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Social Capital and Relationship Capital

Social Capital and Relationship Capital

When I started working in the field of intangibles, I immediately learnt to appreciate the immense value of one of the assets that form part of the intellectual capital of a business: the Relationship Capital. The transition from my work with intangibles to working with social media was a natural development for me: I’ve always considered social media as the perfect vehicles to build, exploit and manage intangible assets. The most obvious example is indeed with Relationship Capital: we are promoted by word of mouth reputation, and our networks grow at the rhythm of community advocacy. Social media gives us hundreds of tools and technologies to develop and harness those dynamics, allowing for a continuous and spontaneous social interaction that should add value to our business. I say “should” because it doesn’t happen by itself. Social Media introduced infact another type of capital, the Social Capital, formed by all those contacts, fans, followers that we meet during social wanderings. It’s the result of serendipitous discoveries and occasional meetings and there’s a clear distinction between that and what we refer to as Relationship Capital. The latter is measured in depth and strength, the former in reach and breadth: this often means that the latter rightly belongs to the realm of intangible assets and, as such, it’s hardly measured; the former is measured by sheer numbers, which give us an immediate feedback.

Whereas social technologies are allowing for an ever growing Social Capital without too much effort from our side, Relationship Capital is still to be merited, and it needs the same commitment that an offline relationship requires, if not more. When we meet a new friend, and we add their number on our phone, if we don’t phone them and invite them for a coffee or a walk, their name will be left in our contacts and probably deleted at the next contacts clean-up. The same thing happens online, within the different social networks we’re on. How many LinkedIn contacts do we actually know, and with how many of them have we exchanged a meaningful conversation? Not to speak of twitter followers, or Facebook fans.

I was at TEDx Glasgow at the beginning of the month, and I had similar thoughts about the huge amount of content we continuously share online. Joe Tree from Blipfoto was one of the speakers and as usual he captured my attention talking about the simple and successful concept at the basis of his social network: 200 millions of pictures are uploaded on Facebook everyday, we can only upload one photo a day on Blipfoto. Which one will succeed in leaving some meaningful contribution to human history, and also in leaving us with most memories? Most certainly, the latter. It’s one pic per day, it is personal, we curate it with metadata, we tell a short story about it, we care about it, we don’t just upload 100 pictures a time straight from our phone, and then forget the how, who, when, where and why. In the same way, Relationship Capital has to be derived one contact a time. Who’s ready to say that they have a meaningful relationship with their 500+ LinkedIn connections, 1200 Facebook fans and 300 G+/twitter followers? Dunbar’s numbers are there to demonstrate that we can only maintain a stable relationship with 150 individuals.

So, does this all mean that too much equals to nothing? No, absolutely. Social Capital has got its value, but it’s not the same value as our Relationship Capital. If we think “viral”, if we think of ‘the long tail’, the value of Social Capital can be immense, but the distinction we made above is not just a speculative one, we need to keep it in mind when we develop our business strategies, social media plans, crowdfunding campaigns and so on.

Let’s think about a crowdfunding campaign for example: everybody is telling you that you need a big social presence to start with, which translated means a lot of followers, fans, contacts, etc. But when you launch your campaign, you struggle to hit any meaningful sum. Why? What happened to all those followers and fans, are they really listening? In this case the Social Capital has limited value. A strong Relationship Capital would probably make the difference instead: formed with time, people can associate a twitter handle with an email or a shake of hands, not only with an undefined profile pic. Of course, for a crowdfunding campaign to be successful, Social Capital is important as well, crowdfunding is indeed based on the ‘long tail’ concept, and on word of mouth. But it must not precede the Relationship Capital, it has to go through it, and rely on your contact’s Relationship Capital too. Then, in a latter moment, we might have those serendipitous moments when an odd contact who’s part of one’s own Social Capital will be listening to your tweets. But we can’t base a success on serendipity alone, we can build on dreams not on chances.

We now have the right tools and the right mindset to create a meaningful Relationship Capital. Probably we can do it only slightly quicker, because it still takes time to build a relationship that has some value, but we can certainly do it more effectively, because we can tap into a world of possibilities. Let’s not think it’s all about online interaction, above all because we are still in a transition era, there are people out there who “don’t get it” and probably never will. But we all are social ‘by default’, we don’t need to struggle to go social, we just need to stay so and make the most of it. Then let those 6 degrees of separation do the rest of the job for us.

Jam with JC and Vasco da Gama

Back from the sun of Portugal to the ceaseless rain of London and Glasgow. Daniela and I flew to Porto to attend the MSKE conference at Universidade Lusíada de Famalicão where we had been asked to chair some streams and present a case study on some pro bono work that we had undertaken, and talk generally on generating value for organisations through the use of the intangible asset that is their social media presence.

A fascinating conference with more than 20 nationalities represented and all led by the enigmatic presence of Eduardo Tomé of the Universidade Lusíada de Famalicão. Eduardo paces restlessly throughout the days of the conference, navigating his way through the sometimes turbulent conference timetabling arrangements with nervous energy and off beat humour. As he pushes the conference ship in search of new worlds he seems to increasingly take on the look of a later day Vasco Da Gama and there were times I fully expected to see him turn up in 15th Century garb to fully embrace the look!

The university is delightful and unlike many a conference at academic institutions in the UK the staff have such pride in the event that nothing is too much trouble and they do go the extra mile to make one welcome. They love to demonstrate how the institute is bound into the local culture and life. This was exemplified by the brief but charming show by a student tuna band who serenaded the port laced reception to close the final session, rocking and swaying through a 12 man vocal rendition of some traditional songs, accompanying themselves with an assortment of guitars and mandolins and a couple of them demonstrating some pretty impressive flag waving as well (a short video captured on the day is available here).

It is always good to attend events like this, hear some of the fascinating research that is being done, and catch up with some old friends and acquaintances. It’s good for both the brain and solar cells.

Have to confess though that it was a very tiring trip as we had to squeeze it into the ever increasing commitments that take our time in curating Social Media Week in Glasgow, so the schedule was pretty hectic.

Nevertheless there was a good deal of opportunity for reflection with Spanish and Portuguese colleagues on the situation in Europe right now and the challenges they face in their economies. Some of the opinions and concerns expressed were illuminating, surprising but largely fatalistic about what can – or perhaps more truly – what can’t be done to turn round a parlous situation.

One person I am always pleased to see is JC Spender, who provided the key note on day one and riveting contributions through the other days of the conference. He is a man of immense intellect and formidably well read, and time with him is always challenging, stimulating and a great pleasure. He is one of the people who’s arrival in the audience of your own presentation slot is something to be greeted with both delight and an element of trepidation. Trepidation because you know the curve ball is coming – or should I say googly ( yes I should) – but delight because you will get the most excellent and valuable forensic critique of your work. Always insightful, ever willing to buck the trend and ever willing to challenge conventional or lazy thinking, he remains one of the best conference speakers around. Of course Daniela is able to stop anyone in their tracks with a pithy insightful comment in a debate, however this time she stopped JC dead when she suggested the main local industry was jam! On this occasion it was in fact a mistranslation but sensationally effective, and became the best in joke between us for the next couple of days.

So after braving some Portuguese cabbies, the perils of bridges being welded at 5am (that’s a story for another day, as is the discovery that my business partner is in fact a serial killer with a few ideas for virtual murder weapons) and being caught in the first monsoon of the season in London on the way to the British Library, the twintangibles caravan has returned to Glasgow. Lots of new ideas, new friends made and just a hint of colour on the face. Good result all round.

Sustainable is the new profitable

Sustainable is the new profitable

I was sitting in a café today, sipping my chai latte and waiting for two potential clients/partners to come along. Table next to me, two men in business suits, talking about something.. Suddenly they said the magic words (exactly, social media, how did you know) and my brain unconsciously tuned in to their conversation. The exact sentence was: “how can they possibly help us with social media if they don’t even know how to use it themselves, hardly 100 followers on Twitter and 14 on their FB page”. At which point my brain detuned in despair.

Ok, I must confess I’m particularly happy if I can stay away from numbers. However what is this need to quantify everything, why are we always thinking in numbers when numbers are just not enough? It’s about intangibles values, it’s about strategic thinking. And it’s not a social media strategy, it’s a business strategy in which Social Media are incorporated. A strategy that aims to improve engagement and trust, rather than immediate return on investment. Engagement and trust can last for ever, money can always (and too easily) run out.

The most interesting people I met through social media are people like the ones I just left today. Oh yes, their numbers: followed by 58 people, following 101 because they “take the time to listen to them all”. And I “sacrificed” 5 potential new “tweeple” and one new follower (this is the ratio roughly) to take the time to meet two of my tweeple in person and discuss an idea with them.

Sustainable is the new profitable. And – guess what – it doesn’t do numbers.

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twintangibles Ltd is a company registered in Scotland with company number SC397987. Registered office is Blue Square House, 272 Bath Street, Glasgow, Scotland, G2 4JR

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