The risk of an internal social bubble

Summary: Is there a risk of an internal bubble caused by the 2.0 and social trend ? Not a vendor bubble, but a bubble that related to the value of internal projects. Why ? : After years of efforts, of investments, the benefices drawn from the projects, even when tangibles and real, are to small regarding to the investments that were made. The reason is simple : new practices are often seen as surface behaviors while they actually contribute to improve the intangible capital of the organization. This has a direct consequence : the organization did not change the way it operates to make the most of this capital, to make this improvement scalable and, consequently, a global investment often produces local results only. The risk of  seeing internal financiers or even employees that didn’t get much from the investment loosing their motivation and retiring from the social thing is actual.

With the coming wave of IPOs that will concern lots of web 2.0 businesses and, most of all, social networking services, many wonder if a bubble is forming. A legitimate concern when looking at some numbers and business models, but it will be rather like a necessary clean-up than the crisis we saw a decade ago. Businesses learned, investors too and, contrary to this time, there are users on the web who are either real customers or products, depending on the business model.

But what about enterprise social players ? Except one remarkable exception, IPOs are far for enterprise social networks players (at least for pure players…the older ones having been public for a long time already). But this is not the matter here. Or only a part of the matter. As a matter of fact, the valuation of these businesses highly depends on the value they generate at their client’s. That’s where things get tougher because they’re not fully responsible for the use that’s made of their product.

That’s where the real question lies : after years of investments in software, in time, in energy to deploy projects that have a great impact on how employees use their time, the time will come when those who paid will ask for account. What was the money used for ? Can tangible improvements be seen ? Even if we forget the tradition ROI model, there will be lots of cases where, beyond activity indicators (provided 50% of the activity don’t come from community managers and advocates), it will be hard to show anything tangible, measurable or even assessable. Or, at least, nothing that will be worthy of the cost (don’t forget there a lots of hidden costs in this kind of projects due to the  uncomfort of the ones, the time wasted by others, frustration, loss of motivation, internal conflicts etc…).

In the current state of things, most of such projects increase the enterprise’s intangible capital. Competences by sharing best pratices, know-hows captured through conversations, relationship potential that is known being key to work better together etc.. Ironically, most of organizations are not conscious to be working so deeply and only think they’re improving surface activities. “They share, they exchange, they connect…so good!”.

With such a state of mind, the logical sequel is to keep things as such and keep the dynamic going. But doing so is building a system that’s not used by everybody, not in the same way, a system that competes with what already exists and a very fragile system that can easily go downhill when its sponsor and leader leave the organization or get a new position.

On the other hand, if there’s a conscious of increasing the intangible capital, it’s easy to understand that such systems increase the value of the company and that a perennial system allowing an optimal use of this capital today and tomorrow. Any wise accountant would say that capital that’s not used is only a useless tying up. So we need that the new practices that’s been developed, the knowledge made accessible and available….can be used on a wider scale on a non optional way. If there’s a better way to do things either everybody follows it or it’s a waste (knowing that diverging operating models may also be armful).

In other words, as long as best practices and knowledge are only used by a few people (even if that means thousands…) either because some don’t want to change or because nothing is done to impact them so they’re not aware of what they can take from he system, the enterprise may get some local benefits but there won’t be any significant gain at the global scale. Ang gains will be as poor as the benefits will stay local as the effort was global. In short money is spend everywhere while nothing is done to make everyone make the most of what a few are doing.

As Mary Adams says, the graham of the knowledge economy is the structural capital. What does it mean ? It’s about to make the knowledge capital scalable, reusable and reused. What leads to the content of work, rethinking processes etc…

Saying that makes it clear that a 2.0 or social bubble is likely to form. In many cases, even if there are measurable achievements, they are incipient in terms of scope compared to the effort made and nothing is done to change this.

In other words, as long as there won’t be any structural approach to change processes the risk of seeing financiers ask for account and throw the baby with the bath water because of inane answers is real. And even if they decide to continue the aventure, motived employees that get very few in return on their personal investment because of unadapted mechanisms may decide to give up.

Then, while some are wondering if all these systems, even if useful, are not counter productive regarding to the resources ans time that are consumed, it seems urging to reframe things focusing on value and scalability.