Valuing Social Connections

A team of researchers from International Business Machines Corporation (IBM) and the Massachusetts Institute of Technology (MIT) released a very interesting piece of academic research this week, which presents some findings from a study of “the largest organizational social network ever collected.”  The researchers collected and mined data related to c. 400,000 IBM employees.  The researchers further focused on a subset of that dataset — 2,600 consultants — to draw insights on how connectedness impacts the productivity of employees who generate revenues by logging billable hours.

What makes the study so interesting — in addition to the extraordinarily huge dataset used — is that it is one of the first attempts I’ve seen to assign a currency-based value to social network connections.  In this case, the social network is based in email; it lives in IBM’s internal deployment of Lotus Notes.

The study associates incremental revenue earned by a consultant with both individual and project-level email activity.  For example, the study finds that if an IBM consultant uses email to reach out to a manager that is not his direct supervisor, he produces, on average, an additional $588/month in revenue as compared to a consultant that only interfaces with her direct manager.

This is fascinating stuff, and my head is spinning with the possibilities of how this might be applied to inter-enterprise interactions conducted via emergent social software, rather than through well-institutionalized email.  I just came across this study today and haven’t had time to properly digest it yet, but will do so and comment further.  In the meanwhile, I invite you to read it for yourself and leave observations and  comments here.

Culture Trumps ROI

Talk about signs of the times!  Lately, there’s been a rapidly growing number of posts declaring the need to demonstrate return on investment (ROI) in social software, but lamenting our inability to do so.  Just today, I read three posts on the topic and noted that a fellow IBMer has launched an internal virtual event to brainstorm the issue and potential solutions.

My take on ROI of social software is pretty much along the lines of Jon Mell’s and Gia Lyons’ — don’t bother!  Trying to demonstrate business value created by the deployment and use of collaboration tools, regardless of what label we use to describe them, is a misguided effort.  Too much of the evidence is anecdotal and difficult, if not impossible, to translate into credible and compelling currency amounts.

I spent too much time around the Millennium trying to devise clever ways to show ROI on investments in software that supported knowledge management.  I learned that it is fruitless to try to sell collaboration technology to an organization that does not want to collaborate — or is not ready to do so.  Those types of organizations are very likely to demand a detailed business case demonstrating ROI on social software, or any other collaboration technology.  It’s one of the ways they can maintain status quo and kill grassroots efforts to improve collaboration.

So let’s not spend countless manhours trying to develop metrics that will help us demonstrate ROI in social software.  Better to spend the time, energy, and money qualifying and quantifying potential customers’ willingness and readiness to collaborate.  Knowledge audits, Social Network Analysis, and other consulting services are what we should be selling to organizations that don’t understand the instrinsic value that collaboration software can produce.  No business case will sell social software to a firm that doesn’t already value collaboration in its culture.