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February 10, 2009

Champagne economics

Champagneeffectsmall
Photo courtesy of ori2uru

Technology creates affordances within organizations that are making it possible for commerce to experience a shift from process to people.

With technology creating transparency, we don’t need the apparatchik. Management layers of old can be stripped away as true talent claims the right to emerge, blinking, into a new world.

The new world is about more than strength in numbers or the factory. It's where quality and quantity balance and where the strength of the individual is the key to the strength of the collective.

This is an intriging dynamic. And, in recession, it has the possibility to create a ‘champagne effect’.

Quality and equity both boil down to the strength of the individuals that support and follow something. In that kind of situation, every impression, every experience, every touchpoint matters and the richness of experiences is what holds sway. This is a phenomenon of social connectivity.

Technology means what now matters is all about the company we keep. This new world brings with it huge potential for those prepared to live outside bureaucratic protection because freedom beckons for strong individuals.

Network effects are crucial to consider, and it's impossible to ignore the implications of the long tail - both good and bad - and that an infinite supply of crumbs can exist in the tail, while the big players in the juicy head grow bigger.

Whatever the case it’s clear that the simple irrefutable equation is that leadership creates success.

One essential characteristic of tribes is that the strength of a tribe is inherently connected to the strength of its leadership. You get to have a tribe by having the courage to lead. Where push marketing is thrust and permission marketing is traction, it’s the pulling power of the leadership from which all else follows.

So when a leader is ‘full up’ and their cup overfloweth in a tribe there are opportunities to go round, opportunities gained by developing leadership in each and every member within their tribe, each doing their own thing, each going their own way, each with a specialization, each being remarkable.

These aren’t the days of the factory anymore where people are assigned. In tribes leaders choose and are chosen. I wonder whether the way to make profitable relationships in a tribe is less about tails and heads it’s more about leadership and individual excellence.

The commune was fair, but flat. Imagine a notional 30%:70% value split cascaded all the way down a champagne tower and you get a lot more fizz, and a lot more leadership. But it also takes strong leadership to stir up the bubbly in the first place.

The champagne effect is what makes social communities exciting. It encourages leaders with fizz and the chance for us all to pop our corks.

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