The ROI of being social at work

by Matthew Hodgson

February 19, 2009 at 11:01 pm · Filed under Collaboration, Communities, Enterprise 2.0, Web 2.0, social media, social networks

Decades of psycho-social research on team work suggests that effective teams have both strong task-based behaviour as well as good social cohesion.

“A high-performance team works together to achieve mutual goals, recognizes that each member is accountable and committed to achieving team goals, communicates effectively with each other, shares the joy of achievement and the pain of not meeting goals, shares information, helps each other, and recognizes that the success of the group is dependent upon each individual” [1].

Without both the factors of task and social cohesion a team tends not to be as effective.

In some cases, though, modern businesses struggle with the idea that being social has a business benefit. Taylorist management practices in particular only focus on those things that are measurable and directly associated with the task rather than understanding whether or not social interaction is of benefit to the task at hand. The result is seen in many modern managers who believe that their employees need to be busy and not wasting time (where wasting time equals socialising). Particularly, this attitude has impacted on the adoption of social media within the enterprise because networking with peers and colleagues through Facebook, for example, is believed to be time-wasting and of very little actual value to “busy work”.

Recent MIT research, however, is challenging this idea [2].

MIT research shows that 40% of creative teams productivity is directly explained by the amount of communication they have with others to discover, gather, and internalise information. In other MIT studies, research shows that employees with the most extensive digital networks are 7% more productive than their colleagues. Furthermore, those with the most cohesive face-to-face networks are 30% more productive.

This reinforces similar research by Aral, Brynjolfsson & Van Alstyne [3] that highlights the importance of these networks because they “strongly influence information diffusion … and access to novel information”. Availability of these networks, their research shows, is a highly significant predictor of worker productivity.

Since information does not diffuse randomly in organisations, but rather reflects the nature and structure of human relationships, providing the right tools that support human social relationships, communication and interaction, will provide a significant ROI to the enterprise.

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1. Bulleit, B. 2006. Effectively managing team conflict. Cary, NC: Global Knowledge Training LLC.

2. Pentland, A. 2009. How Social Networks Network Best. Harvard Business Review, Feb, p 37.

3. Aral, Brynjolfsson & Van Alstyne. 2007. Productivity Effects of Information Diffusion in Networks.

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Yes, knowing who/what/how/why of organizational communication and information flow sure helps build for productivity and innovation. Having a map of it all helps steer the ship. Several case studies on organizational networks and information flow…

The result is seen in many modern managers who believe that their employees need to be busy and not wasting time (where wasting time equals socialising). Particularly, this attitude has impacted on the adoption of social media within the enterprise because networking with peers and colleagues through Facebook, for example, is believed to be time-wasting and of very little actual value to “busy work”.

I’m thinking these days about ROII … return on investment in interaction. It’s the creative friction where flow of info meets imaginations connected-on-purpose that value gets created. Working on articulating it better …

Does this depend also on the nature of the tasks being accomplished and the industry in which it takes place? I imagine that the effect of greater social cohesion and information dissemination would have it’s largest impact in industries that experience the greatest change over time – for example, the evolution of SEO vs. the best techniques to stock shelves in a small local store.

I feel that the tide is turning in most industries on this fact. There are a ton of examples of companies that originally banned, then allowed, the use of social media/networking sites and the results of doing so (Dell, for example).

I’d be interested to see more studies that explained the ‘directly’ part of this:

MIT research shows that 40% of creative teams productivity is directly explained by the amount of communication they have with others to discover, gather, and internalise information…

While you don’t come right out and say it, you seem to be advocating for the recognition by Taylorist managers that employee interaction provides significant value to an organization — despite the difficulty (inability?) we have in assigning a currency amount to that value. I’m a firm believer that an organization either recognizes the value created by communication and collaboration without constructing and digesting a business case, or it doesn’t because it’s culture rewards demonstrable bottom line results only. Clearly, having more statistic such as those you cited at hand would help us prove value to the skeptics.

When you are the Membership Director of a Chamber of Commerce, and the time you spend on social media sites is with your members, it’s work! Not just socializing. Using the social networking sites has allowed me to:

*keep in touch with members we don’t see at face to face networking
*promote our activities to non-member (enhancing attendance which benefits members)
*increasing awareness of the organizationg
*and establishing our Chamber as a leader in social networking for the area.

Fortunately, my boss has also embraced the social media. The biggest challenge of course, is to stay focused on business during business hours and leave the personal entertainment for later.

Thanks,
Beth Bridges
Membership Director
Clovis Chamber of Commerce (California)

Since the major function of my job is to communicate and collaborate, I put a pretty high premium on these skills and appreciate the validation this post provides that I am on the right track!

My feeling is that the more your employees know about the entirety of your business and what each person’s role within that business is, the better everyone will be able to communicate between departments & team members and you will better be able to spot problems before they occur and to lessen the impact once they do.

I think this works for any team in any industry anywhere and is not dependent on industry.

[...] The ROI of being social at work | The AppGap In some cases, though, modern businesses struggle with the idea that being social has a business benefit. Taylorist management practices in particular only focus on those things that are measurable and directly associated with the task rather than understanding whether or not social interaction is of benefit to the task at hand. The result is seen in many modern managers who believe that their employees need to be busy and not wasting time (where wasting time equals socialising). Particularly, this attitude has impacted on the adoption of social media within the enterprise because networking with peers and colleagues through Facebook, for example, is believed to be time-wasting and of very little actual value to “busy work”. (tags: Web2.0 productivity collaboration socialmedia social roi enterprise2.0) [...]

[...] AppGap presents argument that socialising at work is productive, and your boss should stop claiming that you are goofing off — you are maximizing your [...]

Thank you so much for this, have linked on Twitter, also intend on sharing and following up with our staff. We’ve made forays into social media, but it’s the intangibles that are proving the most difficult to grasp, as in using these tools for communicating with our audience and as part of a community, as opposed to simply another outlet for promoting ourselves or another source to mine. Good online citizenship is a subtle thing and harder yet to instill in others, especially given these tough times, when folks may opt for retrenching and not communicating/sharing with colleagues, not sharing resources/links with our audience that don’t directly benefit us, etc. There’s real room for leadership in this area, especially when the ROI (of being a good colleague, as well as online citizen) may not be clearly defined.

[...] article, this time around published by Matthew Hodgson (At the AppGap), under the title "The ROI of being social at work" and which, I am sure, would prove to be rather helpful in laying out the answer(s) for us [...]

Great starting point and as expected no outcome. I’m actually teaching a class this Friday on Social Media Academy about ROI calculation. But before I go on I wonder: What let people to believe to calculate an ROI on some investments but not on others.
ROI-less investments:
- Corporate building: the cost for a 1,000 people building may easily vary by $100,000 per month
- Advertising campaign – we no that today we have a negative ROI we still do it
- PR – ROI can’t be calculated in $ and cent
- Personnel education and skills development – ROI is rather artificial
… you complete the list
ROI full investments:
- IT-Equipment, we calculate the time we spend over the cost of an employee
- Machine output one machine over the other justified price over output
- Exhibition, cost to do it relative to direct accountable new business

ROI by the way was created by some smart consultants and actually never were able to prove the concept on ROI on most things. Now we ask about ROI on a relationship to a customer – how much do I invest in a customer relative to what I can get out of it. One way to look at things.
But there are adjacent cost to the customer engagement model:
- How much cost can I save if that customer is a happy customer
- How much could I save if my product would be of better quality
- How much can I save if my sales force would be better trained…

So ROI is at the end a function of organizational effectiveness, support capability, product quality, engagement smartness, ability to compete faster, agility in the market, ability to create attention effectively…

You get the idea. Now if we put all that together we actually do get an ROI in hard dollars and cent on social media. But as you can see not by calculating the time you spend messing around with your LinkedIn profile but by calculating a holistic approach of an organization and ALL it’s facets in the new market engagement model.

[...] Although some managers believe social interaction at work is a time waster, some studies show that social people are actually MORE productive. In fairness, the study looked at people with both digital networks and face-to-face networks [...]

Modern collaboration tools with anytime anwhere access, tagging, commenting, re-editing, faster distribution of knowledge can significantly boost productivity and creativity. For RoI purposes, it is best to define challenges and collaborate around those challenges.

At OpenTeams.com collaboration tool, our users experience the simplicity of collaboration, and hence realize the benefit much faster.

[...] The ROI of Being Social at Work: Människor och arbetslag som står i kontakt med varandra och erbjuds möjligheten att utbyta erfarenheter och idéer är upp till 40% mer kreativa. Anställda som är mest aktiva på nätets sociala nätverk är 7% mer kreativa än kollegor som inte ingår i något nätverk alls. Möten och dialog föder kreativitet, nytänkande och en energisk arbetsplats baserad på gemenskap. På det sättet fungerar de sociala nätverken som en kontinuerlig kick off för företaget och det är bra. Men det gäller att hålla koll. I mitten på 2007 skrev SVD att facebooksurfandet kostar företagen 27 miljarder kronor. Men det ena utesluter inte det andra. En väg att gå kan till exempel vara att starta och bygga upp ett nytt och eget företagsnätverk på Ning.com som endast innehåller och tillåter användare från det egna företaget. [...]

[...] starts at work. By being connected at work, you tap into resources within your own walls. in a recent article written by Matthew Hodgson on the ROI of being social at work, an MIT study showed that 40% of creative teams productivity [...]

This complements previous MIT research which offers tangible evidence for the productivity gains achieved by reducing search chains (to find experts) and collaboration across workgroups or divisions.

It’s not really about ROI. What’s really going on is that the fundamentals of how we carry out knowledge work (= work design) are undergoing massive change, and no one has the mental models nor practices to accompany the shift … yet.

So we want to understand ROI because we don’t ‘want’ to understand or acknowledge the size and scope of the (eventually fully realized) transformation.

[...] Although I’m involved in community management, I still consider myself an engineer (or, at least I haven’t lost my engineering mindset completely). I like data and measurements as much as the next linear thinker. However, I’ve experienced first-hand how utilizing social media in proper amounts has benefited cycle times, increased worker productivity, and generally moved projects along in a more efficient fashion. The problem is, it’s usually difficult to measure the actual effect using these technologies has had on the work. That may still be the case, but recently, Matthew Hodgson wrote an excellent article on ‘The ROI of being social at work.’ [...]

[...] Matthew Hodgson as always as a post on the behavioural side of things. [...]

[...] Then I came across Matthew Hodgson’s post about a study, called the ROI of being social at work, and a follow-up piece; the more connected you are, the more productive and effectively you can [...]

[...] Furthermore, those with the most cohesive face-to-face networks are 30% more productive.” (Hodgson, 2009 – my [...]

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