This video introduces the generalized algorithm that will ultimately control the value game. This video identifies what Social Entrepreneurs will do to create value which will eventually be stored and exchanged with a Social Currency.

This System for the Monetization of Social Capitalism is presented in this sequence as an introduction to the various inputs for the Value Game, specifically the Knowledge Inventory. Later we will discuss social vetting mechanisms, then we will introduce the social currency, and finally, we will discuss the capitalization and securitization of knowledge assets.

This Video stands alone but it actually represents part 4 of our series defining Modern Social Capitalism.

In earlier articles, I described Social Media evolving into user-generated productivity in the new science called Social Capitalism. A social currency will be required to represent ONLY real productivity, not simulated productivity.

Monetization means that social currency must be convertible with financial currency or accepted widely enough to stand alone across all phases of production.

What exactly will people produce in Social Capitalism and from what raw materials?

We know that buying a can of Tuna Fish at the grocery store is a very simple transaction. This is because the institutions that support that transaction are incredibly complex; there are catchers, processors, banks, transportation, inventory, outlets, etc. – all are very complex pieces that need to integrated in order for that final transaction to be very simple. |

Those same complex institutions must exists in Social Capitalism in order to ultimately make transactions in a social currency very simple and widely accepted so that one may eventually be able to buy groceries with it.

In classical economics, entrepreneurs deploy land.labor, and financial capital in various combination in order to produce stuff.

In social economics, entrepreneurs deploy social capital, creative capital and intellectual capital in various combination to produce stuff.

Now, what is the stuff of Social Capitalism?

WIKiD stands for Wisdom, Innovation, Knowledge, information, and Data. Value in Social Capitalism is created by transforming one of these elements into another one of these elements.

For example: Transforming data into information creates value. Transforming information into knowledge creates value. Transforming knowledge into innovation creates value, and transforming innovation into wisdom created value.

We see this today

In social media bloggers transform data into information, people take that information and combine it with their own to create knowledge. They get together with friends and share it creating new ideas that transforms their businesses. This makes everyone wiser as they see the success or failure of their own or another enterprise.

All this value is being created there just is no way to express it in an economic paradigm except through some increasingly irrelevant association with Land Labor and financial Capital.

In WIKiD Tools, the word “Tools” refers to how each of the WIKID elements is related to each other. You can’t have knowledge without information and you can’t have information without data, nor can you have wisdom without innovation. If you take away one element you lose the others. So these are all related.

On the other hand, you cannot create one without the others.

We can now say that wisdom is derived from trail and error, that’s innovation. Innovation is derived from knowledge. Knowledge is derived from information, and information is derived from data, etc. These are the production “tooling”

Productivity:

The word productivity means all the stuff we can produce within a certain period of time.

So now we can say that:

• The value of wisdom is related to the rate at which innovation can be produced.
• The value of innovation is related to the rate at which knowledge can be produced
• The value of knowledge is related to the rate at which information can be produced
• The value of information is related to the rate at which data are produced.

On the flip-side:

Suppose a social entrepreneur wants to create value. They would simply look for high rates of change of information in a community. That tells them value is being created and all they need to do is transform that information into knowledge and they will enjoy a profit.

If the social entrepreneur sees a diverse group of people getting together to share their knowledge about something, this is a big red flag that value is being created and all they need to do is transform that information into knowledge and they will enjoy a profit.

…Etc.

The Monetization of Social Currency:

This value can be measured sincee Internet analytics record all the required data and their time functions. Analytics can tell the entrepreneur what information is aggregating and where. Entrepreneurs can determine that diverse groups people are getting together at Conferences, Meet-ups, and Social Media Clubs.

Now, Geolocation will accelerate innovation as people populate the last mile of social media. Deep web search engines are mining data at an unprecedented degree of relevance and inter-connectivity – all of it is measured with respect to time.

Done.

With WIKiD Tools, we have an extraordinarily powerful algorithm for creating, measuring, storing, and exchanging value that we can represent with a social currency. Since social currency represents real productivity (as opposed to Simulated Productivity) it can therefore be fully convertible to financial currency.

Thousands of social currencies are emerging as people lose confidence in the ability of the dollar to store value. At the end of the day, a currency is a social agreement. People need to agree that whatever they use for the storage and exchange of value accurately represents their productivity – otherwise they will not work for it.

Of course this is much easier said than done. Alternate currency advocates continue to stumble across substantial structural issue is defining their currency; It must be scarce, it must be difficult to forge, debase, or counterfeit and it must be accepted by everyone.

The only thing that fits all of those criteria is ‘Time’

Social Media is greater than the sum of its parts, but it is these parts that define the socialization of business. Today consumers are interacting with peers, brands, and influencers in social networks at varying levels across more industries than you might possibly believe. The answers of who, what, when, where, how, and to what extent are out there, we just need to spend a moment searching for the insights necessary to galvanize meaningful social media content, branding, and engagement programs.

Instead of creating holistic programs that embrace social consumers through the distinct business channels that affect their decisions and experiences, we rush to networks to create a presence, one that may not fortify or represent the brand as well as we might think.

Hurry! Get a profile on Twitter, set up a brand page on Facebook. Let’s go go go!

While it may seem commonsensical or more importantly logical to create a strategy for social networks based on research, data, and perception, a recent study shed light on some interesting facts.

A May 2010 study by Digital Brand Expressions found that 52% of social marketers are running social media programs without a defined “game plan.” This finding is in line with an April report by R2Integrated that documented one-half of marketers were reacting to social rather than leading it.

Visibility is not the same as presence. In social media, presence is felt.

The Ingredients of Social Media Communications Plans

The Digital Brand Expressions report that found that those who are approaching social media with a plan find that needs, concerns, and outcomes outweigh the current scope of activities. The study found that logistics contributed to visibility, but insight was absent from investing in presence. Most notably, resource allocation guidelines, registration of branded usernames in social networks and competitive research were among the top ingredients of a social marketing plan. Other tactical elements include:

71% establish metrics to measure ROI, which is in direct contrast with a previous study by Mzinga that found that over 80% of companies were not measuring ROI.

52% plan for ongoing monitoring

45% develop social media protocols and policies

39% create and distribute guidelines for professional and personal social media use

At the bottom of the list, we see that only 29% of businesses are introducing protocols and policies for the usage of social media by specific departments. As this is the socialization of business, multiple divisions will embrace social media at any one moment, from sales to service to HR to sales and marketing and everything in between. Social media indeed reveals the true 360-degree opportunity. The social consumer is many things to brand snow and over time. And, to expect one representative or facet of business to track and engage with influential individuals in active and expansive networks is narrowing.

The question as to who owns social media is universal. Ownership begins within the team where social media championship is concentrated. As experience matures, social media extends and in many cases, “socializes” each sector. At the moment however, a land grab is in full effect with marketing taking the lead as the area responsible for the creation and management of social media plans. In fact 71% of respondents stated such with communications representing 29% , the executive team accounting for 16% and sales and IT tied with 10%.

The Last Mile Begins with the First Mile

In a recent post, I discussed the concept of The Last Mile and how social media would force businesses to adapt current practices to open-up traditional top-down methodologies by expanding engagement and interactive communications and feedback loops.

As previously stated, “Everything begins with a shift in perspective from viewing stakeholders as a separate entity, ‘us vs. them,’ to a singular view of ‘us ‘ as this enlivens a new era of community-focused marketing and engagement.”

The need for a new approach is inspired by the disconnect that exists not only between brands and social consumers, but also between the brand, management, and brand representatives in these emerging channels.

The socialization of business is forged in the last mile, but it is the first mile where strategy, planning, and the internal evolution of management and processes that inspires relevance and ultimately resonance.

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This is the fourth in a series of videos that specify the structure for Social Capitalism on a platform of social media.

The knowledge inventory is the most important part of Social Capitalism. It is also the only piece that will require everyone to think substantially differently about how we organize ourselves in on-line and local communities. Once we can get over that hurdle – it will be smooth sailing into the next economic paradigm.

I have a business plan for a for-profit start-up called Zertify.com which can build the knowledge inventory to a sufficient degree that it can reach a critical mass – did I mention that it is for profit? Let me know if you are interested in seeing this research.

Next videos will discuss the algorithm followed by the capitalization and securitization of Social Currency in a Social Capitalist system.

(Editor: Here is an important discussion from Mary Adams and Michael Oleksak.  They suggest that a knowledge factory is really at the core of all production – not necessarily land, labor and “financial” capital such as  conventional “wisdom” continues to uphold. The implications are vast.  Instead of people transforming raw material into finished goods, the raw material is a substrate for transforming social currency into financial currency (and vice verse).  Seriously, this changes everything)

by Mary Adams

The core of the tangible economy is the factory. Simply put, a factory is a building where production equipment converts raw material into finished goods. Companies make their money by selling these finished goods. The story of the tangible economy is the story of organizing and running these factories.

The modern knowledge business can also be understood as a factory, a place where the knowledge raw materials get put to work. This factory is where you create value for customers and make money. The story of the intangible economy is the story of organizing and running the knowledge factory in combination with physical processes.

The combination of all the intangibles in an organization is intangible capital (IC), sometimes also called intellectual capital. We see IC as a system which is what led us to the creation of the concept of the knowledge factory. By getting you to think of your knowledge assets—your intangible capital—as a factory, we want to get inside your head and change the way you think about your business—hopefully forever.

Don’t think about and manage human, relationship and structural capital as separate components. Manage them as a system. Think of yourself as head of the knowledge factory of your team, your division, your organization. Maximize the effectiveness of each by putting them to work in a powerful system that can’t be stopped.

Adapted from Intangible Capital: Putting Knowledge to Work in the 21st Century Organization by Mary Adams and Michael Oleksak.

The Knowledge inventory will become the most important element of Social Capitalism. Today, knowledge is largely sequestered behind the walls of corporation in the form of titles, skill codes, resumes, job descriptions, certifications, and college degrees. In order to predict the future, we point to the things that we have done in the past.

2nd Place is 1st Loser

10% of the country is unemployed and less than 10% are fully actualized in their profession. Competitive forces drive the hiring manager. The consequences of all business decisions eventually lead to win-or-lose market scenarios. People compete with each other for promotions, the boss’s time, the corner office, or just staying off the unemployment line. That is the only future anyone can truly predict based on the past. It’s easier to predict the loser than the winner – so that’s what happens.

Social media is very different.

People are organizing themselves in a new form outside the construct of the corporation. Linkedin aggregates intellectual capital, Facebook aggregates social capital, and You Tube aggregates creative capital. Millions of blogs, Twitter, and a generation of search engines reassemble all these parts in ways that create social value. People are not competing with each other, instead, they live on a bell curve. They are seeking cooperation and collaboration. People use “like” buttons, tweet counts, and analytic data to “value” the quantity and quality of another person’s knowledge. There are fewer losers, hence more winners, because there are a greater number of markets – not just one corporation. Everyone is a corporation.

No Governance, no anarchy, no problem

Since social media is outside the construct of a corporation, there is no governance. There are lots of people trying to control only to experience diminishing returns. Microsoft, Apple, Google, and Facebook must tread extremely carefully on the landscape of public opinion precisely because of their dominance. People use Facebook to attack Facebook, PowerPoint to attack Microsoft, YouTube to attack Google, and Twitter to attack everyone. Retribution would be suicide.

The Last Mile of Social Media

Now, geo-location services and mobile connectivity are filling in the Last Mile of Social Media where communities will form to produce things that are tangible and real. As a result, there is a sharp increase of interest in a form of currency that can represent this social value. Some of this is because the dollar is losing its ability to represent people’s productivity. So they engage a different economic system.

Social Productivity

The next great leap in Social Media will happen when people reorganize themselves in an external knowledge inventory, outside of corporations, and segmented in high granularity of knowledge assets in close proximity to each other. Entrepreneurs can then assemble people in unique, efficient, and productive ways. People will then build things for profit using a new currency – a new social currency.

I often make the point that a currency is simply a social agreement.  People need to agree that a monetary unit represents their productivity so that they will use it to trade their productivity with the productivity of another person.  The test question for any so-called currency (coined by Jay Deragon) is: “Yeah, but can you buy groceries with it?”

I am now seeing a SHARP increase in the social interest for an alternate currency to the dollar.  The dollar does represent productivity – albeit future productivity in the form of debt – that’s why it is still exchanged for the work that we do.  My suspicion however is that the social agreement regarding the dollar is, in fact, increasingly becoming a social disagreement.

People have a deep seated unease with what the dollar is and what the dollar represents.  To escape the dollar is to escape a tangle of influence that impacts everything we say, do, and think about ourselves and about each other.  It almost seems that to escape the dollar is to escape ourselves.

That’s just the idea that came to me after watching this video about a soldier questioning the occupations.  He is saying something very interesting:

War is simply the soldier’s willingness to fight it.  It is a social agreement.

Guest post by Paula Hahn Managing Director at Marina Maher Communications (MMC). An expert in marketing to women, she heads the Media Connections practice, focused on managing brand dialogue via traditional and social media.

Time is proving that no matter how much social media changes, the core rules of engagement remain the same. Transparency and authenticity have been points of entry recommended by social media experts since its beginnings.

Now, in what seems like decades later (in social media years), transparency and authenticity might well be referred to as “best practices” in any engagement activity. The blogosphere is especially demanding of something “real.” In fact, if you’re a marketer, online influencers generally agree that getting free products to review is great, but the trump card is the authenticity and transparency something experiential offers.

A recent event produced by my agency with client CoverGirl®, bears this out. CoverGirl® invited Los Angeles-area online influencers to a Beverly Hills salon to witness make-up artist Molly Stern get Parks & Recreation star Rashida Jones red-carpet-ready for the MTV Awards.

It doesn’t get much more real than inviting a group of people in to watch you get ready. And the online influencers recognized that for what it was: transparent and authentic.

They loved the behind-the-scenes experience and the transformation tips from Stern – particularly because they saw how effortless the make-up application was. Better yet, they loved their own transformations afterward. It doesn’t get any more authentic of an experience than that.