ROI of Internal Social Networks? Zero if the Network isn't Used

Just about a year ago, I discussed the factors driving ROI of internal social media networks.  But most companies are NOT realizing the benefits they expected.  The reason is fairly simple.   

Employees aren't showing up.

The InformationWeek 2012 study of enterprise social networking revealed that 87% of participants had an internal social network.  Only 13% rated the usage success as excellent.  The likelihood that a company viewed its success as average to poor?  A chilling 62%.

What makes an internal social network successful?  There are many details, approaches, and stories to success.  Primarily, though, a company has to embrace the change that the network will both enable and cause.  A social network functions most effectively within a social business; it does not attract adoption within the old, bureaucratic, staunchly hierarchical business models.  What's critical to success and what standard thinking doesn't work?  Here are my top 5:

1.  Flexibility, not strategic goals - Having a strategy and an objective for implementing an internal social network is important, but flexibility is more important.  By their very nature, social networks evolve and adapt and find their own reasons-to-be.  Organizations too focused on achieving a specific goal, on determining ahead of time how the network will be used, tend to flounder.  The social network becomes just another system that employees need to use; it becomes a burden rather than a benefit.  Deloitte Australia, a winner of the Forrester Groundswell Award, began using Yammer because they thought it looked "cool."  Three years later, Pete Williams, CEO Deloitte Digital, says "we're finding new value in the tool everyday."
2. Leadership, not grassroots -  Social media is the tool of the 99%, and successful internal social networks flatten hierarchy.  Social networks do not flourish under a command and control management model, but they do require leadership.  The active involvement of senior executives is critical to the effectiveness and usage of the system.  Unisys CEO Ed Coleman was an early adopter in the company, using the social network to communicate with employees, to listen, and to engage.  His executive team quickly followed, and employees began to use the network and then began to develop new uses for it.  Internal social networks, like external social networks, emphasize respect and collaboration across all levels.  Leadership needs to be willing to engage with employees without fear.  Deloitte Australia CEO Giam Swiegers talks about a first year analyst who challenged his point of view, and the debate was visible to all employees.  Swiegers liked knowing what employees were thinking and appreciated having the opportunity to discuss the issues; the ability to engage with leadership drives loyalty in employees.
3. Organic Evolution, not controlled growth - Staying up-to-date with the latest in social media is a challenge; new applications and uses appear frequently, because users keep trying out their ideas - and some stick.  It's the same with internal networks.  Should an executive team have some idea of how a network might be used before implementation?  Of course.  But then let it evolve.  "People are trying to rationalize, police, and control the tool," says Chris Laping, CIO of Red Robin restaurant chain, but "the power of information technology is sharing information.  What we naturally do with systems is lock them down, which prevents us from sharing information."  As more employees join a network, uses and needs also change.  Smaller groups form around projects or interests; new connections drive new ideas.  Users need to be able to adapt the network to meet their needs.
4. Communities of Interest, not just work - Employees with friends at work are happier and more productive (lots of data on this issue that I will spare you at the moment), and work issues are often intertwined with personal considerations.  Many companies strictly limit internal social networks to looking up data, working with project teams, or posting official pronouncements.  Yet communities of interest create friendships, help develop new policies and introduce new perspectives, and often both align with and drive corporate objectives.  Deloitte Australia employees have created a variety of communities of interest, from a "Mums Group" to "Audit Specialists."  At IBM, the gap between employee-produced content and corporate-produced content is large and still growing.  Leaders need to be actively engaged with the network, but users need to have a strong hand in shaping it.
5. Operational Virtue - Less controversial than the 4 points above, but also important; an internal social network must operate well in 3 ways.
• Ease of Use - If the system is not largely intuitive, if employees need a separate sign-on, or if the network does not integrate with e-mail and other critical enterprise platforms, employees will stay away.  The internal social network must be user friendly and agile, not cumbersome.
• Productivity - Social networks should improve the daily work of employees.  Project teams might work more efficiently and with greater speed; employees might be able to locate information more easily; work flows might be streamlined.  Not only should a social network create greater engagement and community, it should enable employees to be more productive.
• Measurement - While the uses of a social network will morph over time, it is always important to measure the real business results.  A McKinsey survey found that social business reduces time to market by 20% and increases the number of innovations by 20% on average.  Several companies that I have worked with have measured decreases in the amount of time spent finding information and, as a result, more efficient workflows.  Measurement is critical.  It just needs to evolve with the usage.   

What have been your keys to success?  What have been your pitfalls?

Related and of interest:
The ROI of Internal Social Media Networks
Behavioral Change Before ROI
IBM's Journey to Social Business
Deloitte Australia: A Yammer Customer Case Study
Increase Your Company's Productivity with Social Media

Build It and They Might NOT Come: Internal Social Networks, Employee Engagement and Culture Change

Not everyone agrees that an open, transparent culture -- the type we identify with social media -- is best.  Not everyone wants to add "marketing" or "customer service" to his or her responsibilities.  "I want to work with technology, not people" is a not-uncommon, although usually unspoken, thought.  Other people simply prefer structure and limited responsibility.  And those traits can add to the efficiency and productivity of many companies.

Not everyone want to focus on making the company successful either.  Many employees are trying to establish themselves and further their own reputations and careers; the organization is a short-term alliance.  Ideal?  Not at all.  But reality.

So if, as I believe (see for instance http://bit.ly/oYbtHT), success with social media first requires comfort and cultural support internally, are these organizations doomed in the new social world order?

A few years ago, I helped a mid-sized professional services company implement an internal social platform as the first step in executing a social media strategy.  Employees clamored to be among the first on the site.  We offered tips and training; a few people started posting; two executives participated actively, and within a couple of months - NOTHING.

Leadership faultered.  While many executives were lurkers on the site, only the original two enthusiasts had posted.

The professional value was not clear.  Performance reviews did not recognize those who shared.  In a business where knowledge and relationships are power, employees felt the new platform might enable others to snap up their information without giving credit.  The efficiency of the social platform for exchanging information, pointing out new ideas, and adding value to an initiative was overlooked.

The dominant culture of the company was one of controlled sharing on a need-to-know basis.  Not exactly social media nirvana.  We decided to embrace and respect the corporate DNA nonetheless.

We found success by using the social networking platform to enhance and evolve the existing culture, not change it.

We limited use of the platform to one team with 5 selected characteristics:

• Team members came from several different departments
• Team members were geographically dispersed
• Each person brought a different perspective and knowledge to the project that was important for a successful outcome
• The team leader was enthusiastic about the new way of working
• Benefits were clear   

Team members experienced real-time value from using the social networking platform.  Communication and collaboration were easier; the number of major revisions dropped; edits and modifications could be made, disseminated, and enacted more quickly; work hours and end-to-end project time declined.  

Sharing more openly paradoxically also made team members feel that they had more control of their work process and product.  At the completion of the project, team members were already using the internal social network for other work activities.

Work team by work team, node by node, the use of the internal social platform spread.  The objective was not to change the culture, but to help employees succeed more fully within the existing norms.  Two years later, the cultural changes are manifest.      

Internal Social Networs - Behavioral Change Before ROI

Intranets are everywhere, and companies are rapidly adding social networking features - wikis, blogs, tagging... Yet satisfaction with these tools is stunningly low.  Prescient Digital reports that only 23% of executives rate 2.0 tools as good or very good, and 38% rate them as poor or very poor.  (http://ww.prescientdigital.com/articles/intranet-articles/intranet-2-0-becomes-mainstream)

Technically, a LOT of good tools are out there.  So what's going on???

•  Tools increase efficiency

• Tools improve productivity

• Tools make it easier for employees to find information and the experts they need

• Tools alone don't work

Prescient points out, "Those organizations that don't have intranet 2.0 tools are not getting executive approval to proceed as they don't have a proper plan or business case that convinces senior management of the need."  Is the failure to achieve the promised savings the reason behind the dissatisfaction of those who do have intranet 2.0 tools?

Maybe in a few cases.  But overall it's not execution or the lack of a plan or business case that is the problem.  The problem is the core need to justify internal networks with business cases.  ROI is critical, and I have written about it many times (see, for instance, http://bit.ly/internalROI), but the anticipated ROI will not be realized if the social network does not reflect fundamental shifts in organizational and interpersonal behavior.

The objective of social media is lifestyle, not initiatives (http://bit.ly/kYsQ6u).  And lifestyle within the corporate walls needs to change before internal or external social media strategies have lasting and measurable value.

When Starbuck's introduced MyStarbucksIdea.com, the driver was CEO Howard Shultz's belief that the company needed to reconnect with its customers.  Look at the site (really, even for non-coffee drinkers, it is a great site).  Yes, Starbuck's is engaging its customers.  It is also engaging its baristas, those rarely listened-to front-line employees who see it all, who talk to and listen to customers, who execute the policies and operational procedures and know what works and what doesn't.  Effective social media ignores hierarchy and organizational silos.  The results probably do drive greater employee efficiency, but that is a by-product of the new social lifestyle. 

One of my favorite corporate activities was the "feel good" campaign by Canadian credit union Servus.  Servus gave 20,000 people $10 CDN and asked them to create a "Feel Good Ripple" by giving the money to someone else.  Buy flowers for the grocery store cashier; buy coffee for the person behind you in line at the drive-thru; give $10 for a lunch to a homeless shelter.  (http://www.springwise.com/financial_services/feelgoodripple/)

To have a positive impact, internal social network initiatives similarly have to change the interpersonal dynamic.  

• Reward employees for sharing what went wrong so that others can learn.  
• Reward people for helping others when it didn't affect their own jobs.  
• Have people track how much time the intranet saved them, and allow them to donate that time to help someone else. 

Internal social networks work when they help corporate lifestyle and culture to change.

What has your organization done to make the intranet a lifestyle change agent? 

Internal Knowledge Sharing and ROI - It's Personal

Why would you give away your knowledge, not to a competitor, but to an internal colleague?  Team work is great, but in the end one person gets primary credit for the sale; one engineer is the lead developer; one customer service manager drives the highest customer satisfaction scores.  And that person gets the promotion, the biggest bonus, and the greatest ego boost. 

Yet organizations are adopting internal social networks with the hope of improving productivity and innovation through greater knowledge sharing.  Prescient Digital (www.prescientdigital.com) reported in their Intranet 2.0 Global Study 2010 that the main reasons that companies invest in intranet 2.0 tools are employee collaboration (76%) and knowledge management (71%).  Does knowledge sharing naturally follow?

Knowledge is far more than data; it includes the analysis and experiential wisdom that we bring to information.  Understanding when we need to share true knowledge and when we need to facilitate the transfer of information helps organizations build effective internal social media networks.  It is critical to driving the ROI of internal social media.

Knowledge versus Information Sharing

Two of the three factors that drive ROI for internal social media depend on knowledge sharing.  Only one factor is primarily data or information driven.  (see http://goo.gl/fb/pdpSI 3 Benefit Measures - The ROI of Internal Social Media Networks) Recognizing the distinction helps the change management process; employees can share at the level that benefits both themselves and the organization.  

v  Enhanced Employee Engagement depends on the give-and-take of knowledge sharing.  Numerous studies have linked higher levels of employee engagement to increased customer satisfaction and loyalty, lower turnover and higher sales.  By facilitating greater sharing of both personal and professional knowledge, internal social media networks boost employee engagement.  Within about 3 weeks of launching its new social networking site, The Hub, SAS had almost 50% of its employees using the site and 425 groups established.  The Hub intentionally blurs the line between the professional and personal, creating stronger, more multi-faceted ties between employees and the company.  Becky Graebe, internal communications manager at SAS, describes the site as “kind of like a Facebook/LinkedIn behind the SAS firewall.” Sharing knowledge creates friendships and connections, across and up-and-down the organization, which drives employee engagement and positive ROI. (For more information, see http://www.ragan.com/InternalCommunications/Articles/SAS_internal_social_network_attracts_5000_users_in_42751.aspx)

v Better, faster innovation requires more structured knowledge sharing.  Success depends on governance structures that facilitate and reward cross-silo and cross-functional work - while continuing to recognize the primary sources of both inspiration and execution.  A key is bringing together individuals with complementary skills and reducing redundancy. Merely sharing data is insufficient for innovation; sharing must involve insight, analysis and creativity.  $21.8 billion pharmaceutical company Eli Lilly implemented an internal social networking solution to enable more efficient and cost-effective processes for new drug development.  R&D scientists and subject matter experts are now in touch throughout the product development process, across multiple divisions and around the globe.  Increased knowledge sharing has helped reduce costs and accelerate innovation.  Personal brands are enhanced not threatened.

v Streamlining operations depends on information sharing, not knowledge sharing.  Many tools enable employees to find data and experts more quickly, and allow executives to ensure that activities are focused on the key strategic initiatives.

Many internal social networks facilitate data sharing; doing the same things more efficiently yields a positive ROI.  Knowledge sharing multiplies the benefits that an organization receives.  Unlike data, however, knowledge is personal and reflects an individual’s value and builds his or her personal brand.  Internal social networks that enable true knowledge sharing must recognize the individual as well the organizational benefits.  The ROI of these networks rocket upward. 

Is Social Media Killing Innovation?

Would social media have helped Thomas Edison?  Or Alexander Graham Bell?  Or Henry Ford?  Or Steve Jobs?  Subjectively, it seems that most disruptive innovations spring from the mind of one individual, or at most from a two-person partnership.  Remember the commonly held and oft cited view regarding the output of committee work?  I think there is little question that social media, when effectively engaged, can and does have a positive impact on improvement.  Product improvement.  Business model improvement.  Service improvement.  Operational improvement.  Many of the by-now “classic” social media cases showcase these benefits.  Starbucks, Ideastorm, even Comcast’s foray into Twitter for customer service – they all use the power of customer engagement and the speed of social media response to uncover and drive improvement.   How do I do better what I already do? But does social media, the ultimate collaborative tool today, really help drive innovation? True innovation requires discontinuous or lateral thinking.   Innovation reframes or redefines the underlying issue.  It’s risky.  And it rarely has immediate mass appeal or acceptance.  Is social media, then, diminishing real innovation, driving business to the mass mediocre and to only incremental improvement? Maybe.  But I think that social media can also enhance the ability to innovate.  v One spark to innovation is the intermingling of previously unrelated ideas – Social media provides an unprecedented opportunity to acquire and mix new perspectives.   Customer views, vendor perspectives, and the ramblings of random people we otherwise wouldn’t encounter potentially create more seeds to cross fertilize.  Internal collaboration tools and social platforms bring together the thoughts and knowledge of colleagues in different locations and with different expertise.  Innovation is about putting ideas and facts together in new ways; the more ideas and facts, the greater the inputs to innovative thinking. v “Edison didn’t invent the light bulb by trying to improve the candle.”  Innovation usually springs from addressing a broad, underlying need, not a short-term complaint or usage issue.  Monitoring and listening can help to reveal fundamental opportunities that few people articulate before seeing the solution. v As the economist E. F. Schumacher said, “Any intelligent fool can make things bigger, more complex…It takes a touch of genius – and a lot of courage – to move in the opposite direction.” At their core, great innovations generally reflect simple ideas – the execution might be complex, but the motivating concept is typically elegantly well-defined.  Social media helps simplify and focus.  Express your idea in 140 characters.  Or blog until you know what you are blogging about. Does opening up the organization to social media and the vast array of unrelated, non-linear thoughts and ideas pay off?  I think so.  Consider the Cuisinart.  No focus group or market research ever identified the need for a Cuisinart.  Carl G. Sontheimer mixed his expertise in business, technology and cooking to develop the Cuisinart.  Almost everyone has heard of the Cuisinart today, but at its introduction in 1973 most people didn’t understand WHAT it was beyond a fancy toy or souped up blender.  It took two years for the home cook to begin to embrace the Cuisinart as a new, and now indispensible, kitchen appliance.  Not an improvement on a blender, but an innovative tool.  Innovation pays off.  Sontheimer sold the Cuisinart company in 1987 for $42 million. Sontheimer’s education, experience, and personal interests gave him insights and the ability to span knowledge silos.  Social media can help others grasp those seemingly unrelated bits that drive innovation… if companies encourage engineers and techies and marketing folks to engage in social media.  If companies acknowledge that wide-ranging ideas are NOT a waste of time, that listening and learning and sharing are the sources of the seeds of innovation.  If social media is integrated into the everyday of business.  How do you make social media part of the everyday at your organization?