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Monday, October 01, 2007

The Laws of Relationship Capital, Part I: The First Law

The Laws of Relationship Capital, Part I: The First Law

By Adam J. Kovitz, CEO, Editor-in-Chief

Many of our readers may be wondering why this article is not entitled "Navigating on the Relationship Economy Sea, Part 2", considering last month’s article was Navigating on the Relationship Economy Sea, Part 1. I have made the executive decision to postpone this worthwhile discussion for a later issue as I have received much positive feedback (and questions) about my previous article Can Relationship Capital Solve the World’s Problems? I have to admit that the topic of Relationship Capital is one on which I spend much of my research and introspective time these days, especially based upon my work with RNIA. Therefore, I have decided to introduce the Laws of Relationship Capital - there are currently ten in all and I plan to discuss a different one each month. It is my hope through this series of articles to encourage discussion and debate amongst business leaders, academia, thought leaders and the socially and environmentally conscious who wish to benefit from networking. It is also my intention to discuss this at the "flying at 80,000 feet" as there is much more to each law than presented here.



Why Relationship Capital?

The reason more profits are all too often made at the expense of nature and humankind is the same reason dogs lick their privates…because they can! Relationship Capital (or Social Capital, as it is sometimes referred) has been getting more buzz as it addresses the need to link a profit-based system to personal accountability and integrity as well as corporate responsibility. Proponents of Relationship Capital feel that the current economic system cannot continue to be maintained and must therefore be constrained by mutually agreeable standards as well as personal and cultural value systems. In a truly-networked world, Relationship Capital provides the foundation of a healthy Relationship Economy.



The Good News

If the idea of Relationship Capital sounds a bit subversive, anti-establishment or even a bit too utopian you’re probably under the impression that an alternate economic system like Relationship Capital doesn’t already exist. The truth is that early forms of Relationship Capital are already here and under your very nose. Consider the frequent flyer mileage programs of every major airline as well as credit card rewards programs. Points = Products and Services = Relationship Capital; they can be exchanged. Still not convinced? Take a look at online social network Second Life, a virtual world where its citizens can earn "Linden Dollars" to buy property, start a virtual business, etc.



The First Law of Relationship Capital

Despite the fact that these alternative economic systems exist and serve as early models, the switch to Relationship Capital, if not done correctly, can be highly disruptive. This switch also requires an understanding of the Laws of Relationship Capital. We will cover the First Law this month:



All entities that are alive (or have ever lived) possess Relationship Capital.




Some Definitions

RNIA has defined Relationship Capital as "A measurement index based on RNIA[‘s Common Body of Knowledge (CBOK)] used to value an individual’s or an organization’s networking effectiveness." I define it more as a measurement of capacity, defining the ability to establish a relationship with others. I look at RNIA’s definition as more of the definition of Relationship Capital Value (RCV) in which, like with dollars, can be positive or negative.



The Implications

The First Law of Relationship Capital starts with biology. In biological taxonomy, the highest grouping of organisms is called a "kingdom". According to the First Law, no matter what kingdom you’re from (if you’re reading this, I hope you’re from the animal kingdom), you possess Relationship Capital: animal, plant, fungus, bacteria, etc.



For example, I recently shared the First Law with my wife, Wendy, and she asked, "Does that mean I have a relationship with my salad?" I answered her with an emphatic "yes" in that we develop relationships with all combinations of living organisms and each one brings value to us through Relationship Capital (in this case, food brings us sustenance, and therefore has value). Another example might include bacteria establishing a relationship with us, either positively as the cultures in yogurt are good for digestion or negatively as certain strains will make us sick.



What’s more is that entities can possess Relationship Capital even long after they’ve left this Earth. We’re not just talking the "I see dead people", esoteric kind of stuff, because it tends to be experiential and there is very little scientific proof of such things, although I suppose it is valid in certain circles. I am referring to the knowledge one can receive from reading up on the history of a particular individual’s mark on society, such as with Benjamin Franklin. Without ever having to know him, his works, deeds and actions bring a form of Relationship Capital in that we have gained insight and knowledge. Another example is the value we receive from burning fossil fuels which are the remains of plants and animals long gone so we can have power. If something possesses Relationship Capital, it can be valued.



When we look at the countless examples and permutations of human to human, human to animal, plant to animal, bacterial to fungal, etc., we can see many of our current sciences studying these relationship pairs, by setting up an Entity Relationship Matrix. It’s fascinating to me when I see that it’s no wonder we have sciences like sociology, psychology, paleontology, biology, archeology, anthropology, ecology and botany; they help explain our relationships between us and various organisms! Why? Because each brings value to us through the relationships we have with them. So the next time you sit down to lunch with a business colleague, you are not just networking with them, you’re networking with the fruits, vegetables and fungus that made up your salad, the animal(s), vegetables and various grains that make up your sandwich and a hopefully a minimal amount of bacteria (just to add color).



Summary

To reiterate, the purpose of this article is to give readers a top-level view of The First Law of Relationship Capital. There is, of course much more to this, including potential new research (or at least continuations of old research with a new perspective), new books, countless articles and perhaps a new academic field of study. The First Law of Relationship Capital suggests a world that is currently quite different from ours – one where fools and their money aren’t mutually exclusive and do not have to part, but where having money is about being human. Next month, we will take a look at the Second Law of Relationship Capital and its impact on a Relationship Economy. Stay tuned!


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The Emergence of The Relationship Economy

The Emergence of The Relationship Economy
The Emergence of the Relationship Economy features TNNWC Founder, Adam J. Kovitz as a contributing author and contains some of his early work on The Laws of Relationship Capital. The book is available in hardcopy and e-book formats. With a forward written by Doc Searls (of Cluetrain Manifesto fame), it is considered a "must read" for anyone responsible for the strategic direction of their business. If you would like to purchase your own copy, please click the image above.

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