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Social Value Creation: How To Manufacture Wisdom

by Dan Robles on October 29, 2010

We call this wisdom

In the old days, the hiring manager was the person to know if you wanted to get a job. They would read your resume and compare it with the “bell curve” in their mind.  This bell curve contains a statistical sample of all similar situations that the manager has witnessed, the variables involved, and a range of outcomes observed across their long and illustrious career…Ohhhmmmmmm

We Call This Simulated Wisdom

Modern HR systems try to simulate this wisdom through a series of innovations such as key word search, structured interviews, personality tests, and employee incentives. Now we can use Google (an information company) to derive sort of a proxy for wisdom as we assess search results in our own image.  Facebook and Linkedin go a step further by providing us with another filter through which to pass judgement upon a future employee or partner.  The problem is that the more we look into these systems, the more they deliver back to us a reflection of ourselves…Ohhhmmmmm

Social Media vs. Normalized Intellectual, Social, and Creative Capital

The Data need to be Normalized

The world has become so strange, complex, technological, and interwoven, that no single person can possibly posses such a vast and broad set of experiences as to arrive at an optimized outcome every time.   Innovation favors strategic combination of diverse knowledge unlike the Industrial revolution which favored identical packets of similar knowledge.  The Innovation Economy will require a completely new approach to social value creation.

The Social Credit Score

Not unlike the FICO score, the knowledge inventory is a collection of potential knowledge events where the social network is a reporting agency that has a vested interest in meaningful knowledge events. Unlike FICO however, the variables for knowledge can be infinite (think of the Dewey Decimal System).  Also, a Social Credit Score would respond to positive events rather than a finite set of negative “hits”.

The Percentile Search Engine

Instead of just returning information, this new search engine must return probabilities from which an entrepreneur may test scenarios related to the likelihood of executing a particular business process at a known time, cost, proximity, ROI, etc.

Example

Innovation Economics

An entrepreneur may want to know if her team has enough knowledge to execute a business plan. Perhaps the team has too much knowledge and they should try something more valuable. Maybe the team does not have enough knowledge and they should attempt another opportunity or accumulate training.

Valuation of Knowledge  The search engine can look into a network and identify the supply and demand of a knowledge asset. If it is unavailable or too expensive, the search engine can adjust for price, risk, or options that may emerge at a later date.

Business Intelligence Organizations can scan each other’s knowledge inventory and decide to compete, cooperate, acquire, or evade.

Knowledge management If a key person retires, the entrepreneur would simulate the knowledge that is lost and reassign people strategically.

The Secret Sauce  Companies such as Disney and Boeing both use Engineers, each would have proprietary algorithm of knowledge that represents their “secret sauce” of success. These recipes can be adjusted and improved to reflect and preserve the wisdom of an organization. Over time, these algorithms will become far more valuable then the Patents and Trade Secrets created by them – this will allow technologies to be open sourced much more profitably and shared across more industries.

Eventually, we will learn to manufacture wisdom …OhhhhMmmmmGeeeee

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The Social Credit Score

by Dan Robles on October 27, 2010

Money Matchmaker

The function of a Bank is to match most worthy money surplus with most worthy money deficit. In the old days, the banker was the person to know if you wanted to be successful in town because they did the matching. But with the emergence of the credit score, the “banker” became digitized.  The spread of the credit score is responsible for great wealth creation because many more entrepreneurs could borrow money in the present to increasing human productivity in the future.

The Credit Score

The credit score is statistical in nature; it isolates about 30 or so indicators of your financial activity and puts them on a bell curve. These include how much debt you have, how much your assets are worth, your income, etc. These ratings are run through the FICO Equation and out pops your credit score. Anyone can predict the likelihood that you may default on your financial obligation.

All of the data that feed FICO are collected from public records, your employer, and the people who you borrow money from because these same organizations have a vested interest in a system of correct credit scores.

We are competing with ourselves

It is interesting that people do not compete directly with each other for our credit score because it is not a ranking system, it is a “normal distribution”. However, with no credit, people are invisible and the system shuts them out. With bad credit, the system also shuts them out. People are also willing to give up some freedom and privacy, but they accept these terms because the credit score provides tremendous leverage to finance a business, automobile, or a home.

The Knowledge Matchmaker

The Value Game specifically transforms financial currency into social currencies where value increases by human interactions in communities. Then, the social currency is transformed back into a financial currency or stored in a yet to be determined social currency. The efficiency of the Social Value Creation Process can be vastly improved with a Social Credit Score.  The objective, like the financial credit score, would be to match most worthy knowledge surplus to most worthy knowledge deficit.

The Social Credit Score

There are two forces that need to be combined to produce a credit score; the reporting of social activity and the independent variables that constitute social activity. We already see some elements where search engines report your social activity and we have seen a few unsuccessful attempts to use Twitter as a proxy for social productivity. Neither are functional but the nascent social credit score system will eventually improve.  But why wait if we already know what needs to be done?

Something else needs to happen

Not unlike the FICO score, the Social Credit Score is a knowledge inventory for social, creative, and intellectual assets that a community of people collectively hold. The format of the knowledge inventory must be assembled to a bell curve.

Next, a new type of search engine must be developed that can process the knowledge inventory and statistically match most worthy surplus of knowledge asset with most worthy deficit of knowledge asset given a set of business objectives. Then and only then can holistic transactions take place which can redefine human economics in social currencies, i.e., where knowledge really is an asset.


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How Knowledge Assets Live In Community

September 17, 2010

Communities, people, social networks, and their integrated knowledge assets are the mis-allocated asset being squandered by losing management teams, not land, labor or capital.

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The Knowledge Inventory: You Can’t Make A Bet Without Odds

July 22, 2010

The knowledge inventory is the most important part of Social Capitalism. It is also the only piece that will require everyone to think substantially differently about how we are organized in communities. Once we can get over that hurdle – it’s smooth sailing into the next economic paradigm.

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A Community of Knowledge Assets

February 11, 2010

Our culture organizes itself around winners and losers. Corporations reflect this competitive nature to the core of their Capitalist doctrine. Sports analogies abound across the enterprise straight through to the HR department always on the lookout for the most amount of superstar for the least amount of money.

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Necessity Is The The Mother of All Stimuli

February 10, 2009

The Ingenesist Project is to induce a crowd sourced innovation economy by integrating Social Media with three web applications. It’s all about to become extremely exciting.

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Social Enterprise; Rating Systems

October 31, 2008

There is an ongoing discussion about the rating system for articles posted to a business oriented social network site that I belong to.  While am not part of the discussion, my one and only post to that site had been rated very low despite the fact that I am recognized internationally in the subject matter [...]

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The Knowledge Inventory; Part 3

September 17, 2008

In American society there is a persistent ideology of winners and losers; there can only be one winner and the rest are losers. We rank things in a very linear way; 1st, 2nd, 3rd, etc. Sports analogies dominate many business expressions; low ball, hail mary pass, ball’s in your court, etc. Our culture is to [...]

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