July 13, 2015 at 10:19No spoon
This article is not about corporate social networks having no ROI. If it weren’t, it is unlikely that this market would show such steady growth. But, on the other hand, could corporate social networks be more widespread if more attention was paid to non-financial criteria for achieving business goals? And what are these criteria? Read on.
There is always a high level of competition in business. Whatever you start doing, most likely you already have competitors. For every Microsoft there is its own IBM, for every Google there is its own Yandex. Therefore, quite often, sales come down to the premise that the thing the customer needs can be done more efficiently. If the customer drinks five cups of coffee a day, you can make it so that he can drink six or even seven cups of coffee a day for the same money. Thus, efficiency is a characteristic of how expediently or rationally the company's resources are used to obtain the expected results. And that same ROI equal to Profit divided by Invested_Capital is an indicator of effectiveness.
But this is a characteristic of the normal, regular functioning of the organization. And what happens when 1998, 2008 or 2014 comes? If I did not survive, was I effective? In this situation, two other parameters arise - stability and adaptability. Sustainability - the ability to obtain expected results in changing conditions without changing the way they are received, these are reversible changes in the organization. Adaptability - the ability to obtain expected results in changing conditions with a change in the way they are received; these are irreversible changes in the organization. Stability and adaptability reflect the ability to survive in a changing environment, these are two strategies for responding to change.
So, there are three groups of management criteria: effectiveness, sustainability and adaptability of the organization. (For more information on the management triangle, read the wonderful article by Vladimir Ananyin, “ Does Business Always Really Need Efficiency? ”, I strongly advise you to read it along with the comments, the picture was taken from there).
It is these criteria that can become criteria for assessing the positive impact on business of information technology, and corporate social networks in particular. The absolutization of one of the three parties examined is extreme and risky for business. Efficiency describes normal activity under normal conditions, stability and adaptability under abnormal conditions (in a Western environment, oriented not toward solving problems, but at realizing opportunities, adaptations are called innovations).
By the way, try to answer your question - and your organization, which model implements for itself, sustainability or adaptability? A classic example of a “sustainable” organization is to reduce the number of projects, leaving 20% of the most important ones, and dismiss 20% of employees in the hope that when the sanctions run out and oil prices go up, return crossed out projects to their list and hire new staff for this. An organization that is no longer trying to be sustainable, but is following the path of adaptation, is going through much more diverse changes. Signs of this situation may be the active involvement of business consultants, a new management view on business development, the rapid exchange of information within the organization at all its levels, the accumulation and implementation of new ideas.
So the corporate social network is a solution that can increase the adaptability of the organization and support change management. Moreover, not due to the organizational structure and processes, but primarily due to a fuller use of the potential of its employees and the creation of a new organizational culture.
The organization should be effective and efficient in the short and long term (for more details, see the book “ Managing Change ” by Yitzhak Adizes, so beloved by me). We will not go deep into the term “performance”, we will only say that this is the degree to which the result of the functioning of the system meets the requirements and expectations of the consumer of this result. That is, the customer should receive not seven cups of tea, but seven cups of coffee. So, long-term efficiency is the ability of a company to change in the future in such a way as to bring maximum results at minimum cost.
Imagine a chair with four legs. If one leg of a chair is sawed off, it will lose stability and will cease to fulfill its main function, in its network it will cease to be a chair because it is mechanical. Now look at your hand. If you break your finger, will the hand remain hand in hand? Of course, because between the fingers there is an internal relationship, and the remaining fingers will be able to cope with the functions of the broken. And the hand, although it will have fewer opportunities, will still act like a hand.
So the corporate social network just allows you to realize the relationship between disparate employees of the organization, it integrates them, it makes the organization effective in the long term.
How long is it? Not a quarter or even a fiscal year. But the problem is that in the current business culture we perceive more the American business model, few people are interested in efficiency in a few years, we need to close the current year and get a bonus for it. And it turns out that the deep integration effect that the corporate social network provides is not yet in demand by domestic large business. (This is very clear in comparison with the Japanese business culture , in which the long-term outlook is even more significant than the short-term.)
***
Conclusion. According to the author’s personal observations, corporate social networks are ordered mainly by HR directors or internal communications directors, because they can show short-term effectiveness with the regular functioning of the organization. But it is possible that a corporate social network brings more benefits when it makes an organization more adaptive, innovative, integrated. In an ever-changing and unstable world, this is becoming a very significant addition to ROI.
Vladimir Ivanitsa
viva@supereon.ru
Approach number 1. The control triangle.
There is always a high level of competition in business. Whatever you start doing, most likely you already have competitors. For every Microsoft there is its own IBM, for every Google there is its own Yandex. Therefore, quite often, sales come down to the premise that the thing the customer needs can be done more efficiently. If the customer drinks five cups of coffee a day, you can make it so that he can drink six or even seven cups of coffee a day for the same money. Thus, efficiency is a characteristic of how expediently or rationally the company's resources are used to obtain the expected results. And that same ROI equal to Profit divided by Invested_Capital is an indicator of effectiveness.
But this is a characteristic of the normal, regular functioning of the organization. And what happens when 1998, 2008 or 2014 comes? If I did not survive, was I effective? In this situation, two other parameters arise - stability and adaptability. Sustainability - the ability to obtain expected results in changing conditions without changing the way they are received, these are reversible changes in the organization. Adaptability - the ability to obtain expected results in changing conditions with a change in the way they are received; these are irreversible changes in the organization. Stability and adaptability reflect the ability to survive in a changing environment, these are two strategies for responding to change.
So, there are three groups of management criteria: effectiveness, sustainability and adaptability of the organization. (For more information on the management triangle, read the wonderful article by Vladimir Ananyin, “ Does Business Always Really Need Efficiency? ”, I strongly advise you to read it along with the comments, the picture was taken from there).
It is these criteria that can become criteria for assessing the positive impact on business of information technology, and corporate social networks in particular. The absolutization of one of the three parties examined is extreme and risky for business. Efficiency describes normal activity under normal conditions, stability and adaptability under abnormal conditions (in a Western environment, oriented not toward solving problems, but at realizing opportunities, adaptations are called innovations).
By the way, try to answer your question - and your organization, which model implements for itself, sustainability or adaptability? A classic example of a “sustainable” organization is to reduce the number of projects, leaving 20% of the most important ones, and dismiss 20% of employees in the hope that when the sanctions run out and oil prices go up, return crossed out projects to their list and hire new staff for this. An organization that is no longer trying to be sustainable, but is following the path of adaptation, is going through much more diverse changes. Signs of this situation may be the active involvement of business consultants, a new management view on business development, the rapid exchange of information within the organization at all its levels, the accumulation and implementation of new ideas.
So the corporate social network is a solution that can increase the adaptability of the organization and support change management. Moreover, not due to the organizational structure and processes, but primarily due to a fuller use of the potential of its employees and the creation of a new organizational culture.
Approach number 2. Integration or efficiency in the long run.
The organization should be effective and efficient in the short and long term (for more details, see the book “ Managing Change ” by Yitzhak Adizes, so beloved by me). We will not go deep into the term “performance”, we will only say that this is the degree to which the result of the functioning of the system meets the requirements and expectations of the consumer of this result. That is, the customer should receive not seven cups of tea, but seven cups of coffee. So, long-term efficiency is the ability of a company to change in the future in such a way as to bring maximum results at minimum cost.
Imagine a chair with four legs. If one leg of a chair is sawed off, it will lose stability and will cease to fulfill its main function, in its network it will cease to be a chair because it is mechanical. Now look at your hand. If you break your finger, will the hand remain hand in hand? Of course, because between the fingers there is an internal relationship, and the remaining fingers will be able to cope with the functions of the broken. And the hand, although it will have fewer opportunities, will still act like a hand.
So the corporate social network just allows you to realize the relationship between disparate employees of the organization, it integrates them, it makes the organization effective in the long term.
How long is it? Not a quarter or even a fiscal year. But the problem is that in the current business culture we perceive more the American business model, few people are interested in efficiency in a few years, we need to close the current year and get a bonus for it. And it turns out that the deep integration effect that the corporate social network provides is not yet in demand by domestic large business. (This is very clear in comparison with the Japanese business culture , in which the long-term outlook is even more significant than the short-term.)
***
Conclusion. According to the author’s personal observations, corporate social networks are ordered mainly by HR directors or internal communications directors, because they can show short-term effectiveness with the regular functioning of the organization. But it is possible that a corporate social network brings more benefits when it makes an organization more adaptive, innovative, integrated. In an ever-changing and unstable world, this is becoming a very significant addition to ROI.
Vladimir Ivanitsa
viva@supereon.ru