In the aftermath of the financial crisis of late 2008 and the resulting global recession, defenders of the US financial system maintained that it was a source of US competitive advantage. Our capital markets facilitate the exchange of money and risk and thereby not only help maximize productivity but also attract businesses to our economy.
With the exception of some of the more exotic financial structures, I tend to agree. Just as the shift from barter to physical currency enabled new economic prosperity, more sophisticated financial instruments and capital markets (properly regulated) benefit individuals, businesses and entire economies.
The same could be true of social capital. Today people already exchange favors, debts of gratitude and obligations of reciprocity on a daily basis. Indeed, reciprocity seems to be deeply ingrained in the social nature of humanity. Dunbar’s number could be explained as the result of the cognitive limits on mental accounts in social groups.
What if companies could make all these invisible exchanges more visible? How might collaboration and innovation benefit? What would a system of social currency look like? How would it effect rewards and incentives?
Such a system is both possible and relatively easy to implement using a combination of gamification concepts and social technologies. Here is a hack that I have been mulling over recently.
Every year allocate to employees a set number of social currency point – say 200 per employee. They can choose to hold onto the points or they can award points to colleagues as a thanks for helping out – say, 1 point for a discrete favor or for providing some much needed insight as a subject matter expert, 5 points for consistently being a team player who goes above and beyond, 10 points for saving the day and making the difference on an important project. (Publishing very basic guidelines will help.)
Require some information on why the points are being awarded, and make that information public. This will enforce some discipline and avoid frivolous exchanges. Making the information public also reinforces the inherent value of the social currency.
For 1 point, the information required can just be an option in a drop down; for 5 points require an additional one or two sentences – for 10 or more, maybe a short blurb. Include the date. As you collect information and track awards, you build a data set on social interactions that can be analyzed later.
At the end of the year, everyone is entered into a raffle for prizes with the number of entries per person being somehow proportional to the points that the entrants have accrued by the year’s end. There can be multiple winners, and smaller prizes are probably better than really large ones. The goal is to make the whole process fun and slightly augment the value of the currency without distorting the normal social incentives so much that employees start gaming the system just to win.
At the end of each year you can see who are the experts and who are the team players. You can map out interactions and social networks and begin managing people with a new set of metrics.
We are only just beginning to understand the potential gains from harnessing social data. The Enron corpus has proven to be an invaluable trove of data for analysis. Imagine adding datasets from the exchange of social currency, one day maybe even gadgets like those that are already gaining popularity in the quantified self movement. All sorts of new, more rewarding and more productive organizational structures and management practices could be possible.