The Laws of Relationship Capital

The Fourth Law

By Adam J. Kovitz, CEO, Editor-in-Chief
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As we continue to discuss the ten Laws of Relationship Capital, it is always good to have a quick review. The first two laws (detailed in Part 1 and Part 2) relate to whom and/or what can possess Relationship Capital. The Third (detailed, so far in Part 3) through Sixth Laws focus on the mechanics of Relationship Capital. Both Third and Fourth Laws deal respectively to the famous “Quantity vs. Quality” debate that most networking strategists ponder when debating in which networks to invest their time as well as deploy their marketing strategies.

The Fourth Law

If the Third Law is a statement of the effects and implications of quantity and its effect on Relationship Capital, then (by process of elimination) the Fourth Law does the same for quality:

Relationship Capital Value increases or decreases proportionally as the perceived quality of relationship increases or decreases.

The Fourth Law while simply stated and seemingly intuitive has some major implications.

Relationship Capital Value

The Fourth Law introduces the concept of Relationship Capital Value. The reason for this is that the first three laws discuss Relationship Capital from a capacity standpoint. The Fourth Law implies that due to perceived quality, the value of Relationship Capital Value (measured in “Relationship Points” or RPs, as per RNIA) can fluctuate, much like a company’s stock, over time. Therefore, Relationship Capital can exist in three basic states:

1. Positive – the perceived relationship by both parties involved is one that is favorable, pleasurable, enhancing, meaningful, useful and/or supports the sustainability and/or survival of the person, product or business unit in question
2. Negative – the perceived relationship by both parties involved is one that is unfavorable, toxic, diminishing, meaningless, useless and/or leads to eventual destruction of the person, product or business unit in question
3. Neutral (zero) – the relationship is unknown, unrecognized, brand new, irrelevant, inert, forgotten and/or has no effect whatsoever upon a person, product or business unit. The Fifth Law addresses this state in greater detail.

Perceived Quality

The Effects of Time: Influence and Impact

The Fourth Law also implies the element of time as perceptions regarding specific relationships change based upon actions (or lack thereof). In Newtonian physics, any value measured over time can be researched and used for further analysis to gain a better understanding of the world around us. Much in the way, velocity is the rate of distance traversed over time, influence is the rate at which Relationship Capital changes over time:

In = DRC / Dt

Where:
In = Influence (measured in RP/s)
RC = Relationship Capital
t = Time

In the same way that acceleration is the rate of change in velocity over time, relational impact is the rate at which influence changes over time:

Im = DIn / Dt

Where:
Im = Impact (measured in RP/s²)
In = Influence
t = Time

Therefore, if we were to graph the Relationship Capital of a person, product or business unit over time, we could look at the rate of change (a steep rise due to the endorsement of a popular figure or a moderate decline due to layoffs) to determine its influence. We could also quantify the level of impact generated (positively or negatively) due to particular events that took place. Imagine doing this for historical figures, identifying areas of psychological trauma, etc. The possibilities are endless when we perform this type of analysis.

Reputational Mass

The longer one’s Relationship Capital remains relatively consistent at a value while the number of connections grows, the more of a reputation (or tendency) it has, and becomes much harder to change due to inertial effects. Last month we stated an equation of the Third Law as:

RC = S(R)

Where:
RC = Relationship Capital, and
R = Number of relationships

As we stated, this was inaccurate, and relied on the Fourth Law, but was useful for purposes of illustration. The more accurate statement is:

Rm = S(R)

Where:
Rm = Reputational Mass (measured in connections), and
R = Number of relationships

Take, for example, an historical figure like Sir Isaac Newton, with whom we all have a relationship even though he has long gone. Because of his deeds, accomplishments and actions, he has earned a reputation based upon the Relationship Capital profile that he developed over the course of his life. If a new historian suddenly shocked the world with evidence “contrary to popular opinion”, information would be suspect and unlikely to change the value of his Relationship Capital too quickly unless considerably substantiated and widely accepted, which actually did happen (to a much lesser extent) upon the discovery of Einstein’s Theory of Relativity.

Reputational Momentum

As Newton’s First Law states: “Objects at rest, tend to stay at rest and objects in motion tend to stay in motion, unless acted upon by an outside force”, there is a link between Relationship Capital and reputation. If Reputational mass exists, then what happens when we dramatically increase (or decrease) Relationship Capital over a considerably shorter period of time and have a considerable number of relationships? You got it…reputational momentum, which can be calculated as:

Rp = Rm * In

Where:
Rp = Reputational momentum (measured in connectionsRP/s)
Rm = Reputational mass
In = Influence

Reputational Force

For Relationship Capital to drastically change amongst all connections there would need to be a considerable amount of reputational force exerted on such a system through action and deed. Again, if one’s network has mass which can build momentum, reputational force must be exerted to positively or negatively influence it or to bring it to rest. Therefore, based upon Newton’s Second Law:

F_Reputational = Rm * Im

Where:
F_Reputational = Reputational force (measured in connectionsRP/s²)
Rm = Reputational mass
Im = Impact

Over time, reputational force could be quantified and analyzed, based upon individual actions like direct mail, advertising, word-of-mouth, genocide, keeping promises, misdirection, etc. as a means to influence Relationship Capital. Again, the implications are quite substantial. Was this what Isaac Asimov foretold in his groundbreaking Foundation series of books when he introduced the concept of Psychohistory? Time, will indeed tell.

Next month we will be taking a break from the ten Laws of Relationship Capital to indulge in what has become a February tradition at The National Networker as we celebrate our third anniversary; my State of the Industry Address. In March, we will resume with Part 5 and the Fifth Law of Relationship Capital…stay tuned!

The Emergence of the Relationship Economy

Relationship Capital is the cornerstone of the Relationship Economy, which I have defined as “a business and social ecosystem in which one’s interconnectedness and integrity determine wealth, prosperity and success.” I am proud to have contributed discussion of the Ten Laws of Relationships Capital to the upcoming book The Emergence of the Relationship Economy, due out on January 19, 2008 as an eBook and on February 1, 2008 in hardcopy. 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.

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The Laws of Relationship Capital

The Laws of Relationship Capital, Part 3: The Third Law

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

Over the past two months, I have introduced the first two Laws of Relationship Capital, which collectively focus upon the biological implications of Relationship Capital. Long story short: organic entities (following commonly-accepted biological taxonomy) possess Relationship Capital from birth through eternity, whereas non-organic entities only seemingly possess Relationship Capital because organic entities have “imbued” their Relationship Capital within them. Make sense? If not, feel free to check out Part 1 and Part 2. The next set of laws (third through sixth) focuses more upon the mechanics and evaluative side of Relationship Capital.

The Third Law

Back in the October, 2005 issue of TNNW, I discussed the “Quantity vs. Quality” factors when choosing the right networks. Since that time, this debate has sparked numerous posts on message boards and newsgroups by Relationship Networking thought-leaders worldwide. The Third Law of Relationship Capital takes the quantity side of the argument into account:

Relationship Capital is derived from
the collective relationships an individual has with other
Relationship Capital-possessing entities.

Therefore the mathematical equivalent states that an individual’s Relationship Capital is equal to the sum of their relationships. Therefore:

RC_individual = S(R_individual)

Where:

RC = Relationship Capital (RNIA measures Relationship Capital using “Relationship Points”), and

R = Total Relationships

It should be acknowledged here that as stated, this law is incomplete on its own and in itself, implies the need for the Fourth Law, which we will discuss next month. Nonetheless, there are some interesting implications here.

The More, the Merrier

One immediate conclusion one draws from the Third Law is that Relationship Capital increases (potentially) when the number of relationships one has increases. This is certainly the basis for advertising, sales and marketing, which uses the laws of statistical probability. The more exposure to the market a product, service, person, company or brand has, the more relationships are developed, thereby increasing the attractiveness, credibility, etc., which are all components of Relationship Capital. When this happens, the probability of “closing a sale” is increased.

Mo’ Connections, Mo’ Complications

Of course, the more relationships one has, the more one must leverage and manage these relationships. This means a few interesting things including, but not limited to the fact that:

1. We must know ourselves – Considering that all of us “little grasshoppers” are continually re-evaluating who we are in any given moment through trial and error, meditation, learning from others, etc., this all becomes relative as we journey through life. The ones who have a better handle on this (i.e., can be more decisive in this area) have a much better advantage.
2. We must be able to effectively communicate our message – The sooner we master this skill (which helps us even more if we have #1 down as well), the more we can rally our relationships around our cause.
3. We must continually develop and improve our interpersonal skills – Sure we might have the connections, but if we don’t know how to help them as they help us, we have to work even harder.
4. We must continually develop better time strategies – As the number of relationships grows, the more we are susceptible to interruptions by our relationships looking for help from us. Sound familiar? How many online networks do you belong to?
5. We must understand our network – Effective retail businesses know how to manage their inventory. Mapping out our own network is the same thing as taking an inventory of our relationships. Just like Judo masters know how to apply the least amount of force to get maximum results using the principle of leverage, we can do the same the more we know our own network.

Relationships are Forever

We stated earlier that according to the Third Law, Relationship Capital (potentially) increases as the number of relationships increase, but can the number of relationships decrease? The answer is that while Relationship Capital can decrease, the number of relationships one has cannot.

We often view events such as breaking up with a boyfriend/girlfriend, divorce, business partner split and death as “the end of a relationship”, but is it really gone? The answer is no. While out of sight may just be out of mind, it doesn’t mean that the relationship doesn’t still exist. It might be labeled as a “bad” relationship, but it is nonetheless a relationship. The First Law even states that relationships survive death – think of our relationships with historical figures from our past or relatives who are long gone.

This is HUGE.

This is why we have sayings like “the past coming back to haunt us”. It also adds much more gravity to the statement “we only have one chance to make a first impression”. It also changes our views of “playing in the same sandbox”, which implies that one can leave the “sandbox”. According to the Third Law, the sandbox only gets bigger and there is no escape!

This, of course, sets the stage for discussion of the Fourth Law, in which we talk about the quality side of relationships…stay tuned!

The Emergence of the Relationship Economy

Relationship Capital is the cornerstone of the Relationship Economy, which I have defined as “a business and social ecosystem in which one’s interconnectedness and integrity determine wealth, prosperity and success.” I am proud to have contributed discussion of the Ten Laws of Relationships Capital to the upcoming book The Emergence of the Relationship Economy, due out this month as an eBook and next month in hardcover. It is being considered a “must read” for anyone responsible for the strategic direction of their business. If you would like to place your advance order for The Emergence of the Relationship Economy, please send notification to Sales.

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The Laws of Relationship Capital, Part 3: The Third Law

The Laws of Relationship Capital, Part 2: The Second Law

By Adam J. Kovitz, CEO, Editor-in-Chief Adam's Bio Email article RSS feed

A few months ago, I introduced TNNW readers to the concept of Relationship Capital in my article Can Relationship Capital Solve the World’s Problems? Last month, I introduced the First Law of Relationship Capital:

All organic entities (living or at one time having lived) possess and have the potential to create Relationship Capital

Like I’ve stated previously, "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."

The Second Law

The First Law deals with organisms that follow biological taxonomy, but what about non-organic things? Don’t we have relationships with cars, works of art and computers? The answer is undoubtedly "yes", but how does Relationship Capital work with non-organics? This is where the Second Law comes in:

Non-organic entities do not possess Relationship Capital, but reflect the collective Relationship Capital of those Relationship Capital-possessing entities who have relationships with them.
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The Laws of Relationship Capital, Part 2: The Second Law

October 17, 2007 05:24 PM Eastern Daylight Time The Relationship Networking Explosion Gets Its Own Industry Association: RNIA LOS ANGELES--(BUSINESS WIRE)--Social and business networking sites are exploding all over the web, historical evidence of people’s strong desire to connect with like-minded individuals. A great many companies are seeking to capitalize on the trend, yet there is no common body of knowledge to help them harness relationship networking in their products and strategies. To meet this need, a group of corporations and professionals have formed the Relationship Networking Industry Association (RNIA), a non-profit, neutral third-party trade association. “Networking is a young, emerging industry which is just now determining the rules,” says Executive Director Adam J. Kovitz. “It has the potential to become a multi-billion dollar industry. The time is right to bring together corporations, entrepreneurs, investors, educators, trainers, consultants, recruiters, member-based organizations and governmental agencies who on their own have networking initiatives, but are not effectively connecting the initiatives to maximize effectiveness. RNIA provides the common ground to do this.” RNIA’s goal is to accelerate relationship capital, enabling people and organizations to intelligently apply networking and measure its true value. To attain this goal, RNIA members are creating a common body of knowledge (CBOK) divided into working groups focused on various aspects of relationship networking, including Education, Metrics, Technology-Driven Platforms, Employment and Collaboration. The availability of RNIA’s CBOK will enable stakeholders to deliver open and secure standards for online networking as well as consistent relationship networking education. Contacts Relationship Networking Industry Association (RNIA) Adam Kovitz Executive Director 215-945-3411 Adam.Kovitz@RNIA.org www.RNIA.org

| © Business Wire 2007

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The Relationship Networking Explosion Gets Its Own Industry Association: RNIA

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 Laws of Relationship Capital, Part I: The First Law

Convergence Happens Because WE Make it Happen!

There seem to be several groups that want the same thing...convergence of technology over the internet that will support more efficient and meaningful online (and offline) networking.

So why aren't these groups collaborating? Doesn't that make the most sense?

The good news is that the technology is already here! We (as a human society) have everything we need to create open standards which will facilitate a safe and secure means of entering our profile data in ONE PLACE. It won't matter if you're on Facebook or MySpace or Friendster or LinkedIn or anything else out there - THEY ARE JUST FLAVORS OF THE MONTH...YOU'RE NOT!

So what's missing?

Structure, standards and agreement

A few months ago we started a non-profit trade association, The Relationship Networking Industry Association (RNIA) - www.RNIA.org to facilitate a seamlessly-connected Relationship Economy by working with its members to develop such standards as well as the educational initiatives and accreditation processes to support them.

The Relationship Networking Industry (social + business networking) is a Multi-Billion dollar industry. If you want to get involved and make a true difference, please check us out.

www.RNIA.org

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Convergence Happens Because WE Make it Happen!

RNIA: Are You Connected?

Issue 5, 2007 • Are You Connected?

We thought it best to share with you the progress we're making in our early formative stages:

STEERING COMMITTEE

Until a full Board of Directors is formed, it was decided that a Steering Committee serve as an interim governance body. The Committee is made up of the following members:

• Jay Deragon, Link to Your World


• Mike Fesler, KMA Capital Partners, INC.


• Adam J. Kovitz, RNIA


• Norm Myers, eFirmM


• Margaret Orem, Execsolution, Inc.

The Committee has accomplished the following over the past few months:

• Completing incorporation of Relationship Networking Industry Association, Inc.


• Filing for 501(c)(6) Status


• Launching www.RNIA.org, the main RNIA website


• Launching RNIA's online community, thanks to Founding Member Sossoon.net and Jay Deragon


• Adoption of RNIA's Vision, Mission and Objectives


• Finalization and adoption of RNIA's Bylaws (available on the RNIA.org site Bylaws)


• Developing Board Procedures and an Operations Manual


• Initial Fundraising Strategies


• Initial Budget


• Developing RNIA's Founding Member Program


• Developing Membership Dues Structure


• Develop CBOK Group Initiatives.

Over the next few weeks, the Steering Committee will be putting its full attention on:

• Developing and recruiting a fully-functional Board of Directors of at least 7 members


• Continuing fundraising efforts, and


• Continuing other recruiting activities.

CBOK GROUPS

Margaret Orem of Execsolution, Inc. and RNIA Founding Member has agreed to serve as CBOK Coordinator for RNIA. Margaret will be working with all Group Leaders and Advisors to ensure consistency of product produced and report to the Steering Committee on group progress.

Filling the gap of Employment Group Leader, now that Margaret Orem accepted her new position, is Patrica Diver of McMaster University.

The initial fourteen CBOK groups have been reworked into ten:

1. Collaboration, led by Dan Garvin (Seamless, LLC) and Ron Sukenick (Relationship Strategies Institute)


2. Customer-Product Relationships, led by Chuck Dennis and David Hall


3. Education, led by Dr. Sue Barnes (Rochester Institute of Technology, Social Computing Lab)


4. Employment, led by Patricia Diver (McMaster University)


5. Member-based Organizations, led by Scott Forcino (ProRealEstateCity.com)
   
6. Metrics, led by Chris Kuelzow (Zybic, Inc.)


7. Organization as a Person, led by Matthew Best (Best Solutions)


8. Principles (formerly "Practices"), led by Rick Weaver (Multicultural Business Council)


9. Relationship with Self, led by Tia Carr Williams (Amodus Consultants), and


10. Technology-Driven Platforms, led by Jay Deragon (Link to Your World)

Several of the groups have begun their regular conference calls and started seperate Wikis for more collaborative online work. Currently, each group has been tasked with developing five areas of improvement in their respective areas (50 in all). Margaret will be collecting these and disseminating to the RNIA Community.

Over the next months, the groups will be recruiting new members as they develop intiatives (up to five per area of improvement). The ultimate goal for each group is for the CBOK groups to continually produce best practices and recommended procedures.

WHAT CAN I DO?

Successful growth and expansion of RNIA depends upon its voluteers. Here are some suggested ways to forward a seamlessly-driven Relationship Economy:

1. Get involved with one or more CBOK Groups - this is where all the action is! Join with other thought leaders as you take part in determining the future of the Relationship Networking Industry.


2. Tell your friends, co-workers and associates about RNIA - using the populistic and viral nature of the internet, RNIA desires as many interested parties as possible. Whether you work for an industry giant, are a thought leader, are passionate about relationship networking or just want to be part of this new and exciting industry, WE WANT YOU!


3. Share your thoughts and ideas with the Community - RNIA is about YOU. We want to hear from you. Do you agree with the current direction of the CBOK Groups? Do you have ideas for areas of improvement that were missed? Let us know and let your voice be heard.


4. Become a Founding Member - our Founding Member program has been extended into the Fall Season. All Founding Members receive the following:




• One or more years of paid membership


• Your name or company name, plus live web link on the Founder's Board of our main website


• Permission to use "Founding Member of RNIA" in all promotional materials


• For more information about the Founding Member program, contact Adam J. Kovitz at (215) 945-3411 or by emailing Adam.Kovitz@RNIA.org.





5. Pay your Membership Dues this Fall - for all others using the RNIA Community. We will be collecting membership dues this coming Fall Season. More information to follow.

IN CLOSING

We're in a rapidly-changing world. There are ever-expanding, yet more confusing ways to connect than ever before. Our hyper-networked youth and technological advances are forcing an internet society that is akin to the US's "Wild, Wild West" of the 1800s. Offline networking is not that much better and just as confusing.

Corporations, big and small, are working to make sense of this new world while end users do the same and are caught up between knowing they need to network but not knowing the best ways to do so. Our schools have still not developed the best ways to teach relationship and team building.

Isn't it time, we worked to change this?

RNIA

New world, new rules, new economy

Adam Kovitz

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RNIA: Are You Connected?

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This Week in TNNW...

Building the Case for the Relationship Networking Industry

By Adam J. Kovitz, CEO, Editor-in-Chief & King of Business NetWorking
Adam's Bio

It always amazes me when I hear folks saying that networking is only for small businesses or that “networking isn’t for everybody”. I’ve also talked with several consultants and trainers to Fortune 500 companies that specialize in networking – only their clients don’t like to use the word “networking” (it’s a four letter word to them) and prefer terms like “horizontal integration”. In the rapidly-changing business environment of social or business networking (personally, I prefer the term “relationship networking” as it’s all-encompassing) and Web 2.0, however, these attitudes are just “so 2006”. It’s time to wake up and smell the coffee.

The Compelling Evidence

Consider the following:

1. From a recent article in Fortune Magazine, “The Trouble with MBAs”: “When Jack Welch gave a guest lecture at MIT's Sloan School of Management in 2005, someone in the crowd asked, ‘What should we be learning in business school?’ Welch's reply: ‘Just concentrate on networking. Everything else you need to know, you can learn on the job.’” Like him or hate him: when Jack talks, big business listens.
2. Time Magazine’s “2006 Person of the Year: You” is an acknowledgement to the internet as a populist movement and the power that we, as individuals, now wield over the worlds of politics, entertainment, etc.
3. Educational Institutions are developing curriculums for networking education like the Rochester Institute of Technology (RIT)’s Social Computing Lab which has recently received a $124,000 grant from the National Science Foundation to fund a new course offering to 90 students for the upcoming Fall, 2007 semester.
4. High gas prices are causing more individuals and small businesses (which, according to the Small Business Administration accounts for 50% of U.S. private nonfarm gross domestic product) to rely upon the internet for online networking to do business, conduct meetings, etc.
5. Web 2.0, “new media” and mobile networking are gaining in popularity due to several factors:
   • TeleComms are investing more money into technology infrastructure this year (Sprint: $7 Billion, Verizon: $5 Billion) as well as being acquired (Alltel’s recent $24.8 billion acquisition by private investment firms)
   • On the wave of the infrastructure boom, larger social networks like MySpace and FaceBook continue to amass their followings while a flood of new start-up networks are vying for market share.
   • Generation Yers (or Millennials) embrace this new technology more readily than their counterparts from other generations and the oldest of them are now entering the workforce (see my article from last month: Networking with the Millenials: The End of the World as We Know It?)
6. Media giant Yahoo.com just recently hired two economics and sociology professors: Preston McAfee and Duncan Watts to head their research department and find opportunities in the areas of social networking and online markets.
7. According to an article in Canada’s The Chronicle Herald, social networking sites are beginning to overtake pornographic-related sites as the most popular web destinations.
8. The increasingly-accepted paradigm of “Markets are Conversations” (from The Cluetrain Manifesto by Christopher Locke, Rick Levine, Doc Searls and David Weinberger is being supported by the fact that large corporations like U.S. Television Network NBC is planning a launch of their own social networking site.

The Challenges Ahead

This overwhelming data clearly demonstrates that relationship networking is indeed, an industry. According to Dictionary.com, industry is defined as “the aggregate of work, scholarship, and ancillary activity in a particular field, often named after its principal subject”. And while this information is quite exciting for a network-o-phile such as myself, who’s been following these trends for the past 3+ years, the reality of the current “snapshot” indicates that there is still a long way to go for universal acceptance and efficiency.

Some of the many obstacles that face the industry are:

1. There is not enough clear identification as to whom the stakeholders are
2. While the industry does exist, it is not yet formalized
3. There is no consensus amongst stakeholders as to what the definition of networking really means
4. Many of the stakeholders continue to plan in a “silo”-type world, ignorant of the rich opportunities offered by convergent technologies, strategic alliances and other collaborations
5. All business is valued upon financial capital. As Donald Trump’s rapid return from bankruptcy shows, he was able to leverage his own “relationship capital” to turn his situation around. What if relationship capital could be measured and related to financial capital? What are our economies missing without this key component? How might business change? Sadly again, there is no consensus or standards other than on a very small scale.
6. There is no consensus on the best ways to evaluate people for jobs when core competencies depend upon “people (relationship networking) skills”.
7. While a few enterprising networking gurus are offering certifications for relationship networking, they do not have the backing of all industry stakeholders or a neutral third-party governing body.
8. There are no consistent or standardized methodologies of insuring privacy, security and due diligence on a global scale. How do we know if the people with whom we network online are who they say they are?
9. There is no consistent or standardized curriculum for relationship networking education
10. As end-user networkers, the question we always have to ask is, “with so many networking opportunities out there, which are the ones that are the most worthwhile for me and/or my business?”
11. We do not yet know at what point can we tell whether or not our time spent networking is being invested or wasted.
12. The idea of convergence, while it appeals to many networkers, others fear the “Tower of Babel” syndrome. As humans, our own egos and pride can prevent such “true networking” to take place for any extended period of time. We would be forced to develop more collaborative systems on a scale that has never been seen to date that would be mindful of multi-cultural, cross gender and multi-generational issues.

The Solution

Despite the uphill battle of progress, we are seeing overwhelming evidence that there is a movement, albeit, a scattered one. Fortunately, there is a newly-forming, neutral third-party, non-profit organization that is looking to change this. I am happy to be associated with the Relationship Networking Industry Association (RNIA), which aims to make networking convergence a reality. This will be done by gathering consensus of seven major communities of stakeholders: corporations, entrepreneurs & investors, consultants & trainers, recruiting firms, member-based organizations, educational institutions and governmental agencies. Through consensus, a common body of knowledge (CBOK) will be developed, from which the first standards will be introduced. From those standards, the RNIA will establish a certification process for acquiring minimum basic skills, ongoing education, technologists and educators. Expect to hear more about this new organization as companies like SoSsoon, eFirm and BNI are among the initial supporters. Every uphill battle can be fought one step at a time.

For more information about how you can support the RNIA, visit their website at www.RNIA.org.

Happy Networking!

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Building the Case for the Relationship Networking Industry