From a read of the announcement, it appears that collectively we are still on the path towards social computing becoming a fixture in the knowledge-based workplace … hardly a surprise.

I (and many others) have said here, and elsewhere, that the ubiquitous presence of the Web, the growing ease-of-use of tools and services, and the growing understanding of productivity in a networked era, are leading inexorably to a fundamental re-think of the way(s) knowledge work is carried out and the type(s) of organizational culture necessary to support that productivity.

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Across all categories, the use of Web 2.0 technologies by employees for internal purposes has increased from 53% in 2007 to 65% of respondents in 2009.

The largest components of growth have come from using Web 2.0 to develop new products / services internally, to manage internal knowledge and to reinforce the company culture via tools such as internal social networking applications.

The companies who have embedded these tools in their day-to-day activities and processes have seen the largest impact by improving communication across silos to reduce duplicate work and leverage experts in other areas.

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The report notes that enterprise use of Web 2.0 technologies to connect and interact with business partners and suppliers has slowed down or stagnated … again, not much of a surprise given the often transactional nature of those relationships and the fact that electronic connections between those parties have existed in one form or another for quite some time now.

The final statement of this most recent McKinsey report offers, in my opinion, some clear writing on a big wall … “expertise in the use of Web 2.0 technologies is becoming a required skill for all enterprises.”

When will your organization adopt, or grow its capabilities and culture with respect to, collaboration platforms and Enterprise 2.0 expertise and dynamics ?

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The momentum we see in the growth of Web 2.0 technologies implies we will see higher penetration in 2010 for using these technologies for employees to collaborate and to facilitate interactions with customers.

To drive increased usage for managing interactions with suppliers and partners, companies will need to find ways use these technologies to augment the formal relationships between business entities and not substitute formal interactions with more ad hoc ones.

Nonetheless, it is clear that expertise in the use of Web 2.0 technologies is becoming a required skill for all enterprises.

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Further to my post a couple of months back about the ROII (Return on Investment in Interaction), I noticed AppGap blog colleague Patti Anklam’s guest post on Dave Snowden’s Cognitive Edge blog wherein she riffs of a blog post titled "Enterprise 2.0 – Skip the Pilot".

Notwithstanding Michael Idinipulos’ claim to be committing heresy, in the past I have read any number of E2.0 pundits’ suggestions that value will be realized more quickly and more steadily when social computing is introduced to an organzation as "the way things get done around here" when it comes to dealing with and responding the need to beuild useful knowedge from information flows … rather than in small controlled pilots.

Michael adds his voice to that chorus.

Patti picks up on that point and adds to it the notion that the ROII may come from harvesting the output from increased numbers of people, increased numbers of interactions and increased diversity (of perspectives).  These metrics are not as hard as past metrics used to measure work and effectiveness, but given that a number of well-known voices have coalesced around the same observable network dynamics, we can expect that they will come to be reference points regarding the effectiveness of adopting E2.0 tools and services.

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Piloting Social Media

A good blog by Michael Indinopulis, "Enterprise 2.0: Skip the Pilot" introduces a nice complex notion. His actual premise is that piloting (the sense that we pilot collaboration software, something I’ve done quite a bit of) is based on using small control groups. We introduce the software carefully, exposing it to only a few people, learn from them what the strengths and weaknesses are, work up required training, make the change management plan, and so on.

But social media is different from traditional software. As he says, "Traditional IT enables transactions; Enterprise 2.0 enables interactions." And interaction is fundamentally different from transactions, which are bounded and constrained. We can’t understand the power of interactions until there are many of them, going out in multiple directions, increasing exponentially.

And there is no value to any individual until there are sufficient interactions bouncing around out there. The solution, therefore, to a moribund social media pilot is not to shut it down and reconsider, but to "Make it bigger. Open it up. Invite more people. Tell them to invite even more people. That’s the only way you’re going to find out the real behavior and the real value."

One of my early lessons about increasing knowledge flow in organizations was the answer to the question, "How do you stimulate knowledge flow in a network?" Possibilities:

Increase the number of people

Increase the number of interactions

Increase the diversity

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… on what he calls “the most exciting day in his professional life“, as the Dachis Group announces that it will work with Headshift to grow its capabilities in bringing social business design and implementation to the business world.

Here and elsewhere I’ve often written about the growing evidence that social computing will become the core foundation of knowledge work … the major vendors are all focused on social-media centred enterprise collaboration and productivity platforms as a major line of business, and there is a growing realization that the participative dynamics of the pervasive hyperlinked web environment are here to stay.  Today’s work needs to be, and will be designed in and for social networks

The Dachis Group has re-visited the whole-systems thinking / cybernetics arena of 25 – 30 years ago and updated it to present a holistic value proposition for today’s interlinked and participative era, and are calling it “social business”.

I think I’d argue that business has always been a social undertaking, but that we passed through a period of management philosophy cum reductionism (through the prism of “management science”) whereby enormous gains were obtained over more than a half a century through a relentless focus on efficiency and redundancy.

Now we are in (back to, some would say) an era where information is passed around and shaped into knowledge through interaction with others, it just happens faster by many orders of magnitude.  And so, it ups the ante for understanding how to operate effectively in the fast-flowing communications networks that characterize the environment.

I suspect that soon all or most of the major consulting firms will be headlining their social media consulting practices (now that working with all these tools and web services has become too important to be left to amateurs

Amongst all the offerings we are sure to see, clearly the Dachis Group is bringing a systems perspective to their three-pillared vision (business partner optimization, workforce collaboration and customer participation).  In presenting the model, they state that the way(s) work and business are done are in the midst of massive transformational change.

Interconnected ecosystems of interest, efficiency and purpose are clearly central to today’s and tomorrow’s organizational effectiveness.  Focusing on the right levers has always been the essential value in and by strategic consulting, and these are bright and experienced people.  I am sure they will add an useful perspective to understanding how “social” and “business” will co-exist as we all learn how to operate in tomorrow’s postindustrial societies.

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We are growing: Dachis Group expands with Headshift

We believe that organizations across the globe will begin to view “social media” as social business and when this happens, integration, scale and adoption will become complex issues which will only be solved through a purposeful act of coordinated activities built upon a solid strategic foundation. Enter social business design as a systematic comprehensive approach that orchestrates social business across three core areas: business partner optimization, workforce collaboration and customer participation.

These three areas of business possess ripe opportunities for the emergence of improved outcomes ranging from cost savings to new product/service innovations and increased revenue streams.

These are outcomes which happen when organizations connect and expand their ecosystems, evolve toward a more open culture and empower employees, business partners and customers to actively participate in their business.

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Thanks to Paul Thomas, guest-blogging at the Cognitive Edge, a networked organization focused on applying complexity theory in practical ways to complex issues and organizational problems.

(Dr Thomas is founder of the complexity theory think-tank organization DNA Wales, Head of Leadership at the Business School, University of Glamorgan and is also the BBC Wales ‘Business Doctor’. Paul works with private and public sector organisations of all sizes, including multi-nationals, trying to show them there is another way to run the workplace.)

The title is lifted from the Cognitive Edge blog (extract below).

I have not yet read the Macleod Report (I’ve skimmed through it) ) but it seems that the Cognitive Edge blog post lays out yet-another-argument for coming to terms (or grips, or whatever) with the probability that it (social computing) will become the main way of carrying out the bulk of non–routine knowledge work.

Oh .. and of course I don’t think that all management concepts and activities should be dropped holus-bolus.  I do, however, think, that managers everywhere should start really trying to understand the new social dynamics and methods of constructing pertinent knowledge that are now available, and making thoughtful and sensible decisions about why and how people get engaged with getting things done on purpose.

I know, I know .. it sounds like heresy to not constantly "tinker" in order to improve processes, efficiency and effectiveness.  After all, we’re all familiar with concepts like continuous improvement, orthodox performance management schemes, Six Sigma, reengineering, etc. 

However, how many of us have often wondered about whether or not people have an orientation towards doing things better, easier, faster, cheaper, if we find ways to honour their desire to do good work, to be respected, to make meaningful contribution, to be heard … 

Maybe (in some or many instances) there’s too much structure, too many goals, overly rigid mindsets and worldviews … not enough questions, not enough debate, too few mistakes (how many discoveries or innovations are preceded by mistakes?), not enough "failing faster to learn faster", not enough acknowledgement of the deep motivations of people to serve others and do more useful and meaningful work, etc. ?

There’s a reason why the word "unleashed" gets used so often in books, articles and conversations about organizational effectiveness .. and I don’t think it means turning a horde of web-bots loose onto the organization’s processes.  It has something to do with people and their motivation and guidance.

Anyone else ever wonder ?

I think that’s what this report from the UK government suggests.  But I will have to go beyond skim-reading it to confirm that guess.

What do you think ?

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MacLeod Review says people potential should be ‘unleashed’

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The MacLeod Review of employee engagement, commissioned by the Department for Business, has said workers need to be properly involved in the future of their firms.

Author David MacLeod said he wanted to see people’s potential “unleashed” and said engagement was a key to innovation and competitiveness. Apparently the report’s authors were told during their research that “trust works two ways” and that not trusting staff had a negative impact. They were also told it was people, not machines, which made the difference to a business.

Responding to the report employment relations Minister Lord Young said: “Workers know better than anyone how the firm they work for can improve, innovate and succeed.”

If this all sounds familiar, that’s no surprise.There’s nothing radical, or even new, about this report.

[ Snip ... ]

Of course people are the key to a company’s success. Of course the best people to ask for a solution to a company’s problems are those within it and on the frontline. And it stands to reason that if you haven’t got everyone in the organisation fully behind what you’re trying to achieve, you’ve got less chance of achieving it.

The Government says it accepts the report’s recommendations and now there’ll be an action plan to deliver them.

Now that the message is becoming more mainstream, maybe those who run our organisations will forget their management tools, and constant ‘tinkering’ with the system and finally wake up to the fact that this is the only way to make them fitter for the future.

Let’s hope they don’t just pay it lip-service, and they actually do it.

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As he recounts in his new book, Enterprise 2.0: New Collaborative Tools for Your Organization’s Toughest Challenges, his initial reaction to Web 2.0 talk was “Oh, give it a rest, would you?” He confessed that he ” wanted to spend as little time as possible investigating Web 2.0 because I was so convinced that it was nothing more than a new marketing buzzphrase invented by a vendor or member of one of the helper industries, and that it was yet another example of the tech sector’s tendency to put old wine in new bottles.”

However, exploring Wikipedia in 2005, he discovered that 2.0 was a phenomenon that had legs — and vast, untapped potential for the enterprise. McAfee states that the real opportunity behind Enterprise 2.0 isn’t the Internet, nor what the technology offers to entrepreneurs, venture capitalists, coders, or CIOs. Instead, Enterprise 2.0 holds profound promise for operational or line managers — who “have frequently been left out of IT discussions, which in my view is a serious mistake.”

The promises of Enterprise 2.0 include “significant improvements, not just incremental ones, in areas such as generating, capturing, and sharing knowledge; letting people find helpful colleagues; tapping into new sources of innovation and expertise; and harnessing the ‘wisdom of crowds,’” McAfee writes.

However, getting to Enterprise 2.0 and making it work for organizations requires high levels of commitment from management. As McAfee also points out in the book, “the benefits of Enterprise 2.0 are available to any organization. These benefits, however, are not automatic. Experience shows that it’s surprisingly difficult for people and organizations to move away from their current collaborative tools and habits and adopt new ones. Managers must involve themselves in this transition if they want it to be successful.” Many organizations, he adds, “feel that they’re currently stumbling rather than excelling” at Enterprise 2.0.”

Perhaps even the most complicated challenges — such as unraveling years of bad management decisions — could be tackled with greater collaboration, bringing all the minds of the business together.

(The first chapter Enterprise 2.0: New Collaborative Tools for Your Organization’s Toughest Challenges is available for free download here, with registration.)

I’ve read much of the pros and cons (not all) and understand why some people consider it the best thing since sliced bread, and why others consider it a massive time sink and / or an invitation to get bombarded by unwanted marketing activity.

What seems clear to me is that it can often function as an effective means for searching for pertinent information.  To my mind, Twitter replicates the experiences I have often had after blogging for some time … because of my social networks mainly focused on issues, and people who are paying attention to those same issues, there is a regular experience of  ”synchronicity”. When something is on my mind and I start searching for information, I mre often than not “stumble upon” it, almost as if by magic (why do you think the web service Stumble Upon came into being ?).

When we use Twitter, we make decisions about who we follow, and so I think we invoke a social-network-of-purpose-driven filter that we apply.  Yes, we can follow thousands of people, but by and large we interact most with those concentric rings of trust and connection closest to us.  Often, the innermost rings of connection and trust are people that we have already connected with (through blogging or or professional / interest-driven networks), or whom we are learning to trust and to whom we come to pay attention.  

This selection of people with whom we interact (the innermost concentric rings of connection) provide context like no algorithm can (I’d love to know what the FAST search experts think of that assertion on my part).  The people with whom we interact most frequently on Twitter are paying attention to the same or similar things (and different things) as are we, and we are reciprocating.  So, when you push a question out into the twittersphere, those who are paying attention to you or notice your tweeted question may well have something to offer you that may be directly or closely aligned with the search you are carrying out.  There is the “ambient intimacy of context” that comes into play.

Now for the “on the other hand” … there’s an awful  lot of noise to churn one’s way through to get to the signals.  I know that there are various efforts underway to enhance the relevance and pertinence of finding one’s way through the mass of content that’s in the daily twitterstream, but I suspect that there’s a long way to go yet for such efforts to take new Twitter-related capabilities beyond the purview of the early adopters.

I also think that as large masses of people take to the newest socially-connected-streams-of-content to engage in purposeful activities, rather than trying to drive or acquire attention for attention’s sake (or to make money), we will find that Twitter-like capabilities or Twitter clones will be built into most, if not all, social-network platforms and collaborative-work platforms.

I suspect that this emerging concentration of attention and time allocation onto purposeful activities is what is behind the thinking in this extract from a WebGuild piece by Daya Baran titled “Twitter Will Be Obsolete In A Year“.

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Twitter Will Be Obsolete In a Year

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He says Twitter won’t be as important as some think. He points to Friendster and how it was surpassed by MySpace which in turn was surpassed by Facebook in a shorter time doing the same thing.

He says as with any internet “gold rush,” as soon as others demonstrate success, everyone moves in, and the “next big thing” is born.

“All I have to do is mention QuickBooks, and I have 30 QuickBooks “experts” following me in hopes of getting business. How long will it take to wear people down dealing with these kinds of requests?… I predict Twitter will find its social media and marketing niche, but I cannot see it being nearly as important as some marketers are making it out to be.”

He also points out the retention rate of Twitter is ONLY around 30 percent, which means seven out of 10 people try it out once and don’t come back. So to get users the hype must continue and the process it becomes overhyped.

“Twitter seems to be proud of the fact that it has no profit model. I’m imagining that the company will want to keep the hype building long enough to sell the company for a few billion dollars… I also cannot foresee Twitter’s user base growing too much higher than it is now.

The simple functionality of Twitter will also lead to a glut of competition in the next few months, with companies duking it out for the best implementation of the microblogging model. There’s not enough to Twitter to keep it on the top of the heap. Being first in this case, as we’ve seen, is not a guarantee that you will have longevity.”

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I’d love to learn what you think.

1. Each year, over 50% of the people in attendance were new to the field and often were there because they’d ‘inherited’ responsibility for a data warehousing initiative, but knew nothing about the industry or the practices.
2. Because of #1, the majority of the attendees were under tremendous pressure to perform. They were looking for recipes — checklists that they could take home and just start working on.

This appears to be indicative of all emerging disciplines/practices. But for Enterprise 2.0, unlike Data Warehousing, the predominant focus is NOT technology. And yet, from where does the funding or focus from such initiatives typically come? This is a much larger issue — one related to obsolete organizational design practices. The reason IT is the most obvious choice for sponsorship is that it is the only organization not vertically challenged — it delivers (or should) only horizontal services to an enterprise — crossing all other departments. Indeed, IT is one of the few organizations that takes on the battle to find common threads across organizations to weave the horizontal lines of the tapestry that holds the business together.

And yet, the approaches needed for E2.0 initiatives are the antithesis of typical IT practices.

1. There are no rules; there are no requirements
   An optimal E2.0 initiative evolves organically (hold that thought for further clarification). E2.0 initiatives are the canary for Business 2.0 — if they die, the business will as well (either absorbed by the larger market or re-emerging anew after an identity meltdown).
2. The goal is not Binary Code
   This is the realm for Design Thinking, not Analytical Thinking (previously noted: end of piece). As Roger Martin alludes to in The Design of Business (starting pg 6) this is an era to shift away from the locked down binary code of repeatability (optimal for machinery) and become more comfortable with the ’squishy’ realm of the heuristic (optimal for capitalizing on human wetware). It doesn’t mean that we abandon the right side of the continuum — mystery…heuristic…algorithm…binary code — but that we shift to the left.
3. Controls are Nooses of Death
   This is the realm of ‘middles’: neither chaos or order, but a powerful, constantly changing space called complexity (think practice of ’science’ not ‘lots of pieces’). IT is still focused on increasing controls to improve results — increasing compliance, embracing defined practices of Project Management, etc. If you’re building a spaceship and lives are at stake, these practices are a must. If you’re running a company in today’s turbulent marketplace, everything that is locked down and fixed prevents the real human capital of the organization from adapting to constantly changing circumstances. There is never an ideal process or system and there will always be exceptions. IT cannot respond fast enough to these changes. That means the flexibility has to be built into the systems. This is not to suggest that controls are abandoned — it simply means that all of the existing controls have to be questioned and likely changed for greater human oversight throughout the organization (managed via a distributed social governance model, not a hierarchy).
4. It’s not about a Blog or a Wiki
   A true sign of a E2.0 initiative destined for failure is one that focuses on the technologies. Certainly there are a variety of technologies that enhance and help to enable E2.0, but even as technologies, they are absolutely ineffective when implemented with a typical IT approach: install them. Blogs, Wikis, Mashups, and other Social Computing mechanisms are elements of a flexible infrastructure. As a solution they have to be architected. This will prove problematic for most IT groups for the same reason that SOA has failed — IT hires ‘drafters’ not ‘architects’. In company after company, the majority of people I’ve met who hold ‘architect’ titles know nothing about real design: they can draft solutions, but not architect them (the problem starts with the job descriptions — check out some postings).

So what IS Enterprise 2.0 focused on? People: tapping the human potential, helping to change the way business gets done by optimizing it not to the systems but to the people. Not shaping the people (via training and documentation) to the systems and the business, but changing the systems and the business to optimize the potential of the people.

Enterprise 2.0 is a mindset, framed by the orders of nature: enabling endless possibilities, organizing simple things in simple ways.

Enterprise 2.0 is about facilitating orderly chaos:

• Minimizing Structure, Optimizing Connections
• Tapping Existing Kinetic Energy
• Celebrating Flaw-Finding and Fixing
• Supporting Rapid Change

How do you get there?

• Truly Utilize Resources
  It’s not a destination — it’s a journey. You’re already on the path: embrace where you stand. First assess whether or not existing resources have access to one another: the people element. Finding people has to be the first priority. Determine the typical scenarios for problem solving and recognize that departments or hierarchies do not hold the answers to business problems/issues: people do. Warning: classic ‘expertise locator’ technologies will likely not be the right answer here.
• Shorten Distances
  Simplify all aspects of ‘doing’ business. Repeatedly ask: What can we stop doing? Leverage what’s working (from the perspective of all individuals impacted, not just those with ‘management’ responsibility to execute) — bypass the rest. From an IT perspective, being successful here the concept of software as we know it goes away. The desktop becomes a collection of functions that can be assembled into sequential processes, but are not locked into place. Existing applications can be tapped, bypassing inefficient UIs and raising the most relevant activities and functions to the ‘top’ (omnipresence). Even two years ago Dion Hinchcliffe introduced the concept of situational software.

• Embrace Organic
  Organic is not chaotic. A palm frond is distinct from a maple leaf. Nature has order, but that order is under rapid cycles of repeated construction and destruction. The question becomes one of determining what structure is necessary to support a specific, unique pattern (purpose), yet does not prevent the ability to adapt to constantly changing conditions — not only to survive, but flourish.
• Shift Focus
  Particularly for IT, the focus shifts from code (developers) to UI (designers). Coders are trained to make things binary; good designers are comfortable with the ’squishiness’ of heuristics. That doesn’t mean developers go away; it means that there should be a 1-to1 ratio of developers and designers. They’re two totally different kinds of mindsets — and while there are unique individuals who can do both, it’s rare that 1) you can find them or 2) you know what to look for and adequately assess. Besides, there’s an important phase of working through the natural ‘dissonance’ that will occur between these two mindsets. This can be lost when resolved in the mind of a single person (or it will just increase work-induced-schizophrenia, ala. stress). The fallacy of paired programming is not in the number, but in the resources and their focus. Pairs should be made up of two different perspectives.
• Shift Thinking
  Design Thinking requires a different approach: it focuses on trying out multiple possibilities (fail fast) to test an algoritm — a problem statement. Don’t think problem=flaw, but problem=mathematical equation. Different algorithms solve different problems. Many solutions fail because they either 1) started with the wrong question (the solution is the answer to the question) or 2) did not adapt to change the question (the problem statement) as more was learned along the way. Our current definition and funding of projects is a key contributor to this fatal flaw.
• Shift Culture
  A company that has been optimized for ‘machine’ design (command and control), will have a culture that reinforces such behaviors. Such a culture will undermine E2.0 potential. It will seek to eliminate the efforts as a ‘foreign body’. A different culture is not a prerequisite, it’s a corequisite. It should evolve as enabled by the other changes. Such cultures have to move from ‘rules’ to ‘guidelines’; from ‘fixed processes’ to ‘governance models’; from binary to heuristic (obvious exceptions will be for those industries and/or business artifacts subject to legislation).

A primary challenge is that we’re so used to operating in ‘binary’ that we attempt to turn everything into linear processes. This is not a linear solution space (in reality, neither is business — we’ve only artificially forced it to be so). Most of these things are codependent — they rely on small changes from the other dimensions to accommodate their own change. This is ‘informed change’ not ‘command and control change’. How is this possible? Social computing — facilitating conversations and exchange of business artifacts that are: transparent, persistent and accessible.

Now we can start the technology discussion…

A number of other practitioners and theorists who pay attention to networks and their dynamics (such as FASTForward’s Jevon Macdonald and Joe McKendrick, Dion Hinchcliffe, Valdis Krebs, Matthew Hodgson, Patti Anklam, Jessica Lipnack, and others) have covered the same or similar ground.  It is becoming more apparent that the returns from network activities are found in intangibles that do not fit well into the industrial era concept of Return on Investment (an accounting concept used to make investment decisions in stable, time-defined, typically single-purpose use cases).  New assumptions and methods for assessing what to do are needed.

So, I’d like to use the reporting in a ZDNet article that caught my eye titled “A Real ROI From Twitter ?  The Start of Social Medical Networks“  to discuss several of the key issues about whether or not to use social computing to achieve purposeful goals and objectives..

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There may not be a big enough return on tweeting yet to report it to your CFO. But it won’t be long before there’s a clear, return on tweeting to report it to your doctor.

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At the Autism One Conference in Chicago, a Web-based program for collecting data on individual cases of the brain development disorder will be unveiled. It’s called ChARMTracker and is designed, at the start, to help ease the burdens of each parent trying to keep track of the drugs, nutritional supplements, physical therapies and dietary tacks being taken to treat their sons or daughters. They will also use it to keep track of any observations about their behaviors that might seem pertinent and how their children are performing academically, as a result of the constantly changing constellation of combinations that are being applied to the still-mystic condition.

[ Snip ... ]

Horn has, for instance, collected 60 two-inch thick binders of observations, medical and supplement records about Sophie, over the last 11 years. Those records would be available to Sophie’s doctors and health care aides, in an instant, if ChARMtracker had been around from the start. They would also be part of a growing mound of evidence on how drugs, supplements, therapies and diet affected autistic individuals, as they grew and evolved.

[ Snip .. ]

Pramila has founded another company, MedicalMine Inc., which will take what she has developed and try to extend the approach to other chronic physical conditions and forms of disease management.

If all goes well, parents and patients will not just be collecting and sharing data through sites like this on the Web. They’ll be communicating with doctors and providing real-time evidence of results, through tweets and other instant messaging technologies. In some cases, sensors will provide constant streams of data that will be put into the record and analyzed, for individuals and the group, as a whole.

These social medical networks could wind up being “the most fundamental IT app” that a family or its friends need, when desperately seeking answers about afflictions suffered by anyone they care about.

For that, every data element – and every tweet – will count.

And, over the long haul, produce a calculable return.

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So, to begin measuring increases in effectiveness and value in a networked social computing environment, please consider the concept of Return on Investment in Interaction (ROII), which we have derived from the principles of Metcalfe’s Law of Networks (as have many of the others cited above).  Why, you may ask, do the above excerpts portend being able to identify and / or assess Return on Investment in Interaction ?

Identifying and Measuring ROII (Return on Investment in Interaction)

The focus in purposeful networked environments is to do what’s important and involve those who know what’s important, why it’s important and what they know (or know how to find out) about a problem or issue.

Let’s define some core assumptions about ROII :

• Continuous flows of information are the raw material of value creation and overall performance,
• Information flows are carried by links, alerts, RSS feeds, search engines, aggregation and filtering of content, etc.
• All leading social / collaboration platforms now feature social networking, search and computing capabilities,
• These platforms’ architectures facilitate purposeful cross-silo communications and exchange.

Social networking pioneer Valdis Krebs has outlined four generic metrics that are becoming widely accepted as leading to observable, tangible, measurable outputs:

• Increase in size of network  
• Increase in internal network connectivity 
• Increase in connection to valuable 3^rd parties   
• Increase in number of projects formed from all three factors above 

It’s important, we think, to note here that we are not proposing a definitive answer but rather the need to debate and clarify the issue(s). However, an attentive read of the ZDNet article referenced above clearly aligns with Krebs’ four principles:

1. Increase in size of network:  As The CHARMTracker database grows and the volume of families’ data it holds increases, it’s utility to doctors, other health care professionals and the families themselves increases.  And, as the article points out, if and when the data begins to be (appropriately) used by those networked around the health issues, the value of the interaction will increase in an (likely) exponential fashion.

2. Increase in internal network connectivity:  Again, as suggested by the paragraphs excerpted from the ZDNet article, as more and more participants are networked into the CHARMTracker information and begin to use the dynamics of social networks to seek for and circulate pertinent and useful information, each time a piece of information is useful to someone there’s a tangible return on the intangible capacity offered by the flows of information and knowledge.

3. Increase in connection to valuable 3rd parties:  As more information fills the CHARMTracker database, and more doctors, health care professional and families use it, the apparent value will become clear to others with expertise or value to provide to the social medical network that will have grown up around autism issues.  Expect to see both volunteer and for-profit services to be added to the growing ecosystem of knowledge and attention.  

This expected outcome reminds me of the core argument of Shoshan Zuboff’s book “The Support Economy – Why Corporation Are Failing Individuals and the Next Episode of Capitalism”, wherein she argues that the complexity surrounding many issues in today’s society are such that all sorts of people (consumers, families, professionals, and so on) will need “support” that can be designed, built and delivered via the digital interlinked infrastructure we know as the Web.

4. Increase in number of projects formed from all three factors above:  It’s pretty easy to imagine that as the CHARMTRacker database and its use(s) take root, there will be other clever and useful projects that grow out of the experience and the learning it affords.  Doc Searls, of Cluetrain Manifesto and VRM (Vendor Relations Management) fame once sagely noted that one of the critical outcomes of operating in purposeful social networks was the “scaffolding” (building in layer upon layer) of useful knowledge. 

That’s how circulating pertinent information and sharing useful knowledge works .. we don’t go backwards, we build on what’s useful and what works.  That’s how Return On Investment in Interaction will work and will deliver value to organization and groups who decide to use social networks, linked information and data, and social computing dynamics to accelerate their effectiveness towards achieving their purpose.

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Enterprise 2.0: A Great Concept Often Taken Backwards

Although 2.0 memes are everywhere, hardly any of them have generated as much controversy as Enterprise 2.0 (a.k.a. E2.0). Introduced by Andrew McAfee in 2006 and later expanded by others, the term seemed to be a slam dunk for a while. Forward-looking and fresh, it was (and still is) about application of social software and corresponding approaches in business. However, somewhere along the way something didn’t go quite right. Today, almost three years after the term’s introduction, there is more confusion about it than there was two years ago. Heated terminology discussions keep going on. Key players are on the quest to find and articulate ROI. And most curiously of all, many business decision makers who decide to dive into the E2.0 sea, often come back more confused than they were before taking that dive.

AIIM’s year-old survey, which found that 74% of surveyed organizations had no idea what E2.0 meant or how it could be meaningfully applied, likely would’ve come back with a similar numbers today. This time around, it also would’ve included people who looked at E2.0 tools only to get puzzled. If you work in or sell to enterprise IT you know what I’m talking about. More likely than not, you have your own example of “now what?” story. As in “So we’ve deployed internal blogs and wikis. Now what?” All of a sudden, software that seems to work so well for millions of people on the internet, fails to make any noticeable difference when used internally. All these stories have the same root cause: as of today, E2.0 is still primarily a vendor space, dominated by ISVs selling software to businesses who haven’t really asked for it. It is simply not a demand-driven market. By contrast, just think of CRM or payroll software. You don’t need to convince businesses they need that.

This is why E2.0 ROI discussion keeps going on like a never-ending story. A thirsty person doesn’t care about the ROI of buying a bottle of water – and even paying a premium for it. But try selling to him a cute new gadget – and you better have some very good supporting arguments on why it’s a smart way to invest a single cent. As enterprise customers look for cutting costs and streamlining processes, ISVs along with internal E2.0 champions often offer them what seems to be a miracle pill. It promises to make their workforces way more productive, their executives much more informed, and their customers happier. And, given the loud buzz around social, many companies do give it a try. Some like it. But some end up with a loud huh? Worse, some end up with an outraged response from the people who think it’s a wrong way to spend money (like an Oregon county’s chair who recently posted a 70K per year social media coordinator position). Why? Because, in a Benjamin Button fashion, many customers – often encouraged by enthusiastic sellers – think about E2.0 backwards, starting with tools instead of concentrating on specific business problems.

It Takes More than Social Software to Become an E2.0 Company

No one (okay, almost no one) expects that buying a word processor can turn him into a great writer. Yet somehow it’s almost widely assumed that deploying tools labeled E2.0 would turn an organization into an E2.0 business. Which couldn’t be further from the truth. Despite all the buzz, E2.0 is first of all a set of principles, not software bits. It is more about business practices and human behaviors than about features. Software with strong social computing capabilities makes it much easier to establish and maintain these practices, but it doesn’t create them on its own, nor does it sustain them.

Social technologies have enormous potential, but to make E2.0 more than a hotly debated buzzword, many players in the space have to shift focus from cool capabilities to critical business functions. This applies to how E2.0 software is developed, how it is positioned, and how it is used. Despite catchphrases like “Facebook for the enterprise”, the much discussed consumerization of IT does not mean emulation of consumer experiences within the firewall. It means taking the concepts behind the amazing transformation of consumer space, and leveraging them to address real business needs. All businesses have to deal with things like customer support, supply chain management, R&D and product distribution. Who makes all these things happen? People. Now, what E2.0 is all about? In essence, it’s about people connections, just like any of its 2.0 siblings. And with the right focus, any business function can benefit from better connections.

There are enough success stories to support this claim. Marketing has already added social media to the must-have part of its portfolio. Customer support organizations have been experimenting with social tools – some quite successfully. Many R&D departments have already discovered that capturing knowledge in wikis can be more powerful than using traditional strict-workflow content management systems. Enterprises around the globe have been finding that Facebook-like employee profiles speed up internal communications. But we’ve just scratched the surface. Real gold is not in the technologies of today. It’s not even in applying the best of breed E2.0 tools correctly. It’s in solutions of tomorrow, designed to solve hard business problems through people-connecting technologies.

Now, there’s one little caveat with everything I’ve just described. Implemented right, social business software and practices have a potential to transform many business functions almost beyond recognition. In other words, they can be quite threatening to organizations that are built around existing processes and tools, and are not willing to evolve. But that’s the topic of another post…

Yuri is a new contributor to the FASTforward Blog – more about him here. This is the first post in the “Connected Enterprise” series. Topics to come: adoption, corporate walled gardens, and more.