Ok, so I’ve been thinking about this, but not sure what the current state of play is. Someone was stating that talking about ROI of the social network was important but hard to do now, and essentially wondered if there was new thinking in this area. So let me ask the question.
So I’m calling out L&D because they’re only measuring efficiency when they should be measuring impact. You look at measures used to evaluate the industry, and they’re things like cost/time/seat. Which is potentially a useful measure, but only after you’ve decided that having a bum in the seat is having a positive impact on the organization. If you’re not doing something measurable – decreasing time to close sales or increasing the number of problems resolved accurately on the first call – it doesn’t matter how efficient you are!
With social media, I believe it’s the same thing. If we put in social media and facilitate discussion in engineering, we’d expect a different impact than in manufacturing. In engineering we might get less time to design a requested feature, and in manufacturing we might increase usable yield. It really doesn’t matter if you’re seeing more use of the system, more messages or connections or what have you, if you’re not seeing an impact. Of course, if you can correlate them, all the better.
Sure, we also might affect indirect metrics – retention, workplace satisfaction, or customer satisfaction – with tangible value, but our real focus should be on direct metrics. If creating a more effective culture for sharing, and sharing is supposed to lead to better outcomes, it sure would be nice to demonstrate those benefits. I guess my experience with instructional design – if you design it according to the formula, it is good – leads me to some skepticism that we can just trust the outcome.
So, is this obvious, or are we still wrestling with this? Other opinions?
Craig Taylor says
A very Happy New Year to you and your family.
I’m not sure the following link answers your question directly, but thought it worthwhile adding as it may expand the conversation around this subject.
David Glow says
First, I wanted to share a quote: â€œThere is nothing so useless as doing efficiently that which should not be done at all.â€ â€“ Peter F. Drucker
I think that perfectly sums up the disparity between the typical metrics used in L&D vs what we really should be keeping track of.
As for SoMe…social happens. The tools are just that- tools. Is there ROI on email? (I suspect not, because I suspect for many orgs it has a negative return to key performance metrics). Is there an ROI on phones? Meetings?
I think the problem with layering ROI on tools, it is isn’t inherent in the tool itself, but how it is applied. Take networking- a highly valuable endeavor- but the majority of benefit comes from a small portion of your network. And the challenge? You really won’t know as you build your network. Is networking with people who don’t provide the greatest value poor ROI?
Timing also plays a large part. Advice given at one point in your life can seem like a wasted discussion. Then, something may occur that changes your perspective, and suddenly, the ROI is realized.
So, I find it very hard to put such metrics on “socializing” let alone the tools of socializing. I think we all understand more minds coming together usually has benefit if the right folks are engaged, and aligned to a common purpose. I am comfortable with leaving it at that for most things.
Usually, I sell this to the C-suite with having them recognize how many times in a day when things need to be resolved in an organization that the answer is some form of the response “Have you talked to….?” Tools to facilitate that (and often, eliminating the necessity to talk to someone who has special knowledge to inform people which folks you should talk to) seems a no-brainer.
Thanks for the pointer, Craig, nice framework and Jane makes it clear.
David, agree L&D measures the wrong things. Still, I think you should have some goals of any initiative you take, and you should see if you’re getting them. Just greater conversations? There’s an implicit belief that that can be good. Though as I said, I think we can expect impacts higher up the value chain (see the diagram Craig points to). Jane’s example of solving a problem in 4 minutes that she didn’t have the answer to is just the sort of thing you’re suggesting.
Of course, talking to person X won’t work if it’s not safe to share, but that’s a different problem.
David Glow says
I didn’t see Craig’s comment and the article referenced (as always, Jane is brilliant).
I 100% agree- impacts higher up the value chain is exactly what we need to figure out how to articulate in some manner. I keep tripping over the issue with an ROI equation (don’t get Jane going with her square root equation with unicorns).
ROI almost gets inevitably put on a “must have X return in Y time period”. Often, it just doesn’t happen that way. There is something to this- accounting for the the value of social tools.
I think we all “get it”- most meetings are (sadly) negative ROI. But it only takes one blockbuster to realize the value they provide. I think a lot of discussions (F2F, phone, or SoMe) are a writeoff- but if you look at those breakthrough cases (more quickly getting to the right person, getting quick answers, key innovation, access to experts, network scope) value and impact become transparent.
I think the value of SoMe are perhaps the affordances they provide: removing bottlenecks in sharing and having a less “hierarchically controlled” access to experts at point of need, network diversity, etc. I have no doubt there is positive ROI there, but to put a dollar value- and at what level of interaction – it gets tricky.
I think this is a highly valuable exchange, but to articulate it’s impact on my role- I am jot confident I could. But, I have no doubt this is a valuable exchange.
Jay Cross says
Usually, I’m all for measuring impact, but in this case I’m not so sure. Social networks are infrastructure. They accelerate the cycle time of the organization.
Aren’t social networks akin to the telephone system? You can debate the economics of one switchboard system or mobile phone provider, but at the end of the day, you’ve got to have phones, so ROI is irrelevant.
I like the old saw that the ROI of an organization’s social network is staying in business.
Thanks for the feedback! David, I’d argue that good meetings have benefits, and we know how to have good meetings (we just don’t always practice what is known). And the benefits of the social network won’t be seen unless the elements are aligned, if you’ve a Miranda organization (anything you say can and will be held against you), there’ll be no ROI out of your network.
So, in many ways I buy Jay’s point that you’ve got to have it. However, I’m inclined to think that in many cases an Enterprise Social Network (ESN) starts with an installation in one group, and that you should set expectations of the delta’s you get, so you can iterate (e.g. debug the culture) until you get it.
It’s not a case of “if you build it, it is good”, so you need some evidence about what’s happening, and you should be comparing that to what? The best answer I can come up with is comparing it to what you expect, so you should set some expectations.
As Craig’s pointer to Jane’s pointer to Wenger’s diagram suggests, it might be anywhere, but I’d be perhaps picking some everywhere along!
David Glow says
I really have to thank Jay for perspective of infrastructure (I was circling, but couldn’t land that plane)- I think that helps re-frame the whole ROI discussion in the correct manner.