Can social business be measured?

There is a notable lack of published examples of organisations implementing a social business strategy backed up by a comprehensive measurement programme. In this, the fourth in the...

Social Business Measurement

This is the fourth in the series of blog posts taken from our recent white paper called The Future of Social Business. You can read the previous post here or download the full report here.

Social Business Measurement

While there have been various estimates of the potential value of implementing social business across organisations, how these estimates are calculated and how organisations should measure the impact of their own initiatives – either piecemeal or comprehensive – remains contentious.

Perhaps the least controversial outcome is that of cost savings generated through the use of peer-to-peer support communities, such as the celebrated giffgaff community, in which customers help each other, rather than relying on support staff. This, it is generally agreed, is a no-brainer for brands.

Richard Hughes from BroadVision gives us a more ambitious picture of what social business success can look like, saying:

“If you are working more effectively, more transparently and more efficiently with your employees, partners and customers. That’s success”.

But he also points out that, without a benchmark, organisations will struggle to measure improvements in communication efficiency:

“One of the challenges is that organisations don’t measure how effective they’re being at the moment. Often, when I’m doing an analysis of social network deployments, they say ‘this is fantastic!’ And it makes me think, ‘why didn’t you do that with your email systems?’’

Looking inside the organisation, the language used to describe the benefits of social business can present further challenges.

“If success involves things like ‘openness’ and ‘transparency’ then we need to define these in a quantifiable way”

… says Guy Stephens of IBM. While it’s true that issues like this could be addressed, at least partially, though the implementation of performance measurement processes such as the Balanced Scorecard or Performance Prism, there is a notable lack of published examples of organisations implementing a social business strategy backed up by a comprehensive measurement programme.

Beyond the business metrics of efficiency and information sharing, there is also, of course, a human impact. Chris Heuer prefers to measure the success of social business activities by examining the impact it has on an organisation’s most valuable resource: staff.

“I think it’s all about the level of employee engagement. Have you hired people who love what you’re doing? Who are aligned with the mission of the organisation? Are those people staying engaged? Are they happy and effective? Are they contributing and operating more efficiently?”

Perhaps this highlights one of the hidden benefits of social business. Words like ‘openness’, ‘transparency’ and ‘empowerment’ may not play out well in the boardroom but they do tend to resonate with employees. A well-planned social business strategy should tap into these feelings, which can help to produce happier staff that work harder and stay in their posts for longer.

The external impact of social business, on relationships with and between customers, as well as on reach, revenue, reputation, can be equally difficult to gauge, but Chris Heuer has a very clear, if radical, recommendation on the best approach for forward-thinking organisations:

“I believe the number of real relationships an organisation can build in the market with employees, partners, distributors, competitors and customers will define their success”.

Pressed to define a ‘real’ relationship, Chris pins it on the nature of the engagement that an organisation has with an individual, saying it must be Reciprocal, Empathetic, Authentic and Loyal (R.E.A.L). If you can develop customer relationships that tick each of these boxes, you have a genuine opportunity to become their product or service of choice.

In effect, what’s being described here is ‘first mover advantage’ in a commoditised world in which a simple touch of humanity can make all the difference to the choice a consumer makes. As Chris goes on to explain:

“The interesting thing when you look at real relationships is that the switching cost of a relationship is extremely high. So if you’re not the first to secure the key relationships in a given market, trying to win them over later is a very expensive and perhaps impossible proposition”.

Guy Stephens agrees with this analysis, but offers a more simplistic metric:

“Just find out if your customers are happy”.

Beyond the business metrics of cost-savings, improved efficiency, employee retention and customer satisfaction, it’s also been suggested that, by engaging more with their stakeholders and opening up to closer scrutiny, social and environmental concerns come into play.

“We now know that there is a large portion of the consumer population who make spending decisions based upon if a company is a good steward of its resources”.

…says Chris Heuer, adding:

“We’ve been talking triple-bottom line for at least fifty years now and were only just coming to the realisation that maybe those people, those wacky hippies, were actually onto something”.

Organisations that, in an effort to become more responsive, create more porous communication flows with and between their stakeholders – a process that has been described as ‘humanisation’ – should expect to be judged according to the ethical standards of those stakeholders. This, then, becomes another important measurement to consider when venturing into social business.

Chri Heuer


The Future of Social Business is available as a free download here.

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