Companies around the world are about to start using social media software internally to make their businesses better – and many aren’t sure how to measure success or failure, writes Duncan Stewart at Canada’s Globe and Mail…

I am not talking about companies using social media for external purposes. If a cheese company wants to start up a Facebook page or monitor its brand on Twitter there are buckets of tools for measuring effectiveness. And the desired goals are pretty obvious – usually something along the lines of “sell more cheese.”

When companies move toward “Enterprise 2.0” and adopt social media technologies for processes inside their business, things get murkier.

The whole idea of measuring enterprise software is a recent thing. For years, companies spent tens of millions of dollars on expensive software. At the end of it, the CEO would ask the IT department “How did it go?” When things went well, the IT folk would say “It was a success – it came in on time and on budget.” Champagne for all!

However, some particularly smart and crafty CEOs started asking follow up questions like “Do our employees like the software? Are they more productive? Are they even using it? And are we making more money?”

Since these goals had not been set from the beginning, nobody knew the answers to those questions. When they were eventually tracked, the answers often turned out to be an unsurprising “no” much of the time.

But in 2011 smart companies – and governments – are asking ahead of time what goals should be set and measured for enterprise social media implementations.

It isn’t even possible to measure everything important that social media is expected to achieve. Many who adopt internal collaboration tools such as Yammer or Chatter (enterprise versions of Twitter) expect to become more innovative or profitable.

How exactly does one measure the innovativeness of a company? It isn’t by patents filed – most enterprises don’t file any patents at all, even if that were a reliable metric (which it isn’t.)

Although better and faster collaboration ought to result in higher profits, in the real world it would be virtually impossible to disaggregate any positive effect due to the social media initiative from broader economic trends, seasonal variations or product mix.

There are some metrics that may be more measurable.

Social media is supposed to do four big things: make organizations less hierarchical, let knowledge flow better across various silos, increase the speed at which knowledge flows, and make employees feel more connected to the company and part of the team.

How would one measure hierarchical-ness? Asking the peons what they think of their bosses ain’t going to work. But there is one metric where social media already seems to be having a positive effect: questions on internal conference calls or web meetings. In the pre-social era, a CEO or upper manager would talk for 40 minutes and at the end of the call there were one or two questions (sometimes plants). With social tools, I am seeing many more junior employees being able to ask questions while the manager is still talking.

No need to interrupt your boss in full flow, no need to worry because you have a strong accent or are shy about talking in public. A little text box pops up, everybody can see it, and the manager can answer the question as they go along. It’s easy to track the number of questions on calls, and see if social does transform the monologue into a dialogue.

Speed of information flow could be monitored on a project basis. Give some of your project groups social tools and not other groups, and see if the ‘socialized’ projects get done (on average) faster than the ones using traditional collaboration tools.

If you have a Knowledge Manager – and most big companies do – one could see if creating a company wiki or installing short messaging software reduces the growth rate in information requests. In a world of exploding information, nothing is going to cause an absolute decline in requests, but moderating the growth rate would be a good thing for most companies.

Finally, the biggest corporate challenge today is about the war for talent: making your employees feel like anonymous cogs in a giant machine is usually not a great way to keep your most productive staff.

But if social tools, especially internal social networks, make them feel more connected to the company, to management, and especially to their colleague (either in the same city or across the country,) then that should have a measurable and positive effect on employee retention, a metric that most firms already track.

This isn’t even a complete list of all the ways that enterprises can measure if 2.0 is all it’s cracked up to be – but it is a start.


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