Social Capital: An Accounting View of New Media

What value is measurement of value? What’s really the point of measuring anything? Quick-to-the-chase answer: decision-making. If a measurement can’t help you to decide, it’s probably irrelevant.

We all know that not everything of value can be measured and not everything that can be measured is valuable. Social Capital has value – either positive or negative. Can it be quantified? That’s debatable, but let’s take a look at the value of understanding Capital in the age of mass connection via new media.

COST ACCOUNTING FOR VAGUE QUALITIES

Cost Accountants can be cleaver about capturing the quantification of relatively vague qualities: e.g., how to allocate fixed overhead to the cost of goods sold (there’s latitude in determining methods of allocation).

Of all qualitative objects to measure, social activities and relationships are perhaps the most difficult to quantify in any meaningful way. Nevertheless, they do play a substantial, if not primary, role in the financial capital ecosystem.

We’re not going to muddle with the nuances of Cost or Financial Accounting and how to develop Social Capital Income Statements and Balance Sheets. But we can analogize and correlate segments of financial statements with Social Capital Accounting.

COMPONENTS OF SOCIAL CAPITAL ACCOUNTING

From an accounting perspective, the key components of a business’s financial statements follow this basic flow: Revenues are generated from Assests; Expenses are generated from Liabilities and the realization of asset-use. The net of Revenues and Expenses flows into Equity. And ultimately, it is Equity which is the home of Capital Accumulation (and ultimately of Social Capital).

FINANCIAL EQUITY IS A MANIFESTATION OF SOCIAL RELATIONS
Financial Equity is the result of social relations. How? Let’s breakdown the financial statements into the above components:

  1. Revenues arise out of the social relationships between a business and its customers.
  2. Expenses arise out of the social relationships among a business and its vendors, employees, governmental agencies and other stakeholders. Contracts, laws, regulations, property rights, distribution, production, labor: all processes and products of social relations.
  3. Equity, therefore, represents the manifestation of all social relations among a business and its entire ecosystem.

A business’s’ financial health depends on its mastery of social relations. The very source of currency valuation is social: where else does the price of a good arise? Money – for good or ill – is a social extraction – and monetary value is the basis for all financial accounting. Although excellence in social relations doesn’t guarantee success, poor social relations almost guarantee failure, or at least poor economic health.

CAPITAL IN ALL ITS FORMS

Businesses are wise, then, to pay close attention to social relations. In particular they must posses a profound understanding of the deep and complex interconnections among Financial Capital, Social Relations and Social Capital.

Investing isn’t the goal of a business: it’s a vehicle towards capital accumulation. The pervasive discussions of social media’s business values continue to roll through C-wing – and it’s fundamental that executives have a framework to guide them.

The ROI of social media, therefore, is a measurement that can only have meaning in the context of Capital, especially Social Capital (read Dennis Howlett’s provoking guest post on Chris Brogan – peruse the plush treasury of comments too). It isn’t the number by itself, stupid: it’s the decision.

The proper study of any accounting is Capital in all of its forms. This is harder than it sounds.

You must understand media in all its forms, especially the social kind.

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The Rules of Tweet Club

Welcome to Tweet Club. That’s what I”m calling my little corner of the Twitterverse. Good tweeters are like good fighters: they have guts, stamina and honor.

Do you have what it takes to join Tweet Club? Know what you’re getting into.

  1. The First Rule of Tweet Club is, you do not talk about Twitter.
  2. The Second Rule of Tweet Club is, you DO NOT talk about Twitter.
  3. If someone tweets stop, tweets lame, or tweets out, the fight is over.
  4. Only two tweeters to a fight.
  5. One tweet at a time, tweeple.
  6. No spam, no bots.
  7. Tweets will go on as long as they have to.
  8. If this is your first night at Tweet Club, you have to tweet.

Join my Tweet Club or make your own. You can break the rules but there’s hell to pay (I’m doing life without parole for breaking #1 and #2). Except these two, you never break:

  1. Nobody is ever in the center of Tweet Club, except the members who are engaging.
  2. Tweet Club will always be free.

Components of Hospital Branding: A Rant

Along the lines of social capital, I’ve thought about hospital branding and why it’s an important part of any health care system. Marketing has a bad reputation (and deservedly so in part), but it’s a critical feature of delivering the values of any organization.

This morning, I saw some tweets about branding, and I was spirited with this.

Beyond the colorful jest, there are points to be made. What follows is my rant on hospital branding:

How do you feel about this. I’d like to hear from you professional marketers. Is this delusional? Or am I on to something important?

[Link to video if it’s not viewable here.]

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1001 Remarkable Pharma People to Follow on Twitter

Twitter Bird
Image by Paul Snelling via Flickr

Online, everybody loves lists. A number like 1001 is impressive. But would it be useful? I’ve compiled an extensive, curated list of people (and feeds) focused on Pharma and Life Science. The list continues to grow as more people hop on the Twitter hype-train.

I was going to publish the list a while ago, but then it occurred to me that a Twitter directory is in effect a mechanical tool that – while practical and useful – could actually discount the most important value which Twitter offers: the re-humanization of traditional communications. That’s not something you can achieve by pushing 1001 follow buttons in one afternoon. Twitter is discovery.

FELLOWSHIP AND PHARMA

So what if you follow 1001 people on Twitter who specialize in Pharma (or any other industry for that matter)? What matter most are the purposes, meaningful conversations and valuable links to interesting and relevant content which Twitter can enable. Taking a mechanical and technology-focused approach to Twitter deprives you of the core experience – the one that will ultimately help you to accumulate social capital.

Also, it’s my opinion that the Pharmaceutical industry’s traditional marketing philosophy and approach won’t square with the realities and opportunities presented by the Web and the communities which it has the power to engender.

I’d rather Pharma marketers and doctors and nursers and researchers take advantage of Twitter’s ability to connect people in meaningful and productive ways. And that can only be accomplished by starting out Twitter small, following the exchanges and links of who you follow, participate in conversations and following whomever you find interesting. Social relations involve time not numbers.

1001 REMARKABLE PHARMA PEOPLE TO FOLLOW ON TWITTER

You can follow thousands or millions of people on twitter. But if you followed 1001 of the “right” people on Twitter all at once, you’d lose any sense of meaning and orientation. If, however, you follow and engage a few people at a time, you will slowly but surely develop a strong fellowship – you’ll be following 1001 or more before you know it if you’re sufficiently active.

Rather than following some arbitrary number at once, here’s who I recommend you focus your following on:

  1. @BoehringerBoehringer Ingelheim’s Twitter account. Perhaps the first Pharma tweeter to “get it”. Providing pertinent and interesting content, the interaction with the community is outstanding and probably sets a standard for how Pharma can use Twitter to provide value to its communities. You could just follow this one stream and find just about anybody who’s tweeting about Pharma and related fields.
  2. @WhyDotPharma – Silja Chouquet blogs over at WhyDotPharma with a focus on patient-focused social communities. She’s obviously sincere about leading the use of social media for Pharma, interacts heavily with the Pharma Twitterverse and provides links to intelligent content.
  3. @Arthur_Alston – Arthur tweets from Down Under and is an oncology marketer and project manager for Big Pharma. In addition to tweeting about Pharma, he understands social technologies and for that alone he’s worth the follow for anyone interested in exploring where social media is heading.
  4. @WendyBlackburn – Wendy blogs at EyeForPharma and has an active presence on Twitter. Always engaging, and scouring the web for high quality content she brings an intelligence to Pharma’s social media needs that is hard to find. Follow her. Period.
  5. @Shwen – Shwen Gwee founded Social Pharma, blogs at  Med 2.0 and is currently Lead, New Media Communications at Vertex. Shwen is the arrow head for the industry’s trek into emerging technology and new media trends in science and medicine. In addition to tweeting most of his day ;) he promotes some of the best material and people related to life sciences. View his presentation Twitter Power Tools for Health Activists.
  6. Bonus:  @swoodruff – Steve Woodruff is Pharma consultant who brings in a marketing perspective important to online presences.

I selected the above six because I’m certain you could connect to the right people in your own way just by following them. I have literally thousands of remarkable people I could recommend for life science tweeting. Any of those deserve to be mentioned. Twitter’s like a universe of connect-the-dots: Twitter reduces the degrees of separation between us.

SOME CHEATING TIPS FOR TWITTER FOLLOWS

Feel like cheating?  #FollowPharma is a hashtag that helps to collect Pharma tweeters. Feel free dump yourself into that stream and learn to swim. In addition to following the above, it’s a way to follow Pharma activity and introduce yourself to the community.

Also  @jonmrich has a Pharma social media wiki from which you can find talent.

PARTING THOUGHTS ON TWITTER, PHARMA & MARKETING

Everything is marketing: 21st Century marketers need to understand that (there are lessons in this post’s title). The old model of massive unilateral communications is being inverted by real-time conversations. Hopefully, I have pointed you in the right direction to exploring just what that means.

You can follow me, but less than 10% of my tweets are Pharma-related. My interests in Pharma & Healthcare social media marketing lie in creating living spaces for remarkability in how we come together, share experiences and increase social capital in health care for the next generation. I’m just an idea man. You need focused executioners, like the people above.

For me, Twitter is useful chaos. As for yourself, perhaps that’s just what you’ll see it as too.

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Trust Is…

Handshake
Image by Aidan Jones via Flickr

Who do you trust? Why? Who trusts you? Why? Do you trust people because of who they are or what they do? Do you trust them based on what they’ve done in the past or what you expect them to do in the future?

Your answer to these questions might differ from mine or anybody else’s. Trust is a very simple concept, and yet it can be experienced in many different ways. For example, I might trust you to lie to me – which sounds tautologous, depending on your reading of the sentence. The point is that trust embodies several elements that determine its specific meaning. Your history of previous actions, your honesty, your competence.

TRUST EQUALS THE PRODUCT OF ACTION AND TIME

Whatever definition or attributes you assign to trust, when it comes to marketing – be it a non-profit, a political movement or a for-profit enterprise – two necessary variables are key to establishing trust: a valued action and time. Thus, as a practical rule of thumb we could say the following:

Trust = Valued Action x Time

The more actions that I value which you execute and deliver to me over time, the more I will trust you. Building trust, therefore, requires energy and time: and lots of it.

Of course, entropy works in the opposite direction but much faster: while it may take a long time to earn your trust, it only takes one or a few blunders or betrayals in one moment to wreck your trust in me. This is especially important in social media since the subjective experience of Online Time tends to be faster than Offline Time. So perhaps it’s technically more appropriate to say this:

Trust is variably proportional to Valued Action x Time.

Common sense. It’s obvious. Of course, attention to the obvious is the hardest kind to maintain. So what’s the point? you may ask. What’s not so obvious?

ALL ROADS LEAD BACK TO CAPITAL

All investments involve the same two elements as trust: I expect a valued action (Return) over or at the end of the investment cycle (Time).

Which brings us back once again to the core of business, Capital. For Capital depends on Accumulation and Accumulation depends on Investment. Which is to say that Capital depends on Trust.

Moreover, Capital not only depends on Trust – and is not only an act of Trust – it is Trust – at least insofar as the contexts of social relations are concerned (more on that later).

This inter-relationship between Capital and Trust is foundational to all Marketing. It means that you must invest in trust in every portal of capital flows. Revenues are manifestations of the social relations between you and your customers. Expenses are the manifestations of social relations with vendors and employees. Which means: Equity is the manifestation of social relations with everybody, not just owners.

Capital without Trust is a corruption. It’s an acid and, if not buffered in time, consumes itself until nothing good is left (or, to put it more ominously, nothing left is good).

So in the story that you tell your various customers, how are you underwriting their trust? You must know the answer to this above all else, because that’s where you’ll find your Capital.

You have little time and much to do.

Capital is Trust, Trust is Capital.

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What Do We Know About Social Software & Social Capital?

Image representing ShareThis as depicted in Cr...

Image via CrunchBase

These are some thoughts and questions that came to my mind after today’s #HCMKTG chat (2pm EDT every Friday). Two observations in particular came to mind:

  1. Subtle changes in social software can greatly impact the community reach and use of platforms (one platform can  morph into another one very quickly);
  2. An exploration and understanding of Social Capital is needed to better appreciate how the evolving web affects our daily lives

I plan to explore #2 in more detail over future posts, but I need to better articulate them. I’m hoping more of you contribute your thoughts and questions so we can extend and develop the conversation. For now, here are some thoughts for the weekend [link if the embed isn’t visible]:

As always, I’m interested in what you think – it’s why I blog really. So join in: either here or on  Twitter (or if you’re really geeky,  FriendFeed :) ).

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