Proving social media ROI

Thinking about proving ROI for business inspired me to look at this great SlideShare on metrics for online communities:

This nicely shows the range of issues businesses should consider with social media implementation and ROI. But what’s the quick and easy version? I have uploaded this one slide which focuses just on the use of KPIs (key performance indicators) to track value. Obviously the results each need to be owned and actionable. Also I have just used two examples from the four Balanced Scorecard (BSC) perspectives, when you’d need to use all four.

So after deciding your business objectives, group them under the four BSC perspectives, trying to if possible allocate across all four:

1. ‘Financial’

How do we want our shareholders/trustees to see us?


2. ‘Customer’

How do we want our customers to see us?


3. Internal ‘Business processes’

What business processes must we excel at to satisfy our customers, shareholders/trustees?


4. Internal ‘Learning and growth’

How do we sustain our ability to change and improve?

Then set measures and targets against each, both quantitative and qualitative, with a regular review of results set up, and with ownership to enable actions against these to help improve under-performance for example.

This balanced approach to setting up a way of monitoring SME social media effectiveness is my recommendation for demonstrating ROI in the simplest way possible.

Systemantics and online communities

OK, it’s long list but it’s pretty useful when thinking of designing online communities for example! From John Gall. So as a planning tool how about thinking where your approach might fit into these. Good or bad!

1. The Primal Scenario or Basic Datum of Experience: Systems in general work poorly or not at all. (Complicated systems seldom exceed five percent efficiency.)
2. The Fundamental Theorem: New systems generate new problems.
3. The Law of Conservation of Anergy [sic]: The total amount of anergy in the universe is constant. (“Anergy” = ‘human energy’)
4. Laws of Growth: Systems tend to grow, and as they grow, they encroach.
5. The Generalized Uncertainty Principle: Systems display antics. (Complicated systems produce unexpected outcomes. The total behavior of large systems cannot be predicted.)
6. Le Chatelier’s Principle: Complex systems tend to oppose their own proper function. As systems grow in complexity, they tend to oppose their stated function.
7. Functionary’s Falsity: People in systems do not actually do what the system says they are doing.
8. The Operational Fallacy: The system itself does not actually do what it says it is doing.
9. The Fundamental Law of Administrative Workings (F.L.A.W.): Things are what they are reported to be. The real world is what it is reported to be. (That is, the system takes as given that things are as reported, regardless of the true state of affairs.)
10. Systems attract systems-people. (For every human system, there is a type of person adapted to thrive on it or in it.) [eg: watch out for contributors who dominate your community]
11. The bigger the system, the narrower and more specialized the interface with individuals.
12. A complex system cannot be “made” to work. It either works or it doesn’t.
13. A simple system, designed from scratch, sometimes works.
14. Some complex systems actually work.
15. A complex system that works is invariably found to have evolved from a simple system that works.
16. A complex system designed from scratch never works and cannot be patched up to make it work. You have to start over, beginning with a working simple system.
17. The Functional Indeterminacy Theorem (F.I.T.): In complex systems, malfunction and even total non-function may not be detectable for long periods, if ever.
18. The Newtonian Law of Systems Inertia: A system that performs a certain way will continue to operate in that way regardless of the need or of changed conditions.
19. Systems develop goals of their own the instant they come into being.
20. Intrasystem [sic] goals come first.
21. The Fundamental Failure-Mode Theorem (F.F.T.): Complex systems usually operate in failure mode.
22. A complex system can fail in an infinite number of ways. (If anything can go wrong, it will.) (See Murphy’s law.)
23. The mode of failure of a complex system cannot ordinarily be predicted from its structure.
24. The crucial variables are discovered by accident.
25. The larger the system, the greater the probability of unexpected failure.
26. “Success” or “Function” in any system may be failure in the larger or smaller systems to which the system is connected.
27. The Fail-Safe Theorem: When a Fail-Safe system fails, it fails by failing to fail safe.
28. Complex systems tend to produce complex responses (not solutions) to problems.
29. Great advances are not produced by systems designed to produce great advances.
30. The Vector Theory of Systems: Systems run better when designed to run downhill.
31. Loose systems last longer and work better. (Efficient systems are dangerous to themselves and to others.)
32. As systems grow in size, they tend to lose basic functions.
33. The larger the system, the less the variety in the product.
34. Control of a system is exercised by the element with the greatest variety of behavioral responses.
35. Colossal systems foster colossal errors.
36. Choose your systems with care.