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Metrics that Matter

Deloitte Insights Video


From instant messaging and Wikis to blogs and online discussion forums, the term “social software” has become a virtual grab bag of emerging technologies designed to help people connect and communicate. But one technology does not fit all users. Companies that take a more strategic ─ rather than check-the-box approach ─ will get the most value from investments. 

Tune into the latest episode of Deloitte Insights to learn about pros and cons of applying social software to your business.

After viewing the video podcast, be sure to read Deloitte Center for the Edge’s report, "Metrics that Matter."

Speakers

John Hagel, Co-chairman, Deloitte Center for the Edge

Transcript 

Sean O’Grady: Hello and welcome to Insights. Today we are talking about the pros and cons of applying social software to your business and here on the desk with us in New York to discuss this topic is John Hagel the author of a series of bestselling business books and the cochairman of the Silicon Valley-based Deloitte Center for the Edge. John, welcome back from the Edge.

John Hagel (John): Thank you.

Sean: You’re welcome. What I would like to understand first is what do you define as social software?

John: Well social software has become a very broad grab bag of lots of different technologies that have emerged, some fairly early, others much more recent. Everything from instant messaging to Wikis to blogs to discussion forums online, it is all software that is designed to help people connect and communicate more effectively with each other and it’s not just within the enterprise but it is also with customers. So it is people outside the organization as well as inside but what’s happening now is a lot of these one-off technologies are getting integrated into platforms where there is much more seamless communication across larger and larger groups.

Sean: Now obviously there is a number of organizations that are trying to implement these types of software into their daily workdays, in your view how is that process going?

John: It is going very unevenly, like most new technologies I think the early adoption within the enterprise actually is coming in under the radar screen. You find teams who have been put together for a six-month or 12-month project on their own initiative going out and finding social software that can help them collaborate as a team without the approval, without even the knowledge often of the central IT department. So that is one form and probably the most frequent occurrence in terms of adoption. You also see ad hoc adoption where one executive goes to a conference hears about social software and says wow this is interesting let me deploy it in my part of the company and then increasingly also there is a situation where senior executives are saying this is a check the box thing, I got to have a blog, I got to have a discussion forum, or a Twitter like platform in my enterprise get me one of those. They don’t really know exactly why, but they just want to check the box and say they have got it.

Sean: So it sounds a little unrefined, in your view then how can it become more refined, more even to your point earlier?

John: Our sense of having looked at a lot of the adoption that has gone on is there is a real opportunity to tie social software to metrics that matter to the company and that is today a gap that exists, the social software evangelists are not really talking about what matters to the company in terms of operating metrics that these executives are measured on. So I think that there is an opportunity now to take this new technology and say starting at the highest level the senior executives are typically measured on financial metrics so what are the financial metrics that are most challenging or biggest opportunity at this point in time, then drilldown to the operating metrics that are relevant to those financial metrics to say, okay what operating metrics drive that, it could be the growth, revenue growth is the biggest issue for the company, it may be that at the operating level customer turn is a problem, where turning over customers more rapidly than we would like and then drilldown further to the frontline metrics and say okay why is that turn happening, well it might be that you are not very effective in responding to customer questions when they call in and have issues with the product or service you are offering. So now you have got something very tangible that says okay what can we do with social software to help the customer support function do their job better and more effectively answer the questions and that in turn is going to make the biggest impact on the company, it is not just a random site within the company it is the one that is really going to matter to the financial metrics at the most senior levels. So taking that funnel we think is a really interesting way to make this a much a more systematic adoption process going after the metrics that really matter to the company the most.

Sean: So beginning with the end in mind is the best practice. My last question for you I am going to have you stare into your crystal ball and as we have been talking about social software what do you see being the big software in the next five to 10 years. What do you think the companies are going to be using?

John: Crystal balls are usually murky, so it is with some trepidation but I think that over time what we are going to see is continuing evolution both in the functionality of the software we have today and integration of these functionalities so that you again have a broader platform to interact and where you are going to see this boundary that exists today where we say there is social media which faces out to the customer and then there is social software that happens within the company. I think we are going to see platforms that emerge that more effectively integrate those two dimensions. So you are at one level interacting with third parties that matter to the company by connecting them to the people that matter within the organization and helping them to achieve performance levels that they haven’t been able to achieve before.

Sean: One last thing with that tool maybe another angle within that crystal ball is there anything that companies might shy away from? Do you think they are learning any lessons and saying may be this isn’t the best approach for us?

John: I think the issue that I see a lot of companies wrestling is with this top down blanketing approach and the problem that you have when you just mandate everybody is going to have this social software platform is what is known as the empty bar problem, you go in once you look around there is nobody else there and you leave and you are never coming back you know that was not a very fun experience or satisfying experience. So I think the notion of being very targeted initially and saying who are the people that really are going to get the most value from this will be the most motivated to participate let us get them on board first and then lets broaden it out over time to the rest of the company is probably a much more effective way of engaging people.

Sean: So avoid the empty bar. John thank you very much. All right, we have been talking about the application of social software in business with bestselling author John Hagel who also cochairs the Silicon Valley-based Deloitte Center for the Edge. If you would like to learn more about John or any of the topics we discussed on this broadcast you can find that information on our Web site it’s www.deloitte.com/insights/us. For all the good folks here at Insights, I am Sean O’Grady, we will see you next time.

As used in this document, “Deloitte” means Deloitte & Touche LLP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.

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