Thursday, 30 June 2011

Social Net - Working Or Not?


Social Networking is changing the entire world, at least at the present moment.

It is really amazing to witness how easy it has become to touch people digitally  - either by commenting on status messages or just by putting a thumbs up on their photos, videos or blogs. It’s simple, it’s quick and it’s free and hence addictive. It’s hip for teenagers in search of quick adult identity. It’s a wonderful buddy for a traveler who wants to reconnect to familiar circles transcending challenges of time zones.
It runs on the mobile phone allowing anybody to just press a button and share a personal moment. It also emulates a group discussion forum where all comments are made public to a group of friends and their friends and even further to friends’ friends. So an intelligent quip can draw a reaction in the form of a ‘like’ or a comment and it can cascade even further into a longish thread if the group-force desires to take it that far.
The language is free from any bar and can be interspersed with emoticons capturing any specific moods. If we like comparing this with that of emails and SMS then this is perhaps positioned in between. While email has to follow grammar and spelling and text messaging does not have to abide by any such rules but just exist as phonetically functional and economically zip-locked, the social networking language can range from copy-pasted anything to original writings.
So the disposition is pretty much open for a friendly interaction. Most popular amongst the social networking sites are Facebook, MySpace, Orkut and Twitter which have successfully diverted and transformed most of the email traffic from Hotmail, Yahoo, Gmail to themselves. However the best part of sites like Facebook is that friends can be searched by names and ‘friend requests’ can be sent to strangers whose email addresses are not known. This is phenomenally exciting for teenagers, the twilight aged and even those in between who want to to search for friends and who  are avidly waiting to exchange gratifications, thereby exponentially increasing their friend lists.
But some statistics are really astonishing. Would we believe that more than 767,063 people like the profile of Paris Hilton for any other reason than just drooling at her photos? Likewise, it’s also true that some of the friend requests come to us with similar curiosities written all over.

 Virtually Yours …

This is changing the social behavior of people living in cities, who having gone through a phase of independent workaholic loneliness and boredom are now finding the appearance of red notifications on their Facebook dashboard caring and comforting. With the economy slowing down, the salaries getting cut, the increments becoming infinitesimally small and the superiors complaining far more than ever before, it is generally quite depressing to wade through each and every work week before finally reaching the shores of our planned weekend getaways. Such weekend consumption sprees are stimulating since those are supposed to be the best ways of getting entertained and also quickly prompting us to putting check-marks on our weekend planners. These check- marks are of immense value when we are in a circle of friends or colleagues in real life or in the surreal circle of Facebook friends.
A lot goes into our prior planning and online research in discovering those links which offer ‘more for less’, thus paying us back in pure currency- denominated satisfaction. But the check- marks do not end those stories. That job gets accomplished only after those getaway photos are shared on social networking sites amongst friends and their gratifying comments and likes are received against most of them. It is similar to a salesman sending a survey questionnaire to a buyer for rating a product or a service just sold and then waiting in expectation for a superlative feedback. And if that happens, then our joys shoot through the roofs, bringing in reassuring smiles and reaffirming our justifications of splurging on those very special getaways.
Also for others these become great references to start with their own weekend planning.
As opposed to persons with families, those are single and have been earlier glued to dating sites, have now gradually taken to one of these  social networking sites in search of authentic friendship which their old acquaintances or batch mates can perhaps provide, or just take to it for the sake of variety. Surprisingly for us this form of socializing has become a source of greater entertainment than even watching online flicks. We do not have to dress up for the real parties with friends nor plan for logistics. We just need to deck up our moods to the virtual party beats and glide into a wonderful few moments of comfort and bliss.
Also the face- time between friends and families are decreasing. Same holds true for our verbal communication and story telling skills. Every communication now seems to be filtered and condensed like carefully- worded advertisement punch-lines with goal-driven sales pitches. There was a brief period earlier when urban workforce spending long hours at offices regularly chose colleagues as relationship partners only to justify spending significant time of their relationships on the common convenient street, but of late those are slowly giving way to far greater choices panning a far larger virtual world.
Those who are in their teens today are hardly expected to marry or live with their colleagues. They will perhaps transcend all boundaries of states, nations, languages, religions, institutions and reach out with their hearts to whosoever will give full attention to their virtual identity. On the other hand a more mature group will try to seek their roots and their ties with their past, their families, their religions, their languages, their nations, their states and even their ethnicities. Both these pursuits will have immense passion, traction and excitement while embracing the unknowns. No wonder the erstwhile patrons of newspapers, weeklies and television are shifting their loyalties! Also much pronounced will be our gradually becoming fearlessly articulate in the virtual world and obnoxiously muted in the real one and as communications become asynchronous, more of our real slow analytical thoughts and even deeper introspections reflecting on what and how we eventually articulate. A day may not be far away when a teenager, who may feel shy in confronting a parent, will explain with effortless ease her action in status messages on Facebook, because a virtual medium does not have the ego, ethos, prejudices and hierarchies like real- life individuals.

Must be the next big thing …

The business, currently in need of some steroid shots, has pinned all its hopes on social networking to be the vehicle which will drive industrial revenues in the next few years. It promises to simulate the entire world market on the social networking sites, put gaming console like dashboards on top for the industry captains to monitor and play with, to accelerate the growth of revenues for all industries and finally deliver a panacea for the world which has been thoroughly shaken by the global financial crisis. Does it sound like wishful thinking? Maybe or maybe not. But the truth is that the businesses definitely want it to succeed and deliver on each of the promises. The businesses themselves are prepared to change the way they work currently.  They now predict the demand by analyzing their consumer buying behaviors using Customer Relationship Management systems. Well, these systems can only track buying patterns of existing customers but cannot capture the details for potential future ones. And the latter is far greater in numbers than the former. With social networking, their ambitious plan is to integrate current customers, share profiles in social networking groups, through the friends and their friends’ friends and hence capture data of the future customers. Further they may like to integrate their customer loyalty programs with incentives and reward points for referrals and direct orders from friends who are in their current friend- list. Also social networking sites can be a very reliable places for capturing feedback from friends on products and services sold to them which otherwise are done by sending survey questionnaires. This new approach can provide a much more direct way for business to communicate with their current  and as well as prospective customers and can result in greater customer-satisfaction and probably higher revenues.
Similarly, procurement and recruitment functions can also become more optimized and cheaper as the social networking market grows bigger. After-sales  support can have faster responses and can cost less at the same time if issues are discussed and resolved amongst the customers who are 'friends'.
The businesses are also sensitive of the changing social preferences. They are aware that the consumers, especially the youths, are shifting their attention away from print and electronic media to  more online means and even more to mobile telephony. So their new campaigns have targeted these new-age media. In fact, currently more than 50% social- networking users access it from their mobile phones.
Also the technological advancements, open economies, liberal trade regulations and finally the change in social behaviors of the people have encouraged them to embark upon a humongous plan. They are also aware of the convergence of service providers - for example, internet, wired and wireless telephone, broadband and television which will help the entire initiative.

Economy and politics are inter-connected and hence it may be possible that by implementing social networking, globally large corporations will try to fulfill some of their political agendas as well. Since this is a powerful propaganda-machine, it can be used by government departments, agencies, institutions, and social activists to raise popular support on serious issues as has been in the upheavals in the North African countries and the Middle- East. Though the social- networking throughput is intended for loading sponsor pages with streaming videos and for discussion forums on various merchandise (with the intention introducing direct marketing through friend-chisees and peer-to-peer product support by shopping-friendly mates), the idle bandwidth will still have enough for some free propaganda.

Also post- 9/11, governments have been spending heavily on homeland security, on profiling people, on monitoring mobile calls and on  tracking various financial transactions. Social- networking sites may also fall in line with that agenda. In future, analytics software can start monitoring people like laboratory animals! Privacy, which still remains a dodgy area, can be superficially protective from casual onlookers – however, if somebody needs to really prey into private data, that might not be prevented at all. So users must exercise some restraint in the beginning and also bear in mind the consequences of  misuse. Though privacy and security may not be the same, here we somehow have security preying into privacy. From security perspective a naked man threatens none though from privacy perspective it can still send signals to other perverts.

Before we discuss more on this, let us move to another topic. Here we study the different roles and interactions of entities which comprise the private business enterprise circus and how they all are delicately connected by strings. This will also set the context and throw some ideas about how people will be impacted if this grand plan is implemented like their dream.

Fortunes will differ by Types …

All the people, who we discussed about earlier as friends in social networking, play their role as real-life consumers with varying needs and buying capacities. Let us try to categorize these friends into types.
First are those who in addition, play very important roles as the workforce for business in its various functions like marketing, procurement, production and support services. Let us call them Type I.
Next are kids, teens and young adults who are still students and some of them may have part- time jobs (belong to the age group between 0 - 21 years). Let us call them Type II.
Following in the wakeare the large business owners (Type III) and home makers (Type IV).
Let the small business owners be also classified as Type I.
Assume the self- employed like doctors, lawyers, authors, artists, actors be either Type I or Type III depending on whether they have mediocre earnings or really astronomical ones as celebrities in their respective professions.
There could still be another group of retired individuals who have steady earnings from their past investments in debt instruments or stocks and also from gifts / remittances from children or kin. Let us call them Type V. The following illustrations refer to a few numbers more for helping us to compare qualitatively the income and spending ratios for various types at a rough order of magnitude rather than actually letting us worry about the accuracy of those, which is more of a quantitative exercise and bear no relevance to this discussion.
One, which Type consumes how much? Currently more than 50% of the global consumption for goods and services is by Type II. If we look at the Type IV consumers, mostly women, they consume another 20%. For Type V (considering an aging world population) even a conservative estimate will put that as 10%.
Two, which Type borrows money and pays maximum interest? Globally speaking almost all of Type II who are above 16 years are perhaps in debt. Debt to income ratio or DTI is currently between 0.6 (for Type I) and 0.8 (for Type II, Type V and also for some Type I who are temporarily out of jobs) and in future these ratios are slated to head further north.
Three, which Types are the maximum beneficiaries of business profit? 50% of the world’s profit from private enterprises are earned by 5% people mainly Type III (i.e. large entrepreneurs, private equity owners, investment bankers and CXOs of multinational corporations). Type III comprise mostly of aged bums who seldom support their families (other Type II and Type IV) but like to roam as free discretionary birds looking for ambitious nymphs.
Four, what’re the most pathetic of Types? They are Type I. They are themselves moderate consumers (for example they spend on houses, cars, vacations and debt servicing) but also essentially provide for all their children’s conspicuous needs, education, hi-tech and high octane life styles and their credit card debts (Type II). They may also support Type IV (both if divorced or not) and sometimes Type V (though in western societies those are usually loners). Also, they earn much less compared to the high profits which the Type III earn for themselves (25% - 40% or sometimes quite absurdly high).
A much publicized answer in defense for such high profits is that Type III have the ability to absorb high risks (can absorb losses in revenue and pay penalties in the event of T&C breaches or pay damages when a lawsuit is lost) while for Type I that risk-taking ability is almost nil. The latter, it is argued, are unable to sustain even the slightest irregularities in their incomes and will perhaps break downon hearing of possible pay cuts. But counter arguments could also be that these employees had earned their degrees and diplomas with their own money or by borrowing it while taking the entire risks on themselves. Besides, they constantly bear the risks of losing their jobs at any moment when their performances really dip or their employer desires to lay them off by contriving a verdict from the annual evaluation process. Finally, after 2008, Type I have actually taken pay cuts when the actual quarterly revenues did not meet the ambitious growth targets which somehow are always set at 10% or its multiples but never at anything like 3.79% or 9.07%.  So why should Type I not be considered as risk takers even with their current statuses? Also in the event of losses, Type III not only take recourse to government tax shields and concessions (or bail out packages) but also use contingencies that are already built into their products and services costs as immediate shock absorbers. Besides, their bonuses (which are guaranteed sums per signed contracts) never get slashed even when the revenue targets are not met or the company reports a loss. Their money is always stowed away in offshore funds which are managed by the best fund-managers, thereby hardly allowing that corpus-value to erode. In fact Type III’s corpus only grows and that too at a very rapid rate. They never get poorer whereas Type I does get fleeced in several permutations and combinations.
Let us now look at another possibility of crediting Type III more than Type I with their actual performances on their respective job roles so that we can justify such skewed sharing of payouts. Type I engaged in manufacturing and construction industries are mostly of entry-level employees as well as a few experienced middle-level employees with even less, say 1%, senior level employees. Type I in services industries are also mostly from entry- level with a few supervisors and 1-2 managers. They have set targets and they handle the entire sales and delivery of goods and also provide support services to customers. CXOs are there as the budget approvers and the signatories of all contracts. They attend lunch and dinner meetings with high- profile customers and deliver key- note addresses at town- hall meetings once every quarter. They spend paid vacation with families or partners or significant others. They do not have any downside risks other than being asked to walk out of the job carrying a hefty severance package. All creditors are liabilities to the enterprise but not a single one of them are tied to CXO’s personal assets. For those who are owners amongst Type III, can choose to file under bankruptcy law after transferring all personal assets to other family members or to fictitious accounts. Comparisons of their risk- taking abilities and that of their performances have both failed to clearly justify the reason for such a disproportionate distribution of their incomes. So we can infer that payouts are decided by pure rolling of the dice or luck and most other arguments are fluff.

Now let us examine the quandary of Type I. As employees, they are given targets to stoke the consumerist spirits in potential buyers which also include their own children, spouse and dependants. On the other hand, as consumers, when Type I purchase those products on their credit cards they add up to their liabilities. And quite amusingly, the incentives and bonuses are designed with such clinical delight that Type I can earn those additional perks only to pay for their additional debts on their credit cards or can relinquish those incentives only to see that the debt burdens too got equally reduced. However the only advantages of taking those incentives are seeing the happy faces of their spouses and children with more regularity. That experience is indeed priceless.

What will happen to people by Types if social networking is implemented as the business desires? Type II and Type IV will step on their consumption accelerators with their sights only on the promised future while dreaming that one day Type II will become self employed Type III and Type IV will become the entrepreneur Type I or even the entrepreneur Type III. The harsh realities of the debt traps will perhaps evade their dreamy eyes. If at all there will be somebody to bother about that debt then it could be Type I. But nobody else will care about Type I, since they are such pathetically cautious consumers! And even Type I themselves will de-skin that status when they step into the shoes of enterprise managers! They have to set their eyes on their targets and that’s what they must achieve or else they will be tagged as worse performers, gagged out of their jobs. Social networking will bring in far greater competition amongst Type I workforce for the same jobs. Other small suppliers who are Type I may also join the same race by quoting lower prices. Type I entrepreneurs may even switch roles temporarily with a Type I workers. Again, every year, some Type II will graduate as Type I workforce and compete with the current lot at a much cheaper level. Eventually Type I will be cut from both ends, their expenditures will rise, job security will become low and incomes will shrink!
Let us look at Type V. They will probably pay handsomely for either feeling healthier or looking younger and for goods delivered at their homes (especially medication and homecare). They will have limited buying capacities, almost nil debt-servicing and no financial support from others.
Finally let us look at Type III. Their incomes and bonuses can increase even more since, in the new scenario, the business will achieve far greater revenues as well as profits than their current levels. They are really keen in seeing social networking succeed in a big way as they have envisioned, which will probably catapult them to the safe havens of oligarchy.

People can start behaving bizarrely …

Orchestration is far more difficult in real life than in theory especially when the people involved are politically and demographically disparate. Their propaganda of ‘smart’ and ‘intelligent’ cities which are in their quintquessential vision statements and roadmaps, rely heavily on social- networking sites to capture and analyze millions of consumer data and translate those into orders. However their party can be spoiled if certain assumptions do not become true.
One, all the analytics which is promised by the technology gurus may not be delivered. The verbal commentaries, one of the most difficult things to be analyzed digitally, could pose serious challenges. And the industries may not buy this beta-version of the ‘panacea’. There may not be a single corporate success story to ride on.
Two, in spite of the industries buying them, their revenues may not increase. The social- networking friends may not buy that many or that often, as had been expected by business. They may ‘like’ yet may not have enough money to buy those. Or their social identities may be fake and may not yield any orders.
Three, the rise of the oligarchs may be opposed by the commoners with whistle blowers like WikiLeaks and other sting operators, within various financial and government agencies, making public some of their confidential and sensitive documents. Hence those friends can turn into real foes.
Four, the disposition of teenagers can suddenly change and they can start to vehemently oppose the gradual transformation of democracies into plutocracies. Unemployment problems may become almost impossible to solve by current government policies.
Five, there may be a revival of interest in art, culture and yoga and people can start rejecting war in every form and also the pretexts that their governments may keep on citing to convince them.
Six, people can start acting ‘unsmart’, drive less cars and use less mobile phones, grow organic crops and return to living simple lives in villages. This may sound too extreme to actually happen but we have never had the opportunity to see the interactions and reactions of such huge numbers of educated people (Facebook alone currently has almost 7% of the world population as its users) connected in real time on a single social platform!

How can they alter the planned outcomes envisioned by business?
One thing for certain is that Type III profits will come down considerably.
Type I may see an upsurge of small entrepreneurs.
Type II, and this can be the real difference from the current trend, will also start earning early as small entrepreneurs Type I (they could choose professions as small organic farmers, manufacturers, teachers, tourist guides, therapists, nurses, social welfare workers, zoo keepers, horticulturists, energy producers from non-conventional sources, manufacturers of eco-friendly automobiles etc. They may join politics too). Their debt burdens may slowly reduce and they may leave hedonism and embrace discipline in their lives.
Type IV may become Type I and join the workforce.
Type III may find women to be more efficient and loyal than their counterparts.
Type V may start thinking about themselves as more capable than just fending for their medical and home- care expenses which can become cheaper because of lower margins being charged on price. More importantly, they can reduce their debt too  and that can perhaps bring back some of those who had earlier deserted them.
Finally our Type I cavaliers would feel much less pressure both from their families as well as their employers. Their debt- serving burden in all likelihood will be lower and their revenue targets at the workplace will definitely be less steep than before, hence, allowing them some opportunities to smile and enjoy life at large :-)

So what’s the conclusion? …

What are the chances of social networking being the socio-economic panacea of twenty-first century?
Frankly speaking, if anyone of us knew the answer, he would have already become a billionaire. In fact, some people think the other way round. Those who have already become billionaires think that they have found out the panacea and it is a matter of time for them to be proven right. We need to wait and see what happens finally! It is a crazy world we live in today and those who are really keen in hitting the bull’s eye must go and see an astrologer or a statistician, and I would rather enjoy life than try to gaze at in the crystal- ball and predict the future of thee world;  its politics and economics which are more complex than the theories which many of the stalwarts in business are hurriedly trying to force-fit.

So what may be the future of social networking?
It has already involved a huge investment to create this infrastructure and even though it is valued at several billions of  dollars, but  it can either succeed or  plummet drastically down if the industries fail to get inebriated enough by its magic.  Business is going hammer-and-tongs with its orchestrated epistemic shots but whether it can cure the global financial crisis nobody can tell. On the social side, regardless of the success or failure, the real friends will eventually be lost for free, similar to the way they were locked into this virtual friendship.

What can remain as a part of it will be the direct marketing chains, loyalists earning reward points or real incentives for references or for solving product support issues. And those people who will be marginalized by analytics will move on from one free online resource to the next one.

As the article demonstrates, CrazyLazy is a gifted analyst of society.  
Whenever he sees himself on the side of majority he feels it’s time to start worrying... He does not relish having high hopes about life as long as there is at least one to live with ... He believes that honesty still has its place in people's mind and even later.

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