These news items caught my eye recently.

Brand leaders

The first, and most significant, is a report published jointly by Wetpaint, a social networking site, and the Altimeter Group, a firm of consultants. It gives the results of a survey by Charlene Li of Altimeter into how well-known organizations are using social netting.

First, Li looked at how much each organization uses each of 11 kinds of networking, including blogs, wikis, ratings and reviews, and external services such as Facebook. She also looked into these companies' use of "innovation hubs". By this, she means networks used for product support with an emphasis on customer suggestions. Dell's IdeaStorm site is an example.

The EngagementDB site takes the ratings further by allowing people to add information to its database. The site is attractively laid-out and clear, as is the report.

Charlene Li also presents some case studies in the report and looks into potential links with companies' financial performance. In her words, there is correlation between "those who are deeply engaged and those who outperform their peers".

As the report admits, a correlative link is not a causative link. There is no direct chain of evidence connecting a company's online customer engagement with its turnover or profits. The only link is suggestive but I think many people will take encouragement from it.

Is the evidence believable?

This part of the report reminds me of some work done over 20 years ago by Paul Strassmann, who has studied and written about the reality of computing benefits for many years. In his book, Information Payoff, he examined computer investments in the light of what he terms "management added value". In other words, do computers help or hinder managers?

Strassmann concluded that information technology amplifies management performance. A well-managed company will gain strategic advantage from its computing investments. Conversely, a poorly-managed company will just make matters worse for itself by spending money on computers. The more it spends, the worse matters get. (You can probably think of examples of both results from your own experience.)

Charlene Li has rediscovered, or at least restated, the amplifier effect in her more narrowly-focused study. It doesn't make it right, of course, but it accords with experience. Her engagement leaders are Strassmann's well-managed companies.

I like the ENGAGEMENTdb report, for its content, its presentation and the link to an updated online resource. If I were reviewing it at length, I would ask some questions about the methods and terminology it uses but they are not important enough to air here. I recommend reading it.

And, afterwards, have a go at the online survey. Like most of its kind, it's more indicative than definitive but it might get you thinking differently about the value of social networking.

B... loggers

In The Observer just over a week ago, the always readable John Naughton had some sensible things to say about large organizations' expectations of social networking. They mostly seem to be chanting this refrain, like besuited protest marchers:
"What do we want" - "Financial payback"
"When do we want it" - "Now!".

Naughton later compares their attitude with loggers who clear-fell everything in their path, even if the new growth they cut down is the basis of a new ecosystem. This works both ways. After southern Britain's woodlands were devastated in the hurricane of 1987, foresters, tree surgeons and pretty well anyone with a chain saw set to work cutting up and removing fallen trees.

A few thoughtful characters, such as Oliver Rackham and Richard Mabey, pointed out that those trees were not all dead and were thus still able to make a useful contribution to their local ecology. They were right but still the 'deadwood' was cleared away.

So it is with social networking or any other comparable computing technology. There are twin dangers to consider. The first is that of expecting too much too soon, as Naughton points out. The other is to disregard the value and contribution of what already exists (which Charlotte Li does to an extent). Technoglitter can lure companies into some bad decisions and commentators into some rash judgements.

Thou shalt not

Sad and funny at the same time is the news that Portsmouth City Council has banned the use of Facebook by its employees. I get the feeling that its senior managers are saying, "I don't understand it and I can't control it, so I'll ban it."

This struthian attitude is not helped by the cheerleading from behavioural illiterates like the Taxpayer's Alliance. (There are no prizes for guessing its leaders' political affiliation.)

A more mature approach to the use of social networks by employees is evident here, in the guidelines SAP has set out. This German software house is one of the companies highlighted in the ENGAGEMENTdb report. Spend just a short while looking through the public parts of its community network and you'll probably be impressed.

A good intro to the subject

If some of this talk about social networking is new or alien to you, I think you'll be helped by this well-written outline by Laurie McCabe, of Hurwitz & Associates. (You might also share my feeling that Luke Grange should get a life, and go easy on the capital letters.)

That's it for now!