Measurement and ROI

I read an excellent article earlier in the week on the Chief Learning Officer site on the inability of the traditional definition of ROI to adequately assess the importance and value to the organization of its employee's networks and the value that is derived from these internal and external network interactions, and by extension the technologies and processes that support these interactions.

The essential point of the article was that these network benefits are intangible in nature, do not 'fit' the classic ROI model (that was developed to understand how tangible activities like buying a new factory, or upgrading an assembly line) of measurement.  It really is a riff on the 'what is the ROI of e-mail' argument that is often used when folks are attempting to justify time and expenditure on new tools and processes designed to increase workforce collaboration.Flickr - Darren Hester

Can the organization really accurately estimate the ROI of 'increased network activity'? Does it even make sense to try?

Unlike the new industrial machine, that is built to precise specifications for productivity, output, and operating costs, it is just about impossible to predict how new technologies and processes for collaboration will be embraced inside the organization.  You may be able to apply typical benchmarks on participation rates and utilization statistics, but I have to believe its just about impossible to intelligently make an argument to senior management that a specific 'return' is likely to be generated, at least prior to the introduction of these tools.

In many ways organizations that embrace these projects, and the new ways of communicating, collaborating, and working that they introduce have to take somewhat of a leap of faith that there will be sufficient 'return' on the investment (which for all but the largest organizations is chiefly employee's time, the technologies that are most frequently utilized tend to be low cost, sometimes even free). It is very easy for management to constantly drive the focus back to the traditional 'ROI' measure, and it gives many leaders a convenient 'out' from having to address and show true skill and even courage. 

But just like communication and collaboration advances like voice mail, fax, e-mail, and personal and network computing all moved from experiments to critical business infrastructure mostly without any idea of traditional ROI, so it will be for social networking and collaboration technologies. The smart and leading organizations have already embraced this concept, and I do not think it long before these technologies also become essential components of the modern organization.

MBTI and ROI and E2.0

I saw a presentation yesterday on Change Management and the impact of people's Meyers-Briggs (MBTI) classifications on accepting change and was struck by one slide that attempted to explain the differences in outlook between the 'Sensing' and 'Intuiting' dimensions.Flickr - trussmonkey

The slide indicated that 'Sensing' folks prefer to trust and rely on 'real' or verifiable data.  'Intuiters' on the other hand prefer to focus on connections and meaning, and trust and rely on insights and explanatory patterns.

It seems to me that most of the so-called Enterprise 2.0 technologies like social networks, blogs, wikis, etc.  rely on the 'Intuiting' benefits. Things like seeing value in connections, trying to interpret the patterns, and focusing on connections seem to me to be foundation of E2.0 evangelism.

But the folks that control the budget, allocate resources, and otherwise tend to demand 'real' numbers and detailed ROI calculations for these projects are typically squarely on the 'Sensing' side of things.  They rely on verifiable data, fact and figures, and proof of value.

I wonder if this contrast and conflict between the 'Sensers' that control all the $$ and resources and the 'Intuiters' that are usually the most passionate advocates for E2.0 is behind the difficulty that many would-be implementers of E2.0 solutions have in 'selling' these tools in the enterprise.

So what do the MBTI theorists offer to help 'Intuiters' deal with 'Sensers'?

1. Present the pitch or arguments for E2.0 in precise, step by step manner - this FASTForward blog post has links to several success stories that you can use a a resource for your plans. Another great resource is the 'Groundswell' book by Bernoff and Li.

2. Be as detailed and descriptive as possible as to the 'real' benefits that will accrue to the organization - this blueprint has some suggestions

3. Present the proposed implementation plan, the milestones, resources needed, and overall implementation approach. A great article on this is here.

4. Clearly state the metrics that help define success, why these metrics were chosen, and how you will measure and report them - some examples from the Social Organization blog - here

Remember, the 'Sensers' want the practical details, they want the hard data. 

If you walk into that room as an 'Intuiter' and try to sell an abstract 'collaboration nirvana', you probably have already lost your argument.

What other ways have you seen E2.0 projects get pitched to skeptical management?