SXSW 2014: Capital vs. Talent

Since returning to Dachis Group earlier this year, I’ve been focusing on internal operations and consulting with a select group of clients, leaving little time for publishing thought leadership. However, one event I’ve always enjoyed participating in has been SXSW, where I’ve spoken for the past five years.

SXSW 2013 Book Signing

The 2014 SXSW PanelPicker is live and the session I’ll prepare and present is “Capital vs. Talent.” I’ve been watching the rise of social media and its impact on business for about seven years and issues of power and control are far from resolved. In fact, while social technologies may be new in the workplace, organizational dynamics are the same as they ever were.

Here’s a full description of what I’ll discuss:

The Next Battleground of Capital vs. Talent: Social Business

Since the Industrial Revolution, every business has been forced to manage a fundamental internal conflict between individuals who control the means of production and individuals who operate those means to a profit. Roger Martin outlined how this struggle originated in the 18th century and persists today in the 2003 Harvard Business Review article “Capital Versus Talent: The Battle That’s Reshaping Business.”

As we progress deeper into the 21st century, businesses are still struggling with the ever-shifting balance of power, albeit with a new dimension: the rise of social media. 72% of US online adults are social networking site users, creating indelible change in personal technology use and interpersonal relationships which inevitably impact professional operations. In the early days of corporate social media adoption, individuals like Robert Scoble gained global recognition by using emerging channels to share insider viewpoints with the world — Martin’s Talent had discovered new tools to gain advantage over Capital. Management reacted by putting policies in place, trying to quell the rise of a workforce filled with “personal brands.” These policies have now come under scrutiny, leaving employers wondering what defenses remain to mitigate the risks of an employee base that is active in social media.

The best solution for Capital in this case is counterintuitive — brands are best off by wholly embracing social business. By intimately understanding the dynamics of social engagement and leveling the conversation landscape among customers and employees, management can harness the collective efforts of seemingly self-guided individuals for corporate gain. The potential benefit: McKinsey estimates that productivity increases of 20 to 25 percent are achievable, along with $1.3 trillion in value that could be unlocked within four key industries alone. Managers would be wise to recognize the value creation opportunity inherent in social business and potentially stabilize the long-lasting tension between Capital and Talent.

If you’d be interested in hearing more about this, the session has been included in SXSW Interactive’s 2014 programing in a “core conversation” format. See you there!




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