The Value of Communities

FROM THE OCTOBER 2017 ISSUE

The Value of Communities

I always find it interesting to talk with leaders of customer-centric companies about the strategies and practices that contribute to their success. Lately, I’ve noticed that there is one thing that almost every leader has emphasized about their company mission: A keen focus on innovation. For these companies, innovation is not simply another corporate value statement; it is regarded as an integral element of the everyday culture.

Innovation stems from collaboration. In cultures that take innovation from concept to practice, customer-facing employees are considered subject-matter experts with valuable insights to offer on customer expectations, product design and how to improve service delivery. Their knowledge and opinions are respected and sought out as much as those with impressive titles.

Even big bureaucratic organizations are seeing the need to move to a flatter structure that values employee feedback. It’s imperative if they hope to retain a millennial workforce that craves intellectually stimulating work and the opportunity to be involved in strategic decision-making and innovation.

Engage Employees Through Collaboration

Contact centers likewise have been slowly emerging from traditionally bureaucratic structures into a more empowered environment that takes its staff’s views into consideration. Conducting regular employee feedback surveys has been a good start, but they do little to improve workplace issues in a timely manner or offer the level of involvement that frontline employees desire.

Employee communities can provide the type of real-time connection and engagement that appeals to tech-savvy millennials. Those of us who are not millennials can recall the early employee intranets: Static bulletin boards on which company policies, employee handbooks and contact lists could be viewed. They were not very functional and were often ignored by the audience that they were designed to serve. The advent of web 2.0 and social networking helped to evolve the employee intranet into a useful interactive tool for creating content, sharing knowledge and communicating with peers across functions in a meaningful way. These days, a company’s intranet is a representation of its brand and culture.

It is also at the center of an organization’s ability to collaborate in the digital age, says Vanessa DiMauro, CEO of Leader Networks, a research and strategy consulting company that helps organizations succeed in social business and online community building. “Interactive intranets are no longer centered on sharing completed content—they’re optimized to promote the creation of content,” she says. “They bring together divisions, departments, groups and individuals to flesh out ideas and co-create solutions. They yield faster access to information, break down geographical boundaries and, most importantly, advance competitive advantage.

“When interactive intranets and employee collaboration takes a foothold within an organization, it provides the opportunity to flatten the hierarchical arrangement, and it becomes more of a level playing field,” DiMauro adds. “Employees have ideas and opinions about product or service development as well as organizational culture that need to be shared. It’s an opportunity to gather feedback and engage with employees in meaningful ways that will help to strengthen the business.”

Besides collaborating to develop or improve products and services, progressive organizations use interactive intranets to validate strategic decisions with employees, answer questions and resolve any issues before execution, DiMauro says. She points to Chubb as an example. The insurance provider regularly uses its interactive intranet for crowdsourced collaboration events. The company will present a collection of ideas, and employees who are invited to participate can anonymously force-rank and weigh in on the topics.

Inviting employees to participate in an anonymized ranking and commenting event ensures an impartial feedback system. “It’s a great example of a company that both created a culture of trust and used polling tools within the platform to take the sting out of full disclosure,” DiMauro says.

Align Communities to Achieve Synergy

To ensure a 360-degree approach to innovation, customer involvement is also key. Consumers have long embraced collaborative business models, particularly in the tech industry where companies have been tapping user groups for years to help co-create and improve their products.

Assembling employee and customer communities into a 360-degree model can offer significant returns, says DiMauro. “Employees often have their fingers on the pulse of brewing problems with a product or service, or features that customers request. When employee communities are robust, they tap into the wisdom of the employees and enable that information to be extracted by creating a knowledge transfer that is shared with product development and R&D so they can get ahead of customer needs.

“In turn, companies use customer communities to support, amplify and engage with customers around new products and services, as well as new features within the existing products and services,” she adds. “That information then comes full circle as customers use the products and services and offer feedback. As a result, the release time cycles become faster and customer satisfaction increases because the changes are derivative of customer needs.”

Demonstrate Value with Meaningful Metrics

While the ability to engage customers and employees in collaborative innovation is undoubtedly valuable to any business, putting a number on it has proven to be a challenge. Community leaders have struggled to identify relevant metrics that demonstrate the impact the community delivers in terms that the CEO or CFO can appreciate and support. Research by Leader Networks has found that, although 92% of community leaders believe that their online communities have an impact on the business, more than one-third (35%) lack meaningful metrics to report success in business terms. While 45% of survey participants say that their community reduces costs for their organization, 37% don’t know if their community saves them money on support, customer retention, marketing or other expenditures, and 25% don’t know or don’t track their community expenses in total. When asked how savings are measured, “guessing” was the No. 1 response.

“Given the significant investment that many organizations make in the strategy, software and staffing of their communities, it’s shocking to find that there is not a deeper attention being paid to tracking the financials,” DiMauro says. “This puts the executives in charge of communities in a very tentative position if they can’t respond to senior executives or the CFO about the return on spending in business terms.”

A large part of the issue stems from the lack of appropriate measures of success, as well as the widespread misuse of financial terms. “Marketers often present their case to senior execs by talking about the ROI of communities, which is a bit misguided,” DiMauro notes. “ROI is a specific financial metric that doesn’t factor in the significant positive impacts that a community has on the business’s top and bottom line.

“Communities provide more than ROI,” she points out. “But because we’re in a sea of uncertainty about how to measure the business impact, the majority of organizations are tracking vanity and baseline engagement metrics that don’t matter, such as page views or likes. No senior leader is going to grant your budget based on the number of likes. It’s time to get serious about this.”

How do you begin to demonstrate the true value of your community to upper-level execs? Start with the corporate objective and the strategy for your business unit or your organization, DiMauro advises. Then identify a select number of business goals that align with the objective and which the communities can help to support.

Choose your metrics wisely, she adds. While tactical metrics like membership growth and return visits can help you to monitor the community’s health, be sure to emphasize the strategic metrics (e.g., customer referrals, ticket reduction, etc.) when reporting to your executive team.

Editor’s note: Leader Networks has developed a Community Impact Framework­­ that offers a set of standards for measuring community value. Vanessa DiMauro’s guide, How to Measure the Business Impact of Your Online Community: The ultimate list of community performance questions—and how to answer them with metrics that matter, shows leaders how to align community metrics with business goals to track performance in quantitative terms that appeal to senior executives, and provides a list of success metrics along with questions that the metrics answer.

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