Things we once considered opposing forces--doing right by people and delivering results, collaborating and keeping focus, having a social purpose and making money--are really not in opposition. They never have been. But we need a more sophisticated approach to understand business models where making a profit doesn't mean losing purpose, community, and connection. Finding the right balance among them is key. We will find that balance as we shape new constructs for business models, strategies, and leadership. What we can create will be rich in many senses of the word.
Here are the social-era rules that allow both people and institutions to thrive:
The social era will reward those organizations that realize they don't create value all by themselves. If the industrial era was about building things, the social era is about connecting things, people, and ideas. Networks of connected people with shared interests and goals create ways that can produce returns for any company that serves their needs.
Power used to come largely through and from big institutions. Today power can and does come from connected individuals in community. Power can come from the way you work with others, such as one party offering a platform to the multitude of creators. When community invests in an idea, it also co-owns its success. Instead of trying to achieve scale all by yourself, we have a new way to have scale: scale can be in, with, and through community.
Organizations that "let go at the top"--forsaking proprietary claims and avoiding hierarchy--are agile, flexible, and poised to leap from opportunity to opportunity, sacrificing short-term payoffs for long-term prosperity. No longer can management espouse the notion that good ideas can come from everywhere, while actually pursuing a practice in which direction is owned by a few. Instead of centralized decisions, there is distributed input, decision making, and distributed ownership.
The foundational element starts with celebrating each human and, more specifically, something I've termed onlyness. Onlyness is that thing that only one particular person can bring to a situation. It includes the skills, passions, and purpose of each human. Each of us is standing in a spot that no one else occupies. That unique point of view is born of our accumulated experience, perspective, and vision. Without this tenet of celebrating onlyness, we allow ourselves to be simply cogs in a machine--dispensable and undervalued.
"Doing work" no longer requires a badge and a title within a centralized organization. Anyone--without preapproval or vetting or criteria--will create and contribute. And this fundamental shift changes how any organization creates value, and how many individuals gather together. This talent inclusion--across ages, genders, cultures, sexual orientation--is essential for solving new problems as well as for finding new solutions to old problems. Be the one to enable that connected individual in your enterprise, through systems and leadership, and you win.
More and more companies embrace consumers as "co-creation" partners in their innovation efforts, instead of as buyers at the end of a value chain. Consumers, traditionally considered as value exchangers or extractors, are now seen as a source of value creation and competitive advantage. This collaboration shares power between the participants as we start to recognize value creation as an act of exchange, not simply a one-way transaction. As an exchange, all parties need to do it sustainably as each must have equilibrium to stay viable.
Reach and connection in the social era start to be understood as a relationship similar to falling in love, following an arc of romance, struggle, commitment, and co-creation. These are not easily controlled by one party over the other but are a process of coming together. And the relationship gains strength from trying new things and the resulting failures, for it is in the process of making mistakes--and the ensuing forgiveness--that resilience develops.
Adaptability is central to how organizations and people thrive in the social era. In psychological language, the key to adaptability and personal growth is resilience. In biology, the equivalent term for adaptive skills is plasticity. In the social era, the term to use is flexibility. Instead of viewing strategy as a set end point, it becomes a horizon to aim for. Instead of asking employees to each simply man their own oar, we must encourage their capacity to navigate as conditions shift. Instead of perfection and getting it right the first time, innovation can be continuous.
Protecting intellectual property allows a company to keep its edge, to erect barriers to entry from competitors, to establish entirely new markets. At least, it used to. Then along came the social era, with its networks through which open, connected ideas became powerful, even catalytic. It's the difference between holding our ideas in a tight, closed fist or holding out our hand, open to what happens next.
The social object that unites people isn't a company or a product; the social object that most unites people is a shared value or purpose. Money motivates neither the best people nor the best in people. Purpose does. When people know the purpose of an organization, they don't need to check in or get permission to take the next step; they can just do it. Nonprofits have leveraged the power of people and purpose for years. But business hasn't been able to see the upside of purpose. With social purpose, alignment happens without coordination costs.
Don't assume any set of rules is fully baked. Accept that your job is to stay alert to what happens next to figure out what assumptions need to be tuned. Listen, learn, adapt.
Let's dive in.
Reprinted by permission of Harvard Business Review Press. Excerpted from 11 Rules for Creating Value in the Social Era by Nilofer Merchant. Copyright 2012 Nilofer Merchant. All rights reserved.
Nilofer Merchant is a corporate director at a NASDAQ-traded firm and a lecturer at Stanford, and formerly the founder and CEO of Rubicon. Among other Fortune 500 firms, she’s worked at Apple and Autodesk. She is the author of The New How  and 11 Rules for Creating Value in the Social Era . Follow her on Twitter @nilofer .
To further aid you in social era navigation, Fast Company has compiled for you--and from you--the Rules of Social Media .
[Image: Flickr user Ajari ]