Pondering reputation for a second, illuminates many of the issues that are now in play in the social web.

Reputation is not something you can buy, it is something that’s given to you. The concept of reputation demonstrates how the economy of relationships is not like the economy of commodities and transactions. There’s a growing interest in the idea of reputation as forming the basis of new kind of gift economy online.

Think for a minute about love and friendship. Just as the song goes, “money can’t buy me love“. There are clearly limits to the power of money. A couple of crude examples might be prostitution is sex without love, and escorts are companions without friendship. This limit to money is something we sense intuitively and points to something embedded deep within our social sense of self.

All that glisters is not gold;

Often have you heard that told:

Many a man his life hath sold

But my outside to behold:

Gilded tombs do worms enfold.

- Merchant of Venice (Act 2, Scene 7)

This timeless theme of how money cannot reach what makes us human within, is what makes Shakespeare’s Merchant of Venice as relevant today as ever. It’s an idea that goes way back to Aesop‘s fable (from about 600 BCE) of the goose that laid golden eggs,where the owners killed the goose to get the gold that must be inside it. They found nothing and so this narrative of how gold is not something that you can find inside us, goes back to the mists of time.

Buying reputation

It’s strange then that it should be a surprise to find that charities have stronger reputations when compared to commercial entities if we understand that reputation is not something you buy. On Wednesday last week the Guardian’s David Brindle reported that in the Reputation Institute’s latest report that was extended beyond corporates, included ten charities for the first time. The report measures reputation by surveying public opinion. They found:

While the global average score for corporate reputation on the institute’s scale is 64.2 out of 100, and the highest UK corporate score is the 87.2 achieved by high-street chemist Boots, nine of the 10 charities that were assessed have come out above 80 and three are above 90. Top of the tree is the Royal National Lifeboat Institution (RNLI) on 95.1, the highest score ever recorded by the institute.

I’ve not seen the full report as I’ve not been able to clarify which report David Brindle’s citing. There’s no mention of charities in the top line report “2010 Global Reputation Pulse Study – UK Results” that I’ve been sent by email. I’ve not found anything on the Institute of Chartered Secretaries and Administrators (ICSA) website which carried out the research. If anyone’s been able to get hold of the information it would be interesting to see the details.

It’s important to set the results in context. From the information in the article, only ten charities where included alongside 140 companies. In addition, following their methodology for private companies, the research seems to have only selected the biggest charities. In fact, it’s bizarre if reputations can’t be bought that the Reputation Institute is mainly interested in the richest companies. These limitations aside, the results would seem to just underline the obvious: reputations can’t be bought. Reputations are given. So it’s not really any surprise that charities, built on giving relationships (volunteers, donations and supporters) can establish stronger reputations, than companies built on exchanging commodities to maximise the bottom line. But should relationships come at the expense of profit?

‘Markets are conversations’

With the advent of the social web, private companies have become more and more concerned with this question of how to build their reputation in a world where customers have a platform to voice their views about the products they buy. Into this world came The Cluetrain Manifesto in 1999. Its message that ‘markets are conversations‘ gave a voice to the sense that companies, used to focusing on clinching the deal and controlling management, needed to begin focusing on a more reciprocal relationship they could build with their customers.

The first markets were filled with people, not abstractions or statistical aggregates; they were the places where supply met demand with a firm handshake. Buyers and sellers looked each other in the eye, met, and connected. The first markets were places for exchange, where people came to buy what others had to sell — and to talk.

The first markets were filled with talk. Some of it was about goods and products. Some of it was news, opinion, and gossip. Little of it mattered to everyone; all of it engaged someone. There were often conversations about the work of hands: “Feel this knife. See how it fits your palm.” “The cotton in this shirt, where did it come from?” “Taste this apple. We won’t have them next week. If you like it you should take some today.” Some of these conversations ended in a sale, but don’t let that fool you. The sale was merely the exclamation mark at the end of the sentence.

Two of the manifesto’s authors Doc Searls and David Weinberger talk about the ‘industrial interruption‘. It captures this idea that industrialisation has increasingly created barriers and lengthened the distance between buyers and sellers. It’s reminiscent of the Simmelian concept of the stranger and the changing nature of the relationships we have with the people around us explored in a previous post. Behind the Cluetrain Manifesto is also the idea that the relationship between buyers and sellers is give and take in both directions, not just a straightforward exchange. But what do buyers give to sellers? Their answer is, in part, knowledge:

This conversation may be irreverent of eternal verities, but it’s not all jokes. Whether in the marketplace or at work, people do have genuine, serious concerns. And we have something else as well: knowledge. Not the sort of boring, abstract knowledge that “Knowledge Management” wants to manage. No. The real thing. We have knowledge of what we do and how we do it — our craft — and it drives our voices; it’s what we most like to talk about.

Measuring reputation

Reputation is not just for companies as a whole to think about, it’s also for each one of us.

In 2003, Cory Doctorow’s book Down and Out in the Magic Kingdom was published. Quite apart from being an fascinating experiment in the gift economy (you can download it for free in a ton of different formats), it introduced the concept of a kind of reputation-based currency called Whuffie. Importantly, anyone’s Whuffie can be “pinged” at any time by anyone so your Whuffie is public information.

The book describes a kind of post-scarcity economy where there is an abundance of material goods. Whuffie is essentially a way of keeping track of people’s standing in the opinion of others with a view to incentivising cooperation and good behaviour in a society where money is meaningless.

As a result, the concept of whuffie gets into some of the problems of measuring things that are hard to measure, such as reputation. Doctorow himself in an interview with Gerry Canavan hinted at this:

“I think that in general we have a pathological response to anything we measure. We tend not to measure the thing we care about; we tend to measure something that indicates its presence. It’s often very hard to measure the thing that you’re hoping for. You don’t actually care about how calories you eat; you care about how much weight you’re going to gain from the calories you eat. But as soon as we go, oh, well, calories are a pretty good proxy for weight gain, we start to come up with these foods that are incredibly unhealthy but nevertheless have very few calories in them.”

Since it was published, Cory Doctorow’s idea of whuffie has evolved. Tara Hunt has written the book The Whuffie Factor, and in 2009 start up The Whuffie Bank was a finalist of the Tech Crunch 50. The Whuffie Factor feels like a reformulation of The Cluetrain Manifesto- with Hunt making the point that on the social web market capital flows from social capital. Hunt seeks to expand the idea of Whuffie beyond reputation to include the following (via frrl):

  1. Connections
  2. Reputation
  3. Influence
  4. Bridging capital – the number of connections you have across to different industries, social strata, etc.
  5. Bonding capital – the depth of your close connections (how close and how much you could ask of your connections)
  6. Access to ideas and talent through your connections
  7. Access to resources through your connections
  8. “Potential” access to further resources (more distant, but very legitimate)
  9. Saved up favors (reciprocity is huge – which is why doing good stuff matter a lot with social capital)
  10. Accomplishments (slightly different from reputation, it is the more fungible form of social capital – resumes, awards, etc.)
  11. Social capital of those who you have relationships with

Several people including Venessa Miemis have picked Hunt up on equating whuffie to social capital. Miemis quotes James Coleman, Robert Putnam and Francis Fukuyama to demonstrate that “social capital and reputation are not equivalent things. Social capital is something embedded within networks, not something directly tied to an individual’s status“. It’s the gap familiar to students of social science between what happens on the individual or micro level, and what happens on the social or macro level.

Hunt in a later blog post insists her intention is not about creating a measure, at least not measuring influence, but rather impact. My interpretation is that Hunt is more interested in the ends of having Whuffie than the means. But it all feels awfully like this argument about commensurability between economic efficiency and deeper social values. In other words, it’s easy to mistake a proxy like number of Twitter followers a person has (that’s readily available, understandable and even exchangeable), with the deeper value of the relationship with the person (that’s not so easily understandable or exchangeable). Tara Hunt explains her position on measuring Whuffie (for want of a better term):

What I love most about the way Beth [Kanter] thinks of measuring is that the impact, not the influence is the final goal. The big prize. All too many times, people stop at the influence part: how popular is that person? how many followers do we have? who is talking about me and my company? how much love do people feel for me?

This is one of the biggest reasons I don’t like to measure Whuffie. I get the question time and time again when I talk about the book. The question I *should* be getting is ‘what can I do with my Whuffie?’. We should be less concerned about how many followers one has and more about what that person does with that many followers. Not only is Whuffie left better in the non-fungible, ephemeral realm, but it is inconsequential. The measure needs to be in the impact. If we concentrate on our influence, we forget the end goal. We get caught up in our ego.

But if Whuffie isn’t a measure and is not about an exchange-based system, then it seems the guys over at the start up Whuffie Bank have got a bit confused, since this is exactly what they’ve attempted to get started. As one of the commenters (Artbrock) on the TechCrunch piece points out: “For a reputation currency to be useful and have integrity it should not be able to be exchanged, bought or sold. It should only be able to be earned for doing the things that the reputation is granted for”.

People are interested in Whuffie particularly because, with the increasing use of online social networks, people’s reputation appears to be more easily measurable and exchangeable. Doctorow based Whuffie originally on the idea of karma on Slashdot, Hunt was inspired by Facebook, Twitter and blogs and more. The Whuffie Bank proposes to base its virtual currency on users Twitter activity.

As Reid Hoffman, founder of LinkedIn, added after Whuffie Bank’s presentation at TechCrunch 50, ‘reputation is based on personal networks and context of issues’. For example, a close family relation might not be publicly well-known and so have low whuffie, while in fact may be personally influential because of the closeness of the relationship. Again, I may rate reputation differently for certain people in my network depending on how I rate their expertise on the issue being discussed. It’s this complexity that makes reputation so difficult to quantify.

It feels like while Twitter ‘glisters’ it’s still a poor proxy for reputation, but the point here is that it’s firing the imagination of many of a new basis to the economy made possible by a more social web.

The implications for volunteering

To sum up, this debate about reputation illuminates the issues and challenges for gift economies in the age of the social web. Reputation building is all about relationships and connection, not about money and control. Reputation is not the same as social capital. It cannot easily be measured and exchangeable reputation is almost certainly a contradiction in terms.

There are questions for charities. Is a measurable kind of reputation useful? Could it help volunteers find more suitable volunteering opportunities? Could it help donors find the causes they want to support more easily? Could it help incentivise volunteering if people felt it was contributing to their reputation that could be easily understandable, publicly available and perhaps even exchangeable for other kinds of goods and services? These are questions I’ll be turning to in future posts.

Finally, I like the way Beth Kanter (a blogger on now non-profits can use social media) phrases it:

“There’s no way to maintain strong ties with that many people with such fast growth. So, the point here is that numbers in social media don’t matter as much building relationships one person at a time.”

In other words, remember: ‘all that twitters may not be gold’ :-)

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