Friday, September 19, 2008

The Value of Relationships – a PR opportunity?


The wise men comment on the financial tsunami that has broken over the financial world in the last few months on the BBC.

They are worrying over the future of capitalism which is a sideshow compared to the other changes happening around them.

As readers here know, I have been talking about such shock waves for some time and I have been yelling into the void that we have to come to terms with intangibles and notably the value of relationships. When relationships break down the commercial consequences are, as we can see, dire. But history also tells us that when relationships fail between peoples the consequences are far worse.

It seems to me that too many people are too aloof to see the present danger.

In an era of internet driven transparency, the lack of it un-nerves many and so it is to be expected that bundles of "special investment vehicles" would eventually un-nerve people. In this case the people are bankers.

But this is insignificant compared to the next shock wave and the ones after that.

In business the practice of 'off balance sheet' finance from lease and lease back at one extreme for companies large and small to cloud computing for mostly small organisations, there is a similar shock waiting just round the corner. The question about assets that underscore the value of the company is a very real one and is not measured in the flights of fancy or terror at the LSE. It is measured in the cloud and the relationship value of the relationship networks on and off line..

Financial reporting has to change and it has to recognise the intangible assets that are the basis of most enterprise. There is plenty of evidence that the intangible values in and of organisations is both in-house and beyond. There are many case studies showing that beyond the corporate firewall there is greater value. The examples are not 'high tech' or special and they cut across sectors as diverse as gold prospecting (Goldcorp), education (MITOpenCourseWare), pharma (Procter & Gamble) and computing (IBM). No form of human endeavour is exempt. Each of the above examples are deriving huge value and enhanced assets through community and 'open source' interactivity with huge numbers of none-payroll people involved.

These relationships assets need to be represented in the financial and management reporting conventions on across the world. They need to be reported in company accounts. At best such value is expressed on the stock markets of the world and yet, as we are seeing today, this is a poor measure.

In politics too, we see how relationship assets are exposed to transparency and, driven by the internet, can have far reaching effects. The US presidential election may seem to be an exemplar but compared to the DDoS attacks on NATO countries like Estonia and Georgia there is more than elections at stake. Garry Warner notes some of the motives and user mobilisation techniques available. This is cyberwar between peoples and not necessarily governments or politicians. Our economies, society and polity are now dependant on the internet and yet, unless we can reach out to all communities on a global scale, we will soon be fighting another war with a very different, if just as effective Blitzkrieg taking conflict to the people.

The rise and rise of user created value and wealth through collaboration seems to be passing sensible people by. It may seem that the content of MySpace or Bebo or even blogs is of little consequence and at first sight that is understandable. But every post is of consequence to at least one person if not a huge crowd. It has value. This stuff is being generated at the rate of millions of (over 1.5 million blog posts, over 3 million Twitter Tweets perday, 50,000 Facebook transactions per second) items a day. Each has value (at least to one person), value that cannot be ignored and has to be counted as part of the world economy.

Whether capitalist or not, it's there. The capitalism debate needs to be put back in its 20th century box. It is no longer relevant.

Meantime, what is a relevant lands in the lap of relationship management. This could be public relations 2.0 and 3.0 but right now is well beyond the scope of most PR research and practice.

Who will take up the challenge?