Risk versus Reward

ITBusinessEdge has an interesting take on the increasing struggle between freedom of expression and command-and-control when using Enterprise 2.0 tools.  Discussed in the article is a blog post by Andrew McAfee:

“McAfee notes that E2 tools take some of the control out of the hands of companies:

Enterprise 2.0 tools have no inherent respect for organizational boundaries, hierarchies, or job titles. They facilitate self-organization and emergent rather than imposed structure. They require line managers, compliance officers, and other stewards to trust that users will not deliberately or inadvertently use them inappropriately. They require these stewards to become comfortable with collaboration environments that “practice the philosophy of making it easy to correct mistakes, rather than making it difficult to make them” as Jimmy Wales has said. They require, in short, the re-examination and often the reversal of many longstanding assumptions and practices.”

This is a battle I’m seeing waged every day - how do enterprise let users enjoy the freedom of collaboration that wikis/blogs/web 2.0 provide, but still ensure that their data is secure and in compliance with policies?  There’s no easy answer here, but much of the thinking here deals with risk versus reward.  For instance, a company with minimal intellectual property, such as a public relations firm or consumer services firm, will face relatively less risk in letting employees share information through blogs or wikis.  However, a big pharmaceutical or financial-services company that has piles of confidential information and intellectual property takes on additional risk in letting users use blogs or wikis.  Yes, they certainly trust their employees to use these tools appropriately, but they also must verify that information isn’t being exposed.

Yes, blogs and wikis are coming to the enterprise, but being able to simply trust that everything will go according to plan isn’t an option for some organizations.   For some companies, a few controls will need to be put in place so that these web 2.0 tools can be used.  Sometimes this is the lesser of two evils.

Whole Foods Responds

Whole Foods, the company recently known for the exploits of its CEO, John Mackey, who anonymously blogged about Whole Foods and its confidential business for years (see history here, announced an update to their blogging policy. The company no longer allows discussion of any company business on any social media - blogs, message boards, forums, etc.

To avoid the actual and perceived improper use of Company information, and to avoid any impression that statements are being made on behalf of the Company, unless approved by the Nominating and Governance Committee, no member of Company Leadership (as defined below) may make any posting to any non-Company-sponsored internet chat room, message board, web log (blog), or similar forum, concerning any matter involving the Company, its competitors or vendors, either under their name, anonymously, under a screen name, or communicating through another person. Violation of this policy will be grounds for dismissal. For purposes of this paragraph, “Company Leadership” includes each Company director, Executive Team member, Global Vice President, Regional President and Regional Vice President.

While this response is not a total shock (Whole Foods’s acquisition of Wild Oats was nearly blocked because of Mackey’s blogging), it is severe, and probably the wrong stance to take when designing a blogging policy.

1. Employees are beginning to mandate the use of social media at work. How can an organization expect to hire the most talented employees when they don’t make the newest technology tools available?

2. Employees will continue to use social media as a way to vent about their personal and work lives, and this type of policy will not stop this behavior. If anything, it will only encourage the use of anonymous names, making it more difficult for Whole Foods to find employees putting the company at risk and help them understand the risks of public blogging.

3. A totalitarian policy is likely to encourage employees to continue blogging.

While Whole Foods is certainly trying to minimize the risk of being damaged again from an employee blogger, a better policy would be to educate employees of the risks of blogging and encourage employees to read each other’s blogs. If an employee spots a potential problem in another employee’s blog, they can quickly point out the problem. Often these are simply honest mistakes. Openness and communication are usually the best assets when designing a social media policy.

Do you agree or disagree with Whole Foods’s stance?  What’s the blogging policy like at your company?

Measuring ROI

One of the first talking points associated with Web/Enterprise 2.0 always seems to be ROI. “What’s the value from Web 2.0, and how do I measure it?” This is an all-too common question, but utilizing a few basic finance/tools can take us a long way in measuring ROI when your organization is beginning to use blogs, wikis, social networking or tagging.

Opportunity cost – The Granddaddy of all measuring sticks

Most finance types consider opportunity cost to be the greated-valued foregone opportunity of a choice. For a quick overview on opportunity cost – see the Wikipedia entry.

Value of time is also an important tool when measuring ROI. For instance, if I make $10 an hour, the cost of my taking a 10 minute break is $1.66. See the Wikipedia article as well.

One of the major benefits of Web 2.0 tools such as blogs, wikis and search tools is that they make it much easier to communicate, collaborate and find information.

As Jeremy Thomas of Social Glass puts it:

“I suppose Search is the easiest to quantify. The average knowledge worker spends 25% of his day looking for content. So let’s say that company X has 1,000 knowledge workers who make an average of $80,000/year. This means the company ‘wastes’ 20 million/year in funding with the time workers use to find content.”

 

When measuring ROI, one of the best places to start is to determine how much time employees save by using blogs and wikis instead of email, or how tagging makes it much easier and faster to find the latest document needed.

Another place to measure ROI is to examine if employees can make more money with Web 2.0. Can sales people make more calls because they have more time? Are customers that participate in your company’s social network 50 percent more likely to renew contracts? Another avenue is to examine how Web 2.0 makes your marketing team more efficient. Are 40 percent more leads coming in because of buzz from your company’s blog or social network? Is there more brand awareness from word-of-mouth generated by bloggers?

There are also significant cost that must be measured as well. What is the value of the time it takes IT to setup and maintain a system of blogs, wikis and social networks? How long will it takes employees to learn the new software, and what’s the value of their time? Is there a cost for new software or hardware?

This is just the tip of the iceberg in measuring ROI, but any effective organization must be able to have at least some idea of the ROI when using new software. Just because Web 2.0 can be collaborative and dispersed doesn’t mean that costs and benefits cannot be identified.

Are you measuring ROI from Web 2.0 in your organization? Do you have any other ideas on how to measure ROI? Leave a comment!

Welcome

Welcome to the new blog, and thanks for stopping by. As a quick into to the blog, we’ll be taking a look at “Web 2.0” and how it’s being used within the enterprise. We’ll also exchange ideas on how to get started with Web 2.0 in your organization. There may also be sporadic discussion of startups, baseball, film and music thrown into the equation as they relate to technology. Stay tuned!