TNNWC Publications: RC

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Monday, July 11, 2011

Friends, contacts and trust | A NOTE FROM THE FOUNDER

Friends, contacts and trust

by Adam J. Kovitz

The backbone of any successful entrepreneurial venture is based more upon who you know, rather than what you know. I call the "what you know" Relationship Capital, or "RC".

A well-connected individual has access to more capital (RC, and otherwise), talent and resources than most. As the saying goes, "no man is an island unto himself" and therefore, we are forced to rely and trust in others while managing multiple relationships as well as expectations if we truly want to be successful.

Often times, however, things go astray, expectations are not met and feelings are hurt, and that hurt can come from those who you thought were friends.

Recently one of my closest contacts confided in me a harsh realization about one of his long-time friends. I've actually spoken with the individual in question before, and their name came up in countless discussions. My contact, wanting to help this person (because they were financially desperate) introduced them to a business venture where this individual would stand to make a considerable sum of money. Talks broke down - my contact's friend was deemed by the other party to be inflexible, one-sided and rude.

It occurred to my friend, upon hearing the news, that:

a.) They may have damaged their credibility with their business acquaintances to whom they introduced their friend

b.) Even though we was a friend, they should have never introduced them to their business contacts, and

c.) Their friend was never really a friend as their manner has always been inflexible, one-sided and rude, even when it came to my contact.

There was a sadness in my contact's voice, and I empathetically felt for him, as I have experienced similar phenomena. In fact, those of us who have been disappointed and hardened by such circumstances might justify these experiences by stratifying their connections into friends, supporters, colleagues, acquaintances, contacts, rivals, competition, enemies and arch-nemeses.

Other more scientifically-minded (like myself) use an RC scale from -10 to 10 for certain key contacts, reassess those values periodically (weekly or monthly) and examine how they might change over time.

Yet other, more cynical, entrepreneurs simply leave friends and family out of any business dealings and take a much more sterile corporate approach to business as a defensive measure from dealing with such hurt. Over time, blocking or suppressing emotions can have their own detrimental effects upon one's mental and physical health.

I believe, however, that most entrepreneurs desire a more balanced approach to business. They don't deny their own emotional state and those of their team, but they do establish strong boundaries and enforce them to stay on target.

There are those who say that there are varying levels of trust and that the highest levels indicate a greater tolerance to being disappointed by their friends, colleagues, etc., but in the end it comes down to how we react to such changes or shifts in our relationships that truly define each and every one of us.

How about you? How do you manage your relationships? Feel free to comment on this article below or email me directly. I would love to hear from you.

All my best,

Adam

www.TNNWC.com

www.TheNationalNetworker.com

http://adamjkovitz.blogspot.com

Sunday, March 29, 2009

HEADLINE: In Paper We Trust(ed)

by Adam J. Kovitz

CEO, Founder & Publisher

Adam's section is brought to you by Salesconx.com

There are many “socially-accepted norms” when it comes to conversation that all effective networkers should keep in mind – subjects that one might deem appropriate when making conversation, of which religion and politics are classically considered “taboo”…

…so it is with fair warning that I’m going to be talking about BOTH RELIGION AND POLITICS in this article.

If you feel that you are easily offended by such talk, feel free to peruse the other TNNW articles this month. Actually, I would never have broached such “formidable” topics, but was lured (perhaps “tempted” might be more appropriate a term) into such dark waters, if not for one individual…

Along Came Mr. Rowland

It all started when I published last month’s article, A World Without Money in this very publication. In this article I suggested that our current monetary system is broken, perhaps beyond repair and posed a hypothetical world where money didn’t exist yet run on effective valuation of Relationship Capital (RC) and Intellectual Capital (IC). Okay…I may have had some political undertones to my discussion, but never once did I mention religion or the G-word: “G-d” (yes…many of us Bar/Bat Mitzvahed types spell it this way).

My friend, (and TNNW member) Jay Rowland, Founder of The Referral Marketing Association (a.k.a., ChapterTracker.com), made the following comments on my post:

“As with your State of the Industry address, I feel you’re really talking about the issue of morality, not economic systems.”

And

“…you can’t love both God and money.”

As well as

“God’s economy is one of relationship.”

I was shocked, in a sense, by Mr. Rowland’s comments. Aside from sharing a few political beliefs in my column and publication about networking, had I inadvertently breeched the religion/spiritual barrier with a few offhand remarks or was I making a stronger underlying statement by design? Either way, I was called out, albeit in a friendly manner and felt it a good idea to do one of the things I do best…write about it!

Morality and Economic Systems/G-d and Money

Mr. Rowland suggests that morality/G-d and economic systems/money are mutually exclusive, and unfortunately, he is right…to a degree. It is because of this that I feel we are experiencing our current global economic crisis.

Our current economic system is one of paradox. On one hand, the Founding Fathers of the United States, many of whom were members of one of the oldest running networking organizations in the world, the Freemasons, built the U.S.’s political and financial systems believing and imbuing into them the symbolism of Freemasonry. To be a member of the Freemasons, one must have a belief in that of a higher power – G-d. Therefore, all U.S. currency shares the common quote, “In God we Trust”.

To Mr. Rowland’s point, unfortunately, there is the saying that “money is the root of all evil”, and we’ve recently seen the classic “seven deadly sins” rear their ugly head to a head, resulting in economic meltdown. What took coinage and script imbued with the power and trust of G-d inscribed upon them and reduced them to almost meaningless hunks of metal and paper upon which now our trust is questionable?

Diverging Economies

From my perspective, here’s what has happened – we have abdicated our own personal power and externalized our trust into a situation where we have given power to an economic and political system that has diverged from G-d’s economic and political system of Karma and morality.

Some may argue that it is difficult to base such a tangible system of our current economy on such an intangible concept. To this I respond, our tangible economic system, once backed by such tangible “assets” as salt, gold, oil and even chocolate has "evolved" into something much more intangible.

For a while basing our economic system on tangibles worked quite effectively…it even curtailed our needs for more spending because we could not spend beyond our means. The downside to this was that the profit one could make in business was relatively flat.

But human needs, desires and ambitions work on abundance…our success is never an endpoint, just a milestone on one’s journey through life. Tangible assets, on the other hand, are limited. When we, as a human race, had the opportunity to graduate ourselves to the next level, we kept the same classroom, same teacher and the same curriculum. We just created new rules as we began to head into the new school year.

Those in the class who were ahead of the learning curve decided to make rules to make things more “interesting”. Unfortunately, they were weighted in their favor and refused to notice that by favoring themselves, they would be hurting others while ignoring the classic golden rule “do unto others as they would have done unto you”. They made the rule of credit, whereby we could spend beyond our means in return for speculating that we could pay back the difference in time. Thus began the downward spiral.

In time, words like “extortion”, “blackmail” and “highway robbery” would lose their significance as they were minimized or “spun” positively by those in power who networked and then eventually hijacked the political/economic system. At times, under the guise of being “G-dly” or “religious” they made their points known and got their agendas passed as more of the “regular people” (some called them “middle class”) got too busy playing by the new rules which didn’t at first effect them. The middle class became complacent and trusting into a system that was being perverted and compromised.

In time, the economic system changed to being backed by intangible means. A central authority of “oversight” based upon so-called tangible economic models, once backed by tangible assets would now be based upon nothing more than an “IOU”. Still the middle class trusted in the system…until slowly but surely, the system that “worked” for them at one time, began sorting them into two classes: upper and lower. Due to the nature of the system that was created, the 20% of the population that controlled 80% of the wealth began shifting to 10% controlling 90% of the wealth.

90+% of the people in this world have been taking the same class for years, passing it each time, yet never graduating to the point where it is becoming seemingly harder and harder to do so each year. The problem is that through faith in G-d to save them, they STILL GO TO THE SAME CLASS, EXPECT DIFFERENT RESULTS AND WONDER WHY NOTHING’S CHANGED.

How long must the insanity continue? How soon can we come to our senses and resolve this issue seriously and peaceably before things get worse?

Getting Back to “the Garden”

The question that I pose to Mr. Rowland, TNNW readers and the rest of the world is, how might things have been different if the “winners” of the economic game that has been created, maintained their ethical/spiritual integrity and worked to make everyone a winner. What if they networked to build and earn trust in a viable sustainability model that would support generations to come?

The key lies in understanding that an economic system based upon scarcity and hampered by the self-limiting beliefs of its creators and stewards does not take into account the abundant creativity and power as well as the sovereignty and stewardship of humanity. What if there was a way of merging the two economic systems: the Karma/G-d-based relationship economy steeped in “morality” and the economic system we use to feed our families?

Since we are already basing our currency (Financial Capital, or “FC”) on the valuation of intangibles, shouldn’t we utilize the who we know (RC) and the what we know (IC) that got us all the FC we’ve ever earned and leverage it into something of true value…a currency that we can really trust?

I believe that with proper valuation of RC and IC, we can create a realistically, spiritually and morally-balanced economic system that is scalable for the human condition and optimized for sustainability. Our technical knowledge of the internet and the populism of social media would allow enough oversight by which the playing field will once again be leveled and a one class system can be created. In this way, we would determine and have full control over our own “earning potential”.

I believe that creating such an economy would cater to the majority of the people in the world, despite race, color, nationality, political leanings, religious beliefs or sexual preferences. As one of my fellow TNNW writers and friends, Terry Bean, this month writes about the concept that we are all one, let’s take G-d off of our currency, put G-d back within ourselves and fly our flag under one world nation, one balanced and morally-blessed economic system, and one fully-networked "meritocrity".

This is not capitalism, this is not communism, this is not socialism. This is not JudeoChristianity, this is not Buddhism, this is not Islam. This is not American, this is not Russian, this is not Chinese. This is humanism. In this, we are all powerful and all meek at the same time. Why don’t we all inherit the earth together? And as for Mr. Rowland’s statement, “God’s economy is one of relationship”, I say AMEN, BROTHER…AMEN.

Adam J. Kovitz is the CEO, Founder & Publisher of The National Networker (TNNW).

Follow Adam on Twitter!

The Emergence of the Relationship Economy

Relationship Capital is the cornerstone of the Relationship Economy, which RNIA defines as “a measurement assigned to individual and organizational entities based on the relationship interactions between them, and the interactions they have internally.” I am proud to have contributed discussion of the Ten Laws of Relationships Capital to the upcoming book The Emergence of the Relationship Economy, now out as an eBook and in hardcopy. With a forward written by Doc Searls (of Cluetrain Manifesto fame), it is being considered a “must read” for anyone responsible for the strategic direction of their business. If you would like to purchase your own copy of The Emergence of the Relationship Economy, please click here.

_______________________________________________________

Posted to THE NATIONAL NETWORKER.

To subscribe for your free newsletter, go to www.TheNationalNetworker.com.

For the complete National Networker Relationship Capital Toolkit and a free, continuous RSS feed (available either by traditional RSS or by direct email), go to: http://thenationalnetworkerweblog.blogspot.com.

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Saturday, January 03, 2009

HEADLINE: Relationship Capital in the Workplace

by Adam J. Kovitz

CEO, Founder & Publisher

Adam's section is brought to you by Salesconx.com

With 2009 here I wanted to revisit Relationship Capital (RC) and look back at the Laws of Relationship Capital Series I ran from October, 2007 – August, 2008 and expand upon a few of their points. In fact, I realize (in hindsight) that I never suggested an actual means by which we might calculate RC, although I hope to show how we already do this consciously or otherwise when we “size people up”.

A Review

When we think of “capital” we think of money – the stuff that puts food on our families’ tables and keeps us in our homes and gets us that 42” plasma screen TV. But when we begin to look at how we acquire money (Financial Capital), we realize that any Financial Capital that we’ve ever received has been the result of who we know and what we know. The “what we know”, I have come to call “Intellectual Capital” (not that I have coined this term, but this is what others have come to call it who work in the area of Intellectual Property). The “who we know” refers to RC.

This is the basis of the Ninth Law of Relationship Capital, which states that “Financial Capital is merely a reflection of and cannot exist without some combination of Relationship and Intellectual Capital”.

The U.S. Dollar is one of the world’s leading monetary units, even considering the current global economic crisis. Yet what is the true value of such a currency? At one time, the dollar was backed by gold, one of the world’s most precious metals. In 1933, the Roosevelt Administration did away with the easy conversion of dollars to gold (and back) and in 1971, under the Nixon Administration the gold standard was altogether replaced by the Federal Reserve determining the value.

Whether backed by gold, economic modeling, chocolate (as was once used by Aztecs in Mexico) or something else, the issue is that currency is something external and valuated based upon perception. In this regard, it is an invention of the mind to which most people have agreed, yet when it stops working, more people begin to question its validity

Many regard Intellectual and Relationship Capital as a truer currency in that it can’t be taken away from us like Financial Capital can. Both these forms of capital cannot be devalued without:

Our consent, or
The applicability of who and what we know given specific circumstances.

As it is, Intellectual Capital is being used more and more in the determination of corporate valuation. In fact, the “intangibles” of an organization, mainly Intellectual Capital items like patents, copyrights and even branding have become as much as 80% of a company’s appraisal value (whereas around the turn of the century 80% of appraisal value was based upon tangible assets). Individuals are considered candidates for jobs if they meet initial criteria of a higher-education degree, specific knowledge of computer technologies, or prior knowledge of regulatory issues.

Calculating RC

While there are very few commonly accepted practices to calculating Intellectual Capital, there is even less in terms of RC. That being stated, I figured that I would put forward a suggestion based upon observations of the real world and the Third, Fourth, Fifth and Sixth Laws. Therefore calculations should be based upon the following:

Number of connections – in the world of online networking, we tend to size people up by how many people they “know”, whether they truly know them or not. In terms of mailing lists, we look see how many people have “opted in” to receive it
Quality of connections – eBay uses a system of stars to determine whether or not the buyer or seller of products is reputable. In a corporate setting, we use a similar numbering system in 360 degree evaluations and annual reviews.

It should be noted that such a calculation of RC is good for one snapshot of time and can change – I’ve written about this time dependence of RC in my discussion of the Fourth and Fifth Laws.

The calculation of RC is based upon a scaled perception of an individual (or brand) from -10 to 10 with:

-10 being viewed as highly unfavorable or distasteful
10 being viewed as highly favorable and/or attractive, and
0 as being indifferent or completely unknown.

Individual RC

RC can be calculated for a myriad of entities and purposes, such as in the case of the study of one individual within the workplace. For example:

In the above illustration, we are evaluating Bob’s RC Value (or RCV) in his organization/business unit, by polling his co-workers, Beth, Butch, Brian and Brianna. Each one rates their perception of Bob on a scale of -10 to 10, an average is taken and the result is 4.25.

Of course, Bob has his own perceptions of his co-workers, and in several cases, considerably different from them...

Relational RC

Based upon the average of employees’ perceptions of each other, we can also tie an RCV to the individual relationships between these employees. It should be noted here that each employee (network node) and each relationship (network tie or link) has its own value.

From an individual standpoint, and knowing these numbers, an employee might ask the following questions:

Why is my own personal RCV what it is and what can I do to improve it?
Why is there such a large discrepancy between my perception of my co-worker and their perception of me?
What specific actions can I take to improve my relationship with my co-worker?

From a managerial standpoint we can ask the following questions:

Which one of these individuals should be considered for promotion?
Does it make more sense to invest more into an employee like Butch (like getting him additional training or coaching) or is it best to consider termination?
What are the acceptable RCV levels for:

a. Employment?

b. Year-end bonuses?

c. Dealing with clients/customers?

Organizational RC

RCV can also be aggregated for the entire organization/business unit by simply averaging individual RCV. In this organization of 5 people, organizational RCV is 4.4.

As a manager/director of this organization/business unit, the following questions might be considered:

1.) What steps must we take to improve organizational RCV?

2.) How do the other business units within the organization “stack up” against this one?

3.) How does organizational RCV change with:

a. Key employees leaving/joining?

b. Problem employees leaving/joining?

c. Major economic upheavals?

d. Changes in corporate policies?

4.) How does organizational RCV effect:

a. Innovation?

b. Morale?

c. Profitability?

d. Return business?

Cohesiveness

Teamwork is essential to the effectiveness of any network, organization, business unit, etc. Up until now, this measure of cohesiveness was measured in end-results and a general “feel”. With measurement of relational RC, we can determine the average of all the links within the organization to determine the RCV for cohesiveness. In the above example, the RCV of the four relationships would yield a result of 2.875.

Similar managerial questions should be asked as with organizational RCV. What would be interesting to study is the relationship between organizational RCV and cohesiveness. As well at what levels (if any) cohesiveness is too high as to produce unhealthy co-dependencies, too low to keep a team together.

Other Considerations

The “map” of the organizational network in the examples used are somewhat simplified as Bob is not the only one who has a relationship with others – the others may all have relationships as well with each other, creating a vast mesh which can be analyzed in similar fashion.

As stated earlier, this type of analysis is looking at an organization at one “snapshot” of time. People and relationships change and when we look at the way RCV changes over time, we can begin to see how events, both internal and external to the organization is affected. We can also use this type of analysis along with statistical probability methods (like Monte Carlo analysis) to predict future behavior and growth/constriction of the organization as well.

A Future Economy

If we can come to agreement and begin using RC analysis within companies or any other group of people, we will make significant headway, much like we’ve done with Intellectual Capital, in valuating people, brands and companies. The key to a newer, more effective global economy is developing the means to tie both Intellectual and Relationship Capital closer than ever to Financial Capital. This might allow us to realize, in time, that true wealth is internal, yet also relies upon our abilities to communicate and work effectively with one another in a cooperative manner under a unified sense of purpose. When this happens, we can achieve anything.

Coming Up Next Month…

It’s a tradition…the 4^th annual State of the Industry Address. Stay tuned!

The Emergence of the Relationship Economy

________________________________________________________

Posted to THE NATIONAL NETWORKER. To subscribe for your free newsletter, go to http://www.thenationalnetworker.com/. For the complete National Networker Relationship Capital Toolkit and a free RSS feed, go to: http://thenationalnetworkerweblog.blogspot.com/.

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Saturday, December 06, 2008

'Twas the Night Before Networking

by Adam J. Kovitz

CEO, Founder & Publisher

Adam's section is brought to you by Salesconx.com

After assessing my output of articles this year, I couldn’t help but notice that the content has been somewhat academic, and perhaps dry and “heady”. That can be fine and good, but my own personal barometer tells me that in these challenging times and this roller-coaster year that’s been 2008, I should at least go out with a bit of the levity that some of my long-time readers might remember. I wish you all a Happy Holiday Season and a Happy, Healthy New Year. Enjoy my “little poem”…

‘Twas the night before networking,

And as I looked ‘round my room,

I couldn’t help but feeling,

An impending doom.

I sighed as I reviewed,

The clothes I would wear,

And went over the way,

To show others I care.

As I looked out my window,

Upon the neighbors yards,

I remembered to make sure,

I had enough business cards.

And what to ask of the other,

Attendees I meet?

Would my message be clear?

Or would they stare at their feet?

Yes…something was missing,

Although I could not place it,

I knew that eventually,

I would just have to face it.

So I prayed and prayed,

For some heavenly insight,

As I stared out my window,

Looked out into the night.

Just then I heard it,

Louder than a mouse,

I hoped it would not wake,

My children and spouse.

She floated into my room,

Almost too dazzling to see,

And I awkwardly asked,

“Who are you supposed to be?”

She exclaimed, “I’m the angel,

Of all things ‘referrals’!”

And I took note she was surrounded,

By birds, bunnies and squirrels

And I asked, “Why are you here

At this time of the night?”

She responded, “To give you

Some ‘heavenly insight’!”

I said, “You don’t understand!”

As I stammered and hurried,

“It’s of global economic crises

And my business I am worried!”

“There are sell-offs and layoffs,

I am financially impaired!

Politicians are useless,

And quite frankly, I’m scared!”

“I have notable skills,

I am willing and able,

Yet unsure if I can keep,

Food on our table!”

Through my long diatribe,

She still shone like the sun,

And then she patiently smiled and asked,

“Are you done?”

“Instead of just looking,

At what you have not,

It’s time to focus on,

The things that you’ve got”

“You have a family that loves you,

Pages written and inked in,

Friends on Facebook and,

500+ contacts on LinkedIn.”

“Your friends at the Chamber,

Know for any task you are fitted,

And remember those skills,

To which before, you admitted?”

“We issue many challenges,

In many shapes and many forms,

And now you and the world,

Face one of our darker storms.”

“What you’re seeing is conflict,

Between established and new,

Many contacts of yours know what’s come before,

Will no longer do.”

“So to weather the storm,

Look beyond things you lack,

For it’s only your fears,

That are holding you back.”

“When you network with fear,

It just leads to more talk,

Then round and round in circles,

You will continue to walk.”

“So look to your network,

Take action! Form teams!

Identify problems!

‘Bust out’ at the seams!”

“Network with passion and purpose,

In all of its forms,

Nothing lasts forever,

Not even our storms.”

“In time you will realize,

Seas are calm, skies are blue,

The worst part is over,

Yet there’s still more to do!”

“Then you’ll look back fondly,

On the lessons you’ve learned,

New friends you have found,

RC* you have earned.”

With that she hugged me,

Then her wings had unfurled,

“Remember to ‘be the change,

You want to see in this world’.”

As she turned to leave, I said, “Wait!

What can I do for you?”

She replied, “Spread my message

To all those close to you.”

“Tell Kensel, tell Victor,

Tell Ivan and Ron,

Tell Lydia and Meira

Don’t forget dear Sian”

“Tell Donna, tell Heshie,

Chris, Lynn and Noelle,

Jason, Rita and Larry,

And Douglas as well”

“Tell Matt and Kathleen,

Tell Glen, Jay and Andy,

Tell Bill, Ann and Terry,

Tell Maria and Candy”

“Tell Bruce and Danielle,

Tell the Chinese and the Scottish

Tell Joyce and Patricia

And that dude named ‘Biadasz’”

I thanked the dear Angel

Of All Things “Referrals”

And then picked up after all

The birds, bunnies and squirrels

And then I heard as she laughed

And flew out of sight

“Happy Networking to all

And to all a good night!”

* Relationship Capital, for those newbies out there

See you in 2009!

The Emergence of the Relationship Economy

Relationship Capital is the cornerstone of the Relationship Economy, which RNIA defines as “a measurement assigned to individual and organizational entities based on the relationship interactions between them, and the interactions they have internally.” I am proud to have contributed discussion of the Ten Laws of Relationship Capital to the upcoming book The Emergence of the Relationship Economy, now out as an eBook and in hardcopy. With a forward written by Doc Searls (of Cluetrain Manifesto fame), it is being considered a “must read” for anyone responsible for the strategic direction of their business. If you would like to purchase your own copy of The Emergence of the Relationship Economy, please click here.

________________________________________________________

Posted to THE NATIONAL NETWORKER. To subscribe for your free newsletter, go to www.TheNationalNetworker.com. For the complete National Networker Relationship Capital Toolkit and a free RSS feed, go to: http://thenationalnetworkerweblog.blogspot.com.
Forward/Share This Article With Colleagues And Social Media:

Monday, July 11, 2011

Friends, contacts and trust | A NOTE FROM THE FOUNDER

Sunday, March 29, 2009

HEADLINE: In Paper We Trust(ed)

Saturday, January 03, 2009

HEADLINE: Relationship Capital in the Workplace

Saturday, December 06, 2008

'Twas the Night Before Networking

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