Fresh Insights from Enterprise Social Business Executives and Practitioners

The adoption of Web 2.0 and social networking accelerated significantly in 2009, and it shows no sign of stopping. Global digital word of mouth is disrupting growing swaths of business models, and CEOs want to understand its opportunities and threats. Although the Web is resplendent with prognostications from social media gurus, the voices of enterprise practitioners are too scarcely heard.

Therefore, the Global Human Capital Journal is pleased to present perspectives from highly experienced executives who share their thoughts on how Web 2.0 is changing their businesses and mindsets. Moreover, they share its limitations and problems. Keep in mind that each contributor wrote independently, and I have made no attempt to unify the view, although I will offer my analysis and conclusions as well as the intriguing backstory below. Here is a sampling of the group's eclectic insights:

• A seismic shift in marketing is emergent, and CMOs will require robust strategies to succeed consistently with Web 2.0 and use it to their advantage.
• Gamification will redefine "work" and "play" and gradually make them indistinguishable.
• Performance demands on government will force it to shed its laggard stereotype and pioneer social business at local and federal levels.
• Arguably the biggest disruption of all is that green energy is enabling billions of previously unconnected people to join the world as participants; China and India are two of the fastest growing economies of the world, and millions of people are jumping online every year. Infrastructure limitations are forcing extreme innovation. Jeanne is on the front lines.
• An exciting new career is digital salespeople who help people to deal with exploding choices.
• The print news industry will struggle but continue to crater—this year, executives will create surprising alliances in last-ditch efforts to control content—and laid off journalists will retool by launching myriad new content ventures.
• The continued explosion of ideas and information will burden attention spans and drive the need for curation and consideration to maximize engagement
• Enterprise 2.0 will continue to make gains, but it will face numerous obstacles.
• Adoption is proceeding in professional services, as reflected by the commercial real estate industry.
• Mobile social networking will see significant growth driven by mobile applications and increased handset sales worldwide
• Adoption in Latin America is mixed; in Mexico, limitations in networks, venture capital and monopolistic telecoms slow progress.
• Ultimately the value created by social networks is driven by trusted relationships, but business will struggle to predict their value. Emerging models will attempt to quantify the value of interactions and trust building.

Enterprise 2.0 Will Shift to a Multifaceted Solutions-Based Approach—But Struggle

R. Todd Stephens, Ph.D., Sr. Technical Architect (Collaboration & Online Services), AT&T, Atlanta, USA

Web 2.0 Interests me from a variety of viewpoints. First, as a technical architect within a Fortune 100 company, I am interested in how organizations are incorporating Web 2.0 into their internal business environments. I want to understand the “how” of implementation and the real value delivered to the enterprise. Second, I spend a great deal of time writing about the impact of Web 2.0 to small business. Web 2.0 can generate real business value in both contexts.

Web 2.0 is impacting change in the interaction and dramatic shift in how work gets done. Global organizations now have to communicate and compete 24 hours a day, and they need tools that enable seamless communication. Whether you’re an employee, consultant or customer, you now have the tools to communicate directly with your audience without layers of management impacting the message. We have seen both a huge migration to Web 2.0-enabled enterprise collaboration tools and limited success with 2.0-only technologies. This is because most people want solutions, not technology. In 2010, we will see the migration away from technologies like blogs, wikis, twitter, social networks, etc. to a more solution-based approach. Organizations will ask solution providers to solve problems with a collection of technologies and processes that include collaborative technologies, mobile devices, unified communications and Web 2.0 technologies.

Web 2.0 will continue to struggle within large enterprises. While we hear the success stories, they are still a very small minority. Some of these difficulties are due to the economy, management, culture, small contribution rates, and lack of ROI models. Moreover, these hurdles will not be overcome by 2010. Despite the rose-colored reporting, our Web 2.0 implementations are not succeeding. The good news is that they are not failing either, which allows them to continue to fight for another year.

New Private Social Networks Will Sip Bing’s Value

Clifton Muhammad, Management Consultant, Infosys & Field Marshall, Obama for America, Chicago, USA

I improve business processes for organizations that face transformation from new technology. As a management consultant with over 20 years of experience with business transformation, I have helped many industry pioneers.

In 2009, Web 2.0 technologies tipped the balance between networks and knowledge. The social networks, which used Web 2.0 technologies, increased the value of the knowledge bases that they tapped, well beyond the expectations of past years. For subject matter experts who used social networks in 2009, the year’s growth in the number of other networked subject matter experts increased the value of the knowledge that each individual possessed, by providing an efficient means to identify the most relevant information in their aggregated knowledge base.

Search engines commoditized a large amount of information, in recent years, through the aggregation of vast knowledge bases—any information anyone wanted to have about anything seemed to become just a google search away—while a big need still remained for curation of that massive amount of available information. With the growth of social networks, the reputation of the person who delivered information began to matter more than the information delivered. The integrity of the people in my social network (for example) became much more valuable than the raw information they held because I wanted to trust the information that I got.

In 2010, we’ll see Microsoft’s Bing and other efforts in search and aggregation miss the mark. Businesses will seek to capture more value from the relationships within their organizations and spend less to retain the reservoirs of information that those relationships will ultimately tap. History provides numerous examples where tolls and transit services followed the realization of a desired resource to capture much of that resource’s wealth. In 2010 new social networking models will develop to enable transit and curation of the knowledge that’s most valued within organizations.

Microsoft’s Bing search engine may disrupt Google’s current reservoir of knowledge, through content exclusivity agreements. However the value of that knowledge will depend on new models of both gated and open social networks. I will seek opportunities to adapt the new models for social networks (such as Ardvark) to capture the greater business value in 2010.

Transformation Takes Time

Ken Kabira, Managing Principal at TrueWorks, CMO Chicago Transit Authority, CMO McDonald's Japan, Chicago, USA

I help organizations define and improve customer experience. Recently CMO of the Chicago Transit Authority, I led two Web 2.0 initiatives: to enable customers to help each other to use the transit and to engage employees to improve how we ran the CTA more efficiently and effectively.

In the first case, we helped the large segment of the Chicago population that spoke little to no English. The CTA website was (and still is) English only. The agency just doesn't have the budget to create sites in multiple languages. We used wikis in various languages to enable people to educate each other on how to use the transit system. In the second initiative, we sought to make employee suggestions more transparent and valuable by using a star-based voting system with a comment section (a la Amazon.com's reader reviews) to get input from the 4,000+ drivers much faster than the pen-and-paper system.

Amazon, Best Buy, and other sites that allow users vote on ideas was the source of our inspiration. One of the weaknesses of employee suggestion programs is that other employees don't get to see and vet what their colleagues suggested. The CTA's Scheduling and Service Planning departments need feedback from bus drives and train operators, but it is difficult to know how good suggestions are or how bad a problem is. By having other operators see the ideas and vote on it, we could try to tap the wisdom of the crowd.

In 2010 we will see more public agencies taking risks to engage in this sort of “flat” information sharing and insight gathering. The biggest obstacle will be the CYA mentality of public officials and the legal departments, which hinder risk-taking. However, it's important to remember that public agencies are rarely rewarded for doing things right, but a slightest error is severely criticized by the press, which never bothers to understand the constraints under which these officials have to operate.

Increasing Adoption in Commercial Real Estate

Michael Lunn, Principal Broker at Re/Max Commercial Property Solutions LLC, Chicago, USA, President of the CCIM Illinois

I am a commercial real estate broker on the front line of delivering value to ROI-driven clients. I also serve as President of the Illinois CCIM Chapter. CCIM is the top designation in commercial brokerage. Mine is a black and white, what-have-you-done-for-me-lately world, but most of my new assignments come via referral and reputation.

Commercial real estate professionals have embraced LinkedIn, but they shun Facebook and Twitter as frivolous and unprofessional. Blogging has reached a critical mass, as has using private peer-to-peer email systems like mailbridge, which enables our 5,000 members to ask the (private) crowd about: inside information on a certain firm, procedural/legal issues or trusted people to whom we refer business. This is more focused than LinkedIn, and I receive better quality responses than asking 50 million general members the same question. Our business is becoming more competitive, so the true professionals are experimenting and getting out of their comfort zones to adopt new technology for their own and their clients' benefit.

A key trend is that professionals are weighing carefully where to invest their loyalties because technology gives them a choice. Whether they work for a national brokerage or an independent firm or perhaps they change geography, they have more choice in how to build their networks. Does it make sense to invest their limited time for networking within their current firm or in one geographic area, or does it make more sense to focus on their trade association affiliation and invest time there? The idea is find and commit to supporting the highest quality group that will let you join. I may be a bit biased, but this distinction "clicks" with my peers, and I believe has a common compelling logic for other industries. Group loyalties will transcend employer loyalties.

In 2010, I see top professionals in our field seeking to bend technology to their short term needs continuing, and CCIM intends to use platforms like groupsites.com. Our goals are to have our volunteer boards interact more efficiently between meetings, and to extend our value geographically as we seek to serve more members. Within my firm, we intend to build our own CRE groups dedicated to topics like property taxes. Group members are motivated and frustrated, so they contribute their unique experiences and insights. Members are by definition prospective customers of our primary services. 2010 belongs to those who are aware of their surroundings, and who are willing to adapt quickly to events as they unfold.

Flight to Quality and Subscription-based Models

Nicholas de Wolff, Business Strategy Expert, Chair - National Film Festival for Talented Youth, Los Angeles, USA

Most recently, I served as Chief Marketing Officer for a large multinational technology service provider. As co-founder of the New Media Council of the Producers Guild of America, and a member of the Interactive Media Peer Group at the Academy of Television Arts & Sciences, my interest in emerging media is both technologically and creatively motivated.

I have seen many peers adopt Web strategies inappropriately because they are under pressure from either agency vendors who should know better or from executive management (or even shareholders) to pursue the "next new thing". Unfortunately, too many people are diving into the Web 2.0 and 3.0 pools before they even know with whom they are swimming. The best Web advances are as yet merely trends that will only solidify their value propositions with time. Any good marketing executive must have a Web strategy, but it must be a well-researched and fully informed strategy, which requires either a hefty and well-aimed commitment or great patience. 2009 demonstrated that businesses and consumers alike lacked the latter. Meanwhile, companies like PepsiCo and Starbucks were making the investments, with the results still in question.

2009 saw ubiquity and expansion trumping security and selective pre-qualification. Facebook et al have risked alienating their enviable user base due to their efforts to widen their sphere of influence and, while I believe the gamble will ultimately pay off, other ventures that sacrificed quality of infrastructure for market penetration may not fare so well. Meanwhile, Microsoft has continued to plod along—confident that infrastructure control will yield long-term benefits that far outweigh shorter term gains. Bing, Office 2010, and other releases will soon show whether the giant's focus on security and robustness will be able to wrest the gains made by the likes of OpenOffice.org, Google, Firefox and others. The fact that Microsoft has stopped (for the most part) behaving like a behemoth, and is once more allowing its business units to function with a greater degree of autonomy, is a good sign.

2010 will bring a slowdown in the rate of release and adoption. 2009 was the year of acquisition of market share, and I want to see 2010 become the year of refinement and quality of service. Many ventures will focus on quality, and those that do not will be left in the dust by consumers no longer willing to put up with anything but the highest levels of product and solution service. As a result, later 2010 and early 2011 will see firms shift to subscription-based business models from advertising and VC funding.

Just as film studios are becoming entertainment content aggregators for the screen(s), so social media networks and hardware platforms are becoming application aggregators (the new short-form content delivery model?) for multi-platform media and entertainment. Look for AP and Reuters to release apps for Blackberry/iPhone/iPad/Android/FB/Foursquare/Kindle, while NYT and WSJ release apps for the same, as well as PC/Mac and Linux. The USER will not permit themselves to be limited by device, and will subscribe to content and app providers who are platform agnostic (within reason).

Finally, brands that recognize that they do not necessarily know it all will reflect a balance between expertise and collaborative engagement, so the industries and consumers they seek to engage will self-identify. Consumers will be drawn to not only these brands' physical products or solutions but also to the evolving and strengthening reputation of their character. Consumers say, "Listen to my feedback, ill-informed as it may sometimes be, and help me maximize and leverage my faith in your product or solution. Your reward will be my enthusiastic promotion of your offering."

Seismic Shift in Marketing

Randall Beard, CMO, Nielsen IAG

I am currently Global EVP & General Manager at Nielsen IAG, responsible for Consumer Packaged Goods. I have 25+ years global experience across consumer packaged goods, financial services and high-touch service brands, including Procter & Gamble, American Express and UBS.

With approximately 50% of consumers belonging to at least one social network, marketers have had to restructure their approach to engaging consumers and connecting their brand’s benefit to a compelling need. Marketers have begun to view social networks as a significant marketing contact point (and perhaps even more important than traditional channels) for procuring consumer data and knowledge. The advent of Facebook Connect, OpenID, and similar capabilities has enabled consumers to traverse the web and bring their networks with them.

2010 will see significant evidence of a “seismic” shift in marketing: ROI-based advertising and media. This will help brands analyze what really works and what doesn’t in Web, TV, in-program product placement and cross-media. Based on the airline industry’s principle of yield management, advertisers will increasingly be able to place the right ad in the right program against the right target at the right price. For Web advertising, this means that brand marketers will have to consider the increasingly important, and perhaps even dominant role, of online social communities as consumers interact with each other to make decisions about brands, products and services.

More broadly, media targeting and buying will move from simple demographics to more sophisticated psychographic and behavioral targeting. Media selection will begin to move from simple eyeballs to include consumer engagement with programs, as well as ad effectiveness based on context. Marketers will realize that TV advertising is NOT going away or becoming less effective. Instead, they will begin to understand the importance of planning integrated TV-Web 2.0 marketing campaigns, as well as the importance of designing paid media programs that drive earned media, which, in turn, makes their paid efforts more effective.

Finally, driven by digital and Web 2.0, marketing will increasingly move from an annual plan to a real-time, sense-and-respond function. Marketing effectiveness will increasingly be measured in real time, and adjustments will be made “on the fly,” based on ROI metrics. This will drive a fundamental re-ordering of the marketing organization and governance models.

Mobile Social Networking Will Grow Strongly—Twitter to be Acquired

Alvin Chin, Senior Researcher, Nokia Research Center, Beijing, PRC

Social networking will become truly mobile. This means you will actually be able to record social interactions in real life and dynamically update them to your online social networks.

ZigBee devices will be on the market. ZigBee is the next big wireless technology that has good bandwidth and extremely low power compared to Bluetooth. The technology is mature enough to make it into products.

Twitter will be acquired. Seeing how Ping.fm (what I use to post to all my online social networks) was acquired by Seesmic, I think some company will come to the plate to buy Twitter, even though Twitter does not want to be bought. Perhaps Google might buy Twitter; they bought Jaiku but then killed it off.

Open and portable social networking. Every social network will have its own API, and, with technologies like Facebook Connect and Google Friend Connect, we will see our social networks being brought with us to any Website.

Microsoft's Project Natal will be deployed as an add-on to XBox. Microsoft already displayed the promise with Natal using body movements and will challenge the Nintendo Wii. Look for the add-on on XBox to happen this year.

Pullback from Online Social Networking in Favor of Offline—Newspapers Will continue to Die

Coley Perry, Consultant to Owners, Executives, Managers and their Businesses, Chicago, USA

Revenue models that do not only rely on "eyeballs" will begin to emerge. There are only so many Googles and Microsofts with deep enough pockets to follow the "build it and they will come" and "we will figure it out later" strategy.

Somebody smart will figure out how to put "social" back in social media. The revenue opportunities exist in offline interactions and in REAL LIFE. The Facebook generation does not want to be exploited by advertising, mining of their data, etc. They also will eventually pull back from exposing their data when they realize that social networks are great places for identity thieves, HR departments, parents, relatives, stalkers, etc. Therefore, the offline opportunity will be a great way to create a revenue model around experience, events, etc. As an example, LinkedIn has pop-up networking communities in each of its geographies. What if they would have used their brand to create revenue for themselves by facilitating and providing content for these events. Because they have a subscription model already and additional charge for a worthwhile offline experience would be easy to add to my monthly or annual credit card transaction. Especially if it was an "Expense." LinkedIn could begin to brand as the "American Express" of today. Because of their demographic they could begin to build affinity channels and other "value-add" that are off-line focused that could drive revenue. Think the "LinkedIn Card" or the "LinkedIn-side Lounge" a 3rd place for folks to meet and engage. I pitched this to LI when Dan Nye was in charge and they were interested, since the software guys are back in charge they are more interested in building software than building business.

There will be more M&A activity in the content provider world. Ultimately this will be all about content creation and distribution. Web 2.0/3.0 is just a new set of tools on top of the Internet. I used to call my friend on the phone and tell him/her about the party I went to last night. Now I post to Facebook and do not interact with him/her. This content is interesting and possibly valuable (I doubt it).

Content providers like Mashable and Wikipedia will be acquisition targets of those with deep pockets (i.e. Comcast). In addition, journalists of ongoing newspaper failures will have to retool, which will produce new Web 2.0 ventures and content sources. Think about this. The Los Angeles Times' beat writer for the LA Kings was laid off due the current cost cutting environment. So the LA Kings hired him, and now the LA Kings control their "news."  The print channel is dying, and he can add considerable value to the Kings organization. Does that mean the LA Kings are in the content business? I think so if they want to drive, PR, Marketing, Season Ticket Sales, TV/Radio Contracts, etc.

Traditional newspapers will get closer to official death by the end of 2010. Just like Grunge killed Heavy Metal in the early 90s.

Advances in Facial Recognition—Decline in Value for Some Social Network Activities

Bill Burnett, Partner -- Launchpad Partners, Change Catalyst, Chicago, USA

Perhaps the people who probably profited most from Web 2.0 in 2009 were the Web 2.0 gurus. I think this may continue into 2010. At the same time, the value of social activities like asking/answering LinkedIn questions, and LinkedIn updates will decline due to overuse and misuse.

We may see new players come into the market to compete with LinkedIn, such as clickable graphic user interfaces like Muckety provides. In addition, the capability to use face recognition technology may mean that photos on Facebook may allow the building of connections networks based primarily on photos.

Demands for our attention using Web tools needs to be thought through. People who will stand out in Web 2.0 are those who will appreciate the demands on our attention: they will know when to go after deep thinking, when to accommodate our short attention spans, and when to incent attention.

Slow Going in Latin America—iPhone a Bright Spot

Nicolas Gillet, CEO, Latin3G, San Francisco, USA

I have twenty years of technology and management experience with start-ups, and I've led the strategy of Latin3G since 2004. We launched a professional social network, iximati, in 2009. Its 12,000 users are mainly in Mexico and Argentina. Some Web 2.0 observations and predictions for Latin America are:

Mobile Web 2.0 in Mexico is still slow on non-smartphone handsets. The best thing we are seeing is the rise of iPhone/iPod in Mexico. iPhone/iPod Apps drive start-ups some revenue because they don't have to deal with the carrier monopoly.

I am seeing some positive developments in Mexico: in 2009, many barcamps were organized, new blogs launched, and more apps developers entered the market. However, we have a serious lack of business angels or venture capitalists to strengthen innovation.

Digital Salespeople, 3-D Printing and Games as Work

Ian Hughes a.k.a. epredator, Emerging Technology Consultant, Metaverse Evangelist, Feeding Edge Ltd, Southampton, UK

2009 saw me leave the corporate world of IBM where I had brought enterprises into Web 2.0 and into virtual worlds as an emerging technologist and metaverse evangelist. The fact we have so many ways to connect and do business with one another meant this transition was possible, and required. Here are some of the technologies that will see marked adoption in 2010-2019.

Brands crossing digital borders. Organizations will have to increase engagement with people where they happen to want to be online and offline. It will not be enough, as it was back in the early Web, to just leave a website lying around to be found. Business has to become a travelling exhibit, a movable market stall that can be adjusted and placed wherever people are or want to be. Digitally, distance knows no bounds, but firms need more than signpost or banner ads. They need active guides, persuaders, dare I say salespeople? Maybe I am referring to my evangelist brethren though? People who know the territory, have experience and speak the language working for companies, not just as a sideline that the company takes for granted. 2010 starts to see post-recession rebuilding of businesses. In growth they seek change and efficiency. Just as we saw Amazon, eBay and Google arise from the 90's dotcom crash, is it inevitable we see new players this time around.

3-Dimensional printing. Ten years should be enough for this to become mainstream, as by then the transmission of 3-D content and design with the associated rules and regulations, kite marks, certifications, etc., will start to be in place. Why move goods all over the planet when you can make them locally? It really is a no-brainer. 2010 has seen HP enter the market providing 3d printing. The pressures on manufacturing and logistics from green issues to piracy plus an increased digital design literacy will drive this forward in the next few years.

Games as work. Eventually firms will understand that a significant portion of employees will have spent much of their lives entertaining themselves with World Of Warcraft, Modern Warfare 2 and even Farmville. Firms will work out that there is no reason for humans to drudge along doing dull and repetitive work for the sake of it. Firms that transform menial tasks (at very little cost) into entertaining, morale-lifting and thought-provoking activities will see significant boosts in productivity. Work and business is a role-playing game. Donald Trump says he is not interested in money, but it helps to use it to keep score. (I guess I need to alter the game I play ;) ). This will of course become a lot easier to do as services in the enterprise are exposed, instrumented, rendered and represented in more meaningful ways in environments like Second Life Enterprise. As with all forms of human communication, some people will evolve and flourish while learning to entertain, inform, persuade and motivate using all the online tools and presence that we are able to engage with today. 2010 could well see a landmark venture, a game experience whose aim is to get work done. There is much discussion of gamification. However the cultural acceptance of what work is will take a few more years as the workforce balances generationally.

Renaissance and access for all. Projects like one laptop per child and local country connectivity initiatives are essential. We currently have a divided society in which many of us are the monks with our illuminated Apple logos enabling us to connect with the world. We have an increasing number of people who are just learning to decipher the history of our writings. They no longer need to hear us read it out loud because they write their own digital histories and, more importantly, their futures. We have a few naysayers that are worried that if everyone has access to this, the world will end as we know it. I mean, people communicating with one another and understanding one another's cultures, ideas and needs without being brokered by a ruling class! Education powered by global digital inclusion will drive some huge innovations, upheavals and positive outcomes over the next 10 years. It is putting technology in the hands of people—as a tool to use as it suits them, not just for the sake of a cool gadget—is going to precipitate this generational renaissance.

Emerging Economy Advances in Green-powered Web

Jeanne Heydecker, AVP - Worldwide Marketing at Vihaan Networks, New Delhi, India

An American high-tech executive with 25 years experience with start-ups, I moved to India two years ago. Juxtaposing these experiences gives me a different perspective on Web 2.0's value proposition since I live partially off the electrical grid.

Web 2.0's most transformational potential is empowering disenfranchised people around the world, thereby opening up markets. Connecting the unconnected has become a political cliche, but it is truly critical to lifting people out of poverty, providing opportunities to those who heretofore had a challenging quality of life and few choices. To me, connectivity is second only to a water pump in its significance to a village.

I currently work with a company that is building solar-powered telecom equipment specifically designed for rural areas with unreliable or no electricity. Our systems use very little power (less than a 100 watt light bulb), but they provide voice and data connectivity to places that have had no access to the rest of the world. These systems are typically used by illiterate citizens, so current traffic is mostly voice, and it typically stays within the village and the surrounding area. However, our systems pave the way for entrepreneurs to introduce solar-powered thin clients and servers and establish Internet cafes and charging stations.

This emerging ecosystem opens up new worlds and enables small villages to provide e-learning, e-health and financial education to their children. As these children and their families learn to read and write, the systems will see more broadband traffic. Learning will provide more opportunities and choice. Exposing rural communities to accurate information assists democracy by converting apathetic citizens into contributing and informed voters. We've seen sparks of this in 2009, particularly in countries dealing with corrupt voting systems. Rural communities are the next untapped market for wireless communication: the next billion subscribers will not be coming from urban markets.

2009 was the year that green-powered technology was finally recognized as a huge untapped market with unlimited potential. As fossil-fuel based technologies struggle with higher costs and a finite cap on their potential, I see renewable tech as the next wave of support for powering voice/data communications. There are already solar powered phones, mobile chargers and laptops. Open source software like Linux on thin clients that use much less power will become more widespread, particularly in emerging economies in Central Asia, Southeast Asia, Latin America and Africa.

2010's ICT markets will continue to grow exponentially, with some vendors continuing to focus on the shrinking returns of urban markets. These vendors are not accepting the new economy with its green-powered potential. China and India are the top two fastest-growing markets, and their need for power is huge. The Copenhagen Climate Change Conference did not succeed in making the impact it should have: no one even mentioned the pollution and health hazards attributed to the telecom and internet industries. The renewable sector of this industry will still be a slow starter, even though the technology has been recognized as significant in 2009. Real impact, anecdotal evidence, and significant deployment won't begin until late 2010, once early adopters report their findings. The paradigm shift to sustainable power is still five years away.

Broad Advances in Mobile, Networks and Reviews—A New Facebook Challenger

Steve Ghareeb, Business Development Specialist & Revenue Generator, Chicago, USA

A career business development executive, I have helped companies find and realize significant new revenue growth for the past twenty years. Most recently, I have specialized in working with software and hardware startups. I use Web 2.0 sites to stay current with market and product trends and to determine where the next opportunities will emerge.

Web 2.0-enabled collaboration will unlock extensive value, but this will take time. For example, I encourage my teams to launch wikis for prospective clients to share information, status and questions easily during the prospecting process. When we win the work, the wiki seamlessly transitions to a project tool. My Web 2.0 observations and predictions for 2010:

Ethics and Integrity in protecting corporate confidential information will have to take on a greater emphasis, as technology will not be able to address much of the information exchanged over social networks. I believe companies will wake up to this and start addressing it.

Filtering through what is “real” and “what is not” will get clearer in the next year. Not sure exactly how that will happen but believe it will be part technology and part evolving social protocols of what is acceptable in the various mediums.

Clear’s 4G wireless push will drive a competitive upgrade in mobile and residential broadband for both access and speeds by all providers (wireless, cable, DSL). This will create many new opportunities for both business and consumer Web 2.0 applications, especially those that are mobile but require more bandwidth.

Google’s Android will also push mobile apps across the board for all phone platforms. The application development will become simpler and more widespread, and the applications will take off and become very specific to user needs.

Mobile Web apps for input and feedback will make some huge strides forward. They will get considerably easier to find, view and use.

Consumer/Purchaser reviews will explode in 2010. It is common and useful today but not everyone knows it yet. The word is spreading like wildfire. Amazon reviews are a great source of info for virtually any consumer product whether you buy from Amazon or not. I am curious to see what centralized resources develop for the sale of commercial B2B products.

Another social networking tool to challenge Facebook will show up and begin growth with early adopters and the younger generation of users.

Content delivery models will get significantly refined with ROIs based on some sort of revenue. It may be indirect forms of revenue but it will become more measured, studied and accountable.

More media content will become subscription-based, especially in vertically-oriented content delivered via Web and e-readers. Ubiquity of readable content across devices will accelerate.

Government Web 2.0 information, applications and use will also explode. Significantly more useful information. Ironically, this will start with the Federal Government and trickle down to state, county and local levels.

Old Media Strange Bedfellows Strike Back—Mixed Results for Corporate Web 2.0

Richard Miller, Ph.D., Marketing & Web Business Strategy Executive

I've been a marketing executive focusing on digital solutions and innovation for over 20 years. I have been constantly involved with helping large organizations build their businesses by adopting technology-driven innovation. Over the past few years, I've advised large organizations, small businesses and individuals on the value of Web 2.0 and the importance of actively managing the process for their businesses, their professional and personal lives, and the human factors driving adoption and change.

In 2010, old media will take more radical steps in an attempt to survive. They will form niche alliances that would have been previously unheard of, and they will declare war on the aggregators with creative solutions (e.g., by blocking links to their content—an 'all or nothing proposition' recommended earlier by Mark Cuban). News channels and their news organizations will not survive when they strive to look the same—by simply putting all of their content online and giving it away. Newspaper, television and radio Websites have created a sameness that’s unsustainable.

The pillars of social networking, such as Facebook, LinkedIn and Twitter, will continue to solidify their positions through increased adoption by the public. However, pressures will increase on them to get paid for their services. Some of the pillars' new paid services will drive consumers to more niche players that deliver value that's more easily understood by individual niche users.

Large companies will continue to experiment with their social media business models, but in most instances they will see only modest success. However, those companies will begin to understand the emotional benefits that virtual connections provide individuals, and they will learn new ways to better leverage those ties. After all, people are all inherently social creatures who need to connect and engage others through the weak ties and small touches that Web 2.0 provides. We have become both less connected and more connected through the advent of Web 2.0. Companies will place more value and importance on the 'social' part of Web 2.0 and figure out better ways to include the lost art of conversation in their marketing plans—the art of listening, learning and sharing.

Strong Corporate Adoption Across the Board due to Solid 2009 Gains

Suzy Tonini, Manager, Member Firm Online Communications, Deloitte Touche Tohmatsu

I currently serve as the communications liaison for 54 Member firms in over 140 countries and with approximately 169,000 employees.

My vantage point for viewing Web. 2.0 is that I work online for a large trans-global firm. Social media and Web 2.0 are breaking down cultural and country barriers to an unprecedented degree. People are meeting each other within the firm in ways that would never have happened before: they are sharing expertise and information, creating a knowledge repository, and being transparent in the exchange of information.

Web 2.0 is important in shaping internal global collaboration and innovation, as well as creating a large brand presence via Twitter, LinkedIn, YouTube and Facebook. These efforts have been beneficial for recruitment, attracting clients and connecting with existing clients. In addition, Web 2.0's reach and cost-effectiveness have been a huge plus in these recessionary times.

2009 was the year of laying the groundwork for using internal and external social media. 2010 will see various web 2.0 efforts being fine-tuned and much more widely adopted. People's comfort levels will be much greater, ensuring faster adoption and more streamlined processes. Web 2.0 will be on its way of becoming as ubiquitous as email. The mobile web will also became an extremely important method of communication, as mobile phones and PDAs become more sophisticated while steadily luring new adopters with easy to use features.

Focus is on Demand Creation and Value Measurment

Rob Peters, Chief Evangelist for the Relationship Networking Industry Association (RNIA) & Principal Leader, Banking Practice for Computer Sciences Corporation (CSC)

I serve as Chief Evangelist for the Relationship Networking Industry Association (RNIA). RNIA is a neutral workgroup. We build and maintain the Relationship Infrastructure to facilitate and measure quality interactions between "entities", including people, job positions, workgroups, products and assets. We also certify people who demonstrate mastery of aspects of the relationship infrastructure. I also have 25 years of business development experience in consulting, technology, & application outsourcing.

Greater focus for most companies will be on demand creation through use of social media & Web 2.0 technologies. The old way of marketing and selling is not very effective or efficient for most industries anymore. Business leaders must have key performance indicators that measure the effectiveness of Web 2.0 interactions and 2010 is the year where adoption and measurement become more strongly integrated. Better use of measurement techniques on the cause and effect of "Earned Attention" in the generation of revenue and profit will top of mind.

Renowned "DRIVE" author, Dan Pink states that in the knowledge economy, people are motivated by greater autonomy, mastery, and purpose—not by carrots or sticks. In 2010, successful companies will be those that can intersect these personal motivations, Web 2.0 technologies, and key performance measurements that result in strong relationship capital interactions that generate revenue and profits.

The rules of the road for developing strong relationships online are rapidly maturing. In 2010, business leaders will begin to see the need for relationship standards so that these intangible assets can be managed more effectively. Web 2.0 technology is not enough without a financial management process overlaying these online interactions. These answers will not come from the Financial Accounting Standards Board (FASB), but by Web 2.0 and social media leaders from across the globe.

Sociology Will Become the New Economics

Christopher S. Rollyson, Founder, The Social Network Roadmap and The Executive's Guide to Web 2.0 & Managing Director, CSRA Inc. & Founder, the Global Human Capital Journal

Digital social networks are one of the most important innovations in human history because they change the economics of relationships. They will disrupt every aspect of human society. I write this to communicate the importance of building competency as individuals and leaders. Too many executives regard social networks as a technology event because they do not understand that the cost of discovering, building and maintaining relationships is falling by an order of magnitude—globally. This will increase volatility and make some products and companies irrelevant with unprecedented speed.

Moreover, the most experienced people within organizations do not understand the social context of pervasive transparency and the new categories of relationship that social networks require. Experienced workers are slow to embrace digital social networks, which are a transformational new tool that will drive productivity through the roof for those that see the opportunity and use it. Adoption within the organization will require awareness of social interaction, which business has formerly considered as peripheral at most. Sociology will rapidly become the new economics.

Analysis and Conclusions

Writing as the Editor in Chief, I am very impressed by the diversity and power of contributors' insights. Depending on where you sit in the web of the global economy, any of these could hold tremendous opportunity or threat to your business.

• The Euro-centric world that was enabled by the levers of the Industrial Revolution is rapidly morphing to a multipolar world. Ian's and Jeanne's insights drove this home.
• Billions of people are accessing the Internet, and new technologies are emerging to enable them to communicate. Social networks create a digital social context that can bring people together, especially people who are sincerely interested in others and culturally astute.
• Industrial Economy marketing will rapidly become an anachronism, and CMOs must astutely accept this and turn it to their advantage. Randall, Ken and Richard shared diverse thoughts on this. Tactically, marketers must shift from talking to people to encouraging them to talk among each other. I look forward to learning more about Ian's digital salesperson idea.
• There will be extensive experimentation with digitizing sociology, and the RNIA is one fascinating example (disclosure: I was an early contributor).
• A key means of unlocking the economics of social networks is encouraging many-to-many collaboration, as Ken pointed out. To enjoy the benefits, organizations must enable emergent organization, which is not in their comfort zones. Autonomy is an enabler. It energizes people.
• Although social networks will ultimately change our world, smart executives will realize, as with all other major disruptions, they must walk a tightrope: adopting the disruption aggressively while managing their legacy business processes and integrating wisely.

Backstory

The Global Human Capital Journal decodes global transformation trends for CEOs, CMOs, CIOs, and we have focused on Web 2.0- and social network-driven disruption and opportunity since 2006. To celebrate accelerating adoption of social networks, I asked my LinkedIn Group, CSRA Innovation, to participate in this collective crystal ball gazing initiative. I managed the whole process within LinkedIn, with assistance from GoogleDocs.

This project itself bears testament to the power of digital social networks. Our contributors are extremely limited in time and attention, but the work processes and tools enabled us to make it happen. Some not-so-obvious points: create groups with trust and purpose. CSRA Innovation is exclusively focused on enterprise social networks, and this was our first collective project, which will serve as an example for others. A committed group becomes an expertise platform, which requires some organization to unlock. Moreover, it was an emergent process: asked about the group's interest, designed the project and put it out there. Contributors delivered!

"We are flying into some turbulence, so please return to your seats and keep your seatbelts fastened while we try to find more favorable winds."

As chronicled in the just-published Decade in Review 2000-2009, the twenty-first century is proving to be volatile and disruptive in every way, and 2010 will continue the trend. Three disruptive forces are converging: the relative value of the Industrial Economy continues to fall as overproduction reigns. Globalization is replete with extras that people at the head table didn't order. Most imperceptibly yet poignantly, the emerging Knowledge Economy is digitizing communications and changing the economics of knowledge and relationships. Web 2.0 and social networks drive down the cost of communication, which accelerates volatility because when people talk, ideas change and lead to action, and digital conversations happens faster and less expensively. Social networks are rapidly making "the Web" human, thereby attracting an ever-larger portion of all human communications online. In 2009, adoption reached critical mass, ramping strongly among consumers, so many enterprises are following. The Web 1.0 adoption rhythm is very instructive.

Pervasive Web 2.0 also means reexamination or disruption of most areas of life, culture, society, government and business because social networks alter how many and what kind of relationships people have. The impact is similar to Ford's production line, except it is more powerful: it scales relationships. Large organizations will remain in a profound state of turmoil because they were not built with withstand the volatility these forces are unleashing. Many Fortune 500 companies will be confronted with their survival, and some will not make it. Entire industries will consolidate over the next several years (automotive, airlines, banking, hotels, food, consumer goods...). Web communications mean we consume novelty far more quickly, which curtails product life cycles and leads to ultra-fast commoditization. Companies will require unprecedented innovation to even stay in place. New entrants around the world compete for customers and leverage their lower costs and better innovation processes. And Web 2.0 is still in the early stages of adoption.

This dynamism elevates opportunity and threat for executives and their organizations, so our focus here is to lay out probable milestones for 2010 to assist executives in business strategy and career planning for 2010 and beyond. First, I will lay out predictions, on which I'll build for my 2010 recommendations. By the way, this follows Year in Review—2009/Social Networking Gains Legs on Heavy Seas and Decade in Review 2000-2009/The Rise of Web 2.0, the New Pervasive Human Space.

2010 Predictions

1. The Economy will continue to be unpredictable, and demand will be spotty in 2010. Numerous structures of the global Industrial Economy are in doubt, which delays business decisions everywhere. The U.S. juggernaut has serious economic problems related to healthcare and the lack of fiscal discipline that will not be resolved soon, and no one really knows what the impact will be, except it will be significant. Japan and European economies have similar issues for similar reasons (except healthcare). Related to this, there is more uncertainty around the U.S. Dollar as a reserve currency than there has been in decades. Major economies' central banks are aiming to ease back on the assistance they have been using to support their economies, and this entails significant risk. Unemployment will continue to be high due to the uncertainty, and this dampens consumer demand. Overproduction is rampant, which keeps deflation on the table as a potential risk. These are all structural issues that call for leadership and discipline in facing the unknown. I wish I could see "quick fix" scenarios to any of these, but I cannot. These conditions will persist for some time, so I advise clients to embrace them as a reality.
2. Company failures will continue to make headlines. Automakers, airlines and consumer goods firms will fail or be sold on the cheap. Industries will continue to consolidate to take production capacity out. Mainstream media titles will disappear: newspapers especially will continue to see readership and ad revenue plummet. However, online advertising will continue to increase, and ad agencies that cannot transition to digital fast will fail. This will force governments with unpalatable choices: support enterprises that are "too big to fail" or let them go under, disrupting the economy either way. These decisions are affecting most of the world's largest economies. Worse, 20th century leaders still cling to the idea that BRIC will drive up demand for their products, but this will largely prove to be a mirage: emerging economies will rapidly innovate and grow their own industries to cater to their growing demand.
3. Employment for executives will be stagnant, which will require them to commit to consulting, not only as an interim arrangement between jobs but as a more permanent career. Industrial Economy organizations are transforming, so this will permanently change the structure of work, but demand for services will persist. Organizations in turmoil will avoid hiring as much as possible, but they will urgently need expertise and will contract extensively. Smart executives will chunk their expertise smaller (consulting), but this will require them to use social networks to reduce business development costs. In a related development, executive blogging (more below) will see case studies in which executives are hired or contracted due to their blogs. Within 3 years, executives in several industries will be expected to have their thoughts online. Consulting is the new employment ,^(
4. Marketing 2.0 will conquer numerous big brands because Industrial Economy push marketing is a deflating dirigible, and customers are experts at tuning out mass media. Marketing 2.0 combines digital and word of mouth in a new philosophy, to treat customers as collaborative partners. Marketing executives have been intensively interested in Web 2.0 during the past two years, and they are increasing their investments slowly. Marketers still have to confront their assumptions about how to engage customers: too many marketing organizations still talk about "content" that they push to consumers. The customer wants to hear other customers, and too few marketers understand that. According to Forrester, digital agencies are displacing traditional agencies in agency of record roles at big brands, and look for this trend to continue. In tough times especially, CMOs love digital's ability to offer ROI. What they lack is relationship-focused investment models for social networks. Their agencies' DNA is creative, not roll-up-your-sleeves customer contact and relationship building (it's not sexy), which will lead to disappointments.
5. Social business will see mixed results—on one hand, marketing spend will increase 2x or 3x this year. Given #4, social media, which connotes pushing content through "social" channels, will grow the most rapidly because it is closest to legacy marketing thinking. Social networks will grow more slowly because they require new thinking and skills, but they will increase engagement much more. 2010 will be a parade of case studies. However, this upsurge will be accompanied by a palpable backlash against "social media" in which mainstream media (MSM) will criticize social's lack of effectiveness, but usually for the wrong reasons. Too often, MSM doesn't get Web 2.0, and they have have negative attitudes because Web 2.0 is raising the bar for transparency, speed and analysis while it takes attention away from them.
6. Companies will build "social media" teams in earnest. Beginning in Q3 2009, CMOs and CEOs began asking for social networking strategy to weave together their initiatives and synchronize them with business strategy. Consequently, the Social Network Roadmap features prominently in my practice, and this trend will continue into 2011. Large commercial and government organizations have been experimenting, and marketing leaders no longer seriously think of social as a fad, so they will hire "directors of social media" in 2010, and early adopters will create spots for vice presidents of social media and social networking later in the year. These social execs will manage teams of internal and external bloggers, twitter jockeys, video production people and community organizers. "Community Organizer" will become a piping hot position, too.
7. Social network platform review—2009 was sizzling hot as social network platforms vied for attention. This market couldn't get more dynamic or competitive as key players broke boundaries, invaded each other's turf all year, with no end in sight. Here is my back-of-the-envelope on some of the major platforms:
   • Twitter—served as 2009's dark horse and disrupted the Web 2.0 ecosystem, jangling market leaders Facebook and Google. Twitter created another category of social space that very few people understand yet, especially those who comment from the sidelines. Twitter's competitiveness is largely driven by the social context it created—ubiquitous real-time status—and that remains its key competitive advantage. People are sharing every aspect of their experiences, even very private things, on Twitter because each tweet is only a glimpse. Twitter is lowering privacy barriers and changing the game. Because people tweet from everywhere all the time, followers are becoming a substitute for Google's search for some use cases. Meanwhile, Twitter will be seen as the tipping point for the end of walled garden model. I don't expect Twitter to go through any ownership changes in 2010; they've already turned everyone down, their paper value is at parity with Facebook's and their numbers are strong. Most people don't know how to use Twitter yet. They are fielding enterprise services in 2010.
   • Facebook—Facebook is the "portal of life" in which an increasing portion of executives and their stakeholders engage and share across all spectra. Until 2009, Facebook had a walled garden strategy: "Attract everyone to Facebook, where they would transact and we would learn more about them." They wanted to take over the world by attracting the world to them. Facebook is one of the stickiest sites in the world, measured by length of time people spend on it. They reversed that strategy in December 2009 with the change in privacy, and they are opening the wall to push private content to the Web, where Google can access it and get Facebook more exposure (and advertising revenue). In typical form, Facebook didn't give members much choice as some content was reclassified (i.e. friends are now public). Facebook is still struggling with converting its tremendous stickiness to revenue. It is much more likely to acquire others. Its recent deal with Yahoo was hailed as a coup de grace due to the opportunity to create synergy with the two huge audiences. Facebook is acting like a large company now.
   • Google—is the nervous system of the Web, and its overall strategy is to encourage people to forsake the machine for the cloud (hence the battle with Microsoft). Twitter has been a godsend for Google because it has turned the tide away from the walled gardens. Facebook was a thorn in Google's side because its growth and high-value transactions were invisible. Google is not a social company per se, but I include them here because they are such an influence in the market, and they are experimenting with becoming more social. They are challenging Microsoft, they launched real-time search to neutralize Twitter's erstwhile real-time advantage. Moreover, Facebook sees itself as competing with Google, with the differentiation that it measures social transactions among friends. Google is likely to acquire.
   • LinkedIn—is the quintessential B2B enterprise play; it is relatively outside the mainstream news, but it is executing its strategy of becoming the executive collaboration platform of choice. It has seasoned hands at the tiller, and I expect LinkedIn to drive further into the enterprise in 2010. This also represents a change: in 2007 the company had a competitive stance vis à vis enterprise software providers, now it is partnering with them. If LinkedIn maintains this strategy, it will avoid major transactions; it can play a slow game and will end up rewarding shareholders handsomely. No transactions, but I expect select strategic alliances to continue. As I've said for some time, LinkedIn can become the swiss bank of executive profiles, and I was excited to see the unveiling of LinkedIn API Platform go live in November.
   • MySpace—constantly surprises me during client work, although it has clearly lost its title as the leading social network to Facebook. However, depending on the demographics of stakeholders, MySpace can be an extremely relevant platform for engaging people, as I've repeatedly discovered through client work. Leadership of the company is wandering, and management is delivering relatively little value add, but the community is large. It is the platform most likely to be bought as leadership doesn't seem to have a strong vision or business strategy. News Corp failed the acquisition and doesn't seem to have the vision or skills to make it work, so I expect it to unload MySpace, which could only benefit the company.
8. Social tech will relentlessly drive rich experience into the cloud, but few people will notice. At a minimum, watch for 3 key trends and, even better, consider pilots with them.
   • Federated identity will gain significant traction. Examples are Facebook Connect and Google FriendConnect which enable users to use their credentials to log in to third party websites (think "single sign-on" for the Web). This will encourage more mainstream users to interact with Web 2.0 sites, which require logins. More important, however, it will make friends portable. For example, log into CNN.com via Facebook Connect (FC), and your Facebook Friends who are also members of CNN.com will appear when you're on the site, so you can read their comments or interact with them, and share this on your Facebook Wall. It enables you to interact with Facebook Friends on third-party sites of which you are all members (have logged in with FC). Google FriendConnect is a similar offer except it is not restricted to your "friends" because it doesn't know who they are. Federated identity + social will rapidly become a mechanism for people to ask their friends for input on buying decisions. It will change how people buy.
   • Syndication will ramp strongly in 2010. For one example, LinkedIn's Platform enables developers to syndicate LinkedIn data into enterprise applications. The Web 2.0 ecosystem will see significant advances in 2010 in which experience is the seamless result of content and functionality of multiple properties simultaneously. The rule is, don't recreate, syndicate. Leverage the ecosystem.
   • Widgets have been around forever, but they are vastly neglected as engagement tools. A widget is a mini application whose code normal (i.e. non-tech ,^) people can put on their websites, blogs or social networking profiles. Google FriendConnect is a simple example. Companies thus gain a foothold in others' websites; however, to win this right, their widgets must do something interesting and valuable, so the person wants to have that functionality on her site. Widgets are another way to create and leverage the ecosystem by letting stakeholders create with your information or functionality.
9. Social business models and tactics will see more case studies in 2010, and here are four with which you should at least experiment in 2010:
   • Crowdsourcing—loosely means asking the crowd for input or advice on important questions, usually in a transparent venue, so the crowd itself can vet responses, driving up quality and cred. Most executives don't understand the dynamics of transparent forums, so they overlook the potential, which has three key levers: 1) quality is high due to the crowd's diversity and ability to evaluate responses; 2) crowdsourcing increases engagement because people feel honored that you are asking their opinion; 3) it is fast and inexpensive. You cannot afford to not crowdsource because you will be harmed by competitors who do. It is not complicated, but you need to develop expertise and approach to how to ask, manage venues and follow up to maximize value. One brilliant enterprise example is Facebook's globalization strategy.
   • Comm-Co—is my term for "community company," the Threadless's model. The company serves as an enabler for its online community, which designs products and decides which products are made. I predict that Comm-Co will become widespread for consumer products in general. I'm talking ketchup, apparel, bicycles, tech gadgets, cars. By giving customers a role in designing products or services, you give them a chance to give of themselves, increasing engagement. Give your company to your customers, and your profits will climb. Specifically regarding Threadless, the company has an opportunity to syndicate its business model, as Amazon did. As you remember, Amazon pioneered numerous e-commerce technologies and business processes, and it subsequently used its model to serve as the back end for other companies (i.e. Toysrus, Borders, Target). Did you know that Zappos gives seminars on using culture as a competitive weapon?
   • Pro-Am—mashes up professionals and amateurs to collaborate. Amateurs supply passion, out-of-the-box ideas and time while professionals leverage their expertise. This creates a powerful profit-making cocktail that will become a dominant business model in the next 3-5 years. The Industrial Economy was about buyers and sellers, producers and consumers. The Knowledge Economy is about collaboration. Everyone is an amateur of several things and an expert is a couple things. Unlock the value by inviting amateurs to contribute. Quality is high and cost is low. The Pro-Am model will be prominent in continuous innovation.
   • Gaming and virtual worlds have negative connotations for many executives ("waste of time"), but when you abstract them, you realize they are just structured types of engagement, and many online games and worlds are intensely collaborative. Collaboration in social network forums and gaming are along the same continuum. Contrast World of Warcraft and Wired's experiment with starting over.
10. Consumer empowerment will see prominent case studies in 2010. Empowerment refers to individuals using Web 2.0 technologies for citizen activism, outing companies or governments or people. Now everyone has a digital communications megaphone, and people will increasingly use it. Expect to see examples like Saint Regis, United, McDonald's and others. This will call for Web 2.0 disaster recovery services. This threat will increase exponentially as mobile phones have video cameras, so your company is one click away from YouTube.
11. Mobility and mobile social networking have been simmering the the U.S. for years, and 2010 will see significant growth. The U.S. lags Asia and Europe for several reasons: computer penetration is high, wireless network is poor, provider environment stifles innovation. In most of the world, people access the Internet with their mobiles, and this will start coming true everywhere.
    • The iPhone has mainstreamed the market for smartphones in the U.S. due to ease of use, smart design and focus on "iLife" (music, movies and business). Meanwhile, iPhone applications have extended the "phone" to almost any area of human endeavor, so it has become a limitless tool. The U.S. carriers are, if belatedly, finally at 3G. Other significant device competitors like Android and Blackberry will only extend the trend.
    • Mobile devices are mobile computers, and they give people the ability to create text, photo, audio and video content and publish in 1 or 2 clicks. Every person is increasingly a publisher, which will disrupt many businesses. Companies need to develop a mobile strategy in 2010 with some urgency in order to take advantage of this opportunity to engage people wherever they are in time and space. This will take time because they will have to rediscover how stakeholders experience their company. Increasingly, stakeholders will share all aspects of their experiences, and companies need to engage them.
    • Mobile payments via mobile phone will continue to make inroads, increasing the importance of "the device." These are taking 2 forms: P2P services like Nokia Money and POPMoney and Mastercard's MoneySend. Nokia is also a leader in mobile contactless payments (via RFID and NFC technology). This will proceed slowly in the U.S., but it is advanced in parts of Asia and Europe.
12. Video will be increasingly mainstream, which will require companies to have strategies and processes to be present. As you've undoubtedly heard, YouTube is the second largest search engine in the U.S., behind Google. It means that, for many people (they skew younger), the first request for information is for video, which will eventually displace reading as the main medium for information gathering. Video requires production capability and some coordination of camera and verbal channels, so this is not trivial. The tools are getting easier to use every quarter, which will increase participation. Google is working hard on technology that "reads" video and makes video content searchable. Of course, their endgame there is attaching ads to the YouTube video vault. This is certainly an audacious undertaking, but I'll wager that they have put significant resources against it.

2010 Recommendations

I hope you can see that the Knowledge Economy represents a profound shift in society and business. The good news is, the way you make your transition to it will largely determine whether you survive or thrive. As I review this list, the macrotrends I see are economic uncertainty and increased collaboration tools, skills and expectations. Your company's place in the value chain/web and your relationships with stakeholders will determine how immediately these trends affect you. In general, customers are consulting each other on what, how and when to buy everything, so companies need to be engaged with influencers. It is no longer about having ads and "content" available, it's about interacting and creating relationships. Your company needs to know how to show the right people how you care about them. You can't buy this, you have to earn it.

Based on my experience with disruptive technologies and current work advising companies and executives on their Web 2.0 adoption strategies, I'll offer this guidance for 2010. I invite your questions in comments or privately.

Enterprise

• Identify, define, understand and engage your Web 2.0 ecosystem. Web 2.0 communication and empowerment are rapidly changing stakeholders' expectations, and most companies do not understand how. You need concrete answers for:
  • What are stakeholders (customers, investors, regulators, employees, partners, alumni...) doing in Web 2.0 venues?
  • Why are they there, what are they trying to accomplish?
  • Which venues do they use, how do they use each venue and why?
  • How are they engaging with each other, competitors and other players?
  • Based on your culture, core competencies and business goals, how can you engage efficiently and effectively?
• Develop resident skills with Web 2.0 technologies, processes and sensibilities. This is a strategic imperative because stakeholders will increasingly expect you to be available. Your presence will have a major impact on buying decisions. For many companies, 2010 will be the last year that they can move ahead of their competitors. Keep in mind, Web 2.0 is all about social behavior; it's not a technology you can buy and put in place; your people and proxies have to learn how to act, and that's a process you need to pursue aggressively.
  • Blogging is about what you think, not about selling. Leave the latter for your Website. No matter what your business is, you have to share your thoughts online. This also means engaging bloggers with impact on your stakeholders by commenting on their blogs.
  • Contribute to online forums frequented by stakeholders. This might be LinkedIn Answers, industry forums prominent blogs, MySpace or Yahoo forums, wherever stakeholders are asking questions and solving problems.
  • Deploy social business infrastructure internally to drive skill development and increase productivity; kick off pilots in which teams use wikis, blogs, microblogging, social bookmarking and rich media.
• Assign a top executive to manage your adoption of Web 2.0 because changing stakeholder expectations will change your business. Do you want to let this happen to you reactively, or do you want to proactively help guide stakeholders' expectations?
  • Develop a social business strategy that includes: your overall approach considering risks, rewards and business strategy; goals, timelines and resource requirements; metrics and measurements; a risk-managed process to scale your initiatives. Your availability to interact with stakeholders will increasingly drive your brand value because they will expect you to be present, appropriate and sincere. Your company, employees and proxies need to learn how to do that. It's not easy because people have to unlearn some key things that used to work but no longer do.
  • The strategy will enable you to create a strategic dialog among management; in 2010 and 2011, executives are going to be doing remediation because social projects are happening all over the enterprise, in some cases counteracting each other. I'm not advocating centralization and controlling message, but having goals and meeting them collaboratively will significantly increase returns.
  • Create a strategic dialog within the organization and with partners and people outside. You need an adoption approach that considers the spectrum of risks and focuses your efforts on rewards that move your business strategy.
  • Your champion should have experience leading "innovation"-type initiatives that break rules and ruffle feathers. S/He should also be open to personally embracing social practices (i.e. blogging, tweeting, interacting online).
• Create and maintain a relationship-centric mindset for your Web 2.0 initiatives. See the Social Network Life Cycle Model and the Relationship Life Cycle for more on this.
• Use risk management best practices to maintain momentum. Keep pilots small, specific and rapid to shrink ROI discussions, measure results and scale what's working. Quickly.
• Partner with IT on your initiatives, and engage "realistic enthusiasts" to understand IT's capabilities and willingness to syndicate social content in from outside (LinkedIn Profile information, for one).

Individual

• Start blogging. Here is my free Quick Launch Guide to get on in about an hour.
• Take your LinkedIn Profile up a level. People go to LinkedIn when they are looking for expertise. Remember, Web 2.0 is about interaction, not content. You can pay for content, but your attention is priceless. On LinkedIn, this means:
  • Participating in LinkedIn Answers: answer others' questions and ask questions; this attracts attention
  • Putting your slides on your profile via Slideshare
  • Invoking your blog posts on your profile with the WordPress or BlogLink Apps
• Commit to tweeting. Twitter is a new mode of communication that you need to understand because it is transforming communication and creating new kinds of relationships. See Twitter: Key Disruptive Innovation of the Decade.
• Cut back on unproductive networking. Don't fall into networking as an activity trap. If you drive an hour to/from an event and spend 3 hours there, that's half a day. You could have written 6 blog posts and answered 4 LinkedIn questions. When you have a content strategy for your blog, it creates digital breadcrumbs that are always working for you. If you choose the LinkedIn questions you answer judiciously, people will discover them at any time. At face-to-face networking events, the value dissipates much more quickly. I'm not saying to reduce face-to-face significantly, but cutting back on two events per month will give you more than enough time to ramp up online, where the leverage is far greater.
• Relentlessly conduct yourself so that you increase trust with people who count. Make introductions, answer questions, give help, ask for help, follow through on what you promise. In Web 2.0 environments, other people are observing our interactions. We can choose to be creeped out by that, or use it to our advantage. When you are authentic and help people, other people see. Huge leverage.

"We made it! Welcome to Socialtech International Airport, where you can make these connections: Twitter at gate 12C, LinkedIn at 6A, Blogging at 3B..."

We need to upgrade the turntable again! When I emerged from undergrad in the eighties, the economy was rotating at 16rpm, which we doubled in the nineties with Web 1.0 to 33rpm. The 2000s had us grooving at 78rpm. Even though one part of me says that this metaphor is poorly chosen because it's retro, it also reflects another key trend: atomization and mashing up.

The Web is a communications revolution that speeds the consumption of novelty and its economic value, so it is destroying the Industrial Economy's main value mechanism: value via efficiency and long product life cycles. During the 21st century's first decade, the overriding trend is that society and markets in which executives have interest saw extensive disruption and change. That meant volatility. As I'll discuss, this volatility will continue to accelerate because the transaction costs of communication are plummeting, which drives rapid iteration and change in all areas of human society. At the risk of sounding subjective, I believe this will probably be regarded as one of the most disruptive eras in history.

From 2000 to 2009, I was on the front lines of applying transformative technologies and behaviors to business processes. I've advised clients as a management consultant and led initiatives as a marketing executive, so I'll share my perspective from both. I began the decade advising Fortune 50 companies on their e-business strategy—as a Principal at PricewaterhouseCoopers Management Consulting (PwC). I am ending it advising Fortune 50 companies on their social business strategy—but as an individual. This reflects another aspect of atomization: in the Knowledge Economy, the world is rapidly transitioning to a market of expertise, and structures that contain expertise are diminishing in importance.

These disruptions have a profound impact on economy and politics. Most immediately, many areas of the world have been gyrating wildly due to the U.S.-sparked financial turmoil. A far more important but overlooked driver is the exhaustion of the Industrial Economy. The Knowledge Economy is still emerging, and executives don't yet understand its changes or how to create value according to its rules, so we have been in a period of transition, uncertainty and discomfort. The financial crisis precipitated the global slowdown, but the waning of the Industrial Economy is producing the majority of the pain. Industrial Economy muscle is not producing as before, and this was one driver for financial creativity to create the illusion of value during the early 2000s.

New entrants are rebooting industry and will continue to change its rules—and revise per unit profit downward, far downward. Want a $2,000 car? Don't go the the U.S., go to India. During the next ten years, this will be true for an increasing spectrum of goods, as well as services like healthcare. There will be massive innovation because China, India, Indonesia, Rwanda and myriad others must innovate to increase their standards of living; their people can see, hear and touch how others live (they have friends worldwide), and they are more restive when they perceive that they live so much differently. Global terrorism is one channel for these disparities that is, well, terrifying. September 11, 2001 made that clear to the U.S., which had heretofore been largely insulated from terrorism. That shocked everyone worldwide because small networked groups had proven that they could wreak havoc even to the most powerful.

Politically, this disruption will be as transformational as the Cold War, which reorganized the world by polarizing it. Economically and politically, the world will splinter and decentralize during 2010-2025, and the U.S. will cease to be a unilateral superpower. This will shatter assumptions, organizations and structures of all kinds. Arguably, the U.S. inherited global domination from the major European powers, and the world operated a model of "Third World" and "First World," which was built on Industrial Economy power and control of natural resources. This will fall by the wayside: although there will be countries that are more influential than others, the structure within which they operate will be much more fluid. I'm not even sure that the nation state itself isn't up for transformation because it is defined by geography, a legacy form of organization.

Web 1.0 Retrospective: Information and Transactions on Demand

But our focus here is the rise and transformation of the Web from 2000-2009. As I wrote in my review of Grooming, Gossip, and the Evolution of Language, Robin Dunbar (Dunbar's Number) posits that human language arose through the need to upgrade our capacity for social grooming (read it; one of the most important books I read in the decade). The growth of "the Web" is another profound upgrade in human communication, so its importance is core to human existence. This is not a "tech innovation" proposition—all of humanity, from family structure, work structure and personal lives will be affected significantly.

The Web began the decade as a relative novelty and ended it as with the dubious status of an omniscient utility in many parts of the world. Today, it creates little value itself, but everything depends on it to function. Web 1.0 gave us information on demand: today we take for granted that we can just "Google it." Flip the switch, the information will be there. Prior to the Web, information was expensive and very difficult to get, and now it's free.

Yahoo, Excite, Altavista et al delivered information, and e-commerce delivered goods. Amazon.com redefined retail, which began the decade as a necessary activity to procure goods; however, by 2009 retail's value proposition was closer to entertainment. Now retail focuses most on "the shopping experience," in which furniture and amenities (Champagne, coffee) arguably create a large part of its draw. For an increasing portion of all goods, retail has become abjectly optional.

2000 was the overture of the Web. Of course, the Internet had existed since the sixties, and networked computing—numerous flavors of LANs, WANs, IP—had been growing since the eighties, but Web 1.0 gave us critical mass for a social and economic transformation. I began as head of marketing for a software architecture boutique in 1995, and it turned out that we soon became one of Sun's first Java Centers worldwide. I worked with Sun, Netscape, Versant, Rational, Oracle, Forté and others to pitch distributed computing as an alternative to the prevailing "islands of automation" model. This soon came to mean pitching Java and the Internet, which only served as a front end for the revolution going on in the back room. Since the Internet was government-built, it was free, and Mosaic and Netscape gave every computer a free interface that was something that everyone could use. During Web 1.0, business models pushed toward e-commerce to monetize investments in hand-coded Websites. Personal space was jealously guarded under the Privacy banner that regarded information as a self-contained house.

At PwC, I landed in the midst of the e-business storm, which meant applying IP technology and behaviors to "legacy" business processes. Information on demand meant crestfallen market leaders whose products and pricing were ruthlessly exposed as inferior on third-party sites. It jangled value chains, to say the least. The Web 1.0 bust temporarily slowed the pace of adoption but did not change it substantially.

After consulting at PwC, I transitioned back to technology and led the creation and implementation of nVISIA's marketing platform to drive demand for high end consulting and (software) architecture services. Service-oriented architecture, Web services and enterprise architecture (EA) represented further maturation of the always-on, distributed "web" that serves as the infrastructure for the Knowledge Economy. SOA, Web services and EA standardize the componentization of the Web's infrastructure as well as the work processes needed to create and manage it. I saw from the inside that the Web was rapidly becoming electricity, with the result that "tech" was becoming an infrastructure and management play, not an innovation proposition. Nicholas G. Carr struck a nerve with I.T. Doesn't Matter, but he nailed the overall trend.

Businesses monetized Web 1.0 in several ways: the transactions themselves (e-commerce), leveraging infrastructure (reducing process costs in e-business) and using the new medium (online advertising). They failed to monetize the information itself, even though many firms tried. However, Web 1.0 did not fundamentally alter society; it nibbled at Industrial Economy assumptions, where Web 2.0 will take huge bites out of them.

Web 2.0 Retrospective: Knowledge and Relationships on Demand

As wonderful as "the Web" was during Web 1.0, it was still a relatively impersonal place, when seen from the standpoint of pervasive, continuous human communication space. Web 1.0 mirrored the Industrial Economy, which was impersonal, because the focus was on production and products, not people. Web 2.0 gives organizations the chance to become personal, which they must do in order to survive. Web 2.0 is the motor for personality.

What makes a space human? Faces, emotions, gestures and relationships. Goofing, jokes, gossip, rumors...Web 2.0 is delivering all this, so "the Web" is becoming human. Social networks like Facebook, LinkedIn, MySpace, Cyworld, Bebo, Orkut, Friendster and myriad others offer friends and relationships on demand. Blogging and microblogging platforms like WordPress, Blogger, Twitter, Plurk, Tumblr, Kwippy and Identi.ca give us thoughts and knowledge on demand. Want to know what "the world" (admittedly a subset, but unprecedented and exploding numbers and diversity) thinks about something? Use Google Blog Search, Technorati or Twitter Search, and you'll have it, instantly, for free. Google, its feathers ruffled by Twitter in 2009, implemented "instant search" in December 2009. Flickr, Twitpic and Facebook give us faces on demand, while YouTube, Vimeo, Skype and others give us motion, gestures and voices. Therefore, "the Web" is rapidly becoming the "town square" for an increasing spectrum of human activity. Other collaborative communities like Del.icio.us, Digg and StumbleUpon enable us to share. Google Docs, Ning and CollectiveX give us collaboration platforms and tools. All this is in the cloud, and it is free to use.

Although I may be wrongly applying my experience with information technology to it, I think organization is following its tech infrastructure and communications, and organizations are becoming more atomized, distributed and flexible. This is a megatrend. As I said in Geography 3.0: What It Is and What It Means, Web 2.0 now enables us to organize around interests, not geography. We can tap relationships according to highly specific interests. This will also affect political organization, and we must be vigilent to make sure that this transition doesn't produce nasty special effects. The Industrial Economy was about specializing and compartmentalization, and that included politics that only demanded that citizens vote every four or six years. History is full of power grabs, and this period of disruption will demand far more attention and involvement than before. It will undoubtedly be messy.

Organizations will continue to unbundle, and customer participation will become the rule. Some collaboration trends to look for in this new decade: pervasive crowdsourcing in which companies and people "ask the crowd" for advice, as P&G consults Innocentive. Ditto for the Threadless model applied to other consumer goods and the ProAm model, beginning in media. Smart companies will look to introduce these rhythms to their work processes. The Threadless community produces the designs and decide what products will be made. Ownership is by the community, not Threadless. ProAm is a model for professionals collaborating with amateurs, and everyone is an amateur for something and an expert in something else. As I learned in software development, as long as you assign roles according to expertise, quality is high and costs fall, and ProAm will come to dominate. The Industrial Economy producer and consumer roles are dying quickly, which means that companies that don't harness customer collaboration will die.

Privacy will be redefined because people will increasingly share most of their thoughts publicly, and we will soon come to see our Industrial Economy view of privacy as quaint. The truth is, we human beings have never had much privacy. We have always watched each other closely. We've spent most of our existence in hunter-gatherer bands, where privacy was nonexistent. When we stopped migrating, we built small towns, where there was minimal privacy. Now we have megacities and walled living spaces around which we don't know our neighbors and we can do anything in private without anyone knowing or caring, and anonymity reigns. Web 2.0 will lead us to return to little privacy because we will gain more than we lose.

Businesses don't yet understand how to monetize Web 2.0. How do companies create value, make money, from the increased spectrum of humanity online? The increased humanity of the Web—and its lower transaction costs—means that everyone is undergoing process reengineering, at every level. It is changing how we elect presidents, run campaigns, work, love and buy. But we are all learning the new tools and adapting them to our companies and our lives, so early adopters have been in a period of experimentation while most of the market hasn't realized that anything is afoot beyond perceiving "Web 2.0" as a bunch of tech hype that they have tuned out. All this free collaboration potential is largely untapped; companies and people need to learn how to create value with it.

This is difficult for executives because Web 2.0 is a voluntary place. Industrial Economy rules were directed, not voluntary. Emotions didn't count, innovation was avoided as long as possible because it's interruptive and value was all about scale. The Knowledge Economy is about collaboration. Web 2.0 is all about emotions and asking, not directing. Companies need to get more comfortable with asking people to help them. Innovation will be continuous, product life cycles for many will shrink from years to months to weeks to hours. Market bifurcation will hold for an increasing portion of products: either they will lead as commodities or tap the entertainment or emotional value stream.

So Web 2.0 is still spinning up, we have not hardly tapped its economic value creation potential, so that will be the focus during the next few years. I think of it as applying these technologies and processes to enterprise work processes. What about Web 3.0? At this point, that's a question of semantics ,^) but I think it will end up being seen as a couple of feature enhancements to Web 2.0, in the areas of the Geoweb and the Semantic Web (the thinking Web). From a human perspective, Web 2.0 is far more important, and we'll be on this S-curve for a while. Welcome aboard!

Additional Reading

• Year in Review—2009 is a more micro trend analysis of 2009.
• The Knowledge Economy: The Ultimate Context for Understanding the Future
• If you are a history buff, here are some of my past reviews and predictions while Web 1.0 and Web 2.0 were unfolding.

2009 may have been many things, but boring was not among them! To do it justice, I feel like I have to dock the ship, which has been sailing on turbulent seas, frothed with spellbinding sunrises, sharks, dead winds and tempests. Volatility and surprise have certainly been the watchwords among executives I've collaborated with this year, and all indications are that we should look for the same in 2010. However, as dramatic as the environment is, it is only the backdrop for the real story: Enterprise social networking has found its legs and is ramping strongly. Although still tentative, social network investments are becoming pervasive due to the exploding adoption among individuals—and the latter's impact on markets and firms. As I have been writing since 2005, digital social networking represents unprecedented disruption, opportunity and risk, and I saw many of my predictions play out in 2009.

The 2009 Year in Review gives you the chance to come up to speed rapidly or fill in the holes in your understanding. My perspective comes from intense collaboration with exceptional pioneers of enterprise-focused social networking. Many of the articles come from client work and real situations I encountered this year. I have reviewed 2009's articles, selected the best and wrapped them in a review and analysis to help you realize where we have been, so you can better plan where you want to go in 2010.

So, throw a log on the fire, pour yourself a nice glass, and let's dive in.

2009 Macro trends

For the first time ever, the Year in Review includes articles from GHCJ's sister publications: the Social Network Roadmap, the Executive's Guide to LinkedIn, the Executive's Guide to Twitter and the Executive's Guide to Facebook. In addition, I logged 32 speaking engagements in the U.S. and Europe this year, which brought further insights I have also shared. I have selected ten articles as MUST READ, which are clearly marked in each section. Moreover, I encourage you to share your thoughts and questions in comments.

Economy, Industry and Company

2009 was a nail-biter for everyone on this rapidly shrinking planet. Getting through it required being grounded, amping up peripheral vision, and staying on strategy while not being afraid to question it. Meanwhile, exogenous variables invited all their cousins, adding to dynamism as well as demand for mood altering substances like bailout packages, spirits and other miscellany. The other part of the story: economic disruption became more of a constant, so it was somewhat less newsworthy, especially in light of the other categories below. The Global Human Capital Journal spawned several siblings this year, so my mix of reportage changed significantly: I spent less time on the macroeconomic and political sphere and fielded more stories on the enterprise adoption of social networking and how-to articles.

Economy gurus were trying to salve wounds of all kinds, but there were so many layers of disruption that the most credible experts admitted that we were pretty much off the map. The MIT Enterprise Forum's Economic Outlook panel of experts came to that conclusion. In a first, I live-blogged that event from my iPhone, so it's shorter and snappier that the usual treatment. In 2009, I encountered countless CEOs, CMOs, CIOs, COOs... who, although alums of the best brands and schools, couldn't find decent jobs unless they were willing to move to North Dakota. Thus, Economic Disruptions: How to Benefit Your Company and Career helps executives think ahead of the crowd to guide their companies and careers, so they can use this climate to their advantage. Risk and opportunity always travel together; however, the pain lately is that the amplitude of the waves is much higher than normal.

Noodle VII offers insight around the demise of several erstwhile Chicago publishing titans that are now toppling like 18th century buildings in an earthquake. The way I wrote it, you should be able to apply its lessons to other industries, too. A personal highlight of 2009 was producing and moderating the only conference track on enterprise social networking at PanIIT, a global confab of extremely smart IIT alums. President Bill Clinton was their main keynote, so I covered his preso. Startling-but-unsurprising-in-retro: he can drive more change as an ex-president!

• MUST READ—Economic Disruption: How to Benefit Your Company and Career
• MIT Enterprise Forum 2009 Economic Outlook
• Noodle VII: Tombstones and Milestones
• President Bill Clinton Asks IIT Alumni to Join in Crusade Against Inequality

Strategy and Adoption

Economy was eclipsed by adoption and enterprise social networking this year. I watched social networking adoption intently, focusing on opportunities and threats for executives as leaders and as individuals. I went public in Q2 with the Web 2.0 Adoption Curve, 2009-2015, which predicts how the market will adopt Web 2.0 over the next five years and suggests how you can outperform the market. In Q4, I presented it at the the University of Chicago as the "Web 2.0 Investment Strategy" (video). As enterprise pioneers widely acknowledge, a key inhibitor of adoption is the lack of "ROI," which I argue is the wrong question. Still, it's embedded in corporate cultures everywhere, which prevents organizations from creating value—except those who have read Realizing Value from Social Networks: A Life Cycle Model ;-). It outlines four stages of relationship development and meaningful quantitative metrics for each and is one of my most powerful writings of 2009. Although it's written from an enterprise B2B business development context, you can apply it anywhere by abstracting the ideas up a level. Alumni 2.0 outlines the enterprise opportunity to mine a brand new vein of gold: employees as company representatives will unlock a new value curve for enterprises that have the vision and courage to confront their paternalistic thinking.

On the individual side of adoption, Job Search Techniques for Disruptive Times takes aim at outmoded Industrial Economy thinking, which prolongs executive job searches; it offers Job Search 2.0 as the remedy ("open up and share more"). Blogging and Tweeting drills down more specifically and shares this insight: "There is no one engaged in business or work who should not be blogging." What you share and how is up to you, but I predict that interview invitations will increasingly be awarded on people's published thoughts. The bar is going up, you have to be available when people want to access you. This is already happening.

• MUST READ—Web 2.0 Adoption Curve 2009-2015
• MUST READ—Realizing Value from Social Networks: A Life Cycle Model
• MUST READ—Alumni 2.0: Employer-Employee Realignment
• Job Search Techniques for Disruptive Times
• Blogging and Tweeting to Support Your Job Search or Fundraising

Enterprise Social Networking

The adoption of social networking by commercial and government enterprises ramped very strongly in 2009, and 2010 will see it grow as fast as Facebook (which went from 140 million members to over 350 million, greater than the U.S. population). I published numerous case studies and conference remarks. As I've long predicted, the urgency to adopt Web 2.0 is proving to be as powerful as embracing the Internet was in 1998—except Web 2.0's transformational impact will be ten times greater. Enterprises are starting to awaken to this realization, but they are taking baby steps, with a few exceptions. Executives understand that Web 2.0 has to be on their radar, and they are struggling to get their heads around it. This is one reason why the Social Network Roadmap saw so much interest: it addresses strategy and implementation and focuses on risk mitigation.

2009 saw me presenting at conferences worldwide, and on several occasions I organized panels of enterprise social networking pioneers. Of course, I used blogs to give blow-by-blow updates on planning the panels' concepts as well as on their results. This resulted in case studies from PricewaterhouseCoopers, Dior and Imperial College London. Notably, I organized the London panel completely using LinkedIn.

In another first, I published each session I covered at the Los Angeles Social Networking Conference individually as case studies from pioneers from IBM, Sun, Wal-Mart, Dow Jones, Nokia and many others. See the Social Network Roadmap's Conference category to get them all. Enterprise and Individual Drivers for Social Networks explains the "why" of social networks' transformational power for executives, from individual and company viewpoints. In LinkedIn Becomes an Enterprise 2.0 Syndication Machine shows how enterprise applications should begin sourcing data from outside when appropriate, which will unlock extensive value. Unless you're a 21st century Rip Van Winkle, you probably got tired of hearing about Twitter all year, but Thoughts on Enterprise Adoption of Twitter mashes up the concept of a "LinkedIn for Twitter" and what it might look like. Finally, Social Networks Reach Puberty is my coverage of the Miami Social Networking Conference, (numerous case studies) where I also presented on Social Networks in Healthcare as well as a workshop, "Successful Social Networking Projects in the Enterprise."

• MUST READ—LinkedIn Becomes an Enterprise 2.0 Syndication Machine with API
• 2009 Los Angeles Social Networking Conference Highlights Enterprise Social Media Experience
• Case Study: PricewaterhouseCoopers' Careful Yet Comprehensive Work with Social Networking
• Case Study: Dior's Haute Couture Crowdsourcing
• Case Study: Virtual Worlds, Real Dollars
• Enterprise and Individual Drivers for Social Networks
• Thoughts on Enterprise Adoption of Twitter
• Social Networks Reach Puberty: Miami Social Networking Conference Shows Diverse Enterprise Adoption and Success

Social Networking Platform Review

It has been proven over and over that it is easier to engage people when you go to them rather than asking them to come to you. The major platforms, LinkedIn, Facebook, Twitter, YouTube and MySpace have millions of members, and most have groups to make it easier to connect with people around specific interests. A large part of my client work is helping firms discover what venues are most appropriate and how they can engage people in the venue while being authentic, transparent and true to their business strategy. Therefore, I covered LinkedIn, Facebook and Twitter extensively in 2009. Note that many of these posts are courtesy of the Executive's Guide to LinkedIn, The Executive's Guide to Twitter (and Blogging) and the Social Network Roadmap (I have an in with management ,^).

Strategy for LinkedIn, Twitter, Facebook outlines a high-level process for preparing a firm to engage stakeholders (customers, employees, investors...) in the major platforms. If you look carefully, you'll recognize Social Network Roadmap Pilot. Tactics: Using LinkedIn, Facebook and Twitter is focused on how individual executives manage to use the three platforms together, how to create synergy while minimizing the time required. It is imminently doable when you stay on-task. LinkedIn and Facebook: Thumbnail Comparison analyzes opportunities to use each platform for business. It delves into similarities and differences. Reading all three will quickly make you aware of the opportunities.

Comparing Facebook and MySpace Expansion is all about Facebook's hugely successful crowdsourcing and marketing strategy, which was simply brilliant. In case you are thinking about launching a Facebook Page, check out Just Launched: The Social Network Roadmap's Facebook Page. I'm including several tactical posts on LinkedIn, too. Most of these came up through client work, and I deemed the issues important enough to share widely. LinkedIn: How to Leave an Employer is a step-by-step guide to managing the transition on LinkedIn. How to Evaluate LinkedIn Groups is a thumbnail guide to deciding whether to join a group or not while Five Quick Tips is for startups using LinkedIn to grow. What to Share is another post on content; it takes on a misguided Wall Street Journal article (there are more and more off-base media stories on social networking because journalists are way behind the times in most cases).

I'll close this section with four posts on Twitter. Although it was hyped incessantly this year, Twitter is extremely transformational because its social context is mobile and 24/7. By using it, you can get to know someone far faster and at a lower cost than any other method. Twitter reigns supreme in executing the "power of small touches" strategy. If you've been sitting on the sidelines this year, use these four posts to get on and create much more value than your friends. Everything You Wanted to Know offers a concise background of the platform while Twitter Quick Launch Guide and Introducing show you how to get on in 30 minutes (and do it well). Value Vectors is a tool I developed for Twitter and Blogging content strategy. It makes it easy to increase the quality of your tweets.

• MUST READ—Strategy for LinkedIn, Twitter, Facebook: Where Do I Need to Be?
• Tactics: Reflections on Using LinkedIn, Facebook and Twitter
• LinkedIn and Facebook (and Twitter): Thumbnail Comparison
• Comparing Facebook and MySpace Expansion Strategy
• Just Launched: The Social Network Roadmap Facebook Page
• LinkedIn: How to Leave an Employer or Consulting Client Gracefully
• How to Evaluate LinkedIn Groups
• Five Quick Tips on Using LinkedIn to Start up
• What to Share on Facebook and Twitter
• Everything You Wanted to Know About Twitter* But Were Afraid to Ask
• Twitter Quick Launch Guide
• Introducing Twitter (and Blogging)
• Value Vectors: The Key to Building a Quality Following

Relationships

You may think that a section on "relationships" is a bit strange in these pages, but, as I increasingly argued in 2009, having a relationship focus is probably the most critical success factor. Try these on for size: Countering Social Networks Unique Challenges with the Relationship Life Cycle was one of my most important posts of 2009. Must-read, it features social network myths and realities! as well as how you can increase your team's effectiveness by considering the life cycle. I offer a review of one of the most important books I read this decade: Book Review/Grooming, Gossip and the Evolution of Language deciphers why and how people form relationships, from the point of view of humans as primates! This may sound esoteric, but it's right on target and will give you a rare understanding of what makes social networks tick (hint: it's called social grooming).

How LinkedIn Change the Economics of Cross-Border Relationships came out of a talk I gave at the Swedish-American Chamber of Commerce; it suggests how you can use LinkedIn to discover and build cross-border relationships must more quickly and inexpensively. Two articles took the New York Times and the Wall Street Journal to task for publishing lame stories; I point out their faulty arguments and show how you can outperform your competitors. Twitter: Disruptive Innovation of the Decade deciphers Twitter's uniqueness and suggests how it ruffled feathers at Google and Facebook in 2009. Finally, Networks: Thoughts on Quality vs. Quantity is a short post that is relevant to any social network.

• MUST READ—Countering Social Networks' Unique Challenges with the Relationship Life Cycle
• MUST READ—Book Review/Grooming, Gossip, and the Evolution of Language
• How LinkedIn Changes the Economics of Cross-Border Relationships
• Debunking Uninformed Media Coverage of Social Networks
• Wall Street Journal Claims Facebook Can't Give You Relationships
• Twitter: Disruptive Innovation of the Decade
• Networks: Thoughts on Quality vs. Quantity

Marketing 2.0 and Customer Experience

As I have been writing for years, value is rapidly migrating from products to (customer) experience, which will disrupt the entire marketing function at most companies. Up to now, it's been the slow boil, but I saw increasing examples in 2009. Post-Product Marketing and Engagement confronts this change straight on, and suggests steps you can take to get ahead of your favorite competitors. Increasing Customer Transparency was another post that came up from a CMO group: Isn't it risky to interact with customers online, where competitors can steal them? This is legacy thinking; move to more transparency as fast as you can. Firms that try to hide customers open themselves to more risk, not less. The Dirty Dozen is a short list of snafus that companies too often find themselves in. How many do you know? Strangle Me, with tongue firmly in cheek, takes aim at Apple's ineptitude with "Mobile Me," which won Apple the only Web 0.2 Citation I conferred in 2009. Update: Website Design 2.0 takes aim at conventional wisdom about Websites' role and design. Too many execs want to "sex up their Websites with social media." Dangerous thinking because Web 2.0 enables everyone to talk, so you will get better ROI by having others talk and having conversations off your site. Advertising on Twitter? is a quick piece on the emerging trend of "sponsored tweets" in which marketers pay celebs to tweet for the brand.

• MUST READ—Post-Product Marketing and Engagement
• Increasing Customer Transparency: Real Threat or Paper Tiger for Marketers?
• The Dirty Dozen: Are You Experiencing Symptoms of Web 2.0 Misalignment?
• Strangle Me: Apple Awarded Web 0.2 Citation for Delivering Painful Paroxysm of Yechsperience
• Update: Website Design 2.0
• Advertising on Twitter?

Technology

Web 2.0's emphasis on people has the technology continuing to recede into the background, but here are some posts that merit your attention. Web 2.0 Single Sign-on points out that companies must strongly consider syndicating in content from the outside, and LinkedIn just released their LinkedIn Platform. Catch up with this trend to increase your relevance and productivity while reducing costs. Web 2.0 Pitfall #1 reprises a danger I saw constantly in 2009, assuming that your company needs a blog, a Facebook Page, a wiki... These are technology choices and are sure to express you to the land of disappointment because they don't consider stakeholders and what they want. BTW, don't ask stakeholders if they want a wiki or a blog, they don't know. You need to delve into their workstreams, goals, culture, etc. It doesn't take long, but it pays big dividends.

Finally, I migrated the Global Human Capital Journal from Serendipity to WordPress, and I offer a couple posts about that experience. I also got hacked this year, so I show how to mitigate insertion attacks. Never a dull moment!

• MUST READ—Web 2.0 Single Sign-on Update: Federating Friends with Facebook Connect and Google Friendconnect
• Web 2.0 Pitfall #1: The "Solutions Centric" Approach to Social Venues
• Blog Migration: Learn from how we migrated and how we were hacked

Developments at the Global Human Capital Journal

Digital social networks give their members front row seats in many aspects of human dramas, but few companies or individuals have the understanding of human behavior to appreciate fully what they are seeing. Many executives of commercial and government enterprises perceive "social" behavior as frivolous and discourage employees' activity in social networks. This exceptional book shows that the Industrial Economy idea of the separation of "work" and "social" is dangerously out of place in the Knowledge Economy, in which collaboration among people produces the lion's share of business value. To succeed in the Knowledge Economy, leaders need to appreciate the importance of social activity in collaboration and productivity, and how digital social networks can increase productivity. In this review, I will try to do the book justice, but I will also attempt to show how its ideas apply to digital social networks, collaboration and productivity.

To use a technical metaphor, Windows has its DOS, and Mac OS X has its UNIX. In fact, Windows and Mac OS X are just interfaces that come between the core engine (DOS and UNIX) of the computer and the user, so s/he doesn't have to have technical knowledge to run the machine. However, at critical moments, it can be very advantageous to understand certain aspects of the core operating systems. Since understanding human behavior is critical to success in virtually all human endeavors, it might be useful to understand what I'll term as "Human OS." This enthralling book gets way under the covers on "social" network behavior and puts it all into perspective. As such, readers come to appreciate how and why people behave the way they do.

Book Overview

Grooming, Gossip, and the Evolution of Language, by Robin Dunbar, is one of the most relevant and fascinating books I have read this decade. It reveals "Human OS" (human operating system) in an insightful, engaging way that Dunbar backs with extensive primary and secondary research into primate behavior. I have a very practical interest in Human OS: if digital social networks like LinkedIn, Facebook, Orkut and YouTube diminish the transaction costs of certain human interactions, logic holds that tremendous insight into motivations and likely uses of the networks would be gleaned by understanding Human OS. For people who want to pop the bonnet and delve into human motivations within group dynamics in digital social networks, Grooming, Gossip, and the Evolution of Language will prove an invaluable guidebook. A tremendous plus: the book is as readable as it is revealing.

As a pioneer in using digital social networks for organizational innovation, I constantly see references to "Dunbar's Number," which holds that humans have a practical limit to the number of acquaintances they may have in the traditional sense. Grooming, Gossip.. puts it into a rich context. But there is far more. Grooming and gossiping are core processes in Human OS, and social networks enable them in ways that confound business executives. Dunbar shows conclusively that, on average, two thirds of all human communication is "social": talking about others and ourselves. Digital social networks are disconcerting to many because they reveal this. The most hits, the most popular videos and blog posts are often idiotic from a "serious" business point of view. Grooming, Gossip.. reveals why this makes sense, and it is a shortcut to making sense of Human OS, taking it seriously and loving it. The people and organizations that are willing to engage Human OS will succeed far more.

As in all Global Human Capital book reviews, I will summarize and outline each chapter before drawing my Analysis and Conclusions below. Note that I only give the most important books this detailed treatment. My hope is that you will appreciate the review and buy the book because it makes Human OS so accessible, fascinating and useful.

Chapter One: Talking Heads

In this introductory chapter, Dunbar connects several branches of science in the service of understanding why humans have language. By mashing up evolutionary biology, anthropology, social behavior and linguistics, he leads us down a path that does not presuppose that we should have language. There should be undeniable practical reasons that we have language and large brains.

• Introduces "grooming" and gestures and their importance to primates in the context of social groups.
• Tantalizing facts about the brain: it consumes 20% of our total energy, while it accounts for 2% of our body weight. Why do we have such an expensive piece of equipment?
• Although dolphins have roughly the same brain/body ratio, they do not come close to humans in their language. Why?
• About two thirds of all human language is social in nature: who does what with whom, why it's important or not. Dunbar shares studies that show this ratio holds true in the boardroom, on the engineering team and university professors' lounges. He also cites publishing, newspapers.
• Language and linguistics have been traditionally viewed as "social" sciences, so biologists and evolutionologists stayed away; Dunbar will weave these together.

"The story is a magical mystery tour that will take us bounding from one unexpected corner of our biology to another, from history to hormones, from the very public behavior of monkeys and apes to the moments of greatest human intimacy."

Chapter Two: Into the Social Whirl

Chapter Two is a crash course in the social group dynamics and economics of primates because Dunbar wants to take us on the level of Human OS, and we are primates. More depth on the role of grooming and social status.

• Our primate lineage, and how surprisingly short it is: only about 350,000 people separate us all from our "ancestral eve." Another 350,000, and we are back to the ancestor we share with today's "common chimpanzee."
• Some primate economics: finding food, human biology, how and why we were incented to grow to our body size and live in groups to reduce the risk of being killed by predators.
• How being social is hard-wired into our DNA.
• The two poles: we need the group to survive, but overcrowding compels us to seek the "sanity of a solitary life." It turns out that we manage this dichotomy by creating partnerships, coalitions and cliques.
• How alliances work: Dunbar shares his observations of primates in such a way that it's easy to see the applicability to human behavior. Windows into primates' calculus when building alliances: how primates infer and predict others' behavior in certain situations by observing their social behavior. Quote from Chimpanzee Politics. Grooming's role in compromises and reconciliations between alliance partners.
• The role of grooming in building and maintaining primates' alliances.
• The link to Darwinian evolutionary theory: the ultimate pattern of "meritocracy": reproductive success by successful adaptation to changing circumstances.

"Sociality is at the very core of primate existence; it is their principal evolutionary strategy, the thing that marks them out as different from all other species. It is a very special kind of sociality, for it is based on intense bonds between group members, with kinship often providing a platform for these relationships."

Chapter Three: The Importance of Being Earnest

Dunbar covers a lot of ground here, everything from deception within a group to grooming's physiological effects on us to why it is so effective for maintaining alliances.

• In primates, how much time a pair spend grooming each other is proportional to each partner's willingness to defend the other. Grooming is a mutually exclusive activity, and everyone sees who is grooming whom.
• It also turns out that grooming triggers our brains to produce endorphins (we get high); he references some interesting research to confirm the point. Astonishing fact: many primates spend roughly 20% of their time on grooming, which indicates that it plays an enormous role in their (our) well-being. The bigger the network, the more grooming required.
• More on the economics of group size and interaction, and harassment's impact on reproduction. You guessed it: low-ranking females, because they are harassed by the majority of the group, experience temporary infertility due to the stress harassment produces. Mental and social intimidation are more lethal than physical abuse because the victim uses the stimulus and takes it against herself. Fertility is also reduced in males under stress. The net-net here is, large groups mean more harassment even while they afford more protection against predators. It turns out that alliances are how group members diminish harassment.
• Freeloading is another problem for large groups: freeloaders take something and promise to return the favor later but never do. Within large groups, they can trick and move on before they are found out. In this case, grooming is the cost of entry for alliances: by imposing a high cost in a visible behavior, freeloading is reduced.
• Dunbar closes by citing research that shows that many species have sophisticated communication that approaches rudimentary language (for example, specific sounds identify specific predators).

"The solution of choice is, it seems, to form coalitions (which) allow you to defuse the opposition (harassment)... Forming a coalition with someone else allows you to act in mutual defence, so reducing the frequentcy and intensity of harassment without driving your harassers (completely) away."

Chapter Four: Of Brains and Groups and Evolution

Begins with an irresistible question: why do monkeys have big brains?

• Research on brain/body mass and Dunbar's breakthrough, showing that neocortex size and group size have a causality. The idea: our brains are bigger because we have been forced to be social as an adaptive mechanism. Moreover, the Machiavellian hypothesis suggests primates don't only need to remember how each member of the group relates to other members, they need to anticipate behavior given (often) hypothetical situations because they are in competition with each other, and life is about juggling goals of oneself versus others'. They need to maintain a balance between numerous conflicting interests. This is a strong motor for intellectual development.
• Dunbar's number, which holds that the optimal group size for humans is 150, as a function of the human brain's capacity. Interesting property: in a group, it's the average size of four generations of an ancestral couple's offspring, using data from hunter-gatherer societies, using hunter-gatherer family sizes.
• Introduces the dilemma: bigger groups require more grooming to maintain the group's structure, but there's not enough time in the day to do it physically. This leads to the question: could language serve as a kind of vocal grooming?

"Homo sapiens first appeared as long as 400,000 years ago. Throughout that long time-span, right up until the appearance of agriculture a mere 10,000 years ago, we lived as hunter-gatherers in small bands wandering through the woodlands in search of game."

"In a nutshell, I am suggesting that language evolved to allow us to gossip." (This drove the need for infrastructure, i.e., our brain and body size.)

Chapter Five: The Ghost in the Machine

This is all about Theory of Mind (ToM) and how the brain works. ToM holds that a (person) recognizes that someone else can have different thoughts and beliefs from his own. This gets into trust and deception.

• Theory of Mind (ToM) applied to primates. No, humans are by no means alone here. Dunbar shares numerous hilarious and instructive examples of chimpanzees and apes that anticipate each other's behavior in the service of competition and trickery.
• Think of the last time you observed humans observing chimpanzees, orangutans or gorillas at the zoo; there is a marvelous fascination and a connection. Grooming, Gossip.. taps into that marvel throughout. It's filled with hilarious anecdotes of antics of our primate cousins, but Dunbar skillfully remains on task to drive the point home.
• How and when human children develop ToM.
• The cases of autism and Asperger's to illustrate human development.
• The root of abstract thought and the ability to understand others.

"... the ability to use subtle social strategies and to exploit loopholes in the social context depends on how much computing power you have available in your brain."

Chapter Six: Up Through the Mists of Time

Chapter Six is spellbinding. It returns to the savannah some five million years ago and offers a more complete pass at human evolution, from the perspective of the brain (and by extension, the body): group economics, grooming and language. Dunbar cites numerous studies to make his points.

• The brain demands too much energy from the body: how did we accommodate the energy hungry brain (20% all energy)? There were very few choices: vital organs were, well, vital, so they would not give energy to the brain. The most expedient deal evolution could cut was with the gut (stomach and intestines). In fact, humans have much smaller guts than they should, given body size. Dunbar gives us a fascinating discussion of various primates, diets and gut sizes.
• We learn that "normal" human babies are born twelve months premature, as a function of brain size. However, humans had severe evolutionary constraints in their body and brain sizes that relatively large brains and small bodies (think the mother here). We needed large brains to manage large groups, but the large brain meant that some other part of our anatomy had to give up its demands, and that was the gut. The elephant's brain is roughly the same size as ours; that's what I mean by having a relatively small body. Compared to other species, our brain develops extensively after birth, and human babies are much more helpless than other species'.
• The only way the calculus worked was by changing the diet to more energy rich food that demanded less work to process. That meant meat. Notably, we ate other humans, especially early on.
• Interesting chart showing group size increasing during primate evolution. Surprise regarding Neanderthals.
• Group size revisited: discussion about discussion group sizes, location and language.
• Meat moved humans toward more monogamous relationships because males could only support one or two females in most cases. It also enabled humans to migrate.
• Cro-Magnon grew to dominate because s/he was a hunter, moved about and had a relatively diverse network when compared to Neanderthal, who stayed closer to home and had smaller networks.

"The fate of the Neanderthals (being displaced by Cro-Magnon invaders) bears an uncanny resemblance to the fate of the American Indians and the Australian Aborigines at the hands of the later Europeans, invaders who could draw on a larger and more widely distributed political and military power base."

Chapter Seven: First Words

Here Dunbar returns to the origins of language in more detail.

• Some interesting anatomical details: what's required to develop the ability to produce words? What do humans have that other primates lack?
• Several theories of language: song, gestures, dance.
• How and why language emerged: the hunting hypothesis.
• Dunbar's hypothesis: female bonding and relationships were the deciding factor.
• Large groups demanded that humans exchange social information about others ("gossip") that were not in their immediate sphere so that group members could anticipate their behavior in certain circumstances ("she will go to bat for me in some situations" but not others, based on her interactions with other group members). In the immediate sphere around each member, members see each other's interactions constantly and have to infer less about each other's behavior (they know each other better).
• Think about this: although disparaged by many, gossip is about how other people act in discrete social situations with other people, which enables gossipers to formulate opinions about how the gossipees might act in future situations with them or people they care about. Gossip often seems ugly and small, but it is a vital tool for risk management and trust.

"... there appears to be a limit on the number of people we can bond with... (the so-called 'sympathy group' of 10 to 15). Managing our relationships with the outer circle of acquaintances depends much more heavily on social knowledge than on emotional empathy."

Chapter Eight: Babel's Legacy

Chapter Eight drills down into the development of language and dialects, as well as the practical uses for dialects.

• The life cycles of languages and dialects: cites studies that show that most humans today come from the same stock. Tracing major human migrations and evolutions of languages.
• The importance of kin selection: several studies that show that people live out Darwinian principles in two ways: reproducing themselves and helping their kin reproduce. The closer the kin, the better. Hamilton's Rule, which describes the conditions under which one person will help another.
• Presents the observation that dialects develop quickly and continuously, and explores the reasons for this. Dialects are fast-moving trains.
• Surprise: other animals (birds) have dialects, too, and for the same reasons.
• The importance of dialects: they tie people to a place, time and group, and they are difficult to fake. They make it very difficult for freeloaders. They make it possible to distinguish whether a person is "one of us." Until recently, when people were tied to a time, place and group, the incidence that they were some relation was quite high.
• I have discovered this when learning foreign languages. When you learn and use familiar idiomatic expressions, you quickly get promoted to another level with native speakers. It shows that you have spent considerable time in familiar groups who only use idioms with each other in more intimate situations. Note, it's not only the expressions themselves; even more important is using them in the right context (this nuance is harder to fake).
• Therefore, language and dialect are mechanisms for risk mitigation when dealing with people. Fascinating, too, that group motivation to "serve the genes."

"... the rate at which dialects evolve is not constant, but is directly related to population density. The higher the density of people, the faster their dialects change."

Chapter Nine: The Little Rituals of Life

A fascinating survey of key elements of human life from an evolutionary perspective. Humans as primates and gene-bearers. This is about the stakes of survival, punctuated by interesting studies that describe behavior.

• Gossip: a way to flush out freeloaders and social cheats.
• Cooperativeness within the group is the human evolutionary strategy.
• Explores three purposes of language: keep in the loop about what friends and allies are doing, exchange of information about freeloaders and influencing what others think about us (reputation management).
• Advertising, but from a primate point of view. Dunbar cites a study he directed with these findings: both human sexes spend as much time discussing personal relationships and others' behaviors. Out the window that "gossip" is mostly a female activity! However, males' conversations showed an important change. In male-only conversations, art, politics and academic topics averaged 0-5%, but when males were in mixed company, these topics increased to 15-20% of topics. Conclusion, males were showing off.
• Further, female social conversation was dominated by networking, two thirds of their social conversation was about other people. Among males, two thirds of social conversation was about themselves. Conclusions: females are more cooperative, males more competitive because they are vying for mating opportunities.
• The role of hunting big game: not primarily for food, but advertising one's genes. The role of "heroic" deeds in attracting better genes for mating.
• Non-verbal communication in primates. Eye contact.
• Smiling and laughing: its importance in group dynamics. They also release endorphins. Different types of smiles and laughs, and who typically laughs at whose jokes and why.
• How males and females learn accents: motivations in terms of group dynamics. The wealth of the father has traditionally had a direct correlation with the survival of the offspring. Females almost always try to marry up, so they prepare verbally for that possibility. Lower class males have fewer resources and are more dependent on their networks to provide and protect opportunity.
• Of course, this is all changing with dual income families, and females are now looking for males who have more domestic interests.
• Language as a tool for scaling grooming: can we groom at a distance by using language? Yes.

"By exchanging information on (freeloaders') activities, humans are able to use language both to gain advanced warning of social cheats and to shame them into conforming to accepted social standards when they do misbehave" (a key function of gossip and social networking, where customers increasingly keep companies in line).

Chapter Ten: The Scars of Evolution

Chapter Ten discusses some implications of the book on how people live today, so it is less factual and more exploratory. In a sense, it is more directly relevant to digital social networks. Dunbar wrote Grooming, Gossip... in 1998, and his discussion of some "modern" modes of communication is on point. A quick tour through modern communication situations, in group dynamics.

• Some observation of people speaking in groups; the magic number here is four; male and female patterns; committees, conference calls. How traditions evolved to enable people to be heard in groups.
• Modern life, and coping with the lack of kin; people are not designed for modern life, as kin are increasingly distant. Fragmentation.
• Lack of kinship has a negative impact on physical health; cites studies of groups in nineteenth century London and the American west that show members with no kin present are more likely to die or be killed.
• Business networks in companies, and the Internet. Road rage and Net rage due to the lack of social cues.
• Short story about a TV production company whose productivity fell precipitously when the company changed offices; architects had eliminated the coffee lounge, which had served as the grapevine. A nice example that shows that seemingly "idle" talk is necessary for groups to function optimally.
• Grooming, Gossip... was written before the advent of digital social networks, so I will fuse the two together in Analysis and Conclusions.

"... social group size appears to be limited by the size of the species' neocortex; the size of human social networks appears to be limited for similar reasons to around 150; the time devoted to social grooming .. is directly related to group size because it plays a crucial role in bonding groups; language evolved to replace social grooming because it allows us to use the time we have .. more efficiently."

Analysis and Conclusions

Key Points

If you are interested in human behavior and motivations, I hope you can see that Grooming, Gossip, and the Evolution of Language is an immensely important and valuable book. Here I will focus the book's implications more directly on digital social networks (hereafter "social networks"). Before delving into that, here are the critical points of the book that you need to understand to appreciate the opportunity presented by social networks.

• Historically, social behavior is the defining element of Human OS and humans' key evolutionary strategy: "social" is hard-wired into our DNA. Executives who dismiss "social" networks take heed: we primates are group animals, and we owe our brain and body size to our need to be social as a means to survive. "Social" things may seem inane, but get over it, it's how we are.
• Grooming is the core activity to managing our relationships, and social networks enable us to groom each other. Interactions in digital social networks are all about grooming, LinkedIn Recommendations, writing on Facebook Walls, tagging people in Facebook photos, these are all instances of digital grooming.
• Gossip is mission-critical to Human OS because it is our way to assess and understand the behavior of others whom we don't know well enough to anticipate their behavior. Therefore, it is in everyone's best interest to gossip.
• Social networks enable us to change some of the economics of networks because they put many of the mechanisms Dunbar describes online, enabling the digital multiplier. For a business treatment, see How Social Networks Make Markets More Efficient for Buyers and Sellers.

Applying Human OS to Digital Social Networks

• Social networks are one of the most disruptive phenomena to emerge in modern society because they raise the prospect that people can fundamentally change the number and nature of their relationships. They may prove to be a significant upgrade to Human OS. Language was a tool that enabled people to scale their grooming activities and expand their networks (we jumped to another S-curve), and social networks represent a new tool that will lead to even larger networks.
• Social networks are a digital mirror of Human OS in action, and they expose  many the full spectrum, from "flattering" to "pretty seedy" ,-). I don't think many "serious" people would like to admit that two thirds of human interaction is gossiping, silly jokes and verbal grooming. This confronts us with who we are versus how we want to see ourselves.
• As Clotaire Rapaille explains passionately, we make decisions with the reptilian brain and justify our decisions with the cortex (intellectual). While reading Grooming, Gossip.. I kept thinking about this; one of Rapaille's key points is that we like to think of ourselves as rational people, but we are actually quite instinctual and emotional.
• Although Dunbar does not discuss at length "levels" of networks within the 150 limit, he states that we use social information to infer potential behaviors of people. The further away from us, the looser the tie and the more we must infer. Social networks will enable us to have much larger networks of loose connections.
• However, as Dunbar persuasively points out, the human brain remains the bottleneck to expanding our networks. It has a limited capacity to learn and maintain information, social information, trust and relationship about people in order to maintain much larger networks. Remember, social information is filled with nuance and complexity, so I doubt that computers will be able to help to scale Dunbar's Number in the near term. How can a machine help individuals to ascertain whether another person is trustworthy under specific circumstances? That's what gossip does for us.
• That said, there is a significant opportunity to create larger networks of relationships in different categories (also see Countering Social Networks' Unique Challenges with the Relationship Life Cycle).

Key Observations about Social Networks

LinkedIn, Facebook, MySpace, Friendster, Orkut, Xing, Cyworld, Qzone and others have certain features that seek to automate social behavior that their members want, and many executives see this proposition as silly or superfluous. The networks are in a highly competitive race to attract people with Groups, Discussion Boards/Forums, Profiles and others that enable them to have more social interactions. Dunbar's book shows that social networks get to the core of human behavior and survival.

• Social grooming is committing ourselves to others in certain situations by "stroking" them and letting them stroke us, usually in full view of others, who extend the scene via gossip. This releases endorphins. Grooming is so important that evolution has given us a little "kicker" to encourage the behavior.
• Social networks scale this incredibly; if you send someone an email thanking him/her, that is a one to one communication; however, if you thank him/her by writing on his/her Wall, all your Friends and his/her Friends see it, too. Depending on the intimacy of the thank you, it can be more valuable to write on the Wall.
• I also hope Dunbar's work causes you to doubt that "social" behavior, especially on social networks, is inherently narcissistic, as many people have claimed. Of course, like other modes of behavior, it can be, but not necessarily.
• For more on social networks, groups and business strategy, see Geography 3.0: What It Is and What It Means.

Sociality, Trust and Productivity

• Grooming, Gossip.. shows that people use social interaction to determine how much and under what circumstances they can trust one another. When used correctly, social networks can lower the cost of trust.
• Dunbar's and Rapaille's work suggest that personal interactions get to trust far more quickly than "business" interactions. I'll hazard that social topics can be a useful window into someone because people may be more off-guard when telling jokes than when having a business conversation. "Social" is serious business if you want people to feel comfortable with each other to trust each other enough to collaborate.
• Of course, gossip is all about politics, which Dunbar doesn't cover in great detail. The gossiper is presenting the gossipee in a certain light, which may be quite distorted. It requires even more brain power to decipher and use the information gossip provides.
• Adam Christiansen shared an interesting IBM case study in which project team members who shared social information (i.e., family photos, cricket discussions, favorite music) with each other on Beehive (a digital social network) became productive close to twice as fast as control groups that didn't share information.
• Grooming, Gossip.. shows why this is pervasively true with people in all cultures. When people are seemingly "goofing off" and gossiping, they are really learning where they stand with each other and other people. Huge implications for collaboration and productivity.

A New Look at Features in Social Networks

Social network platforms are designed to let us gossip and share social information about each other, and they break the mold here. Scaling social information will prove disruptive in every area of society. Grooming, Gossip.. provides the context for appreciating social networks' transformational power.

• Profiles enable us to create a platform for our reputations in front of millions. We present ourselves as we want to be seen. Many platforms let other people gossip about us on our profiles (i.e. the Facebook Wall).
• Networks (of Friends, Connections...) are online and visible under certain conditions. They are explicit at an unprecedented level. Often, social information around the relationship is also viewable.
• Updates and Blogs allow us to manage our reputations, instant by instant. Twitter, Facebook, MySpace and LinkedIn enable others to contribute by writing on Walls, commenting on LinkedIn Status Visibility, retweeting, etc. Blogs enable tremendous interactivity about expressing and reporting about everything.
• Groups, in all social networks, enable us to create private and public groups for anything. Notably, they significantly reduce the cost of interacting around any topic.
• Photos and videos are rich media tools for sharing grooming, gestures, activities and moments. These are great tools for social grooming and, since they are scalable, they have tremendous promise.

Wednesday, the Wall Street Journal published What Facebook Can't Give You, which chronicles the growth of the "Wednesday 10," a professional networking group started in 1957 in Manhattan by William Safire. Established when members were in their 20s, the Wednesday 10 saw many of its members go on to become leading broadcasting executives, investment bankers and real estate moguls, and the point of the headlines is that "old fashioned" offline face to face networking is superior to online social networking.

This is another example of uninformed "criticism" of online social networks because it takes a mutually exclusive attitude toward offline and online social networking, a growing head-in-the-sand response to the disruption that the latter presents. Read on for a short review and discussion of how successful executives in the 21st century will use all modes of social networking to increase competitiveness through authentic relationships.

Offline Networking Success Story Presented as "the Real Way to Network"

The Wednesday 10 as presented is a success story for building relationships among a group of motivated people with complementary knowledge and a sense of commitment. There are millions of such groups that use the same formula of noncompetitive professions, monthly dinners and active support. The problem with this story is that it suggests that groups like this will present fantastic value for their members, which is false. I know hundreds of executives that invest years and thousands of dollars in such groups for lackluster returns. In fact, serendipity often plays a large role in determining the group's success: if the culture of the group is committed (the Wednesday 10 was also helped by an ethnic connection) and even a minority of the members are plugged into relationships that can serve the group overall, it can create breakaway value as members help each other advance. It can attain critical mass as the Wednesday 10 did. However, if the group doesn't have access to breakaway connections or the sense of commitment isn't strong enough, results will suffer.

Online Networking Dismissed as Means to Develop Relationships

The story's biggest blind spot is that the editor (I assume s/he wrote the headlines as the writer doesn't even mention online social networks) implies that Facebook (and other online social networks) is frivolous and cannot give you this kind of success. As the founder of the Executive's Guides to LinkedIn, Facebook and Twitter, I have worked with hundreds of executives to help them and their companies use online social networks to improve their competitivness. To an executive, activity on Facebook and LinkedIn often looks frivolous, but there is nothing about the networks themselves that prevents creating high value business relationships. Digital social networks are new, and people are experimenting extensively. Very few people know how to use the networks to build and extend authentic relationships effectively, but they are learning fast. Today, people use the networks for all kinds of activities.

Welcome to the "And World"

When confronted by a disruptive technology or phenomenon, many people first dismiss it as silly; if it succeeds, they then assume that it will displace the pre-existing legacy technology, process or behavior. In The Long Tail, Chris Anderson called this the "or world" mentality. Digital documents will replace paper. Online will displace offline. As he subsequently pointed out, we live in an "And world" in which innovations coexist with legacy technologies and behaviors. We use both and adjust our approach over time, usually slowly.

Even more important, people often mistake a new tool for the process or activity. Online social networks are new tools, processes and environments in which we can build and maintain relationships. But the core activity remains building relationships. Most executives (and editors ,-) do not realize it yet because they often perceive social networks as time wasting activity for the frivolous young. Just like that Internet thingy used to be regarded in the mid 1990s.

Some Economics about Relationships

20th century address books of highly connected leaders rarely surpassed 300 people, but today it's possible to have ten times as many because the transaction costs of keeping connected are far lower when using online social networks. The fact is, it is very expensive to conduct face-to-face networking, but it can be immensely valuable for relationship building. When executives know how to use Facebook, LinkedIn and others, they can find and engage people at a far lower cost (time, opportunity cost, money). They can spend face to face time with well qualified people, leading to higher productivity.

But no one said online networking was instead of face-to-face networking. Best practice is having active digital social networks to discover highly relevant, motivated and committed people whom you get to know by interacting with them online. Based on mutual interest, you supplement some of these relationships with offline meetings to go deeper. Likewise, you can touch people in your network far more often online because it's less costly for both of you. Offline and online are very complementary. For more on this, see Countering Social Networks' Unique Challenges with the Relationship Life Cycle.

Because the transaction costs of online networks are lower, executives can build and manage larger networks. The Wednesday 10 carried a very high opportunity cost for members, probably six or more hours per month. Having larger networks can make each member of offline networking groups more valuable when the members build their online networks with purpose and focus on building trust.

Parting Shots

• All human beings avoid risk as much as possible, and one of our key risk mitigation tools is trust. People we trust will act in ways we can predict, so we prize them.
• Online social networks represent a fantastic new way to find people with very specific interests (common opportunity sets) and to invite them to engage. It takes about a minute to write a specific three-sentence LinkedIn or Facebook invitation, which includes an explicit value proposition. By exchanging messages with the new connection, by introducing her to people you know with similar interests, by sharing specific links and by answering his questions in LinkedIn Answers, you begin building a relationship. You can expand relationships to go offline at the appropriate time.
• When the World Wide Web (the graphic interface of the Internet) began in 1994, it was filled with jumping frogs, porn, rudimentary e-commerce and roll-your-own news sites and little else. After some incubation time in which a few serious business people experimented, it began addressing a larger spectrum of the world. Online social networks can be used to play games and to build and maintain powerful networks, but they will turn very serious over the next two years.
• Once you see this, it's a bit galling to see headlines like the Wall Street Journal's, but as I predicted this spring, 2010 will see a raft of such stories. People who believe them put themselves at a serious competitive disadvantage.
• People who aren't native with pervasive online transparent spaces (most people over 30) have to work to understand this new environment and learn how to translate their personal and professional style into it. This is rapidly becoming a core skill: if you are a sales professional with 300 people in your address book, how will you compete with someone who has your 300, plus 3,000 connections in LinkedIn, Facebook and others? Someone who understands how to build and maintain trust at a lower cost than you.
• As for online social networks not giving you relationships like the Wednesday 10's, just you wait, Henry Higgins, just you wait  ,-)

President Bill Clinton addressed 2,500 alumni of the Indian Institutes of Technology in Chicago on Saturday at PanIIT 2009 with the message: You can make an impact as an individual, and all of us have to take responsibility for creating a more equitable, stable world. Speaking at the three-day global confab, Clinton pointed out that interdependence had positive and negative consequences because it brought people together in unprecedented ways. Through actual and media contact, people start seeing how everyone else lives around the world, and startling differences are difficult to understand and accept. Overshadowing this are a slew of global challenges like disease and climate change, problems that demand unprecedented collaboration. I will both summarize his remarks and provide my analysis and conclusions.

PanIIT and the Indian Institutes of Technology

PanIIT represents the crème de la crème of India's educational system, and it's well known that many of the system's alums are well represented in global corporations and start-ups. Clinton pointed out that Indian immigrants (in the U.S.) produce more economic value than any other group.

He called on the audience to put their brains and hearts to work to solve some of the world's thorniest problems. IIT is in the epicenter of India's demand for an educational system to propel an ever larger portion of the country into the Knowledge Economy. It is trying to expand capacity while retaining quality. Mr. Gupta, who introduced Bill Clinton, acknowledged Clinton for forgoing his usual speaking fee.

Big Problems, Small Solutions

A raspy-voiced Bill Clinton delivered a message that was challenging but actionable for the audience and completely consistent with Web 2.0, which enables people to collaborate at a lower cost through digital platforms and tools. His message also signals a shift from "big is beautiful" to "small is beautiful" solutions. We are accustomed to the idea that intractable problems like world hunger should be met by large, global programs that take millions just to administer and years to organize. Clinton had other ideas: focus on tipping points, which may seem small, but they are poignant and and wreak more change than first meets the eye. Here are two examples for which he had props:

• A $10 lamp that looks like a flashlight and is rechargeable during the following day via its solar panel; it enables families in rural areas (with no electricity) to study and work at night, significantly increasing their productivity. One battery can perform for 750 cycles (2 years) before replacement.
• Deforestation is destructive in many parts of the world, and it affects us all directly due to climate change. People cut trees out of desperation. In Haiti, where Clinton spends considerable time, trees are cut to make charcoal for home stoves. An entrepreneur invented a simple, affordable mechanical device that presses paper and wood waste into disks (they look like particle board, about the size of a bagel) that burn for about two hours and cost a few cents. Less than charcoal. Less deforestation, and people spend less money.

Clinton's platform was largely driven by his personal experience at the Bill Clinton Foundation, which seeks to solve problems in these areas:

• HIV/AIDS (Clinton HIV/AIDS Initiative)—Drugs are too expensive, even generic drug programs. AIDS is rampant in Africa, where some families live on less than $1/day; Clinton negotiated large deals with generics companies and decreased their costs by assuring revenue streams, of course everyone has to make money, so we have to change the conditions in which companies and people make economic decisions.
• Climate change (Clinton Climate Initiative)—One message was that we need to create products and processes and tools that enable poor to get ahead by doing the right thing; for example, using the Haitian "briquettes" instead of charcoal.
• Poverty in Africa (Clinton Hunter Development Initiative)—His message here was everyone may not know it, but everyone has a stake in poverty, even though the connection may not be obvious.
• Healthy living (Alliance for a Healthier Generation)—He didn't address this in detail.

Live Tweeting, 10 October 2009

I have cleaned up these tweets for typos and some of the more esoteric abbreviations; to see them in original form, see my Twitter stream.

• Clinton intro loves Indian food, spent 4 days in India, longest visit by U.S. president (when he was pres) #paniit3:44 PM Oct 10th from Ping.fm
• Interdependence has mixed blessings; inequality, half of the people in the world live on less than $2day3:49 PM Oct 10th from Ping.fm
• http://twitpic.com/l0man - Raspy Bill Clinton #paniit3:49 PM Oct 10th from TwitPic
• USA declines in average household income, increase in wealth enjoyed by wealthy, inequality in India and USA, in the last boom, only finance, housing and credit grew, other problems of interdependence disease, terrorism #paniit3:52 PM Oct 10th from Ping.fm
• Finance crisis global, interdependence; China 35 million unemployed crisis due to western recession, we need to try to get the positive w/o the negative; now recapping his economic achievements as president #paniit3:55 PM Oct 10th from Ping.fm
• India generic drugs are crucial to AIDS program, BC (Bill Clinton) convinced drug companies to change business model, BC certifies that (recipient) countries are using the drugs right (and he guarantees payments #paniit3:59 PM Oct 10th from Ping.fm
• BC foundation highly involved in facilitating low cost drugs; they work on supply chain efficiency: no one loses money b/c they guarantee payment #paniit4:00 PM Oct 10th from Ping.fm
• Tackling deforestation in Brazil, Congo and Indonesia, people need help. In Haiti, trees are cut for charcoal, simple things #paniit4:05 PM Oct 10th from Ping.fm
• People need to make money doing the right thing; Hillary just called fr Zurich, tilapia farmg making more money w partnership started by U.S.-educated entrepreneur #paniit4:10 PM Oct 10th from Ping.fm
• More on Haiti deforestation destroyed fishing and water, now fish farmg needed to feed people; 100% profit, citing entrepreneur who sells fish for $2/pound, 100% profit, need to scale businesses doing right thing, need to improve living conditions #paniit4:14 PM Oct 10th from Ping.fm
• Now microcredit, President Clinton remarks sunnight lights for night, enable people to study and work, lights cost $10 and battery good for 750 nights, charges during the day via solar panel, great message #paniit4:16 PM Oct 10th from Ping.fm
• Now water solution, water shortages increase disease in Africa, there are cheap solutions; think small it rolls up big U.S.-India foundation #paniit4:19 PM Oct 10th from Ping.fm
• India can eliminate malnutrition; we can do things as entrepreneurs, don't have to go thru govt, being good citizens is more required now, help people globally, it's ont enough to vote and pay taxes and depend on govt to do the right thing #paniit4:21 PM Oct 10th from Ping.fm
• We all need to take responsibility, we can make money by saving the earth, now GHG (greenhouse gas) message, equality brings wealth, We need innovation #paniit4:24 PM Oct 10th from Ping.fm
• USA uncompetitive healthcare system, $900 million extra cost (above what we should pay, compared to OECD), Pennsylvania (Geisinger) is the only USA state with total transparency (costs/treatment online) need better delivery; now moving to education, we (U.S.) were #1 in college education participation, now #8 #paniit4:29 PM Oct 10th from Ping.fm
• Indian American immigrants are #1 wealth creation, don't fear china, focus on what you do, collaborate w Pakistani immigrants, get support to work together to reduce suspicion #paniit4:38 PM Oct 10th from Ping.fm
• http://twitpic.com/l0vit - Clinton address #paniit4:39 PM Oct 10th from TwitPic
• India & Pakistan can work together look for nonzero sum games, U.S. mentality wants winner loser, but that can't work in an interdependent world #paniit4:41 PM Oct 10th from Ping.fm
• India and Pakistan could challenge China by working together, the suspicion now a huge cost, if you were to collaborate, it would serve as a great example for other parts of the world (i.e. Middle East) #paniit4:41 PM Oct 10th from Ping.fm
• "Small" things make a difference; in Bangladesh, microcred huge, collaborate to scale the assistance and effect, India has more NGOs than any country, Haiti #2, #paniit4:45 PM Oct 10th from Ping.fm
• http://twitpic.com/l0xgt - Whole room auto silent on Clinton #paniit4:50 PM Oct 10th from TwitPic

Analysis and Conclusions

• Clinton's presentation added a holistic, global element to the conference, and his message that attendees could use similar tools and processes to make a serious impact was refreshing and useful. The examples he used drove home the idea.
• He argued that we are rapidly losing the luxury isolation once afforded; climate change, for example, doesn't care where carbon is created or how "justified" it may have been. Carbon is carbon.
• The Global Human Capital Journal is all about P2P connections and the differences they can make. I can't say enough about his message that people like us, in the audience, can personally take the initiative and make a significant difference.
• His approach felt quite personal, and it makes me wonder whether he might personally feel more empowered to make change happen, now that he is no longer president (and required to manage all the huge machinery that goes with being head of state).
• The audience was deeply appreciative; it was really moving, after Clinton had left the stage, the crowd spontaneously remained standing after the applause, and the room was very still and silent for many seconds.

As the Web 2.0 Adoption Curve, 2009-2015 predicts, there will be a significant backlash against social networks during 2009-2010 because the market's perceived value of social networks is much higher than its skill with the tools, and this will result in inflated expectations and disappointments. Most decision makers are distracted by social networks' novelty and features, and they overlook the obvious, that social networks offer a quantum leap in productivity for developing and managing relationships.

The MSM (mainstream media) have at best an ambivalent relationship with social networks because the latter weaken their monopoly on influence and mass communications. Consequently, they face a double barrier in understanding social networks' value proposition: 1) like the rest of the market, they require time to understand how they can best use social networks in meaningful ways and 2) since they perceive social networks as challengers, they are too ready to be dismissive. Executives will be well served to keep this in mind lest they be influenced into rejecting social networks' promise too hastily.

To illustrate the point, I will comment on Facebook Exodus from the New York Times as an example of self-indulgent journalism that will add to the backlash. Expect a wave of such press in the coming months.

Point Counterpoint

Facebook Exodus appeared in the NYT Magazine, so the fact that it is a personal account rather than factual is somewhat excusable even if unfortunate because the NYT's brand is synonymous with news. Ironically, the article does a nice job of reflecting the ignorance in much of the market, which is normal in the early stages of adoption of disruptive innovations like social networking. I'll attempt to show this by commenting on the topic sentences of each of its paragraphs. These appear in the same order as in the article.

Conclusions

• A key premise underlying this post is that social networks are tools that help people to create and manage larger networks than they could before, but social networks only become truly valuable for most people and companies when they are approached with a relationship-centric attitude and purpose. I tackle this in more detail in Countering Social Networks' Unique Challenges with the Relationship Life Cycle.
• By no means am I suggesting that the companies that launch social networking platforms are altruists in whom we can invest unquestioning trust. Make no mistake, most of them are Type A competitors who are trying to dominate some aspect of the Web 2.0 ecosystem.
• At the same time, users are primarily responsible for informing themselves about how social networks work. As I tried to show above, virtually all the vague criticisms cited by the author had to do with users who were uninformed about the tools or had unclear goals about how to use Facebook to reach their goals.
• I hope the above exercise helped you to understand how misinformed writers and editors can add cacophony and detract from discussing important issues. Expect a crescendo over the next six-eight months.
• There are many valid criticisms and concerns to discuss about social networks, some of which were obliquely mentioned here. Some good resources for astute commentary and criticism are: the Read Write Web, Wired, Mashable, All Facebook, Inside Facebook. Here are my hand-picked articles on Facebook.
• Also see What to Share on Twitter and Facebook, which points out flaws in a recent Wall Street Journal article.
• The MSM, like other market leaders who are threatened by the prospect of connected citizens, will often not be a source of accurate information about social networks. Obviously, there are many exceptions to this, but reader beware!

Digital social networks are transforming every field of human endeavor, from society and romance to politics and business. This is happening because they change the economics of how people discover, develop and maintain relationships. Although some will argue this point, we humans share with other animals the propensity to take more of something desirable when given the chance, and social networks enable us to have more relationships.

However, as I predicted in the Web 2.0 Adoption Curve, 2009-2015, there will be a significant backlash against social networks during 2009-2010 because the market's perceived value of social networks is much higher than its skill with the tools. This will result in inflated expectations and ensuing disappointments. Most executives are distracted by social networks' strangeness and features, and they miss the obvious, that social networks offer a quantum leap in productivity for developing and managing relationships. Much of the market will reject social networks as a fad and will sit on the sidelines during the Failure & Disappointment part of the adoption curve. However, people and companies that understand the real proposition will develop a rare competitive advantage while competitors are snoozing.

Social Networks Myths and Realities

I have advised several companies and hundreds of individuals on using LinkedIn, Facebook, Twitter and others over the past three years, so I have a large sample of helping pioneers to create business value from social networks. I see numerous patterns and myths distract people from realizing value. Here is a sample:

A Mass of Contradiction

Social networks are eerie for some people because they digitize a part of something very personal, how people conduct their relationships. The behaviors are old (what's more basic than creating relationship?), yet digital social networks are new (how do the tools work?). Yes, they are technology tools, but they merely automate some aspects of how people make and manage relationships. Most people are unaware of how they create and manage relationships offline, yet they must approach relationships with more purpose if they are to leverage the value from social networks.

The stakes are high. The firms that use social networks to reduce their sales cycle Discovery process by (roughly) 30% will have a significant competitive advantage. I predict similar benefits after Discovery in the business development cycle.

This revolution in communication is similar in scope to Ford's invention of the assembly line for fabrication.

The Relationship Life Cycle

Relationship building rarely gets enough attention in discussions about social networks, so I'll emphasize it here. What hasn't changed is that you get out of relationship building what you put into it. If you use a superficial approach, you will develop superficial relationships. One of the most uncanny things about social networks is that they make private things public, they increase transparency of relationship building.

The Relationship Life Cycle

• Discovery: with whom should I connect and why?
• Invitation: I found someone I'm interested in, how do I initiate a relationship?
• Building: how do I develop a relationship?
• Management: how do I keep up my relationship?

For virtually all of human existence, we did not choose our relationships; they were a function of proximity (more on this here). Family, location and social standing pre-determined with whom we interacted and how. Today, we have unprecedented choice, but that confronts us with deciding whom want as connections, finding them and building relationships. Building relationships has never been easy, and few people are good at it because they haven't had to be since social structure determined connection. Digital social networks make this easier but more explicit. For example, you have a colleague you'd like to ask out for a drink, so you ask him/her and this is successful or not. Your request takes a moment, and you are largely unaware of it. In a social network, you record your request in writing or other means, and this is more explicit.

How Social Networks Affect the Life Cycle

• Discovery is getting much easier. As people have more interactions on digital social networks, they are easier to find based on specific search criteria. If you are looking for prospects who have specific business challenges, it can help you to find them when they talk about their problems in blog posts or responses of LinkedIn Answers.
• Invitation is more explicit and therefore more uncomfortable for many people. But it is much faster, and it is often successful when you are sincere, forthright and offer something in which the other person is interested. Most people invite people using social networks' default invitations; in other words, they don't personalize their invitations. They also don't communicate an explicit purpose behind their invitation, even though they have some unconscious motivation.
• Building is also largely an unconscious process for people, whether in a social network or not. You build relationships through interacting, and each interaction either increases or decreases trust. Therefore, when you approach your interactions with this purpose, you will be more successful. Interactions in social networks are less costly than other means. For example, having a 30 minute phone call will likely take you as long to arrange. Much of the call will be "small talk" updating each other on what's happened since you talked last. Each interaction contains many channels, but let's focus on two: you show you care about the person, and you explore areas of mutual interest. In a social network, you can communicate that you care about someone by helping them do something they care about (connect them with someone or answer their question). You can learn more about areas of mutual interest by looking at each other's profiles. When you do meet face to face, you can have much better conversations because you can focus more.
• Management is much more leveraged in a social network. LinkedIn, for example, alerts you when your Connections change their profiles (get new jobs, work on new projects...). One click shows you their profiles. Facebook and Twitter offer more real-time updates on what people are thinking and doing. Using social networks, you can keep in touch with a far larger network. Whether you are fighting to eradicate cancer, looking for funding for your latest startup or seeking a new job, having a larger network can enable you to succeed much more than others with smaller networks. Social networks strengthen your offline interactions; they do not replace getting across the table from someone, but you do have to choose with whom you have these precious offline interactions.

More Relationships: Confounding Dunbar's Number

Having more relationships confronts us with our brains and value systems, which were formed when we had access to far fewer people. Dunbar's Number holds that humans can "maintain stable social relationships" with about 150 people. He defines that as remembering important things about each of those people, including whom they know and how. His research connects the number with neocortex size. When we talk about having networks many times larger than that, we run into problems. We can't remember the details, and we deal with this in different ways. Some people try to game the number through mental gymnastics, and many people use digital devices. Traditionally, we have had relationships in the following categories, each of which has socially defined expectations and commitments:

• Family
• Colleagues (work)
• Friends (neighbors, school friends)
• Worship
• Hobbies

What if we created different categories? The trick is, we need to be authentic by not pretending that the extra people have the same commitment levels and expectations as the others. This is so new that people don't know what to do with it. Here is a representative list (Assume that they are not included in the above):

• Networking people you meet at business functions
• Social network connection who answered one of your questions in LinkedIn Answers
• Social network connection with whom you've exchanged compliments on each other's jokes
• Social network connection with whom you've exchanged a dozen pertinent articles

In other words, there is much opportunity when we "add columns to our databases" to make room for new categories of people. If we are honest and authentic, we can benefit from the increased connections. Dunbar's Number shows that we have limitations, so acknowledging them while authentically sharing with people offers opportunity. No matter what is important to you, personally or professionally, other people can help you. For example, if you are looking for a job or a new client, you need access to people who can hire you as an employee or consultant or you need expertise to explain how what you offer relates to target companies. A larger network affords you more access and expertise, but networks are like gardens, they need tending.

Conclusions

• Social networks reduce the cost of the relationship life cycle, but most people don't know how to use the tools or how to act in this new environment.
• Many executives remark to me that social networks are an appalling waste of time, judging by the silly activities that go on. I remind them that very few people know how social networks work or what to do with them; therefore, expect extensive experimentation, but don't be put off by behavior of which you disapprove; no one said you had to behave like others.
• If you focus on developing relationships based on authentic interactions, you can develop and manage a larger network. Your network can help you accomplish more of what's important to you. For more on this, see How Social Networks Make Markets More Efficient for Buyers and Sellers.
• Connecting with people is the first step, but you must have meaningful interactions with them to develop and maintain the relationship.
• Sharing and exchanging on a social network is faster, easier and less costly than offline.
• To optimize the value you can create with social networks, you need to create additional categories for people, and you need to be authentic about how you interact with them. This is not easy because people have different expectation levels. We are making up our own rules as we go along because this is new.

Two Levels of Adversity

We are experiencing "a difficult economy" on two levels, and this affects your company and career in the short and long term, but for different reasons:

The obvious short-term contraction of the credit markets. Don't have to write much here as you've undoubtedly read hundreds of pages. When you live on credit and a trigger event changes your relationship with your creditors, it's like the pinball machine is on tilt. This is overtly painful and frightening; it's life-changing for many firms. Many firms have sought bankruptcy protection, and I believe many more will follow, although for different reasons. Many governments, notably the U.S., are still struggling with this on national and global levels. It takes some time to change behavior and to find a new equilibrium. Business investment is curtailed to the minimum in many areas.

The hidden long-term transition to the Knowledge Economy. For the past 250 years, most of the world has been participating in the product-focused Industrial Economy, from which we are shifting away toward the experience-focused Knowledge Economy. To appreciate the profundity of this shift, look at the last metashift, during the 18th century when many parts of Europe shifted from the Agrarian Economy to the Industrial Economy. In mid-19th century Europe, technology, then in the form of industry and manufacturing, was causing massive upheaval because the move to cities and "working on the clock" changed family structure, culture and life; politics was bound to change, too. I urge you to read Wikipedia's brief treatment, but I'll quote this passage:

Numerous changes had been taking place in European society throughout the first half of the 19th century. Both liberal reformers and radical politicians were reshaping national governments. Technological change was revolutionizing the life of the working classes. A popular press extended political awareness, and new values and ideas such as popular liberalism, nationalism and socialism began to spring up. A series of economic downturns and crop failures, produced starvation among peasants and the working urban poor.

The current disruption has presented itself as a financial crisis, but that hides the real disruption. Many of the Industrial Economy's assumptions will be shown to not hold true as they did before, and disruption will be pervasive, multifaceted and protracted. The executives who recognize this and move to adapt to the new environment will mitigate its negative impact and create opportunities for their companies, their families and communities. Those who don't will increasingly struggle.

Here are some actionable observations and suggestions.

Strategic Considerations

• Long product life cycles and innovation by long R&D cycles. I realize that this is a strong statement, but most companies will only survive if they innovate pervasively and constantly, not only in products/services but in customer experience, which is the main arena of the Knowledge Economy. 
• If you don't change your innovation processes, your viability will decelerate quickly, not immediately, but many companies will not survive.
• The problem is, the Industrial Economy thrived because there was pent up demand for goods; consequently, product life cycles were long, and firms focused on efficiency. Now experience life cycles are trending toward minutes, and they drive market share and profit.
• You may think that you already focus on customer service. Most firms do the best they can, but the customer has been mute until now. Now customers increasingly have full-motion video cameras in their pockets, featuring one-click uploads to YouTube. Your company will soon be on candid camera full-time, everywhere.
• Industrial Economy innovation processes were focused on the slow, high-cost, closed "expert model." Generally, the Knowledge Economy model is driven by "open innovation" in which firms engage highly qualified, free resources for pervasive innovation, their customers and other interested parties. Social networks are the digital gateway to engaging these new resources. 
• Your company's prowess at finding and engaging people using social networks is a critical success factor to succeeding in this environment. This is not an easy transition, but it is a necessary one for those who will lead in the foreseeable future.
• Looking at it another way, one of the legacies of the Industrial Economy is linear thinking, which stemmed from the production line. Our companies existed in "value chains" and "chains of command." We delivered value through economies of scale and efficiency and avoided disruptions to business processes. Inputs came in the back door and products went out the front. We depended on companies that were adjacent to us in the value chain.
• Now we find ourselves in a pervasively networked environment in which there are multiple paths between players, "Value Nets." Think about this shift's impact on the MBA exercise, the "Beer Game." Short circuit.

Tactical Guidance

• Remember how "Web 1.0," the Internet, made an impact on your business because it enabled information and transactions on demand. Web 2.0 will be far more profound because it proffers relationships, opinions and knowledge on demand. 
• Digital social networks will change how people buy because they will ask their friends and colleagues for advice. Most companies are not talking with these new influencers, and this disruption will accelerate and disrupt most industries over the next 3-5 years.
• Consider as strategic your company's approach to adopting social networks. You need relationships on demand: ideas from customers, employees, partners, government—and processes to act on them while mitigating risk. Social networks drive down the cost of interaction, so you can have more interactions.
• Approach social networks as a strategic competency you will need in the future: your main question is how to make the investment and develop the competency. 
• Put an executive with demonstrated enthusiasm for disruptive thinking in charge of an initiative to assess how these changes are affecting your company. Don't focus your inquiry on "what competitors are doing"—rather, focus on customers and their key influencers.
• Explicitly focus on developing in-house skills with emergent, cross-boundary interactions using social networks. Use a risk mitigation approach to accelerate your effort and minimize wasted time and financial resources. For one example, see the Social Network Roadmap.
• Refocus your value proposition away from products and services—and toward the experience of customers. More on this in Consumer Empowerment Market Advisory.
• In periods of disruption, you will mitigate risk by focusing on the end market signal as much as possible. Intel's "ingredient brand" marketing strategy is instructive.
• Rethink employment. Firms need increased flexibility, so they need to drive down the costs of hiring and firing. For more in this, see Alumni 2.0. Work with employees to help them transition in and out of your company. Social networks drop the cost of keeping connected to alumni, and they will bring you business if you approach the relationship as a partnership and serve them.