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Measuring the Value of Web 2.0
A recent McKinsey survey reports that Web 2.0 benefits to employees include improved access to knowledge, reduced communication costs, decreased travel costs and increased employee satisfaction. Web 2.0 use is on the rise, but getting buy-in from the C-suite remains a problem.
While the promise of Web 2.0 has received much fanfare over the past few years, it's been difficult to measure its impact -- if any -- on the workplace. According to McKinsey, the global consulting firm, that is beginning to change, as a recent survey adds some metrics to back up the many anecdotal Web 2.0 success stories. For the uninitiated, Web 2.0 technologies focus on Web-based information sharing and collaboration -- two potentially powerful forces within a workforce. Yet, with all its potential, Web 2.0 has been slow to gain traction in the HR world. During the past three years McKinsey asked 1,700 global executives in a "range of industries and functional areas" whether using Web 2.0 was making a difference at their organizations -- and could it be quantified? The answer seems to be a resounding "yes," as nearly seven in 10 (69 percent) executives reported that, by using Web 2.0 technologies, their companies have gained measurable business benefits. Those benefits include more innovative products and services, more effective marketing, better access to knowledge, lower costs of doing business and higher revenues. Companies that made greater use of the technologies reported even greater benefits, according to How Companies Benefit from Web 2.0: McKinsey Global Survey 2009. On the internal front, three-quarters of the companies reporting measurable results have incorporated Web 2.0 into employees' day-to-day activities. And more than half of those companies plan to increase their investments in Web 2.0 and social-networking technologies, according to the report. Michael Chui, a McKinsey consultant in San Francisco, who authored the report with Jacques Bughin, in McKinsey's Brussels office, and Andy Miller, in its Silicon Valley office, says that "Web 2.0 technologies can be a powerful lure for an organization; their interactivity promises to bring more employees into daily contact at lower cost." Chui adds that, when used effectively, Web 2.0 apps also may encourage participation in projects and idea sharing, thus deepening a company's pool of knowledge. McKinsey lists the top six Web 2.0 apps as video sharing, blogs, RSS (really simple syndication, a way to create Web feeds from a variety of sources), microblogs (Twitter is an example), social networking, wikis and podcasts. The survey reports that Web 2.0 benefits to employees include improved access to knowledge (68 percent), reduced communication costs (54 percent), decreased travel costs (40 percent) and increased employee satisfaction (36 percent). In terms of measurement, employers experiencing better access to knowledge reported a 30-percent median improvement, while employers experiencing reduced communication and travel costs reported a 20-percent median improvement in each category. According to Chui, initial indications are that these technologies are enabling a different -- more networked -- type of organization. "We're seeing organizations that are able to communicate and collaborate across their internal silos," Chui says. The McKinsey survey findings are no shock to Polly Pearson, vice president of strategy engagement and employee brand at EMC, a global data-storage and security-solutions firm based in Hopkinton, Mass. "The people that are using Web 2.0 are getting serious benefits," says Pearson. "It's really inevitable that these technologies will have an impact." Pearson has first-hand experience with Web 2.0, because EMC has an internal online community where ideas are "gathered, debated and celebrated," she says. In fact, more than half of the EMC workforce has registered with the company's internal Web 2.0 collaborative network, EMC Innovation Network, which boasts 4.5 million page views per month. Inside the network, there are more than 160 employee-sponsored and -managed communities. Examples of employees' benefits cited by Pearson include: * Web 2.0 helps the workforce meet the human need for connection, respect and sense of purpose. * Employees are doing great things for their personal and professional developments, sparked by the 2.0 behavior model and tool set. * Workers are engaged in collaborative communities on subjects such as art, green issues, running, innovation, culture and more. * Network users are sharing favorite business books, favorite restaurants and favorite company benefits as well as other subjects. * Employees are also being heard more, and more quickly, by senior management. A "water cooler" community takes employee input and comments and puts them in a place where everyone can weigh in and respond. "This is helping build mutual trust, understanding and engagement," Pearson says. Innovation Network was also leveraged for EMC's annual Innovation Conference, for which nearly 1,000 submissions for "breakthrough ideas" came from EMC employees around the globe and across business functions. Finalists are selected through voting via the 2.0 platform and the winning proposals are rewarded and further developed, she says. "The employee suggestion box is a dinosaur," she says. "Web 2.0 is about intellect and real-time communication." It's also inexpensive, she notes, as you can get a lot of the applications for free. "Today, the old command-and-control model won't work," Pearson says. "It's about people and ideas. Web 2.0 can really bring that into focus within an organization." Another tech company, Citrix, a virtualization and networking provider based in Fort Lauderdale, Fla., has looked to increase communication, teamwork and sharing via the use of internal Web 2.0 tools. According to Rich Berger, the company's HRIS director, Citrix has internal discussion forums, shares information about training and leverages blogs as part of its communications tools. In fact, Berger says, Citrix uses and embraces all of the Web 2.0 technologies noted in the McKinsey study. "We not only have them, we encourage their use as our workforce stays more connected," he says. "We firmly believe that the McKinsey report findings mirror the attitudes of our company." Being both a "networking" and a "networked" company, Berger says, Citrix believes in the value of internal sharing and communication, and as such leverages state-of-the art tools in its HR processes. One way that is happening within Citrix is via SumTotal Systems' learning-management platform, TotalLMS. As part of its implementation, Citrix incorporated social networking as a way to make the company's "My Learning" portal a destination site for employees. "Web 2.0 is obviously on the rise," says Matt Wilkinson, senior director of customer experience for SumTotal. "But measurable results are the key. We hear it all the time from customers, especially those who are looking to adopt Web 2.0 technologies. They are having a tough time selling it on the C-suite level." Wilkinson offers a couple of strategies for overcoming senior management skepticism. One is to talk up employee engagement and retention. "The C-level staff understands that human capital is one of their most valuable assets," he says. "Providing social-collaboration tools has proven to drive engagement, community and participation." Another path is to offer training in metrics that align to business requirements. For example, if a compliance-driven organization needs to keep their staff trained, they will want to institute a collaboration framework in which employees can poll experts and view best-practice libraries. "Not only will this accessible knowledge ensure that employees are compliant, but [it will] drive confidence to the organization that they can conduct business at high levels of efficiency and quality," Wilkinson says, adding that e-mailing company executives a copy of the McKinsey survey would also be a good idea. Wilkinson's confident that the McKinsey study results are on the mark and that Web 2.0 will keep gaining momentum. But the real breakout, he says, will occur as more and more Web 2.0 applications are ported to smart phones, BlackBerrys and other portable devices. "As Web 2.0 goes more outside of the personal computer, you will see the level of engagement grow in more areas, especially in segments such as manufacturing and retail, where employees don't have easy access yet," Wilkinson says. "We're going to see Web 2.0 really take off when that happens."
October 15, 2009 Copyright 2009© LRP Publications |
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