectivesandcontroversiesinsocialcapitaltheoryisre-liedupontoarriveatthefollowingassertionsmadebySCVA:

•Socialcapitalisfundamentallyanindividualasset.(Note:acorporationisaformofindividual.)

•Theintrinsicelementsofsocialcapitalthatmakeitworkenhancetheoutcomesofactions(i.e.,bothinstrumental/gainandexpressive/preservation/defenseactions)are:flowofinformation,theexertionofinfluence,certificationsofindividualsocialcredentialsandreinforcementofindividualidentityandrecognition.

•Aggregationofindividualreturnsresultincollectiveassetsandpropertiessuchastrust,norms,reputation,authority,sanctions,culture,networkstructure(open,closed,density,clustering,diameter,averagepathlengths,degreedistribution,bridges,weakties,betweennessandother

Yellow Brick Road “on-ramps”: Social Capital, SNA & the Corporation

formsofcentrality,etc.)andlocation(structuralholes,structuralconstraints,etc.),whichareex-trinsicvariablesthatcontributetotheformation,accessanduseofsocialcapital.

“Therefore,socialcapitalcanbe(moreaccurately)definedasresourcesembeddedinasocialstructurewhichareaccessedand/ormobilizedinpurposiveaction”(Lin1999,pp.35).IntheSCVAcontext,thatpurposeiscorporatevaluecreationandpreservation.

Towardsthisend,thebodyofsocialcapitalandsocialnetworkresearchisstillverymuchindevelop-ment.Moststudiesfocuseitheronindividualsocialcapitalinsuchcontextsashowpeoplefindjobsorsocietalsegmentssuchasfactoryco-workers,schoolsandcommunities/villages.SCVAreliesuponatheoreticalpremisethatoriginalmotivesfortheconceptionofthecorporationasindividualgivecomfortthattheconclusionsmadeinresearchregardingindividualscanbeappliedtocorporatesocialcapital.ResearchbyBrianUzzifromtheKelloggGraduateSchoolofManagementalsoprovidessomeevidencethatthereisagrowingbodyofworkthatcorroboratesthepresenceandsignificanceofcorporateso-cialcapital,deliveringasecondsourceofconfidencethatconclusionsmadeabout“ego”and“alter”inexistingsocialcapitalandsocialnetworkresearchmaybegeneralizedbetweenindividualsandcorporateindividuals.

Sincethecorporationwasoriginallydesignedtoenableagrouptotakeontheattributesofanindividualinsocialengagementincludingtransactions,accountability(contracts),liabilities,propertyrights,etc.,itislogicaltoassumethateffectsfoundinthestudyofindividualsocialcapitalandsocialnetworksmaybeindicativeofsimilareffectsincorporatesocialcapitalandcorporatesocialnetworks.

In “The Sources and Consequences of Embeddedness for the Economic Performance of Orga-nizations: The Network Effect” (2000) Brian Uzzi notes:

“Thereisagrowingneedtounderstandhowsocialstructureassistsorimpedeseconomicperformance.Inparticular,the

successoforganizations’networkshasspawnednewconjecturesaboutthecompetitiveadvantageofsocialformsoforganiza-

tionrelativetomarket-basedexchangesystems(Powell1990;Inzerilli1991;Perrow1992).Centraltotheseconjecturesis

the“embeddedness”argument[definedassocialcapitalinSCVA],whichoffersapotentiallinkbetweensociologicaland

economicaccountsofbusinessbehavior.Embeddednessreferstotheprocessbywhichsocialrelationsshapeeconomic

actioninwaysthatsomemainstreameconomicschemesoverlookormisspecify[suchasbrandvaluation?]whentheyas-

sumethatsocialtiesaffecteconomicbehavioronlyminimally.”12

Uzzidrawsourattentionto“Larson(1992)andHelper(1990)[who]reportedthat‘thickerinformation’onstrategy,productionknow-how,andprofitmarginsistransferredthroughembeddedties,thuspro-motinglearningandintegratedproductioninwaysthattheexchangeofonlypricedatacannot.”(2000)

His findings that:

•“embeddedtiesperformuniquefunctionsandhavethreefeatures:trust,fine-grainedinforma-tiontransferandjointproblem-solvingarrangements...mutuallyreinforcing...counterpartstothefeaturesofarm’s-lengthties(seealsoUzzi1996),”

•“trust...facilitatedtheexchangeofresourcesandinformation,”and,

•“embeddedtiesdevelopprimarilyfromthird-partyreferralnetworksandpreviouspersonalrela-tionswhich(1)setexpectationsfortrustbetweennewlyintroducedactorsand(2)equiptheneweconomicexchangewithresourcesfrompreexistingembeddedties.”

Along with the conclusions:

•that“embeddednessisauniquelogicofexchange...particularlybeneficialforreducingmonitoringcosts,quickeningdecisionmaking,andenhancingorganizationallearningandadaptation”and:

•“Consequently,knowledgeofafirm’sembeddedness:Itspositioninanetwork,thequalityofitstiestonetworkpartners,andthestructureofthenetwork,providethebasisonwhichtomakepredictionsaboutorganizationalperformanceandcapability,bothpositiveandnegative,”

notonlysuggestparallelsbetweenthecorpusofcorporateandindividualsocialcapitalbutalsoprovideacompellingcasefortheadoptionofSCVAbyinvestorsandmanagerswhoareinterestedin“increases(in)economiceffectivenessalonganumberofdimensionswhicharecrucialtocompetitivenessinaglobaleconomy(including)organizationallearning,risk-sharing,andspeed-to-market”(Uzzi,2000).“Oneoftheadvantagesofbeinginfinanceorbusinessvs.academicsisthatspeed.Ifthereisaneed...ifsomethingworks,ifitmakessense-youuseittoyouradvantage;youdon’twaitforamathematicalproof.”13

In a culture like ours, long accustomed to splitting and dividing all things as a means of control, it is sometimes a bit of a shock to be reminded that in opera-tional and practical fact, 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.14

MarshallMcLuhan UnderstandingMedia: TheExtensionsofMan,1964

Letussetasideforanothertreatisethescalingeffectsthatamplifiedextrinsicsocialcapitalvariablesmusthaveontheaccessanduseofsocialcapital,nottomentionthepositivefeedbackloopthatariseswithnewscalesofsocialcapitalleadingtomoresuchcollectiveassetsandsoon.Forthesakeofbrev-itywecanrestourclaimthatcorporationshavehitavalueinflectionpointdirectlyuponanexaminationoftheintrinsicelementsofsocialcapital:informationflow,exertionofinfluence,certificationsofsocialcredentialsandreinforcementofidentityandrecognition.Whiletherecitalofamazingfactsdocumentingbewilderingtechnologicalchangeoftenfailstocutthroughournarcoticnumbness15,perhapstherealizationthateachunderscoresacorrespondingamplificationofanelementofsocialcapitalwillawakenusfromthetrance.

We’re Off to See BE the Wizard:The Rise of the Individual as Medium

Information Flow

Inmid-2007,71%ofAmericanadultsusedtheinternetatleastoccasionallyfromanylocation;ofthese,94%hadaninternetconnectionathome.Amongadultswithahomeinternetconnection,70%wentonlineusingahigh-speedconnection,versus23%whouseddialup.16

Home Broadband & Dial-Up Penetration(% of adult Americans)

Broadband Dial-Up

Fig. 2

Source: Pew Internet Project February - March 2007 survey of 2200 adults; 296 were home broadband users

Percent of Internet Users Who Report Doing the Following Activities Yesterday (from any location)

Source: Pew Internet Project February - March 2007 survey of 2200 adults; 296 were home broadband users

Send or read email

Get news

Look for information about a hobby or interest

Do any type of research for your job

Read someone else’s online journal or blog

Look for information on Wikipedia

Look for religious or spiritual information

Create or work on your own online journal or blog

Take material you find online and remix it into your own artistic creation

Make a phone call online

All Internet Users

Home Dialup

Home Broadband

Fig. 3

“Thenumberofhomebroadbandusersinearly2007isnowroughlyaslarge(onapercentagebasis)astheentireuniverseofinternetusersin...June2000”(PewJune2007).Inmostcases,householdswithhigherincomesaremoreattractivepotentialcustomersforbusinessesandtheytendtoexercisemoreinfluence.Morethan76%ofthesehouseholds,thosewithover$75,000perannuminincome,havebroadbandin-ternetaccess.Broadbandinternetaccesscorrelatesbothtomorefrequentuseandanexpansioninthewaysthatindividualsobtainanddistributeinformationflow.(SeeFig.3)(PewJune2007).

Exertion of Influence

In2002,JohnHorriganandLeeRainieatThePewInternet&AmericanLifeProjectusedregressionanalysistodeterminewhatfactorsmostaccuratelyexplaintheintensityofaperson’sInternetuseandfoundthattheavailabilityofabroadbandconnectionisthelargestsinglefactor.17OtherfactorssuchasamountofexperiencewiththeInternet(whichisontherise)anddemographicsmatter,butavailabilityofabroadbandconnectionmattersthemost.Aswehaveshown,accesstobroadbandisscalingupandwithit,soistheinfluentialonlineactivityofInternetusers.

ReferagaintoFig.1.Ofthemorethan25marketfactorshighlightedascontributingtoastrategicpointofinflection,atleast18arefactorscontributingtoincreasinginformationflows.Numbyet?Trytobeawareonasubliminallevelthatforeachfactor,wearedescribingexponentialincreasesofinformationflow.Forexample,typicalbroadbandconnectioncapacitiesarefivetofiftytimesgreaterthan56kdial-upcon-nections.Mostofthistechnologydidnotexistordidnotmatterinthedecadewhenbrandvaluebegantosurpassbookvalueforcorporations.Therearemanymoreofthesekindsoffactorsnotaccountedforinthispaper.Forexample,wehavebettermapsthanweusedto.Considertheimplicationsoftheexistenceofamapofthehumangenomeforamoment.

Nevertheless,ofallfactorscontributingtotheexpandingflowofinformation,theglobalexpansionofaffordableconsumerbroadbandinternetaccessisthemostimportanttotheSCVAargument.Itthegreatestfactorcontributingnotjusttothescaleofinformationflow,butalsotoexertionofinfluenceandtheotherintrinsicvariablesofsocialcapital.

Creating and posting content to the Internet is the...

“definingbehavioraldifferenceamonghomebroadbandusers...[Afewexamplesinclude]:havingablog[orvlog],making

onlinecomments,[producingapodcast,postingapersonalorprofessionalprofileonasocialnetwork],postingphotosonline,

orcontributingtochat-rooms,[forums,socialbookmarking,wikisorcitizenjournalismsites].Back[in2002]whenjust12%

ofadultshadbroadbandathome,itwaspossibletoimaginethattheuser-generatedcontentphenomenonwasmainlyanar-

tifactofearlyadopters.Somemodestfractionofleadingedgeuserswoulddemandbandwidthtopostcontentonlineandthat

wouldbeaboutit.User-generatedcontentdidnot,however,stopwithearlyadopters.Ashomebroadbandadoptiongrew,

postingandcreatingcontentfortheinternetbecamemorewidespread.ThePewInternetProjectreportedina2006survey

that44%ofhomebroadbandusershaddoneatleastoneofthefollowingactivitiesthatinvolveuser-generatedcontent:

havingone’sownblogorwebpage,workingongroupblogsorwebpages,remixingdigitalcontentandre-postingitonline,or

sharingsomethingonlinecreatedbytheuser(i.e.,artwork,photos,stories,orvideos).Althoughusergeneratedcontentis

dominatedbyyoungpeople,31%ofthoseoverage50withabroadbandconnectionathomehadengagedinatleastoneof

theseactivities.”18

Broadband Penetration Growth Trends for G7 Countries

02001 2002 - 2002 2003 - 2003 2004 - 2004 2005 - 2005 2006 - 2006

CanadaUKFranceJapanUSAGermanyOECDItaly

Fig. 4

Source: http://www.websiteoptimization.com

SCVAarguesthattheaggregationofthesebehaviorscreatesocialnetwork-poweredideahabitats19,whereindividu-alsexerciseinfluenceonpreviouslyunobtainablescalesbecauseeachindividualnowhasthecontentproduc-tionanddistributioncapabilitiesthathavehistoricallyonlybeenavailablethroughtraditionalmassmediachannels(print,radio,television).Whereastraditionalmassmediacontentandchannelsareboughtwithfinan-cialcapitalorrented(withgreatflexibility)byadvertisers,I.A.M.isafunctionofsocialcapital.

ThePewInternet&AmericanLifeProject’sstudy“Buzz,BlogsandBeyond:TheInternetandtheNationalDiscourseintheFallof2004”20providesomegoodillustrationsoftheseconceptsinaction.ExaminingthePewstudyusingBergerandHeath’srigorouslyanalyzedandempiricallytestedfindings(theirpaperreportsonsevenstudiestheydidagainsttheirhypotheses)-thatfluctuationsandprevalenceofideahabitatshelpdeterminehowsuccessfullyanideaspreads-setsouttoachievetwoobjectives.First,weaimtofurtheradvancethecauseforSCVAbyelevatingthediscussionofthespreadof“Rathergate”versusotherideasduringthe2004Presidentialcampaignfromananecdotalreviewofbloggerinfluence,toanapplicationofBergerandHeath’sframeworkthatprovidesevidenceofgreaterscalestructuralassetsinaction.21Second,BergerandHeath’sframeworkisagreatexampleofthekindofstrategicthinkingthatSCVAaspirestoencourageinthecreationanddefenceofcorpo-ratevalue.

Intheirstudyof“IdeaHabitats:HowthePrevalenceofEnvironmentalCuesInfluencetheSuccessofIdeas,”BergerandHeath“defineanidea’shabitatasthesetofenvironmentalcuesthatprimepeopletothinkaboutanideaandcausethemtobelieveitmayberelevanttopassalong(Sperber&Wilson,1986).”Theyfoundthatfluctuations22andprevalence23ofthehabitatsinwhichideasmustthrivearefactorsthatdeterminethesurvivalandspreadofideas(Berger&Heath,2005).

ThePewstudysetsouttodeterminethedistinctiveinfluenceofblogsinthecourseofthe2004electioncam-paignbytracking“buzz”24.“Ifbloggers,ormedia,orpresidentialcampaigns,werebuzzmakersplenipotentiary,thatis,heavyweightagenda-settersandissue-framers,thentherewouldbearecurringpatterninwhichonechannelledandtheothersfollowed,”(Cornfield,Carson,KalisandSimon,2005).Thestudy“developedacompara-tivefour-channelframework,suchthatonanydaytopicsmentionedinblogscouldbecomparedwiththoseinmainstreammedia,thepresidentialandnationalpartycampaignorgans,andonlinecitizenchatforums”(Cornfield,Carson,KalisandSimon,2005).Thestudy’ssearchforasmokinggunacrossawiderangeofissues

heldbyanindividualoracollectiveofbloggersovershadowsitstwosubstantiveconclusionsthathighlightapointinhistorywhenthereare“full-scalechangesinthewaybusinessisconducted,sothatsimplyadoptingnewtechnologyorfightingthecompetitionasyouusedtomaybeinsufficient”(Grove,1996).“Ablogisaremarkablysuitableplaceforbuzztoform.Abloggercansparkconversationwithchoicecom-mentsondocumentsdrawnfromtheinternet,andtheconversationcanbuildthroughthetoolswhichmaketheblogospherepossible”(Cornfield,Carson,KalisandSimon,2005).Therelativehistoryandfinancialcapitalbackingthefourchannelsstudiedarealsoremarkable:

Channel

Mainstream Media

Presidential &National Campaign

Online Chat

History

Hundreds of years

Less than 10 years

Less than 3 years

2004 Costs

Billions

Greater than $500 million

Marginal

Investment Annual

Billions

Greater than $100 million

Marginal

Fig. 5

Arandomcheckofthe40blogsincludedinthePewstudyfoundthatmostwereestablishedin2002or2003,12to24monthsaheadofthestudyperiod,withvirtuallynocapitalinvestment.TwoPewsurveyscon-ductedinearly2005showthat16%ofU.S.adults(32million)[were]blogreaders...thebloggeraudi-ence...[wasarespectable]...20%ofthenewspaperaudienceand40%ofthetalkradioaudience.Mean-while,6%oftheentireU.S.adultpopulationhadcreatedablog.That’s11millionpeople,oroneoutofevery17Americancitizens(Cornfield,Carson,KalisandSimon,2005).

Thefindingthat,“thepoliticalblogosphereseemslessanentityuntoitselfthanawellintegratedpartofthenationaldiscourse”(Cornfield,Carson,KalisandSimon,2005)isevidenceofanewformofinfluencethatisscalingupinexertiveforce.Itisself-referencing,permanentandgrowingexponentially.However,moreinterestingstillisthewaythePewstudydesignlendsitselftoBergerandHeath’sframework.Inad-ditiontothefourchannelsintroducedabove,thePewstudydatasetswerebrokenintoliberal,conserva-tiveandgeneralfortheBlogandCitizenChatterchannels.TheCampaignReleaseschannelwasdelin-eatedbytheKerryandBushdivisionsandtheMediaCoveragechannelwasapparentlygrantedstatusas“objective,”oratleastindiscriminatesincethesetwasnotdelineated(despitethepresenceofFoxNews!).Considerthismashup25ofthePew“Rathergate”andBergerandHeath26frames,anattempttoillustrateaninformationcascade.27

Pew Framework

Mainstream Media

• objective

Presidential &National Campaigns

Bush - ConservativeKerry - Liberal

Online Chat

• liberal• conservative• neutral

• liberal • conservative• neutral

CBS News

• objective

Dan Rather

• Dan Rather

Idea Habitats

Mainstream Media

Mainstream media (including CBS News)

• Primarily broadcast. multichannel. Embedded with a relative balance of liberal, conservative and topical environmental cues that encourage people to recall and transmit ideas• indiscriminate • rich with media cues

Liberal

• mulitchannel, interactive• rich with anti-media cues

Conservative

• multichannel, interactive• rich with anti-media cues

CBS News

• single broadcast channel• content neutral

Dan Rather

• single voice• nearly content neutral

Disposition or “Charge”

Mainstream Media

• inert state is neutral, but if other Habitats or self interest catalyze can be polarized quickly• competitive

Liberal

• collaborative• multi-channel

Conservative

• collaborative• multi-channel

Monolithic

• competitive

Isolated

• competitive

Outcomes

Mainstream Media

Attacks Rather and CBS News

Campaigns

Stays out of it

Liberal

Abandons Rather & CBS News

Conservative Attacks Rather & CBS News

CBS News Abandons Rather

Dan Rather brand irrevocably destroyed

Information Cascade:Structural assets, i.e. environmental cues about the media and the absence of neutralizing cues & opinion, destroy “Dan Rather” brand.

Fig. 6

ThePewstudyoffersafascinatingblowbyblowaccountof“Rathergate.”Yetitschronological,playerbyplayer,contentpiecebycontentpiecereviewisfrustratedinthesearchforthesmokinggun.WithoutthebenefitofBerger&Heath,thePewteamintuitthatthestructuralsourcesofinfluencehave“somethingtodowithlocationwithinthemediascape(thegeneralideabehindourblog-positioninghypothesis),andsomethingtodowithnarrativefitasperceivedbyvoicesinallfourchannels,andasenactedbytheplayerscastinthecrucialroles(thegeneralideabehindthenotionoftheincriminatingmemeinRathergate)”(Cornfield,Carson,KalisandSimon,2005).UsingBergerandHeath’sframework,wecanspeculatethatDanRather,oneofthestrongestbrandsinnews,investedinbyCBSfordecades,nottomentionhispersonalrecordofdedicationandrelativeinnocenceinthisaffair,sufferedtheeffectsofwhatColumbia’sDuncanWattsmightcallaglobalcascade28thatinpart,“canbeexplainedintermsoftheconnectivityofthenetworkbywhichinfluenceistransmittedbetweenindividuals”(Watts,2002).Inbroadcastspeak,DanRatherratingsweredown.UnliketheothersevenideastestedinthePewstudy,RatherdidnothavethesocialcapitalrequiredintheeraofI.A.M.tocastenvironmentalcuesthatwouldneutralizethespreadoftheideacausinghimdamageandpreservehisbrandvalue.

SCVApostulatesthattheimplicitcontentrepositoryandtransmissioninfrastructureofideahabitatshasbeendescribedinsocialnetworkliteratureassmall-worlds,locallevelclustering(JohnsonandGilles2000,CaroyolandRoux2003,Galeotti,GoyalandKamphorst2004,HojmanandSzeidl2004bandJacksonandRogers2005)cliques(WarnerandLunt,1941:32),theislandsmodel(JacksonandRogers,2005)andseparatebutrelatedconceptsareexploredin“TheStrengthofWeakTies”(Granovetter1972)and“StructuralHoles”(Burt1992).Whilealldescribestructuralassets,SCVAadoptsthenotionofideahabitatsinthiscontexttotrytomoreaccuratelydescribetheimplicitcontentassetsthatimpacttheexertionofinfluence.Technologyhascharged“smallworlds”withgreaterscalesofimplicitcontent.Thechargecanrangeindispositiontowardscorporategoalsfrompositivethroughneutraltonegative,andthischargecanimpactearnings.Warlords,gangsters,kingsandpoliticianshavelongunderstoodthenetworkeffectsofpatronageandlargessintheaccumulationandmaintenanceofpower;religionshavetheir“MardiGras,”themilitary“softens”thebattlefield.

Corporationswhoinvestinsimilarstrategies(seeFig.7foragenericexample29)thataredesignedtotrackandprimethepotentialofI.A.M.phenomenagivethemselvestheopportunitytoemergemorevaluable.Whichassethasmorelongtermresidualvalue?IsittheimplicitcarnivalatMacWorldortheexplicitSteveJobsaddress?Whilethe“don’twalkby,giveitatry”brandspectacleistheoverwhelmingsubjectofenviousmanagementdeliberation,SCVAisthereminderthatthecarrierwavefortheCarny’scall,themoreelaboratelyproducedmidway,indicatesfarmoreaboutacompany’sabilitytocreateandpreservevalue.

“AlltheeditorialcontentthathasbeengeneratedwithinthelastyearabouthowtheconsumerisnowinchargeandthatthemarketerismerelyalongfortheridebecomesmoreunderstandablegiventhatoneinthreeInternetusershashadapurchasedecisioninfluencedbycontentgeneratedbyanotherInternetuser.”30

Putting Your Marketing Plan in Perspective

0Jan 04 Feb 04 Mar 04 Apr 04 May 04 Jun 04 Jul 04 Aug 04 Sep 04 Oct 04 Nov 04 Dec 04

Auto Show Debut

Magazine Award

Pricing Announced

TV/Print Ads Begin

In Dealerships

$5/Day Lease

Incentives

Recall

Model X SalesModel X BuzzPositive SentimentNegative SentimentNeither SentimentMixed Sentiment

Not only can CGM be quantified, it can be tracked and linked to specific marketing and ad campaigns, product launches, offers, news events and industry fluctuations. This exhibit shows how varying degrees of internet buzz – by volume, by sentiment, by model – correlate with key marketing events for an auto client.

Source: http://www.artsmarketing.org Fig. 7

Certifications of Social Credentials, Reinforcement of Identity and RecognitionOnceagaintheneedfornewstructuralmanagementmethodsarehighlightedasweconsidertheseremain-ingcomplexandinter-relatedintrinsicelementsofsocialcapital.Fortunately,ourrequisitehereisnottodetermineifthemassivenewscaleofcertificationsofsocialcredentials,reinforcementofidentityandrecognitionispositive31ornegative(particularlywhenitcomestoeffectsduringadolescenceandissuesofgender)oreventorecommendwhichanalysismodelsshouldbethemosttalkedabouttopicsinmarket-ingtoday.Aworthwhilereviewoftheliteratureattheintersectionofinternetusageandthedevelopmentofself-identitycanbefoundinChinaMediaResearch,3(1),2007,Long&Chen,ImpactofInternetonAdolescentSelf-IdentityDevelopment.Therearedebates,differentschoolsofthoughtandmanydifferentframeworkstoconsider.Thereisnodebatethattheinternet,especiallygamesandrecentformsofsocialnetworkingsoftwareservices,provideentirelynewandexponentiallygreaterscalesofinteractionwiththeseelementsofsocialcapital.

Peoplehavealwaysmaintaineddifferentpersonas:professional,personal,private,public,social,family,etc.Thesimplefactthateachofthesepersonascomeswithitsownsocialcredentialsandformsofrec-ognitionandisnowoftendevelopeddialogically,inpublicandaspartofaniterativelypublished,poten-tiallypermanentrecordintext,photos,audioandvideoconfirmsgreaterscale.However,toreinforcethepoint,letusbrieflyhighlightthecommonfeaturesofonlinesocialnetworkservicesthatincorporatesocialcredentialsandrecognitioninthedevelopmentofidentityandthenofferasnapshotoftheirstartlingadop-tion.

Fig8:Evidenceofgreaterscaleofthreeintrinsicelementsofsocialcapital:identity,socialcredentialsandindividualrecognition.Illustratedbyanalysisoftypicalsocialnetworkservicefeatures.

Identity x 16 Social Credentials x 16 Recognition x 17Legend:

Fig. 8

Online Social Network Services scale with Home Broadband Access32

Launch Dates of Major Social Network Sites

Six Degrees.com

AsianAvenue

LunarStorm (SNS relaunch)

Fotolog

Skyblog

Tribe.net, Open BC/Xing

Orkut, DogsterMultiply, aSmallWorld

Catster

Yahoo! 360

Cyworld (China)

QQ (relaunch)Windows Live Spaces

Twitter

Six Degrees closes

Couchsurfing

LiveJournal

BlackPlanet

MiGente

Cyworld

Friendster

Flickr, Picza, Mixi, Facebook (Harvard only)Dodgeball, Care2 (SNS relaunch)

MySpaceLast FM

Facebook (corporate networks)

Cyworld (U.S.)

MyChurch, Facebook (everyone)

Youtube, Xanga (SNS relaunch)

AsianAvenue, BlackPlanet (relaunch)

Bebo (SNS relaunch)Facebook (Highschool Networks

Fig. 9

OnJanuary21,2007at4:30p.m.EST,thislistofonlinesocialnetworksites,whichlaunchedwith12itemsatwww.wikipedia.orgonOctober10,2005at2:36p.m.,isnoweditedaroundadozentimesadaybyunpaidcontributorsandhas100“notable”siteswithoveronebillionmembers.Onceagain,thedramaofanauthenticpointofinflectionforbusinessbecomesapparentaboutmid-waythroughthefirstdecadeofthe21stcenturywhen,forthefirsttimemoreinternetusersareusingbroadbandthandial-upcon-nections.

IaminthepositionofLouisPasteurtellingdoctorsthattheirgreatestenemywasquiteinvisible,andquiteunrecognizedby

them.Ourconventionalresponsetoallmedia,namelythatitishowtheyareusedthatcounts,isthenumbstanceofthe

technologicalidiot.Forthe‘content’ofamediumislikethejuicypieceofmeatcarriedbytheburglartodistractthewatch-

dogofthemind.Theeffectofthemediumismadestrongandintensejustbecauseitisgivenanothermediumas‘content’.

Thecontentofamovieisanoveloraplayoranopera.Theeffectofthemovieformisnotrelatedtoitsprogramcontent.

The‘content’ofwritingorprintisspeech,butthereaderisalmostentirelyunawareeitherofprintorspeech.33

WehavearrivedatapointinhistorywheretheeffectofI.A.M.hasbeenmadethestrongestandmostin-tense34formofmediaweexperiencebecauseithasbeengivenallothermediaasitscontent.Themovie,theplay,theopera,thenewspaper,thetelevision,theradio,commercialmusic,printandphotographs,eventhebrand,haveallbeengivenovertotheIndividualtobereincarnatedastheYouTubevideo,theprosumerindie,theblog,theblogcomment,theforum,theTweet35,theIMchat,rating&review,theFlickralbum,thepodcast,theviralemailandthemashup.

SCVAarguesthatthiseffectisanewscaleofsocialcapitalthatmarksapointofinflectionforbusinessanditisthisnewscaled-upversionofsocialcapital(abbreviatedhereintoSCx)forwhichSCVAisdeterminedtohighlightthevalue.

Doesitnotseemnatural?Projectandscaleupthepoweroftheindividual,andthatvalueofhumanconnectionofwhichweareallsoinstinctivelyaware,emergesinamplifiedformsaswell.Inadditiontothenewscalesofintrinsicsocialcapitalelementsdetailedabove,SCVAurgescorporationstoexaminetheextrinsicvariablesofsocialcapitalsuchastrust,andmostimportantlynetworkstructure,forsimilarevidenceofnewscaletounderstandfurthersocialcapitalformation,accessanduse.

Scaled Up Social Capital = SCx

Beforethispoint,brandwasthefastestgrowingindicatorofcorporatevalue.SCVApredictsthatfromthispointon,socialcapitaliscorporatevalue’sleadingsource.Overcenturiesbrandevolvedasanintegralpartofbusiness,gainingweightinrelationtootherfactorssuchastalent,fixedassets,distribu-tionandcapital.Itbrokeoutastheleadingindicatorofsustainablecorporatevalueaddedperformancebecauseitwasparticularlysuitedtoguideinvestors,managers,employeesandconsumersinanerawhenbroadcastmedia–radio,televisionandprint–werethemostdisruptivetechnologiesanddomi-nantformsofmedia.Intime,brandhascometobeunderstoodastheperceptionthatemanatesfromallactivitiesofthecompany.Justasproduction,humanresourcesmanagementandfinancehaveremainedcriticaltobusinesssuccessthroughoutthebrandera;brandwillcontinuetoplayastarringroleasI.A.M.,drivenbysocialcapital,emergesasthedominantmediaformtransmittingbrand.SCVAisnotachallengetobrand;itismerelyareflectionofbroadcast’serodingcommandofhumanattention(seeFig.10).“Therehasbeenaclearfalloffintheuseoftraditionalnewspaperandbroadcastmediaandariseinuseoftheinter-net...”.36

Anewfocusonsocialcapitalwillbringaboutanimprovedunderstandingofbrand.Thesymbolicbrandevolvedfromthepracticeofliterallyburningasymbolintothesideofabarrelorbeasttoidentifythecommoditybyitsownerormanufacturer.37Itwasconceivedtorelatealotofinformationwiththeleastamountoftimeandspace.Botharepreciouswithinthebroadcastparadigm.Whetheryouarecopingwiththeconstraintspresentedbyaredhotironandamovingsideofbeeforthe30-secondtelevisionspot,abrandisasubliminationofaproductorcompany’svalues,slogan,pricing,stories,personality,tastes,smells,sounds,appearancesandemotionalandphysicalbenefits.

Pay no attention to that man behind the curtain”: Brand and Social Capital

Consistency,conformityandcontinuity–thesebrandmantrasmaypersistintheeraofI.A.M.butbroad-cast’smonolithicbrandidentitiesandthemethodsthatbuiltthem(symbolicbrand)arebeingreplaced,absorbedbyporous,malleableimitationswithnarrowcastmutationsovermillionsofchannels(i.e.Individuals),eachwithuniquefrequency38butinaggregatebeyondthereach39ofanyadvertisement(memetic40brand41).

SCVAisaspin-out42ofbrandmanagement.Itisdesignedtobringtalentandresourcestotherelativelyunexploredstructuralvaluedriversofsocialnetworkthroughoutthecorporateecosystem.Inthepastbrand’smostimportantrolewassublimination,mostlybecausecommunicationswereexpensiveandspacewasprecious.Nowbrand’smostimportantroleisrootedinthemorestructurallyorientedideaoffindability43.Onthispointitishelpfultomakeadistinctionbetweenthenotionsofmarketpositioningandinformationretrieval.

Fragmented Media Environment(% of all Americans who “regularly” go to news source: PRC People/Press)

01994 1996 1998 2000 2002 2004

Local TVNational TV NewsCable NewsNewspapersRadioOnline News

Fig. 10

Source: http://www.artsmarketing.org

Marketpositioningisacognitivegoal,atheorynowthoroughlyadoptedbymarketingprofessionalsthatwasintroducedin1969byJackTroutandAlRies.Sincehumanscopewithoverwhelmingtechnol-ogy,changeandinformationflow(includingbrandnoise,theproliferationofthousandsofbrands)bysubliminatingalmosteverythingweencounteruponreception;wehavecometounderstandbrand’sroleasbeacon.Brandsignalsthat“ah-ha!”momentwhenaconsumerremembersaproduct’snameorpreviousmessagesthathavebeenassociatedwithit.Traditionalbrandmanagementisstillcriticalwherespaceistight.Broadcastmediaasyet,dominatethemarketcommunicationsmix.Packagingandproductdesignarekeyinstoreandonshelf.

Howeverinanetworkedworld,thesymbolicbrand’smissionofdistillationiscontrarytotheambitionoffindability.Theultimategoalofthememeticbrandisnetworkomnipresence.WithintheI.A.M.paradigm,spreadingyourcorporatepresenceaspositivelyandwidelyaspossibleisakeyobjective.Understand-ingtheenvironmentalcueswithinasmanyideahabitats(i.e.context)aspossibleandtheirsupportingnetworkinfrastructurearethemethodsofachievingthis.Syndicationofyourcorporateandproductpresencecanbeinstigatedbycorporationsandtheiragencies,buttheymustactivateI.A.M.throughsocialnetworkstoachievemaximumreachandthatactivationisafunctionofsocialcapital.OntheWorldWideWebwearedescribingalargedigitalfootprintembeddedwithfavourablereferencesandlinks.Unlikebrandcontentdistributedoverabroadcastnetwork,brandcontentonthewebhasgreaterresidualeffects.ItispermanentlystoredforretrievalandwhengeneratedbyI.A.M.ithasanassociatedgeography,thuseliminatingthedistancebetweenthesocalled“virtual”andrealworlds.Acorporation’srealworldsocialnetworkpositioningandthedispositionofideahabitatsarejustasimportantastradi-tionalmarketingpositioning.

Infactfornewcompanies,productsandservices,whicharethemostexcitingopportunitiesforgrowthincorporatevalue,thesestructuralconcernsareevenmoreimportanttotheirearlysuccessconsider-ingthetime,costandwaningimpactoftraditionalmedia.Whereastheachievementofsymbolicbrandisaboutarrivingatapointofdifferentiationintheconsumer’smind,theachievementofmemeticbrandisaboutaligningyourbusinessbehindamaximthatmayresonate44acrossmanydiverse,existingidea

habitats.ThinkhereofclaimslikeTheBodyShop’s“AgainstAnimalTesting”orGoogle’sunofficialmotto,“Don’tbeEvil”45thatperhapsrailagainstanentrenchedestablishment’sworldview,butareblatantattemptstoconformtoconsumersensibilitiesaboutwhatideasareworthpassingontoothers.

Uponthemomentofretrieval,sincecommunicationsarecheapandspaceisunlimited,theneedistofullysatisfythesearch.Timeandattentionaretoday’srarecommodities,butprioritytrumpsboth.Whenconsumersretrieveabrand,theyprovidepermissiontousetheirtimeandattentiontosatisfytheirsearch.Theirsearchmodeorvigilanceforinformationchangesfromtruncated(continuouspartialattention)toelongated(deepdivesbyamateurexperts)46.Again,thesymbolicbrandisatoddswithcorporatevaluecreationatthispoint.Theneedisforelaborationofaproductorcompany’svalues,slogan,pricing,stories,personality,tastes,smells,sounds,appearances,emotionalandphysicalbenefits,notsublimi-nation.Thecannedmessagecannotsatisfytheseneeds.Corporationssimplydonothavetheinternalresourcestoanticipatethecontingenciesofallsearchesortoarticulatehowtheyrelatetothesearchaccountingforthesubtlecomplexitiesofuniquelanguageandculturalsensitivities.

ThecaseofEncyclopediaBritannicaprovidesanextremeillustrationofthedynamicsfacingallcorpora-tionstosomedegree.Oneofhistory’smostrelied-uponbrandsinreferencesincethe1700semploysfewerthan100people.Howcanthisforcecompetewithaplatformlikewww.wikipedia.org,poweredbymorethan28,000volunteercontributors...allwithnearlythesametechnicalcapabilitiesasthetraditionalcompa-ny?Inanyevent,mostconsumersseekandtrustthereferencesofotherconsumersmorethanthecorpo-ration’sbrandclaims47.Mostimportantly,anyconsumermaynowhavebroadcastcapabilitiesthatcansurpassABCorCNNorNBCundertherightconditions,soitismoreriskytoleavesatisfyingeachtothesymbolicbrand.Thecorporationneedspeopleinvolvedoritwillbeoverwhelmedbythecoordinatedactionof“connectedcustomers”48.

SCVAcontendsthatthenarcoticnumbness(seefootnote14)describedbyMcLuhanexplainswhythevastmajorityofcorporationsinsistonusingthesameoldhammeroftraditionalbrandmanagementwhennewtoolsandmanagementmethodsfocusedonmaximizingsocialcapitalmustbeferventlydevelopedandemployed.

ThetransitionrequiredisnolessabruptthanthatmomentwhenthesearchofDorothy,theTinMan,ScarecrowandLionreachesconfrontationwiththeGreatOzfaçadeandthecurtainispulledbacktorevealameremortal.Thecorporationisatriskofbeingthe“humbug”caughtshoutingintotheloudspeakersandpullingatthemechanisticleversofthepast.

IfSCVAisbroughtintovogueasacompass,thebrandestablishmentneednotfear.Theyare“cleverenoughwizards”toquicklytransformfromGreatOzintoleadershipofgreatcourage,heartandbrains.Playingaroleinpersonalidentityformationbyrecognizingtheirsocialnetworkconnectionswithcerti-fications(theScarecrow’sdiploma),testimonials(theTinMan’stickingheart)andmedalsofhonour(theLion’scourage)willbefamiliaraspectsoftheirstrategies.

Nevertheless,SCVAmanagementisnotametaphoricexercise.Forexample,homophilyorbondingandheterophilyorbridgingareconcepts,welldevelopedinsocialcapitaltheory,thatmayaddgreatvaluetocorporatesymbolicandmemeticbrandingeffortsintheageofI.A.M..Evenaquickflipthroughthefollowingremedialslideshowdemonstrateshowpowerful,existingworklikeBurt’sStructuralHolestheory,isusefulinunderstandingtoday’sbusinessenvironment:

Socialnetworkstructuralanalysis(Burtisjustoneexample)cantakebusinessmanagementandvaluecreationstrategyfarbeyondsuchsimpleillustrations.Beginningwiththepremisethatsocialcapitalisacompetitive“factorasroutinelycriticalasfinancialorhumancapital”,“allthemoretruewhenfinancialandhumancapitalareabundant–whichinessencereducestheinvestmenttermintheproductionequationtoanunproblematicconstant”(Burt,1992)(i.e.theforcesbehindrapidcommoditizationhigh-lightedinFig.1),StructuralHoletheoryelaboratesthekindsofadvantages,substanceofadvantagesandthesocialstructuralconditionresponsibleforadvantages,providingaframeworkthatmayguideactionsintendedtomaximizesocialnetworksforbetterreturnsoninvestment.(SeeFig.1649)

Understanding the Shift ThroughBurt’s Structural Holes Theory

Created by Michael Cayley, BPR, APMCP, MBA

Network images courtesy of Valdis Krebs.

Figs 11 to 15 from “Introducing Social Capital Value Add”

Broadcast Paradigm To The Individual As Medium

Competitive Advantage of Structural Holes

Kind of Advantage

Information Benefits

Control Benefits

Substance of Advantage

Access, Timing and Referrals

Tertius Gaudens, Entrepreneurial Motivation

Social Structural Condition Responsible for the Advantage

Contact Redundacy & Structural Holesnetwork trust, size & diversity cohesion & structural equivalence efficient-effective networks structural holes & weak ties

Structural Autonomyholes & entrepreneurial opportunityprimary holes & constraintsecondary holes & constrainthole signature & structural autonomy

Conclusion: Players with contact networks optimized for structural holes – players with networks providing high structural autonomy – enjoy higher rates of return on their investments because they know about, have a hand in, and exercise control over more rewarding opportunities.

A Question of Opportunity

Profit = Investment + Rate of Return

A Question of Production

Fig. 16

Forexample,throughBurt’svision,businessmanagementmaycometoseehowtheageofI.A.M.markstheendofbroadcast’s“tertiusgaudens50”positionbetweenthecorporationanditscustomers,questiontowhombroadcast’serodingcontrolandprofitswillaccrueandbringtotheforeinvestments,plansandactionsthatarefocusedonachievingthepowerinnetworks51.Developingexpertiseinsuchnewstructuralmanagementmethodsrequiresunderstandingthattraditionalbrandmanagementwasdevelopedforthebroadcastparadigmandsoisinexorablyfocusedonbroadcast-drivenstrategy.

WhyintroduceSCVAwhenbrandvaluationandotherschoolsofvalue-basedmanagementsuchasEco-nomicValueAdded52(genericallyknownaseconomicprofit)arealreadywellknownanddonotrequiredelvingintoentirelynewareasoftheoryandcomplexity?

Thefirstanswertothisquestionis,asdescribedearlierinthispaper,andmoredirectlyinmypreliminaryinvestigationofthistopic,“IsThereMotiveforCorporateSocialCapitalValuation”(2007),clearlybusinesshasreachedavaluecreationpointofinflection.CompanieslikeGoogleandAmazonhavebrandvaluationsamongthe100mostvaluableintheworld,overtakingdecades-oldbrandswithafractionofthetimeandmoneyinvested.Byanyexistingdefinition,thepremiumvaluationspaidforFacebook,MySpace,YouTube

andmanyothercompaniesincludingeBay’sUS$2.6billionacquisitionofSkype(sincewrittendownbyUS$900-million,aninterestingmoveworthfurtherstudy),arenotattributabletobrand.Onaproductlevel,theexpectationsofconsumersthatholdabrandaccountableforquality,priceandothermarket-ingfactorsandenableacorporationtochargeahighermarginforbrandedproductsarescaledupintheI.A.M.eratonewlevelsofinfluence.Brandrelatedvalueaddedearningsaresubjectedtonewrisks.Inshort,delvingintoentirelynewareasoftheoryandcomplexityisexactlywhatisneededforcorporationstosurviveandmaybeeventhriveinthenewcompetitiveenvironment.

LikeSCVAcomingafterbrand,StructuralHoleswasintroducedtwentyyearsafterthesimplerandwellknown“StrengthofWeakTies”argumentintroducedbyMarkGranovetter.“Weaktiesandstructuralholesseemtodescribethesamephenomenon”(Burt,1992),justasInterbrandhasmeasuredGoogle’ssuccessrightalongsideoftraditionalbrandstorieslikeCoca-ColaandHonda.

LetusavertelaborationhereoftheStrengthofWeakTiesargument,althoughitshouldbeausefulmodelforunderstandingmemeticbrandwithinanetworkedparadigm(i.e.theeraofI.A.M.)andtouchonlyuponBurt’sreasonsforpersistingwiththeStructuralHolesargument.Firstly,hearguesthattieweaknessisacorrelate,notacause.Example:Googlebecomesoneofthemostvaluablecompaniesontheplanetandthereforeappearsasnumber20onthelistoftheworld’smostvaluablebrands(Interbrand,2007),yetGoogle’svaluehasnotbeencreatedbybrand.

Secondly,“byshiftingattentionawayfromthestructuralholeresponsiblefortheinformationbenefits,tothestrengthofthetieprovidingthem,theweaktieargumentobscuresthecontrolbenefitsofstructuralholes”(p.28,Burt,1992).Bingo!

Therearemanyinspiringexamplesofcompaniestakingastructuralapproachtostrategy,includingtheworkofWendiBackleratBostonConsultingGroupandtheclientsofValdisKrebsandJohnMaloney.TheInternationalNetworkforSocialNetworkAnalysis,foundedin1978byBarryWellman,bringsto-getherabout1000members,primarilyacademics,manyofwhomconsultwithcorporations.PopularbookandblogauthorSethGodinhasobservedaclassofafewmillion“Digerati”whoarededicatedto

“usingthelearningtoolsbuiltintotheNettogetsmarter,faster”(Godin,2005)andhehimselfevangelizesmarketingmethodsalignedwithSCVA.HoweverGodinalsonotestheminoritystatusoftheseexamples.Hedescribesanewdigitaldivideseparatingsuchearlyadoptersfromtherestofbusiness’investorsandmanagers.

SCVAisanattempttoappealtothesensibilitiesoftheearlymajority,shiftattentionawayfrombrandinbusinesscirclesandbringattentionandinvestmenttoradicallynewmethodsofvaluecreation.ThereisnotmuchherethatwillimpresstheDigerati.ThomasFriedmanhasattemptedtodrivebottom-upadop-tionwithagiganticmetaphorandeducationalefforttargetedatindividualsinTheWorldisFlat.MalcolmGladwellpicksuponassociatedtacticalmarketingcommunicationsdynamicsinTheTippingPointandDuncanWattsisprovocativeatthelevelofproduct/ideapositioninganddesign.SCVAwouldliketofacilitatethiscrossingofthechasmbyplacingthetypicallyunseenstructuralsourcesofcorporatecontrolinthenetworkedagedirectlyontheboardroomtableusingthecarrotofincreasesincorporatevalueandthestickofperformancemetrics(alongwithaWizardofOzmetaphortokeepthemarketingfolksawake!).

SCVAisbasedonthepremisethatsocialcapitalisprimaltohumaninteraction.Itthereforeconcernseveryindividual,everysocialconnectionandisthenapplicabletoeverycorporation.Themethodislikelytobetestedearlybyitsusefulnessinevaluatingonlinesocialnetwork-orientedcompanieslikeFacebookandMySpacewhichderiveallormostoftheirrevenuesfromsocialcapital.IntheeraofI.A.M.,allcompa-niesarealreadydirectlyimpactedbytheeffectsofnewscalesofsocialcapitalortheyhavetheopportunitytotakeadvantageofit.Concurrentwiththisindividualempowermentorperhapsconsistentwithit,isourarrivalatatimeofawarenessrelatedtoourcollectiveimpactonuniversalqualityoflifeandourenviron-ment,alongwithanaccompanyingsenseofaccountability.Socialcapitalmatterstoeverybusiness,bigorsmall,localorglobal,B2CorB2B.Itispredictablethenthatthemethodmayalsobevaluablewhenappliedtoanycorporationinsuchdiverseindustriesasthemindcanimagine,includingretail,fast-mov-ingconsumerproducts,oil&gas,transportation,entertainment,hospitalityandhealthcare,tonameafew.SocialcapitalmeansfarmoretoCoca-ColathanCoca-Colameanstosocialcapital.

ThegoaloftheSCVAvaluationmethodistoplaceadollarvalueonacompany’smostpromisingsocialcapital,calculatedasnetpresentvalue(NPV),ortoday’svalueofearningsthatacompany’sSCxisaccount-ableforinthefuture.ThisnumberwillbecomethebesttoplinemeasureofhowSCxisdrivingacompany’seconomicperformance.AswithallvaluationmethodsSCVAisasnapshot,basedoncontextatapointintime,oftheoverallworthofacompany’sSCxthatenablesinvestorsandmanagerstocomparethecom-panytoitscompetitors,itshistoryandtotrackitsactualperformanceagainstprojections.

Theoverarchingprinciplesofthemethodaretransparency,simplicityandaboveallconsistency.

Whilethemethoditselfiseasilyunderstood,canbeexecutedwithavailableorcheaplydevelopedtech-nologiesandisbaseduponacceptedaccountingandfinancialmanagementpractices,themajorimpedi-menttoadoptionofSCVAisthatitcannotbederivedwithouttheco-operationofthecompanybeingvalu-ated.Socialcapitalisaproductofsocialconnections.Toobtainanaccuratesnapshotofacompany’s

Over the Rainbow:The SCVA valuation method

socialcapital,wemusthaveanaccuratereportdetailingwithwhomthecompany(eithercorporatelyorviaitsagentsandemployees)isengagedinmeaningfulinteraction(i.e.interactioninvolvingtheintrinsicandextrinsicelementsofsocialcapital).FutureworkonSCVAwillfocusonthedevelopmentof:

•atechnologysolutiondesignedtoeasethevaluationprocessbyremovingbarrierstodataex-changewhileaddressingtheprivacy,securityandcompetitiveconcernsoftheparticipatingcorpo-rationsandindividualsinvolved,and:

•aconsistentapproachtodeterminingwithwhomthecompanyisconnectedbaseduponpubliclyavailablesources,andthenaugmentsthiswithamodeltoestimatetheunknowns,perhapsprovidinganaccompanyingaccuracynotationthatisfamiliaralongwithmostsample-basedsurveyresearch.

Thesemayseemlikediscouraginghurdles.HoweverreflectionupontheadoptionofthebrandvaluationtechniquesadvancedbyInterbrandprovidesperspectiveonthecontextinwhichtheymaybeovercome.

In1988,London’sInterbrandconductedtheworld’sfirstbrandvaluationforRHMGroupintheUK53,afoodcompanyfightingoffahostiletakeoverbid.AyearlaterInterbrandwashiredbyGrandMettoconductavaluationofthePillsburybrandportfolioaspartofa$5.2billiontakeoverbid.“Itwasthewaveofbrandacquisitionsinthelate1980sthatexposedthehiddenvalueinhighlybrandedcompaniesandbroughtbrandvaluationtothefore.”54InthecontextofMicrosoft’s$45-billionhostiletakeoverbidforYahoo!,thetimeandmoneythatwillberequiredtosolvetheproblemsoutlinedabovedonotlooksodaunting.UsingtheSCVAargument,Yahoo’sboardmaypresentaplantorefocusitsbusinessontheassetsthatoriginallymadeitaleaderandoutlinehowamergerwithMicrosoftwoulddilutethequalityofitsfutureearningsandperhapsencumberanystructuralassetsithastocompetewithGoogle,i.e.socialnetworksthataremaximizedforsocialcapital.Microsoft,ontheotherhand,maybeabletojustifyahigherbid.AsthevolumeoftransactionsliketheacquisitionofYouTube,thewritedownofSkype,theinvestmentinFace-bookandmanylowerprofiledealsincreases,opportunitiesexist.IfSCVAhasmerit,itmayemerge.

Inaddition,workingfromtheinsightthat“knowledgediffusionassociatedwithscience-basedinnova-tionstemsfromthenormofopennessandincentivesforpublication”55,SCVAwillpursueanopenandpublication-focusedstrategy.PublicationhasbeenakeyfactorcontributingtothediffusionofSternStew-art&Co’sformulaofEconomicValueAddedandInterbrand’sbrandvaluationmethod.In1988,SternStewartlaunchedTheJournalofAppliedCorporateFinanceanditsprincipalshavereleasedanumberofbooksandarticlestoadvancetheirconcepts.ThroughsevenyearsofpublishingtheirBestGlobalBrandsstudy,mostofthemincollaborationwithBusinessWeekmagazine,Interbrand’sworkhasrisentoberegardedasthethirdmostsought-afterbenchmarkamongthetop500CEOsandCFOsintheUSaccordingtoastudybyPRWeek(Interbrand,2006).Giventhedramaticchangesinpublicationdynamicsthataredetailedinthispaper,ifSCVAhasmerit,itispossibleitsbasicideaswillspreadandbeeffec-tivelydevelopedveryquickly.CanyouDigg56it?CanyouhelpmeChangeThis?

SCVA’svaluationapproachisaderivativeofbrandvaluationtechniquechampionedbyInterbrandandeconomicprofitadvancedbySternStewart&Co.’strademarkedformulaofEconomicValueAdded,bothofwhicharederivativesoftheoverallpracticeofvaluebasedmanagement57.ThethreecomponentsoftheSCVAformulaareFinancialAnalysis,SCxFactorandtheSCxInventory.

1. Financial Analysis

Humancapitalistheprimarysourceofcompetitiveintangibleearningsfortoday’scorporations.SoamajorchallengeforSCVAistoproposeaconsistentapproachthathighlightsonlytheportionofhumanactivitybehindSCx,anewdriverofcorporategrowthandvaluethatdeservesparticularmanagementattention.

Afterall,atelephonecallisaformofsocialmedia(albeitsynchronicandonlyrarelypublished58)andmostem-ployeeactivityistakenupbyaplethoraofessentialpreoccupations(learning,meetings,planning,selling,reporting,routinecorrespondence,checkingFacebook,talkingtosomeoneabouttheweekend!,etc.)Coor-dinatingmanufacturinginvolveshumaninteraction.Brandevolvesoutoftheconnectionsbetweenowners,managers,employees,agenciesandcustomersofthecorporation.Socialcapitalisinvolvedinalloftheseactivitiesandthereforeallrevenuesofthecompany.

Recognizingthesocialcapitalinvolvedinalloftheseage-oldoperationsofthecompany,SCVAmain-tainsthatmostofthisactivityisalreadymeasuredbytraditionalaccountingmethods,andperformancealongthesemetricsisbestmeasuredandtrackedbyaccountingprofit.Burtmightdescribetheseaspectsofthebusinessasinvestmenttermsintheproductionequationthatareanunproblematicconstant.

Forexample,thetangibleassetsofcorporationsareincreasinglysubjectedtoglobalforcesofcommod-itization.Competitiveadvantagesattributabletoassociatedlowercostsmayerodequickly.ParticularlyindevelopedeconomiessuchastheUnitedStates,managementoffixedassetsiscriticalasfreertradeandcheaptransportationandlogisticshasbroughtincrediblecompetitivepressurestobear.Inthiscontext,fixedassetsaretypicallynotviewedasthemostpromisingsourceofgrowthincorporatevalue.

GettingatSCxbeginsbycalculatingacompany’seconomicprofit(EP)59,whichisawell-knownprocesswidelyacceptedbyfinanceexpertsandfirmlyrootedincorporatefinancetheory.Economicprofit’smajorcontri-butionistoaccountforthecostsofcapitalrequiredtofundtheearningsandgrowthofthecompany.Inaddition,economicprofitisthe“bigbucket”thatcatchesallofthecashflowingfromthe“valueadded”

performanceofthecompany(i.e.performancethatprovidesreturnsoverandabovethecostofcapi-tal).Partsofthisstreamareattributabletotangibleassetssuchasequipment,materialsandlandandthemanagementneededtooperatethemeffectively(superbsupplychains,speedydistributionmethodsandthriftyoperations).Otherpartsofthestreamflowfromthetalentedhumancapitalrequiredtomarket(brandisincludedhere),developanddirectthecompanytowardsthedeliveryofexceptionalperformance.

SCVAsetsouttodistinguishaparticularstreamofcashflowingintotheEPbucket,sothestartingpointforcalculatingSCVAisasix-yearprojection60ofeconomicprofitbaseduponaconsensusviewfromasuf-ficientsampleofqualifiedanalysts.

Asweshallseeinthefollowingsections,SCVAassertsthatintheageofI.A.M.,oneofthemostimportantsegmentsofearningsthatcorporationsmustcometounderstand,developandtrackarethosesubjectedtofluctuationduetoformsofscaled-upsocialcapital(SCx)likethememeticbrand.Ideally,SCxwillbethefastestgrowingsegmentofearnings,itsuniqueroleinB2Bbusinesseswillrequireuniqueman-agementanditisessentialtotheeffortsofallcompaniesdefendingbrandsestablishedduringthebroadcastera(like‘DanRather’or‘Dell,’(see“DellHell”)orlaunchingrelativelynewbrands(likeAgentProvocateurwho,whencountedinJulyof2007foraTimesOnlinearticle,hadreceived360millionviewsoverfiveyearssincereleasingthisKyleMinoguevideo).SCVAleavesalloftheotherearningsgeneratedbythecorporationintheEP“bucket”,includingthoseattributabletothe“realworld”andbroadcastmarketingtechniqueslikethesymbolicbrand,whicharematuringbusinessactivitieseventhoughtheyarelikelytobethelargestportionofearnings,particularlyinestablishedconsumerfacingcompanies.

2. SCx Factor (SCxF)

TheobjectiveofSCxFistobringintofocustheportionofearningsthatarenotattributabletothefungibleresourcesofthebusiness.

Economicprofitisalsothestartingpointforbrandvaluation(BV),whichthenoutlinesaseriesofad-justmentsthataresubjectivelyarrivedatthroughconsultationwithanalystsandsurveywork.ThefirstadjustmentsBVmakesaretoaccountforcashflowsthatareattributabletocertainlegalintangibleassetssuchascopyrights,patentsandtrademarks.Next,brandvaluationtechniquereliesonthedevel-opmentofaproprietary“roleofbrand”factortodeterminewhatpercentageofintangibleearningsaregeneratedbythebrand,baseduponsurveyworkstudyingthebrandsandthecategoriesexamined.Thesurveyworkisanestimateoftheminds’ofbuyersastheyreflectupontheirdecisionmadeatthetimeofpurchase.Forexample,if60%reportbrandwasafactor,BVattributes60%ofintangibleearningstobrandandtheremainderofintangibleearningsistypicallyattributedtomanagementexpertise.

SCVA,ontheotherhand,reliesonaseriesofauditsandratiostomakeitsdeterminations.

Digital Footprint Audit–Thisisacustomizedsearchoftheentireinternettoidentifyeverypieceofcontentthatcontainsareferencetothecorporationbeingvaluated.ASeptember13,2006reporten-titled,“TheForresterWaveTM:BrandMonitoring,Q32006”evaluatessevenleadingvendorswhoarecapableofperformingthisauditincludingBiz360,Brandimensions,Cymfony,Factiva,MotiveQuest,NielsenBuzzMetrics,andUmbria.TheoutcomeoftheDFAuditistheTotalDigitalFootprint(TDF).

Social Identity Audit–ThisisananalysisoftheDigitalFootprintresultstodistinguishallofthecon-tentthatisattributedtoanindividualidentityandcreatealistofallassociatedidentities.TheSIfactor.

Social Engagement Audit–Thisisacollectionandanalysisoftherecordedcorrespondencethatthecor-porationhaswithindividualidentities.Thisincludesemail,ontheWebandthroughsubscriptions,billing,warrantyregistrations,administrationandallcustomerlists.TheSEfactor.

Social Capital Opportunity–IdentitiesdiscoveredduringtheSocialIdentityAuditarethensearchedformatchingidentitiesfromtheSocialEngagementAudit.ThesematchesprovidethesumSocialCapitalOpportunity(SCO).

SCO/TDF=SCxF

SCxF(EP)=earningssubjectedorexposedtoSCx.

SCxFdoesnotdelveintothequalitiesofthesocialcapitalortheassociatedearningsthatitisidentifying(SCxInventorydoes).Itreliesontwobasicassumptions:

i. An account of a company’s total digital footprint (i.e. its entire existence on the web) is equal to an account of a company’s total value added earnings.

Obviously,thisassumptionneedsfurtherresearchandmodeling.Itisnotvalid,asatJune2007whenbroadbandpenetrationrates,eveninOECDcountries,standatroughly19per100inhabitants61.Itislesstrueofacompanythatdealsinthetradeofcommoditiessuchassugarorsugarydrinks,thancompaniesborninthewakeoftheinternetbrowserandwhosefortunesaremoreclearlylinkedtobroadband.SCVAwillbenefitfromamethodtomakeadjustmentstomorecloselyalignTDFanditsproportion-ateshareofeconomicprofit.ItisimportanttokeepinmindthatEPisfundamentallyameasureofacompany’sabilitytoproducestable,valueaddedperformanceandthiskindofperformanceoftenrequiresmanagerstomakedecisionsinanticipationoffuturetrends.Theusefulnessofthisassumptionisdepen-dentuponhowitcontributestoSCVA’smission.Trendsareconvergingintherightdirection.Thisassump-tioncontainsabiasthatisgoodforcorporations.ItistruethatmanycompanieslikeGoogleandAmazon,whichhaverecentlyshownthemostremarkablestoriesofgrowthincorporatevalue,trendinthedirec-tionofTDF=EP.ItistruethatthesegmentofbusinessrepresentedbyTDF,givenitscorrelationtoattrac-tiveandinfluentialconsumers,isaveryimportant-perhapsthemostimportant-segmenttotrack.Itistruethatallcompaniesareexposedtothesamedynamicsandneedtolearntocopewiththesetrends.

Acompany’spresenceinthe“realworld”anditspresenceontheInternetarebeginningtobecomeone.SCVAprojectsthatwearemovingtowardstheconvergenceofTDF=EPasbroadbandpenetrationcontin-uestoproliferate,I.A.M.continuestoemergeandcorporationsbecomeincreasinglyconnectedthroughconcurrentandrelatedtechnologytrends(forexample,throughgeotagging62andinventorycontrolsenabledbyradio-frequencyidentificationtagsoneveryitematWal-Mart,etc).

ii. The portion of a company’s web presence that is a product of meaningful social interactions correlates to the portion of value added earnings that are subjected to these interactions.

Thisassumptionissubjecttothesameforcesasdescribedabove,exceptitzeroesinontheportionofdigi-talfootprintthatisaproductofSCx.Unlikeapproximationsbaseduponsurveywork,adirectlinktosalescanbeestablishedinthecaseofSCxF,sinceSEfactorisdevelopedfromcustomerlists(whichcouldbetrackedasasubsetwithintheSEAudit).ItmaybeusefultobreakouttheportionofSCxFthatisdirectlylinkedtosalesformanagementpurposes,butSCVAarguesthatwholeSCxF,asdetailedhere,isthebestforarrivingatthetopmeasureweareseekingbecauseitencompassesalmostalltheinfluencesofSCxandthereforeaddressesalmostallearningsthatareexposedtofluctuationsduetoSCx.

WhetherportionsofSCxarepositivelyappliedtodevelopearningsorareanegativedragonearningsisnotdeterminedbySCxF.Forexample,aGooglesearchfor“Wal-Mart”returnsmorethan55millionwebpages.AGooglesearchfor“AgentProvocateur”returnslessthan2.5millionwebpages.Forthemostpart,Wal-Martisabusinessthatwasbuiltpriortotheinflectionpointinvaluethatwehavedescribedabove.Wal-Mart’svalueaddedearningsmayprovetobehighlyexposedtoSCxFand,intheabsenceofstrategiestofocusonthisexposure,mayexperiencegrowingrisksastheeraofI.A.M.emerges.AgentProvocateurhasadoptedmethodsandtacticsdesignedtoleverageSCx.ItsbusinessmayalsobehighlyexposedtoSCxF.However,thisexposurecouldbeastablesourceofhighmargin,rapidgrowth.SCxFsimplyillustratestherelativeexposurethatanycompanyhastoSCxinawaythatisconsistent,mean-ingfulovertimeandpowerfulforinvestorsandexecutivemanagement.

3. SCx Inventory (SCxI)

TheobjectiveofSCxIistobringintofocustheriskstoearningsthatareattributabletoSCx,i.e.,aspe-cific,newassetdiscountratethatisnototherwiseaccountedforincorporatemanagement.

UsingtheWal-Mart/AgentProvocateurexamplecitedabovewehavenotedthatSCxFdemonstratesthatbothcompanies,indeedallcompanieswillhaveaportionoftheirvalueaddedearningsexposedtotheeffectsofSCxastheageofI.A.M.emerges(alongwithothertechnologicaladvancementsthatleadtoTDF=EP).ThequestionthatSCxIaddressesistherelativeriskoftheseSCxexposedearningsmaterializingovertheprojectionperiod.Inderivingnetpresentvalueofforecastedearnings,thestandardpractice,ac-ceptedbyfinanceprofessionalsandrootedinfinancialtheory,isthedevelopmentofadiscountratethatrepresentstherelativeriskprofileofearnings,inthiscasevalueaddedearningsthatareexposedtoSCx.Ofcourse,thediscountratemusttakeintoconsiderationthetimevalueofmoney.ThecalculationofeconomicprofitrequiredasastartingpointforSCVA,presupposesthecalculationofWeightedAver-ageCostofCapital(WACC)63.Consultingwithanalystsandmakingadjustmentstoarriveatacompany-specificprojectedWACCthatcoverstheprojectionperiodisacommonpracticeandprerequisitetoarriv-ingatameaningfulfactorhere.

ThemorechallengingrequirementistodevelopamethodofSCxquantificationwithconcreteterms.Finaldevelopmentofthismethodandthesetermsisbeyondthescopeofthispaper;however,itisimportanttoestablishboththetheoreticalandpracticalpossibilitiesthatsupporttheSCVAargument.

“Themeasurementofsocialcapitalwithafocusonindividuals’‘access’tosocialcapital,consideringadiversityofmeasuredresources,andincludingresourceavailabilityindicators,has...beenpursuedfollow-ingtwomethodologicalpaths.Theoldestmethodisthe“namegenerator/interpreter’approach(McCal-listerandFischer,1978)”64.“Asecondmeasurementinstrumentthathasbeenusedtocollectaccess-typesocialcapitaldataisthe‘positiongenerator’(LinandDumin,1986;Linetal,2001)”(p.6,Snijders,VanDerGaag,2004).Bothmethodshaverelativestrengthsandweakness.“Toovercomethesedisadvantages

Snijders(1999)proposedtocombinethepositiveaspectsofthepositiongenerator(economy,internalvalid-ity)andthenamegenerator/interpreter(detailresourceinformation)bymoreclearreferraltospecificresources,andomittingnameidentificationfromnamegeneratorquestions.Theresultinginstrument,the‘ResourceGenerator’,asksaboutaccesstoafixedlistofresources,eachrepresentingavivid,con-cretesubcollectionofsocialcapital,togethercoveringseveraldomainsoflife”(p.7,Snijders,VanDerGaag,2004).

OnceagaintheexistingworkinthestudyofsocialcapitalwillprovidefertilegroundforthedevelopmentofSCVA.Areliable,consistentSCxIwillbebuiltontheexperiencesofthenamegenerator/interpreter,positiongeneratorandresourcegeneratorapproaches.ApreliminaryreviewsuggeststhatdesigningsuchaSCxIisfeasible:

•Goalattainmentisclearandcommonacrosscorporations,i.e.thedevelopmentandpreservationofcorporatevalue;

•common“domains”ofbusinessactivitiessuchasproductdevelopment,humanresourcesman-agement,marketing&sales,etc.mayassistindevelopingthe“fixedlist”ofsocialcapitalresourcesthataresourcegenerator-likeapproachwouldrequire;

•thenarrowscope,i.e.developingafixedlistthatisspecificallydesignedtomeasureSCx,willalsoassisttheassessmentdesign;

•employmentofonlinesurveytechnologycangreatlyreducethecostandtimerequiredtogeneratethe“fixedlist”ofresources,tomeasureandmaintainit65;

•ideallytheassessmentcanbeconductedthroughanalysisofSCO(i.e.theresultsoftheauditsnotedabove),however,evenifasurveyisrequiredtocompletetheassessment,again,timeandcostsshouldbegreatlyreducedbyreadilyavailabletechnology.

Inverypracticalterms,SCxIcanbeenvisionedasaverticalspecializationorextensionofthetalentman-agementpracticedbymanyleadingfirmssuchasGE,EDSandmanybanksandconsultingcompanies.66SAPalreadyintegratestalentinventorymanagementand“visualizationcapabilitiestoenhanceandex-tendtheSAP(R)ERPHumanCapitalManagement(SAPERPHCM)application”.67ThedifferenceisthatSCxIwillspecificallytrackSCxresourcesavailablethroughconnectionsamongbothemployeesandassetsoutsidethetraditionalboundariesofthecorporation(vendors,consumers,resellers,analysts,etc).

“There’s less to Facebook and other social networks than meets the eye.”

“Silicon Valley’s craze for the ‘social graph’ ... is overdone.”

“For bigger companies such as Google, the (social) graph is simply the web of links among its many users.”68.

QuotesfromtheOctober18th,2007issueofTheEconomist.

How should a global investor or senior business executive evaluate this information?

TheaboveoutlineoftheSCVAvaluationmethodisafirstdraft.Theplausibilityofthisfirstdraftisintendedtosupportademonstrationoftheneedfornewsocialnetworkstructuralmanagementmethods.ThepointhereisthatthevastmajorityofcorporationsdonotunderstandhowtotapintotheextraordinaryvaluecreationdynamicsrepresentedbyMySpaceandGoogle.NordotheyunderstandhowthebusinessfactorsliftingMySpaceandGoogleareexposingtheirsacredcashcowstonewrisks.Thispaperisacallforinvestmentinunderstanding.

InIssue12.10-October2004ofWiredMagazine,ChrisAndersonwrotea5,200-wordarticlecalled“TheLongTail”.Thisarticlecommercializedpowerlaw.Powerfulconceptswereillustratedwithcontempo-raryexamplessothatthe“restofus”couldstarttoputthemtoworkinourbusinessplans.

Follow the Yellow Brick Road: The need for new structural management methods

AsonereviewsMatthewJackson’s2005paper“TheEconomicsofSocialNetworks,”thethoughtoc-cursthatthereisanurgentneedtolockChrisAndersonandMattJacksoninaroomtogether.HereisaquotefromJackson:

“Anotherapplicationofobviousimportanceinunderstandinghownetworkstructureimpactsbehavior,istounderstandhow

informationpropagatesthroughanetwork,andinparticularhowpeopleinasocialnetworklearnfromeachother.Taking

aBayesianperspectiveisastandardapproachineconomicmodeling,andanobviousstartingpoint.ThemodelofBala-

Goyal(1998)buildsfromthisperspective(seealsoAllen(1982)andEllisonandFudenberg(1993,1995)).

BalaandGoyal(1998)makeaverysimplebutimportantpoint.Consideraseriesofagentsconnectedinasocialnetwork

whoallfacethesamestationary,butrandom,environment.Thenetworkisfixedandtimeprogressesindiscretedates

whereagentseachchooseoneofafinitesetofactionsateachdate.Thepayoffstotheactionsarerandomandtheirdistri-

butiondependsonanunknownstateofnature.Theagentsareallfacedwiththesamesetofpossibleactionsandthesame

unknownstateofnature.Theyallhaveidenticaltastesandfacethesameuncertaintyabouttheactions.Overtime,eachagent

observeshisorherneighborschoicesandoutcomes.

Themainconclusionisthateventuallytheagentswillconvergetochoosingthesameaction,basedontheobservationthatover

timeplayerswhoobserveeachothersactionsandpayoffsshouldeventuallycometochoosethesameaction.Theintuition

isasfollows.Weneedonlyreasonthatanytwoneighborsearnthesamelongrunutility,asthisimpliesthesamemust

betruenetwork-wide.Ifoneneighborisdoingbetterthananother,thentheneighborwiththepoorerpayoffwilllearnfrom

observingtheotheragent,andeventuallychangebehaviortoobtainasimilarpayoff.Notethatthefactthatallagentsend

upwiththesamelongrunutilitydoesnotmeanthatallagentsconvergetochoosingtherightaction.However,Balaand

Goyalshowthatifthenetworkislargeenough,andthereareenoughagentswhoareoptimisticabouteachpossibleaction

spreadthroughoutthenetwork,thentheprobabilitythatthesocietywillconvergetothebestoverallactioncanbemadear-

bitrarilycloseto1.Theideaisthattherewillbesufficientlymanyexperimentsbytheoptimisticagentssothatthetruepayoff

ofeachactionwillbelearnedandthenthesocietywillconvergetotherightaction.”

Thatishowanetworkeconomistexplainshope.Ithink.

Allreadersareaskedtosavethequoteabovesothattheymayeasilycutandpasteitintothecommentssectionofanyblograntaboutthedangersofbringinggreatercorporateattentiontothatgreatbastionoffreedomofexpression,democracyandanonymity–theInternet.Thatshouldjustaboutshut“theconversa-tion”down(inmorewaysthanone!).

Jacksonisoneofacademia’sbestcommunicatorsonthestate-of-the-artofthescienceofsocialnetworks,yethisworkneedsfurthertranslationforbusinesspeople,moresotheworkofmanyofhiscontemporaries69.“Themanyregularitiesinnetworkstructureacrossapplicationsmakesascientificstudyofsocialnetworksapossibility.Thedeepandpervasiveimpactthatnetworkshaveonbehaviormakessuchastudyanecessity.”70

Forexample,arecentstudyconductedatHarvardUniversitymayprovidealternativeinsightintohowtocompetewithApple,acompanythatisabletomaintainhighmarginsinconsumerelectronics,anindustrysymptomaticofrapidproductcyclesandcommoditization.StrengthofbrandanddesignaretypicallygivenmostofthecreditinApple’scase.

Thestudy“HowMuchisaFriendWorth?DirectedAltruismandEnforcedReciprocityinSocialNetworks”(originallytitled“SocialCapitalinSocialNetworks”)findsthat“decision-makers...passatleast50percentmoresurplustofriendsasopposedtostrangerswhendecision-makingisanonymous.Undernon-anonymity,transferstofriendsincreasebyanextra24percentrelativetostrangers,butonlyingameswheretransfersincreasesocialsurplus.Thiseffectincreaseswiththedensityofthesocialnetworkstruc-turebetweenbothplayers.”71

Cancorporationsbefriendswithindividuals?Theycancertainlytakegreatsteps,particularlyintheageofI.A.M.,toreducethelevelofanonymityandsocialdistancebetweenthemandtheircustomers.Perhapsaninvestmentinastrategytoreduceanonymityandincreasethedensityofsocialnetworkstructurewillcostlessandleadtohighermarginsthanabrandcampaignortheadditionof4Gofmemorytoanmp3player.

Perhapsmostcompellingtoourargumentthatnewsocialnetworkstructuralmanagementmethods,likeSCVA,areneededisthemethodologyemployedinthisstudy.Alloftheexperimentswereentirelyweb-basedandforpartofthestudy,informationonsocialnetworkswascol-lectedthroughanonlinetriviagameatwww.facebook.com.Morethan90percentofHarvardunder-graduatesaremembersoftheservice(Leider,Mobius,Rosenblat,Do,2007).Facebookisaservicethatenablesuserstoposttheironlineprofiles,broadcastupdatesoftheiractionsandinterestsandpostbiographicalinformation,aswellasconnectwithfriends.Ithasallofthecharacteristicsenablingnewscalesofsocialcredentials,socialrecognitionandidentitythatwehighlightedasevidenceofnewscalesofsocialcapitalearlyinthepaper.FacebookuseisnotlimitedtothestudentsatHarvard.ItisnowthemostpopularwebsiteintheU.S.for17to25yearolds.72Demographically,thetrendsofnewscalesinsocialcapitalandI.A.M.aregrowing.TwooutofeverythreeCanadiansareactiveonsocialmediasites.73

Shouldtheintroductoryargumentherepassthetestsofreviewers,manynextstepsintheresearchagendaaresuggested.Asnotedabove,muchworkwouldberequiredtomaketheformulaforSCVAvaluationcredibleandworkable.Inaddition,acompleteexaminationofnewscalesoftheextrinsicele-mentsofsocialcapital,inparticulartrustandsocialnetworkstructure,wouldbeusefulformarketingprofessionalsregardlessoftheacceptanceofSCVA.Itishowever,moreinterestingtoendoffwithsomehopeforfuturestudyofthe“transfersthatincreasesocialsurplus”(Leider,Mobius,Rosenblat,Do,2007).

“Economictheorysuggestsatleastthreemechanismswhichinducethedecision-makertotreatthepartnermoregenerouslywhenthereisaprospectoffutureinteraction.First,thedecision-makercangrantfavorsbecausesheexpectsthepartnertorepaytheseinthefuture(enforcedreciprocity)...Second,thepossibilityoffutureinteractiongivesincentivesforthedecision-makertosignalheraltruistictypetothepartner(BenabouandTirole2006).Third,psychologicalgametheoryhasmodeledpreference-basedreciprocitywheredecision-makersbehavegenerouslybecausetheyexpectthepartnertobehavekindlytowardstheminsomefutureinteraction,andbecausetheyderiveutilityfromrewardingkindbehavior(Rabin1993,DufwenbergandKirchsteiger2004)”(Leider,Mobius,Rosenblat,Do,2007).

Thedefinitionofsocialsurplusthatmost“iPodkiller”strategiesemployisgreater“utility.”TheyseektobeatiPodbybuildingabettermousetrapwithbetterproductfeaturesandbetterdesign.Rebatestrate-giesandtypicalloyaltyprograms(earningpointsforrewards)arealsowidelytriedmethods.

Itisasocialsurplusdefinedasgreatersignalofaltruistictypethatmaybethemostinterestingtostudyfurtherifalinkbetweensocialcapitalandcorporateearningscomestobeaccepted.Thereissomeevi-dencethatsocialcausesarethekindofmaximbehindwhichbusinessmayaligntheiractivitiesastheydevelopmemeticbrands.Forexamplejustthetop5causesontheCausesapplicationonFacebookreachabout7.5millionpeople.74

Itbringswithitthepossibilityofnewmotivesforcorporatesocialresponsibility.Notonlywillthecor-porationbeaskedtobemoreaccountableforitsactions,perhapsthecorporationcanbeencouragedtoinvestinwaysforitssocialconnections–consumers,suppliers,employees,investors,owners,analystsandvalueaddedresellers–tomovebeyondfeel-goodCSRtacticstowardsarelationshipinwhichtheoppor-tunityisseizedbyeachforgingidentitiesbasedupongreatersocialcontribution.

Bibliography

AssociatedPress,“MicrosoftInvests$240millioninFacebook”,www.msnbc.com24Oct.2007,Dec.2007,< http://www.msnbc.msn.com/id/21458486/>

Berger,JonahandHeath,Chip,“IdeaHabitats:HowthePrevalenceofEnvironmentalCuesInfluencestheSuccessofIdeas”,2005,CognitiveScience,29,pp.195-221

Blackshaw,PeteandNazzaro,Mike,“Consumer-GeneratedMedia(CGM)101:Word-of-MouthintheAgeoftheWeb-FortiedConsumer”ANielsenBuzzMetricsWhitePaper,SecondEdition,Spring2006,January18,2008<http://www.artsmarketing.org/marketingresources/files/Consumer-Generated%20Media.pdf>

Boyd,d.m.,&Ellison,N.B.(2007).Socialnetworksites:Definition,history,andscholarship.JournalofComputer-MediatedCommunication,13(1),article11.Jan.21,2007< http://jcmc.indiana.edu/vol13/issue1/boyd.ellison.html>

Burt,RonaldS.,StructuralHoles:TheSocialStructureofCompetition,(HarvardUniversityPress;Cam-bridge,Massachusetts,1992)pp.27-28

Burt,RonaldS.,StructuralHoles:TheSocialStructureofCompetition,(HarvardUniversityPress;Cam-bridge,Massachusetts,1992)pp.46,February11,2008<http://books.google.ca/books?id=E6v0cVy8hVIC&printsec=frontcover&dq=structural+holes&sig=jM8oaZ-VseMVbUM-t9gGMmusteA#PPA46,M1>

Catone,Josh,“FacebookGraduates:NowDoSomethingFortheWorld”,ReadRightWebblog,February5,2008,February29,2008,<http://www.readwriteweb.com/archives/facebook_social_change.php>

Cornfield,Michael,Carson,Jonathon,Kalis,AlisonandSimonEmily,“Buzz,BlogsandBeyond:TheInternetandtheNationalDiscourseintheFallof2004”,PewInternet&AmericanLifeProject,May2005

“EdlemanTrustBarameter2007”,p.6,February7,2008<http://www.edelman.co.uk/insights/trust/Edelman%20Trust%20Barometer%202007.pdf>

EVA=NetOperatingProfitAfterTaxes(NOPAT)-(Capital*CostofCapital),February11,2008<http://www.investopedia.com/terms/e/eva.asp>

“FacebookExtendsLeadasFaveYoungAdultSite”,www.emarketer.com,March2,2007,February24,2008,<http://www.emarketer.com/Article.aspx?id=1004636>

Festa,Paul,“KeyDatesinBrowserHistory”,CNETNews.com13Oct.2004,Dec.2007<http://www.news.com/Netscape-Bowed%2C-but-not-broken/2100-1032_3-5406682.html?tag=st.nl>

Graham-Cumming,“HowmanyusersdoesDigghave?”,January28,2008,February14,2008<http://www.jgc.org/blog/2008/01/how-many-users-does-digg-have.html >

Grove,AndyS.,OnlytheParanoidSurvive,Preface,1996,Dec.2007<http://www.intel.com/pressroom/kits/bios/grove/paranoid.htm>

“HomeBroadbandAdoption2007”,PewInternet&AmericaLifeProject,Surveyof2,200adultAmeri-cans,FebruaryandMarch2007,releasedJune2007<http://www.pewinternet.org/pdfs/PIP_Broadband%202007.pdf>

Horrigan,John,“Broadband:WhatisalltheFussAbout?”,ThePewInternet&AmericanLifeProject,October,18,2007,pp.1

Horrigan,JohnandRainie,Lee,“TheBroadbandDifference:HowonlineAmericans’behaviorchangeswithhigh-speedInternetconnectionsathome”,PewInternet&AmericanLifeProject,June23,2002,pp.13-14

“InterbrandCorporationHistory:1980s.”<http://www.interbrand.com/history_1980.asp>

InternationalConferenceontheFormationofSocialNetworks,June28&29,Paris,France<http://www.adislab.org>

“InternetCompanies:SocialGraph-iti”,TheEconomistprintedition,October18,2007,October18,2007<http://www.economist.com/business/displaystory.cfm?story_id=9990635&CFID=6893160&CFTOKEN=7dc5b488dd50cdc8-3ABCAAF3-B27C-BB00-0143C0C3EB961394>

“iProspectSocialNetworkingUserBehaviorStudy”,April2007,baseduponsurveyconductedbyJuniperRe-searchinJanuary2007,January18,2008<http://www.iprospect.com/premiumPDFs/researchstudy_2007_socialnetworkingbehavior.pdf>

Jackson,Matthew,O.,“TheEconomicsofSocialNetworks”,p.1,Revised:December13,2005

Krebs,Valdis,“ConnectedCustomers”NetworkWeavingblogentry,February6,2008,February7,2008<http://www.networkweaving.com/blog/2008/02/connected-customers.html>

Krebs,Valdis,“PowerinNetworks”,2004,February11,2008<http://www.orgnet.com/PowerInNetworks.pdf>

Leider,Stephen,Mobius,Markus,Rosenblat,TanyaandDo,Quoc-Anh,“HowMuchisaFriendWorth?DirectedAltruismandEnforcedReciprocityinSocialNetworks”p.1,October2007

Lohr,SteveandMarkoff,John,“DealisConcludedOnNetscapeSaletoAmericaOnline”,TheNewYorkTimes,25September1998,Dec.2007<http://query.nytimes.com/gst/fullpage.html?res=9E03EEDA1739F936A15752C1A96E958260&sec=&spon=&pagewanted>

Madsen,Dr.Hunter,MarketingDirector,Yahoo!Canada,keynoteaddressatOnlineRevealedCanada,May28,2007,February24,2008,<http://falkow.blogsite.com/public/item/170445 >

“medium”,www.dictionary.com,<http://dictionary.reference.com/browse/medium>,February26,2008

“OECDbroadbandsubscribersper100inhabitants”June2007,February19,2008<http://www.oecd.org/dataoecd/21/35/39574709.xls>

PodcastsofCorporateEarnings,example,Feb.2008<http://investor.kelloggs.com/eventsType.cfm?ShowNotify=51170 >

Rainie,Lee,Director,PewInternet&AmericanLifeProject,“HOMOCONNECTUS:Theimpactoftech-nologyonpeople’severydaylives”presentationtoUniversityofNorthFlorida,November5,2007,p.40,February7,2008<http://www.pewinternet.org/ppt/2007%20-%2011.5.07%20-%20Univ%20North%20Florida%20-%20final.ppt>

Rainie,Lee,Director,PewInternet&AmericanLifeProject,6.7.06,“HowtheInternetisChangingCon-sumerBehaviorandExpectations”,SpeechtoThinkTank06,SetonHallUniversity,January23,2008<http://www.pewinternet.org/ppt/2006%20-%206.7.06%20ThinkTank%20Seton%20Hall.pdf>

“SAPtoResellNakisa’sTalentVisualizationSoftware”,www.sap.sys-con.com,Dec.11,2007,March3,2008,<http://sap.sys-con.com/read/473098.htm>

Scott,John,SocialNetworkAnalysis,AHandbook,SecondEdition,(SagePublicationsLtd,London,2000)pp.7-37

Snijder,Tom,A.BandVanDerGaag,Martin,“TheResourceGenerator:Socialcapitalquantificationwithconcreteitems”,partoftheResearchprogram“Creationofandreturnstosocialcapital;SocialCapitalineducationandlabormarkets”(SCALE),acombinedprojectoftheuniversitiesofUtrecht,GroningenandAmersterdam,fundedbytheDutchOrganizationforScientificResearch.October21,2004,p.5

Sorenson,OlavandSingh,Jasjit,“Science,SocialNetworksandSpillovers”(December26,2006).De-cember15,2007,<http://ssrn.com/abstract=953731>

“TalentonDemand:ApplyingSupplyChainManagementtoPeople”,Knowledge@Wharton,HumanRe-sources,February20,2008,March3,2008<http://knowledge.wharton.upenn.edu/article.cfm?articleid=1899>

“TutorialoncalculatingEVA”,Feb.2008,<http://www.investopedia.com/university/EVA>

Uzzi,Brian,“TheSourcesandConsequencesofEmbeddednessfortheEconomicPerformanceofOrga-nizations:TheNetworkEffect”,AmericanSociologicalReview,Ms.#94-289,pp.1

“Valuebasedmanagement”,www.valuebasedmanagement.net,February13,2008<http://www.valuebasedmanagement.net/faq_what_is_value_based_management.html >

Watts,DuncanJ.,“ASimpleModelofGlobalCascadesonRandomNetworks”ProceedingsoftheNation-alAcademyofSciencesoftheUnitedStatesofAmerica,Vol.99,No.9(Apr.30,2002),pp.5766,January30,2008,<http://www.sociology.columbia.edu/pdf-files/Watts06.pdf>

www.wikipedia.org:

brand–etymology:http://en.wikipedia.org/wiki/Brand#Etymology

Digg-http://en.wikipedia.org/wiki/Digg,Feb.14,2008

Don’tBeEvil-http://en.wikipedia.org/wiki/Don’t_be_evil,Feb.5,2008

findability-http://en.wikipedia.org/wiki/Findability,Feb.1,2008

frequency-http://en.wikipedia.org/wiki/Frequency,Jan.23,2008

geotagging-http://en.wikipedia.org/wiki/Geotagging,Feb.19,2008

mashup-http://en.wikipedia.org/wiki/Mashup_%28music%29,Jan.17,2008

meme-http://en.wikipedia.org/wiki/Meme,Feb.4,2008

micro-blog-http://en.wikipedia.org/wiki/Micro-blogging,Jan.,2008

reach-http://en.wikipedia.org/wiki/Reach_%28advertising%29,Jan.23,2008

resonance-http://en.wikipedia.org/wiki/Resonance,Feb.5,2008

spinout-http://en.wikipedia.org/wiki/Spin_out,Feb.8,2008

Weightedaveragecostofcapital-http://en.wikipedia.org/wiki/Weighted_average_cost_of_capi-tal,Feb.20,2008

Yates,Jane,”BrandValuationanditsApplications”Spring,1999,July10,2007<http://www.poolonline.com/archive/iss6fea5.html>

1PaulFesta,“KeyDatesinBrowserHistory”,CNETNews.com13Oct.2004,Dec.2007,<http://www.news.com/Netscape-Bowed%2C-but-not-broken/2100-1032_3-5406682.html?tag=st.nl >2SteveLohrandJohnMarkoff,“DealisConcludedOnNetscapeSaletoAmericaOnline”,TheNewYorkTimes25September1998,Dec.2007,<http://query.nytimes.com/gst/fullpage.html?res=9E03EEDA1739F936A15752C1A96E958260&sec=&spon=&pagewanted >

3AssociatedPress,“MicrosoftInvests$240millioninFacebook”,www.msnbc.com24Oct.2007,Dec.2007,<http://www.msnbc.msn.com/id/21458486/>4“atimeinthelifeofabusinesswhenitsfundamentalsareabouttochange.Thatchangecanmeananopportunitytorisetonewheights.Butitmayjustaslikelysignalthebeginningoftheend.”Grove,AndyS.,OnlytheParanoidSurvive,Preface,1996,Dec.2007,< http://www.intel.com/pressroom/kits/bios/grove/paranoid.htm>5Lin,Nan,“BuildingaNetworkTheoryofSocialCapital”©1999INSA,Connec-tions22(1):pp.456Mediumisatermrichinmeaning.Fordefinitionssee<http://dictionary.refer-ence.com/browse/medium>,February26,20087Burt,RonaldS.,StructuralHoles:TheSocialStructureofCompetition,(Har-vardUniversityPress;Cambridge,Massachusetts,1992)pp.27-288Lin,Nan,“BuildingaNetworkTheoryofSocialCapital”©1999INSA,Connec-tions22(1):28-51,seepp.28-31forcompacthistoryofsocialcapital.9Scott,John,SocialNetworkAnalysis,AHandbook,SecondEdition,(SagePublicationsLtd,London,2000)pp.7.SeeChapter2,pp.7-37forhistoryofdevelopmentofSocialNetworkAnalysis.10Lin’sresearchspansAsianandWesternculturesandisofpersonalinterest.Myownearlyinterestsintheapplicationofsocialnetworksinmarketingbeganwithmystudy(1994)oftheculturalandeconomicsuccessfactorsofnetworkmarketingcompanies(suchasAvon,AMWAYandMaryKay)inAsiacompletedbeforelivingandworkinginChinafrom1995to2000.11“Althoughonemighthavepredictedthatthisrumor(orthatsocialmediacampaignoranotherviralvideocontest!)succeededlargelybecauseofitsinher-entcleverness(somethingthatshouldstayconstantovertime)orthegreedofInternetcitizens(somethingthatshouldstayconstantorperhapsincrease),suchexplanationsprovidelittleinsightintowhythisrumorfluctuates.”Berger,JonahandHeath,Chip,“IdeaHabitats:HowthePrevalenceofEnvironmentalCuesInfluencestheSuccessofIdeas”,2005,CognitiveScience,29,pp.195-22112Uzzi,Brian,“TheSourcesandConsequencesofEmbeddednessfortheEco-nomicPerformanceofOrganizations:TheNetworkEffect”,AmericanSociologi-calReview,Ms.#94-289,pp.1

13OlavSorenson,JeffreyS.SkollChairinTechnicalInnovationandEntrepre-neurship,RotmanSchoolofManagement,Torontoduringearlystagediscus-sionsofSCVAwiththeauthor.14McLuhan,Marshall,UnderstandingMedia:TheExtensionsofMan,(FirstMITPressedition,1994,©1964,1994CorineMcLuhan)pp.715“ItisthiscontinuousembraceofourowntechnologyindailyusethatputsusintheNarcissusroleofsubliminalawarenessandnumbness...Wehavetonumbourcentralnervoussystemwhenitisextendedandexposed,orwewilldie.Thustheageofanxietyandofelectricmediaisalsotheageoftheuncon-sciousandofapathy.Butitisstrikinglytheageofconsciousnessoftheun-conscious,inaddition.Withourcentralnervoussystemstrategicallynumbed,thetasksofconsciousawarenessandorderaretransferred...theelectricagegaveusthemeansofinstant,totalfield-awareness.Withsuchawareness,thesubliminallife,privateandsocial,hasbeenhoicked(sic)upintofullview,withtheresultthatwehave‘socialconsciousness’presentedtousasacause...”(McLuhan1964,pp.46-47)16“HomeBroadbandAdoption2007”,PewInternet&AmericaLifeProject,Sur-veyof2,200adultAmericans,FebruaryandMarch2007,releasedJune2007,<http://www.pewinternet.org/pdfs/PIP_Broadband%202007.pdf >17Horrigan,JohnandRainie,Lee,“TheBroadbandDifference:HowonlineAmericans’behaviorchangeswithhigh-speedInternetconnectionsathome”,PewInternet&AmericanLifeProject,June23,2002,pp.13-1418Horrigan,John,“Broadband:WhatisalltheFussAbout?”,ThePewInternet&AmericanLifeProject,October,18,2007,pp.119Berger,JonahandHeath,Chip,“IdeaHabitats:HowthePrevalenceofEnvi-ronmentalCuesInfluencestheSuccessofIdeas”,2005,CognitiveScience,29,pp.195-22120Cornfield,Michael,Carson,Jonathon,Kalis,AlisonandSimonEmily,“Buzz,BlogsandBeyond:TheInternetandtheNationalDiscourseintheFallof2004”,PewInternet&AmericanLifeProject,May200521i.e.,“Studyingthestructureoftheenvironment(thatideaspropagatewithin,i.e.theideahabitat)isadistinguished,butsomewhatrare,approachwithinthecognitivesciences(Anderson&Schooler,1991;Brunswik,1944;Gigerenzer,Todd&theABCResearchGroup,1999).However,understandingtheenviron-mentseemsfundamentalforassessingthelikelysuccessofculturalideas(brands,productmessages,etc);anideamayberecalledquitereadily,butifitiscuedonlyrarelybytheenvironment,itmayremainquiterare.”(BergerandHeath,2005).

Footnotes

22“Thesuccessofculturalideaswillvarywithfluctuationsintheirhabitat(fluctuationhypothesis).Wheneveranidea’shabitatbecomesmorecommon,itwillbeusedmorefrequently,andwhenitshabitatbecomeslesscommon,itwillbeusedless;usageof‘AprilshowersbringMayflowers’shouldvarywiththenumberofdiscussionsofweatherinAprilorflowersinMay.”(BergerandHeath,2005)23“Habitatprevalencemayhelpdeterminewhichideassucceedincompetition(competitionhypothesis).Althoughhabitatsmayfluctuateovertime,certainculturalrepresentationsmayconsistentlyhavemorecues,andthusmoreprevalenthabitats,thanothers.Holdingotherfactorsconstant,ideaswithlargerhabitatsshouldbemoresuccessful.”(Berger&Heath,2005)24Buzzisthesoundheardinpublicwhenalotofpeoplearetalkingaboutthesamethingatthesametime.Somebuzzformsaroundtrivialtopics,astheYahoo!“BuzzIndex”illustratesinabundance.Butbuzzcanaltersocialbehaviorandperceptions.Itcanemboldenorembarrassitssubjects.Itcanaffectsales,donations,andcampaigncoffers.Itcanmoveissuesup,down,andacrossinsti-tutionalagendas(acrossbeingissuere-conceptualizationorre-framing).Whenthesechangesoccur,buzzcanshiftthebalanceofforcesarrayedinapoliticalstruggle,andsoaffectitsoutcome(Cornfield,Carson,KalisandSimon,2005).25Mashup-Jan.17,2008,<http://en.wikipedia.org/wiki/Mashup_%28music%29>26ThroughoutSeptemberandOctoberof2004“bloggerssparkedapublicout-cryagainsttheauthenticityofmemoscitedinaCBSNewsreportaboutGeorgeW.Bush’sserviceintheNationalGuard,abuzzwhichculminatedinanapologyfromthemediagiantandtheearlyretirementofitsmostprominentfigure,DanRather.”(Cornfield,Carson,KalisandSimon,2005)27“Phenomena...duringwhichindividualsinapopulationexhibitherd-likebehaviorbecausetheyaremakingdecisionsbasedontheactionsofotherindividualsratherthanrelyingontheirowninformationabouttheproblem.”Watts,DuncanJ.,“ASimpleModelofGlobalCascadesonRandomNetworks”ProceedingsoftheNationalAcademyofSciencesoftheUnitedStatesofAmerica,Vol.99,No.9(Apr.30,2002),pp.5766,January30,2008,<http://www.sociology.columbia.edu/pdf-files/Watts06.pdf>28i.e.verylargeinformationcascades(Watts2002)29Blackshaw,PeteandNazzaro,Mike,“Consumer-GeneratedMedia(CGM)101:Word-of-MouthintheAgeoftheWeb-FortiedConsumer”ANielsenBuzzMet-ricsWhitePaper,SecondEdition,Spring2006,January18,2008,<http://www.artsmarketing.org/marketingresources/files/Consumer-Generated%20Media.pdf>30“iProspectSocialNetworkingUserBehaviorStudy”,April2007,baseduponsurveyconductedbyJuniperResearchinJanuary2007,January18,2008,<http://www.iprospect.com/premiumPDFs/researchstudy_2007_socialnet-workingbehavior.pdf >31Ipersonallybelievethesetrendsarefarmorepositivethannegative.

32Boyd,d.m.,&Ellison,N.B.(2007).Socialnetworksites:Definition,history,andscholarship.JournalofComputer-MediatedCommunication,13(1),article11.Jan.21,2007,<http://jcmc.indiana.edu/vol13/issue1/boyd.ellison.html>33McLuhan,1964,pp.1834Intense–“havingorshowinggreatstrength,strongfeeling,ortension,asaperson,thefaceorlanguage;susceptibletostrongemotion;emotional:anintenseperson.”March12,2008,<http://dictionary.reference.com/browse/intense>35A‘tweet’isaformofmicro-blogentry.36LeeRainie,Director,PewInternet&AmericanLifeProject,6.7.06,“HowtheInternetisChangingConsumerBehaviorandExpectations”,SpeechtoThink-Tank06,SetonHallUniversity,January23,2008,<http://www.pewinternet.org/ppt/2006%20-%206.7.06%20ThinkTank%20Seton%20Hall.pdf>37January23,2008, <http://en.wikipedia.org/wiki/Brand#Etymology>38“Frequencyisameasureofthenumberofoccurrencesofarepeatingeventperunittime.”www.wikipedia.org,January23,2008,

<http://en.wikipedia.org/wiki/Frequency>39“reachisdefinedasthesizeoftheaudiencewholistento,read,vieworoth-erwiseaccessaparticularworkinagivenperiod.Reachmaybestatedeitherasanabsolutenumber,orasafractionofagivenpopulation(forinstance‘TVhouseholds’,‘men’or‘thoseaged25-35’).”www.wikipedia.org,January23,2008,<http://en.wikipedia.org/wiki/Reach_%28advertising%29 >

40“Ameme,asdefinedbymemetictheory,constitutesatheoreticalunitofculturalinformation,thebuildingblockofcultureorculturalevolutionwhichspreadsthroughdiffusionpropagatingfromonemindtoanotheranalogouslytothewayinwhichagenepropagatesfromoneorganismtoanotherasaunitofgeneticinformationandofbiologicalevolution.[1]Multiplememesmaypropagateascooperativegroupscalledmemeplexes(memecomplexes).Biolo-gistandevolutionarytheoristRichardDawkinscoinedthetermmemein1976.[2]Hegaveasexamplestunes,catch-phrases,beliefs,clothingfashions,waysofmakingpots,andthetechnologyofbuildingarches.Meme-theoristscontendthatmemesevolvebynaturalselection(similarlytoDarwinianbiologicalevolu-tion)throughtheprocessesofvariation,mutation,competition,andinheritanceinfluencinganindividualentity’sreproductivesuccess.Sowithmemes,someideaswillpropagatelesssuccessfullyandbecomeextinct,whileotherswillsurvive,spread,and,forbetterorforworse,mutate.”www.wikipedia.org,February4,2008,<http://en.wikipedia.org/wiki/Meme>41Thisseemstobearelativelyoriginaluseoftheterm.Itisexternallyorientedasdescribedinthispaper.Itisinterestingthatothershaveusedthetermasanelaborationoftheestablishedideaofthecognitivelyorientedmarketingpositioning.Memeticbrandasaunifiedtheoryofbrandthatmaybeappliedconsistentlytosocialnetworkandcognitivemarketingcommunicationsisapossibilityworthyoffurtherstudyandpopularsupportinmyview.

42“Spin outreferstoatypeofspinoffwhereacompany“splitsoff”sectionsofit-selfasaseparatebusiness.Thecommondefinitionofspinoutiswhenadivisionofacompanyororganizationbecomesanindependentbusiness.The“spinout”companytakesassets,intellectualproperty,technology,and/orexistingprod-uctsfromtheparentorganization.Manytimesthemanagementteamofthenewcompanyarefromthesameparentorganization.Often,aspin-outofferstheopportunityforadivisiontobebackedbythecompanybutnotbeaffectedbytheparentcompany’simageorhistory,givingpotentialtogrowexistingideasthathadbeenlanguishinginanoldenvironmentandhelpthemgrowinanewenvironment.”www.wikipedia.org,February8,2008,<http://en.wikipedia.org/wiki/Spin_out>43“Findabilityreferstothequalityofbeinglocatableornavigable.Attheitemlevel,wecanevaluatetowhatdegreeaparticularobjectiseasytodiscoverorlocate.Atthesystemlevel,wecananalyzehowwellaphysicalordigitalenvironmentsupportsnavigationandretrieval.FindabilityisnotlimitedtotheWorldWideWeb.Theconceptoffindabilityisuniversalandtimeless.However,withadistributed,heterogeneouscollectionofseveralbillionitems,theWebdoespresentuniqueandimportantfindabilitychallenges.Findabilityisnotasynonymforinformationarchitecture(IA).Informationarchitectureisadisci-plineconcernedwiththestructuralandsemanticdesignofsharedinformationspaces.FindabilityisagoalofIA,alongwithusability,desirability,credibility,andaccessibility.Manypeoplecontributetothefindabilityofwebsitesandin-tranets,includingwriters,designers,anddevelopers.”www.wikipedia.org,Feb.1,2008,<http://en.wikipedia.org/wiki/Findability>44“Inphysics,resonanceisthetendencyofasystemtooscillateatmaximumamplitudeatcertainfrequencies,knownasthesystem’sresonancefrequencies(orresonantfrequencies).Atthesefrequencies,evensmallperiodicdrivingforcescanproducelargeamplitudevibrations,becausethesystemstoresvibrationalenergy.”www.wikipedia.org,February5,2008,<http://en.wikipedia.org/wiki/Resonance>45www.wikipedia.org,February5,2008,<http://en.wikipedia.org/wiki/Don’t_be_evil>46Rainie,Lee,DirectorofPewInternetProject,“HOMOCONNECTUS:Theimpactoftechnologyonpeople’severydaylives”presentationtoUniversityofNorthFlorida,November5,2007,p.40,February7,2008,<http://www.pewin-ternet.org/ppt/2007%20-%2011.5.07%20-%20Univ%20North%20Florida%20-%20final.ppt>47“EdlemanTrustBarameter2007”,p.6,February7,2008,<http://www.edel-man.co.uk/insights/trust/Edelman%20Trust%20Barometer%202007.pdf >

48Krebs,Valdis,“ConnectedCustomers”NetworkWeavingblogentry,Febru-ary6,2008,February7,2008,<http://www.thenetworkthinker.com/2008/06/connected-customers.html>

(Note:blogentryissupportedbyauthor’swhitepaper“PowerinNetworks”),2004,<http://www.orgnet.com/PowerInNetworks.pdf>49Burt,RonaldS.,StructuralHoles:TheSocialStructureofCompetition,(Har-vardUniversityPress;Cambridge,Massachusetts,1992)pp.46,February11,2008,<http://books.google.ca/books?id=E6v0cVy8hVIC&printsec=frontcover&dq=structural+holes&sig=jM8oaZ-VseMVbUM-t9gGMmusteA#PPA46,M1>

50Thetertiusgaudensis“thethirdwhobenefits”(Simmel,1923:154,232).ThephrasesurvivesinanItalianproverb,FarIduelitiganti,ilterzogode(Betweentwofighters,thethirdbenefits),and,tothenorth,inamorejovialDutchword-ing,delachendederde(thelaughingthird).Tertius,terzoorderde,thephrasedescribesanindividualwhoprofitsfromthedisunionofothers.51Krebs,Valdis,“PowerinNetworks”,2004,February11,2008,<http://www.orgnet.com/PowerInNetworks.pdf>

YoushouldreadPowerinNetworksandkeeptheexampleofGoogleovertakingYahoointhebackofyourmind.52TheformulaforcalculatingEVAisasfollows:EVA=NetOperatingProfitAfterTaxes(NOPAT)-(Capital*CostofCapital),February11,2008,<http://www.investopedia.com/terms/e/eva.asp>

53InterbrandCorporationHistory:1980s.<http://www.interbrand.com/history_1980.asp>54Yates,Jane,”BrandValuationanditsApplications”Spring,1999,July10,2007,< http://www.poolonline.com/archive/iss6fea5.html>55Sorenson,OlavandSingh,Jasjit,“Science,SocialNetworksandSpillovers”(December26,2006).December15,2007,<http://ssrn.com/abstract=953731>56“Diggisacommunity-basednewsarticlepopularitywebsite.Itcombinessocialbookmarking,blogging,andsyndicationwithaformofnon-hierarchical,democraticeditorialcontrol.Newsstoriesandwebsitesaresubmittedbyusers,andthenpromotedtothefrontpagethroughauser-basedrankingsystem.Thisdiffersfromthehierarchicaleditorialsystemthatmanyothernewssitesemploy.”www.wikipedia.org,February14,2008,<http://en.wikipedia.org/wiki/Digg>WhenastoryhitsthefrontpageofDigg,itachievesasocialcredential.Thestoryquicklycirculatestohundredsofthousandsofusers,whointurnpub-lishblogsandforwardthestorybyemail,distributingitveryquicklytohighlytargetedreaders,whointurn,mayforwardthestoryundertherightconditions,andsoon.SomeestimatethatDigghasabout2.7millionusersinJanuary,2008andisgrowingatrateofabout110,000userseverymonth.Graham-Cum-ming,“HowmanyusersdoesDigghave?”,January28,2008,February14,2008,<http://www.jgc.org/blog/2008/01/how-many-users-does-digg-have.html>57“Valuebasedmanagementisthemanagementapproachthatensuresthatcorporationsarerunconsistentlyonvalue.(normally:maximizingshareholdervalue),February13,2008,<http://www.valuebasedmanagement.net/faq_what_is_value_based_management.html>58PodcastsofCorporateEarningsareagrowingexampleofhowthisischang-ingthough.59ForatutorialoncalculatingEVAsee<http://www.investopedia.com/univer-sity/EVA>60ThesixyearprojectionperiodisselectedtoconformtoInterbrand’sbrandvaluationprojectionperiodsothatthesefiguresmaybetrackedsidebyside.61June2007,February19,2008,<http://www.oecd.org/dataoecd/21/35/39574709.xls>

62“Geotagging,sometimesreferredtoasGeocoding,istheprocessofaddinggeographicalidentificationmetadatatovariousmediasuchaswebsites,RSSfeeds,orimagesandisaformofgeospatialmetadata.”www.wikipedia.org,February19,2008,<http://en.wikipedia.org/wiki/Geotagging>63“Theweightedaveragecostofcapital(WACC)isusedinfinancetomea-sureafirm’scostofcapital.”www.wikipedia.org,February20,2008,<http://en.wikipedia.org/wiki/Weighted_average_cost_of_capital >

64Snijder,Tom,A.BandVanDerGaag,Martin,“TheResourceGenerator:Socialcapitalquantificationwithconcreteitems”,partoftheResearchprogram“Creationofandreturnstosocialcapital;SocialCapitalineducationandlabormarkets”(SCALE),acombinedprojectoftheuniversitiesofUtrecht,GroningenandAmersterdam,fundedbytheDutchOrganizationforScientificResearch.October21,2004,p.565IwasaVPatClickIQ.com,oneofmanycompaniesthatprovideplatformswiththesecapabilities.66“TalentonDemand:ApplyingSupplyChainManagementtoPeople”,Knowl-edge@Wharton,HumanResources,February20,2008,March3,2008,< http://knowledge.wharton.upenn.edu/article.cfm?articleid=1899>67“SAPtoResellNakisa’sTalentVisualizationSoftware”,www.sap.sys-con.com,Dec.11,2007,March3,2008,<http://sap.sys-con.com/read/473098.htm>68“InternetCompanies:SocialGraph-iti”,TheEconomistprintedition,October18,2007,October18,2007,<http://www.economist.com/business/displaystory.cfm?story_id=9990635&CFID=6893160&CFTOKEN=7dc5b488dd50cdc8-3-ABCAAF3-B27C-BB00-0143C0C3EB961394>69InternationalConferenceontheFormationofSocialNetworksaimed“tobringtogethersomeofthebestscholarsworkingonnetworksformation”.70Jackson,Matthew,O.,“TheEconomicsofSocialNetworks”,p.1,Revised:December13,200571Leider,Stephen,Mobius,Markus,Rosenblat,TanyaandDo,Quoc-Anh,“HowMuchisaFriendWorth?DirectedAltruismandEnforcedReciprocityinSocialNetworks”p.1,October200772“FacebookExtendsLeadasFaveYoungAdultSite”,www.emarketer.com,March2,2007,February24,2008,<http://www.emarketer.com/Article.aspx?id=1004636>73DrHunterMadsen,MarketingDirector,Yahoo!Canada,keynoteaddressatOnlineRevealedCanada,May28,2007,February24,2008,<http://falkow.blogsite.com/public/item/170445>74Catone,Josh,“FacebookGraduates:NowDoSomethingFortheWorld”,ReadRi-ghtWebblog,February5,2008,February29,2008,<http://www.readwriteweb.com/archives/facebook_social_change.php >

< Follow The Yellow Brick Road Introducing Social Capital Value Add 66Share This The Blog

…“Atsomepointalongtheway,themomentumhaschanged.IstartedouttryingtotakethisideaasfarasIcould.NowIamtryingtokeepupwithitforaslongasIcan.

Mysearchhaschangedhowinformationflowsaroundme.Aftermonthsoftryingtofindinforma-tion,informationfindsmethroughconnectionsfarandwide.FourpeopleonthreedifferentcontinentsalertedmetoMikeArrington’srelatedpost.IhavewanderedorbeeninvitedintoonlinegroupslikeSeth’s“Triiibes”whereAdamHelwehanddozensofothershaveinstantlyofferedtheirhelpjustasquickasIcanask.

PaulWilmotthasinvitedmetowritesomethingtointroduceSCVAinhissmallbutinfluentialmaga-zinethatservesthequantitativefinancecommunityandIhaveconnectedwiththerightfolksatDell&Procter&GambleaboutreportingonhowtheprincipalsinSCVAareshowingupintheirbusinesses.…”

Michael Cayley, BRP, APMCP, MBA

Principal, Social Capital Practice

www.socialcapitalvalueadd.commichael@socialcapitalvalueadd.commobile:647-407-9598office:416-462-1859ext.2SkypeID:mgcayley

ThankyoutoContextCreativeInc.fororiginalgraphics.

How did this dog get in my boardroom?Hereisanexcerptfromtheblogpost:

Introducing Social Capital Value Add eBook

Documents

Transcript of Introducing Social Capital Value Add eBook

Introducing Windows Server 2008 R2 eBook

kanaja.inkanaja.in/ebook/images/PDF/231.pdf · d dotOod (add: S..1867-d>dta: 1917) add So. gdOd ZOd±aod eaodd duded: redd a . Created Date: 3/8/2017 4:18:30 PM ...

prd-mp-docs.azureedge.net · Web viewOnce you find your eBook, Click ADD TO MY HOME. Your eBook will be added to MY HOME. Author: Carol Branson Created Date: 08/07/2018 09:42:00

Introducing Impress - Family history societyIntroducing Impress Add Pictures Use pictures to enliven slides and to reinforce your message. Insert directly or cut and paste. Add images

JNF eBook (Volume 1, January 2010) Introducing the Jewish ...australiansforpalestine.com/wp-content/uploads/2010/01/JNFeBookVol... · Rahela Mizrahi Bob Williamson John Goss Edited

Pai D Hiy ST or - Penguin Books · 2014-04-17 · ExpEriEncE MalcolM x likE nEvEr bEforE! IntroducIng the MalcolM X deluXe eBook the deluXe eBook adds even more depth and richness

Introducing XM Satellite Radio Model SR9600A (XM Satellite ...us.marantz.com/DocumentMaster/US/DFU_SR9600XM_Final_eng.pdf · 2 ENGLISH SR9600A is designed to add XM Satellite Radio

Pepperl + Fuchs, Inc.: Introducing WirelessHART with Ethernet/IP Gateway and Add On Profile

Transform Your Enterprise Communications: CenturyLink ... › asset › business › enterprise › ebook › v… · Transform Your Enterprise Communications: ... add-on mobility

Springer.com Springer eBook Collection Introducing the world’s most comprehensive online scientific eBook collection Lund, October 2007 Including 2008.

Introducing Smart call blocker*...2020/05/05 · To add another contact, repeat from step 3. Block list Add numbers that you want to prevent their calls from ringing through. Add

Introducing Microsoft SharePoint 2013 ebook

Introducing Spring Roo, Part 3: Developing Spring Roo add-onspublic.dhe.ibm.com/software/dw/opensource/os-springroo3/os-sprin… · In Part 1 and Part 2 of this "Introducing Spring

Add color quickly, easily, and economically to deliver new levels of value, impact, and profitability Introducing the new RISO MZ1090 digital duplicator.

Ebook introducing second language acquisition

Introducing the 6Cs - NHS England · Introducing the 6Cs Add speaker Date . The 6Cs - a set of values for all health and ... 6Cs story by emailing alison.tilley2@nhs.net .

First Post eBook AutoExpo eBook 20120113042621

I Am Simple Inspiration eBook Am... Simple Inspiration eBook CLIPS enamel dots add a little dimension to your layouts! ard frames e ng ff s make it easy to to your photos! with our

Writing Your First eBookWriting your first eBook! 3 reasons YOU should write an eBook: 1. They are a great value add to give to your clients 2. They position you as an expert in your

Introducing Leisure and Tourism Destinationsresources.hwb.wales.gov.uk/VTC/2011-12/leisure-and-tourism/wjec-ebook... · Introducing Leisure and Tourism Destinations ... Parks, or