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

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.

The Theory

The idea here is that the First and Second Laws, collectively place organic entities in a higher standing than non-organics in that they are, in effect, Relationship Capital engines whereas non-organic entities depend upon their interactions with organic entities that might "imbue" them with Relationship Capital.

Take for example the famous monument Mount Rushmore, which (at one time) was nothing more than any other mountain donning the South Dakotan Black Hills landscape. Based upon the First and Second Laws, the granite within Mount Rushmore is non-organic and therefore possesses no Relationship Capital, aside from that of the various flora and fauna living on the mountain.

But beginning in 1923, a group of Relationship Capital-possessing entities: Doane Robinson, Superintendent of the South Dakota State Historical Society, U.S. Senator Peter Norbeck, Congressman William Williamson began a campaign that would eventually get the approval of President Calvin Coolidge. Between 1927 and 1941, the project declared by Coolidge as a "national shrine" was brought into existence by world-renowned sculptor Gutzon Borglum, his son, Lincoln and over 400 local workers.

Today the world’s largest work of art possesses considerable Relationship Capital that comes from the following sources:

• The people responsible for its vision and construction
• Those within the National Park Service as well as a myriad of other societies and associations that maintain it today
• The four notable U.S. Presidents that have left a legacy
• The aforementioned flora and fauna that add to the natural beauty of the monument, and
• The millions who visit it every year and possess interest in Mount Rushmore.

The Practical Application

While the theory can spark some interesting debates over whether or not a wooden roller-coaster possesses more Relationship Capital than one of steel, the Second Law does suggest that a value for Relationship Capital can and must be assigned to non-organics if Relationship Capital is to have any practical application. Therefore, such valuations would have to take into account those who have been responsible for its vision, inception and execution, as in the Mount Rushmore example.

Questions arise, however, as to material costs. Sure, gold certainly has a higher monetar

These are questions that proponents of Relationship Capital will have to answer. RNIA is certainly looking to achieve consensus here, but this can become an extremely controversial subject. The fact remains that like with any system, consensus can eventually occur. When it does, the idea of Relationship Capital valuation in all things changes everything.

Stirring the Pot

I am happy to report that the articles I have written so far regarding Relationship Capital, have indeed, already sparked discussion, controversy and debate. RNIA’s Metrics Group has begun to further define Relationship Capital in their Common Body of Knowledge (CBOK), while I have been asked to further expand upon the Laws in the upcoming book The Emergence of a Relationship Economy.

In and around this topic of conversation, larger corporations are gearing up for major positioning in this space. Microsoft recently announced its $240 million stock acquisition of an astonishing 1.6% of Facebook while an opposing group led by the new OpenSocial platform developed by Google for their evolving social network: Orkut. Since these announcements, MySpace and other notables like LinkedIn, Oracle, Xing, and Salesforce.com have joined the OpenSocial bandwagon.

Where Does This Leave Me?

While the corporate giants are preparing for battle, small businesses and the so-called "little people" will be inevitably affected. In light of the formidable Relationship Networking revolution that is about to unfold, I urge all TNNW subscribers to ask themselves these questions:

• How does this affect me?
• How does this affect the organization I work for?
• Is my organization truly prepared for what’s about to come?
• What opportunities exist to position myself in this new Relationship Economy?

Hang on to your seats…this will certainly be an interesting ride. Next month, the Third Law and how Relationship Capital is derived. Stay tuned!

If you would like to place your advance order for The Emergence of the Relationship Economy, due out in ebook December 1, 2007 and in hardcover January 2, 2008, please send notification to our sales department.

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