Enterprise 2.0: Thinking About Enterprise 2.0 ROI in Three New Ways

Through the course of the sessions and conversations I experienced today, I found myself again and again encountering the question: How do we determine the ROI of Enterprise 2.0/social media? It was great to come up against that question here at the Enterprise 2.0 Conference because I had the benefit of hearing some really smart people deliver what I think are some of the most compelling answers to that question I've heard yet. I'll recount them for you and I'd love to hear what you think.

1. Consider ROI Through Imagining Absence -- That's my wording, but the concept came from one of the panelists at the morning session: "Enterprise 2.0 Reality Check -- What's Working, What's Not. (I've lost his name, if anyone knows it, please tell me. Otherwise I'll track it down tomorrow). The panelist is an international business development manager for DeLoitte, though he previously worked for Bearing Point until DeLoitte bought them. He told us a story of how during the transition from Bearing Point to DeLoitte, the Bearing Point Wiki was shut down, no one had access to it, though their work was expected to continue. He said this about the question of ROI in relation to that event: "I never even thought about the ROI of our Wiki until it was shut down. I didn't have anybody knocking down my door asking me about our financial system, but I had people asking me everyday if the wiki was coming back, when was the wiki coming back? And I realized without that Wiki these people can't do their jobs." 

For me, that says it all: "Without the wiki, these people can't do their jobs." What does that mean for the question of ROI? Well to me it means we should be careful not to always interpret the question of ROI as "What will it cost me to build this". Sometimes the more important question is "What will it cost me if I don't build this".

Rethink the "I" for Which You're Trying to Achieve "R" -- In the same morning session, conversation turned to the importance of Enterprise 2.0 in a down economy. Should companies spend on Enterprise 2.0 when ROI is so difficult to measure and times are so tough? Christian Finn of Microsoft had a great answer to that, which, again turned my thinking about ROI on its head: A lot of ROI has to be faith based, he said. You have to have faith that it's better for your organization to connect experts the way Enterprise 2.0 can than it is to let them remain unconnected. His point was this: in a bad economy, the smart company looks to maximize the return they get on investments they've already made. Too often when we think of ROI from Enterprise 2.0 we focus on the technology tools the employees will use. Finn's point: Focus instead on the employees who will utilize the technology tools. One of the biggest investments any company makes is its people. Give those people the tools they need to give you more value from their efforts. "That," he said, "is a good argument to make the investment" in Enterprise 2.0. In this ROI equation, your people are the I. That's where you should try to get return.

The Nature of Social Media Implies Return -- After the morning sessions I met up with Alex Crabb. She's Director of Media relations at ink Communications in Boston and she's working with clients to help them use social media in their marketing efforts. It sounds like she's making good progress so far, guess what her clients ask her? If you guessed "How do we determine ROI on these social media campaigns" then you're as good as I am at predicting the obvious. Yes, "how do we determine ROI." We talked about that a bit and I recounted the two stories above for Alex, but in this case it's a little different. She's not using Social Media to engage employees of a company internally, she's using it to extend the enterprise outward through her marketing campaigns. In determining ROI for a case like that I think it's helpful to compare how social media spreads your message with how your message would have been spread in previous eras. 

Imagine yourself before the internet, so say 20 years ago. You're a marketer, you get a print ad published for a client in a publication with a circulation of 30,000. Great 30,000 impressions, not too shabby. It's probably a nice ad too -- nice picture, plenty of color, nice to look at, so you can safely assume that most of the 30,000 who get that publication stopped to look at it for a few seconds. But where did your ad go after that? Well, they closed the magazine and put it on a table, and it stayed there until they were done with it and threw it away. So, from you, your ad moved outward one degree -- one concentric circle beyond the circle in which you stand. Maybe it went two degrees because they gave the magazine to their dermatologist's office instead of throwing it away. 

Now consider social media -- in this case, let's think about Twitter. You post some advertising content online, someone sees it and likes it. They copy the link, paste it into Twitter, post it to their 200 followers, who like it and retweet it to their 200 followers each. Now it's gone two degrees (probably in a few seconds). And it goes on from there, degree after degree, concentric circle after concentric circle, as people in each group take advantage of the ease of distribution through social media to spread the content further and further -- it's not an exaggeration to say it could move around the world in a matter of seconds.

So how does ROI fit into this example? First think of what you can achieve through social media that you couldn't before: you can reach a global audience in a matter of seconds and, if it's with Twitter, you can do it for free. Whereas your magazine went two degrees and stopped, the social media content went two, three, twenty, eighty, five-hundred, thousands of degrees outward from you, and with each degree the likelihood that your content would cross the screen of people for whom it was relevant and compelling increased.

It's the degree of reach of social media that holds the promise of return. Whether you're extending the enterprise outward into a global audience, or increasing the reach of ideas inside your enterprise, I just think ROI can't simply be about the numbers of people who see your message (though paying attention to the exponentially increasing scope of exposure is important). It has to also be about the distance your message travels -- the degrees outward from you and the nature of the communities into which it reaches. 

They Said This About Email Too -- Finally, back to the morning session. During the question and answer period, Stowe Boyd stepped to the microphone and reminded us all that companies had the same concerns about email too. "What's the ROI" was the raging question when companies considered introducing enterprise email systems. And before that, they said it about the telephone. As Stowe tells it, companies didn't want telephones in the office because people would use it for gossiping and other frivolous pursuits.

It all makes you think. What does it make you think?