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Posts Tagged ‘competent’

So my buddy Tyler passed this on to me over the weekend, and it stirred a little brain sauce I felt I should share with you. In the piece, Kivi Leroux shares some of the complaints she’s been receiving from some of her NFP friends about patterns of incompetence that they run into at work. Here are some examples:

[…] what I do find a little surprising is how often I will meet a program or policy director, or even an executive director, for the first time, and upon learning what I do for a living, they will say, “Ugh. Our communications director is a complete idiot.”

[…] When I probe a bit further, here are the more specific complaints I hear.

“She knows zero about what we do. She is always asking really stupid questions.”

“She edits the articles I submit for the newsletter, and she dumbs it down so much or cuts it back so far that what we are left with is factually incorrect, and therefore embarrassing.”

“She wants to know about my day, because she says she needs to tweet it. WTF?”

“It’s her job to update the website and write the newsletter. So why is she constantly bugging me to write stuff for her?”

Okay, look…yes, people can be annoying, and yes, sometimes it takes them a while to figure out how to operate in an organization they just joined, especially if some of the staff has taken a dislike to them out of principle. But in ever one of the instances mentioned in the piece, there is also obviously a leadership problem within the organization. Here’s a quick overview:

Poor hiring practices. (Why did they hire this clown?)

An absence of employee development. (How does he still not know how to do his job?)

Lousy internal communications. (Why does she never seem to know what anyone is doing?)

Zero team work or esprit de corps. (Why do those Marketing people have to be so annoying?)

An absence of clearly defined goals. (Okay, I’ve allocated our budget. Now what?)

Not a whole lot of discernible guidance or supervision. (See everything above.)

Did I miss anything?

By the way, here are some of the comments I picked up from sharing the article on Facebook so far:

6/10 times the problem is poor training, leadership, or general communication. Another 2-3/10 can be poor job fits, in which case you should have open discussions with that employee about finding a different niche in your organization, or another job. That misplaced employee might recruit and train their replacement while looking for a new job. Then there is always the 1-2 rotten egg. […]  One of the strongest determinants of employee engagement is leadership. Are you, as a leader, communicating, rather than coercing, coaching rather than criticising, taking the time to set expectations, rather than assuming they should know? – Cherie Turner

Part of the problem is that when someone does their job very well it looks easy. What’s more a lack of understanding of what any job entails means that people can think something is very simple to do in short order. — On the other hand, I’ve also seen people in various job functions who refuse to keep up with the changes in their field. Or, worse, think they are and are just trying to overlay something new on the old ways of doing things. — That said, communication only works if both sides want it to work. Contempt for the other person’s work has a way of shutting down a person’s hearing and understanding of what is being requested of them. – Brenda Young

Yeah, I was thinking before I read the post … Ummm if you’re captain of that boat and your crew are all incompetent ( or if you think they are) what does that make you? – Joseph Allen Gier

So let’s talk about leadership for a second, because incompetent employees, crap internal communications and an absence of clearly defined organizational goals don’t happen when an organization is being properly led.

A note to managers, officers, business owners and corporate executives:

If all of your employees are competent, great. Keep on focusing on ways to translate that into growing market-share, designing the best products in your industry, making your customers rave about you, or whatever other criteria your business uses to define success.

But if some of your employees no longer are competent, then you have two choices: a) Train them properly, or b) replace them with someone who is. That’s it. Those are your only two choices. There is no c) option: look the other way and hope things work out.

As a business owner or manager, part of your job is to make sure that incompetent employees (and managers) don’t become a drain on your resources and overall morale.  It is your responsibility to make sure that everyone on your staff is the best possible person for the job that you can afford. You’re in charge. So if you have people like this on your payroll, what you need to do is basically this: fix your shit.

How to fix your shit in 5 simple steps:

1. Be competent.

I know this seems really basic, but if everyone observed this rule, our economy wouldn’t be in the crapper, unemployment rates wouldn’t be what they are.  So let’s talk about it.

Competence begins and ends with you. If you’re going to be in charge of something, you need to really know your shit.  And if you don’t, you at least have to be 100% committed to getting there as quickly and thoroughly as possible. That requires a “perpetually in beta” mindset. (Great leaders tend to operate in this mode. It is one of the most conspicuous distinctions between business leaders and mere managers, by the way.) There is no getting around this. The alternative is to be an incompetent boss. How do you think that’ll work out?

Every winning organization in history has had at its head a supremely competent leader. Disney, Jobs, Ford, Chanel, Patton, Cousteau, Ferrari, Candler, Alexander, etc.  You don’t get to safely send astronauts to the moon and back by just being okay at math. You don’t get to turn a company you started in your garage to become a Fortune 500 in under 20 years by being kind of clueless about your market or industry. It just doesn’t happen.

Julius Caesar knew his shit. When he took on the conquest of Gaul (and later fought his rival Pompey for control of Rome), good old Jules wasn’t looking to sort of tell his legions to walk north, hang back and look forward to a fat payday. We’re not talking about a guy who sat around and delegated strategy to agencies, intelligence to research firms, and the fighting to cheap foreign labor. There wasn’t a damn thing he didn’t know about soldiering, about campaign logistics, about siege warfare, about politics and geography and morale. The guy lived for one purpose: to be the most capable and accomplished general on the planet. His legacy of success was so great that today, his name is synonymous with “leader.” Czar and Kaiser are variations of his last name. There’s a reason for that. (He eventually overreached and paid for that, but that’s Caesar the emperor, not Caesar the general.)

Every time I run into a manager, director, vice-president, CMO or even CEO who hasn’t bothered to remain informed about and fluent in the developments that have driven his or her field forward in the last 20, 10, 5, even 2 years, all I see is someone who has given up on being competent. I don’t care if the reason for that decision is laziness, being too busy, being distracted, or whatever the excuse happens to be. The end-result is the same: that person no longer has the appropriate set of competencies required to be effective at their jobs. Period. I’m sorry, but if you’re the least knowledgeable person in the room, you aren’t fit to lead. And if you’ve allowed your competencies to fall ten years behind the times, you need to go fix that shit because otherwise, all you are now is a liability to your organization.

Here’s something I have a difficult time understanding: for some bizarre reason, we don’t accept incompetence from brain surgeons, restaurant chefs, military officers, FEMA administrators, football coaches, and first responders, but we give business managers and corporate executives a pass. Why? Because it’s no big deal if a CEO or a CMO doesn’t know his shit? Well… actually, it matters. It matters to the 10,000 people who just got laid off because their boss just invested $150,000,000 in worthless acquisitions and ineffectual media spends. It matters to every employee of Circuit City and Blockbuster, neither of which should have gone belly-up for something as dumb as not being able to adapt to obvious market changes. It matters to all the folks at Microsoft advertising who lost their jobs this year, folks at RIM, who ten years ago thought they owned enterprise mobility, and everyone at Yahoo who is probably wondering if 3 CEOs in 12 months is a sign that they should update their CVs. It also matters to the folks at GM, the Olympic Games, the NFL and hundreds of other organizations who depend on their bosses to eventually (sometime this decade) figure out how to properly leverage Social Media and finally step into the 21st century. (It isn’t complicated, guys. Really. This is what I am talking about.)

As a leader, the success of your organization, whether it is a multinational corporation, a small team of developers or a small clothing retailer, is your responsibility. It’s a lot of pressure, I know. That’s leadership for you. It isn’t all titles, prestige and fat paychecks. Responsibility is worry that you won’t be as good as you hoped you would be. Responsibility is shame when you let your employees down. Responsibility is making sure that your organization comes before your ego, your swag and your golf swing. It means that you have to devote yourself to being the best possible leader that you can be. It demands it. That begins with being competent. Not only competent but ridiculously competent. So competent that if someone were to put you in a room with the world’s top 100 people with the exact same job as yours, you could kick all of their asses with how awesome you are at your job. You should want to be so competent that they all want to be you. If you aren’t that guy, then fix your shit and become that guy. Don’t start tomorrow or next week. Start right now. I shouldn’t even have to tell you this.

2. Surround yourself with competent people. 

We’ve already touched on this, but here are the basics:

Hire the best people possible. If you can’t convince the best people to come work for you, figure out why and then fix your shit.

If you can’t afford to hire top talent, then recruit young talent before it gets expensive. This isn’t difficult. It just takes work. You know… It really is as simple as building a network that you can leverage to identify and approach young talent for you. Be involved enough in your industry (or other industries that might breed the types of folks you want working for you) and key universities that you are constantly aware of either rising stars or kids still studying to become someone you might want to mold into an executive someday. The three rules here are these: Be there. Do your research. Invest early.

Once you’ve recruited your diamonds in the rough, train them. Develop them. Mold them. If they leave after a few years, it’s okay. People leave. So what? I guarantee that if your company becomes known as the place where top talent goes early in their careers before moving on to Apple, Nike, Disney or Ogilvy, that won’t exactly hurt your brand or your HR department. If you really want to keep those junior champions from leaving, just figure out what it is they’re walking away from, and fix. your. shit.

By the way, that training, developing and molding thing, it only happens if done by competent people. If the managers and execs doing the developing are incompetent dumbasses, all you’ll manage to accomplish is turn perfectly promissing young professionals into messes of confusion and frustration. Competence breed competence. Discipline breeds discipline. Incompetent dumbasses breed incompetent dumbasses. (It’s just science.) Shape your organization accordingly.

3. For the love of puppies, start hiring outside of your industry.

Stop hiring the same 500 fucking people. Seriously. Stop it. I know their CV looks awesome, but look… ten years ago, they were director of whatever for competitor A. Seven years ago, they were VP of Business Development for competitor B. Five years ago, they were SVP of communications for competitor C. They’re just going round and round the same circle of crap, and all you are is the next stop. If they ever had great ideas, they’re gone. They’ve been sucked out of them by your competitors already. Now, these hires are only working for you because their last boss wouldn’t give them a raise. Worse yet, they’re only working in your industry because they’re too chicken-shit to go try something else. They’ve stopped being interested in learning anything new. They’re just looking to move up in the world and use you to give their career a 6.3% annual boost. I know these people. I can smell them down the hall the moment I walk into your offices. Stop hiring your competitor’s hand-me-downs. You’re hiring yourself into a cycle of failure and you need to snap out of it.

You know what works? When a designer who spent ten years working on sailboats goes to work for a race bike manufacturer. Or when a product manager from the pet toy industry goes to work for a faucet manufacturer. That designer from Pixar you met at the Pivot Conference or FusionMEx, she’s the missing ingredient in your medical imaging group’s patient UX team. It’s at the intersection of those worlds that cool stuff happens. Where it doesn’t happen, ever, is in a conference room filled with ten guys who have worked at the same jobs for the same kinds of companies for the last 35 years. Think.

So please, cut out the industry inbreeding, and start fixing your shit once and for all by making it a habit to inject your company with fresh DNA.

4. Communicate better.

Your employees’ job isn’t to “do their job.” It’s to do their job so that the company can become… (enter answer here). You have to figure out what that blank is, and you also have to figure out how to communicate that to your employees (and customers, for that matter). Just so we’re clear, I am not talking about mission statements.

Note: nobody cares about your mission statement. The only asshole who ever did was the consultant you overpaid to help you come up with it in the first place, and he sure as shit doesn’t care about it now.

No, what I mean is your purpose. Your raison d’etre. Your actual mission, without the statement. Even if it’s just for this month or this quarter or this year, figure out what it is.

What your purpose it is not: “To establish a global leadership position in the ball-bearing polishing industry.”

What it could be: Become #1 in customer satisfaction for our industry, starting at 10:04 this morning. Consistently be 18 months ahead of our competitors in terms of product innovation. Become the most highly recommended resort destination on the French Riviera. Earn a third Michelin star this year. Make the coolest looking purses in the world. Make the most comfortable toilet seats known to man. Etc. Get it? Start there. So what’s your company about? What do you want it to be? Clarify that simple vision. Strip it down to the core. Then communicate it to everybody you know, starting with your employees.

Once your organization knows what you want (and they also know the role they are to play in getting there,) good things will start to happen. People in your org will become mission-aligned. Silo walls will start to erode bit by bit. People will start to feel like they are working towards a common goal. If someone isn’t up to speed on something, the team will naturally help them get caught up. Good shit will happen.

But if all you do is give your employees individual or departmental goals month after month after month, or worse, expect them to carry on with little more than their job description and an endless stream of vaguely connected projects, all you’ll end up with is an organization that spends all day spinning its hundreds of stupid little self-serving wheels with nothing to show for it. Your best talent will get frustrated and leave, and before long, all you’ll be left with are people who only stick around for the paycheck and the benefits. Oh what wonders will you accomplish with a building-full of those highly-motivated overachievers!

If that last paragraph sounds like a horrible plan, fix your shit and learn to communicate better.

5. Say no to excuses.

Kill excuses. All of them. Ruthlessly exterminate those little fuckers. Why? because if you don’t, failure will spread like a bad case of herpes across your entire organization and infect everyone. Before you know it, rationalizing failure every time you fall short of reaching your goals will become your corporate culture’s very own little brand of crotch rot.

Just for entertainment purposes, here are a few of the excuses I’ve actually heard in meetings these past few years:

“We already tried that. It doesn’t work.” (No, you didn’t. And it does.)

“We’ve already committed to another solution.” (Yeah. It isn’t working. Change it.)

“It’s what we’re already doing.” (No, it most certainly isn’t.)

“That isn’t my job.” (Yes it is.)

“It isn’t in my budget.” (Yes it is.)

“It’s the economy.” (No, it isn’t.)

“Our competitors can afford to spend a lot more money on that than we do.” (So what?)

“That isn’t one of our core competencies.” (Why not?)

“We’ve just hired someone to do that.” (So why isn’t it being done?)

“Actually, we thought it was a huge success.” (Really? Are you serious?)

“We’re not in the video streaming business.” (No? Are you in the “staying in business” business?)

“I don’t know. Our digital agency handles that for us.” (Are you sure they know that?)

“Our IT manager doesn’t want us to do that.” (Oh? Is he your boss?)

“Legal won’t let us.” (Legal won’t let you? What are you, six years old?)

“We can’t compete against Chinese imports on price.” (So compete on something else.)

“There’s just no demand right now.” (Really? See below.)

No demand? Okay. Tell that to luxury car manufacturers. Lexus saw a 99.7% growth in June 2012 over June 2011. Acura saw a 76.5% increase in sales for the same months. Infinity: 66.1%. BMW sold almost 22,000 cars in June 2012 alone, just shy of the number of cars sold by Mercedes-Benz in May. Tell that to Kate Spade, whose direct-to-consumer sales were up 74% last year. Tell that to Fortune’s Top performing companies for 2011.

Here are some growth stats for you, just in case you haven’t kicked your organization’s dependence on excuses in the nads yet:

Oh, but the odds are stacked against you? Unfair competition and all that? Tell me all about how the world is unfair. Please. I’m all ears. Meanwhile, companies with a fraction of your resources are well on their way to kicking your ass and eventually displacing today’s Fortune 500 companies. It might take them five years, maybe even 10 or 20, but they’re not letting that get in their way. They’re figuring it out and pressing on. What are you doing?

Start to think of excuses as tiny little ball bearings that make it easier for you to fail a little more every day. That’s what they are.Excuses give you permission to fail. You didn’t get it done this month? Let’s walk over here to the wheel of excuses and spin it. Let’s see what the reason was this time… (Does it matter?) You can’t seem to retain your top talent? Spin that wheel. Your tablet can’t compete against Apple’s? Spin it. Your TV show was reviewed poorly? Spin it. Your Facebook ads aren’t converting? Spin that shiny wheel. You aren’t happy with where your company, your marketing, your product penetration or your career is going? That really sucks. So what are you going to do about it? Truth is, you have two choices: a) spin the wheel of lame excuses again, or b) figure out what didn’t work and fix your shit.

In closing… fix your shit. No, I’m kidding. (But not really.)

There’s no cosmic force at work here. Whether your company becomes an incompetent dumbass factory (or not) is up to you. Whether your company is drowning in idiotic silos (or not) is up to you. Whether your company falls out of the Fortune 500 club (or not) is up to you. None of this is rocket science.

All you really need to do is make a decision not to settle for mediocre bullshit, and then follow that impulse all the way through: be competent, surround yourself with competent people, look for ideas outside your professional bubble, communicate better and stop accepting excuses. There’s more, but if you follow these five basic little rules, you’ll be a lot better off this time next year and then we can talk about the next five.

So this week, please, instead of perpetuating the same droning routine of meetings, emails, presentations and more meetings that haven’t really gotten you anywhere these last few years, take a step back from the quick-sand of everyday busy-work, and take concrete action to start fixing your shit.

Cheers,

Olivier

*          *          *

Social Media ROI – Managing and Measuring Social Media Efforts in your Organizationisn’t a social media book. It’s a business management book, and it focuses on social media program strategy, management, measurement and reporting. If your boss doesn’t yet have a copy, time to fix that. If everyone on your team doesn’t yet have their own copy, what are you waiting for? (Now available in several languages including German, Korean, Japanese and Spanish.)

CEO-Read  –  Amazon.com  –  www.smroi.net  –  Barnes & Noble  –  Que

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Maybe I should just republish this post every day for the next ten years (or however long it takes for content bloggers, social media “gurus” and marketing authors/speakers to get this).

With a little repetition – and surely with enough time – even the dumbest and most obtuse of them will eventually get it.

Maybe.

As annoying and curious as it was, back in 2009, when so many so-called “experts” and “gurus” couldn’t figure out how to explain, much less determine the ROI of anything relating to social media, it is inexcusable today, less than a month from 2012. We’ve talked about this topic how many times? I and others have presented on the topic in how many countries? On how many continents? For how many years now? How many times has this simple business 101 topic been explained and explained and explained? Even if somehow, some social media “experts” have managed to miss the presentations, the conversations, the podcasts, the interviews, the decks on slideshare and the blog posts, there’s a book now that spends 300 pages on the topic. At the very least, they should have heard a rumor that the “question” had been answered. Right? Bueller? Bueller? Anyone?

What else can we do? Take out full page ads in the New York Times? Take over Mashable for a month? Buy a banner ad on Klout’s home page? What will it take for the asshats pretending to be experts to stop talking about ROI as if it were some arcane mythical metric?

Seriously, you have to be either completely disconnected from the channels you claim to be an expert participant in, or purposely avoiding this stuff to still get it wrong. Is social media ROI to be the the clitoris of the “guru” world then? Will some so-called “experts” really live out their lives without ever finding it? If so, isn’t that a sign that perhaps they need to go try their hands at being experts in another field?

It makes you wonder about these people’s qualifications, doesn’t it? What makes them experts again? A few hundred blog posts and some keynote presentations? A “personal brand?” A lot of followers? Is that all it takes now?

Here’s a simple litmus test for you: Experts know their shit. A self-professed expert who doesn’t know his shit is just a windbag. If you don’t want to be categorized as the latter, immerse yourself in the field you aim to be an expert in. Commit to it for years and years and years. Writing a few blog posts about something doesn’t make you an expert in it, no matter how hard you want to believe it does.

Utterly ignorant nonsense: The battle-cry of new religion of digital windbags?

First, this gem from @CopyBlogger‘s CFO, Mr. Sean Jackson. (A few of my favorite quotes from that post):

“Marketing ROI has become so important that no one questions its validity, but the truth is, marketing will never produce an ROI. […]  The problem for marketing professionals is that marketing activity is not an investment. An investment is an asset that you purchase and place on your Balance Sheet. Like an office building or a computer system. It’s something you could sell later if you didn’t need it any more. Marketing is an expense, and goes on the Profit & Loss statement.”

WHAT?! Are you kidding me?!

And yet in the same interview, Mr. Jackson continues with this:

“Sales generate revenue. Marketing generates profits.”

WHAT?! Sure, it sounds pretty, but how does that work, exactly? How do you calculate profits if… Oh, never mind…

“Marketing, including social media marketing, is about efficiency. Marketing is a process of decreasing the time, money, and resources required to communicate with customers and make it easy for them to buy products and services. The more efficient your marketing is, the more profit you make. That’s what you want to optimize for. By defining marketing as a function of profits, you create a new perception within your organization about the value of marketing.”

Since Sean is a CFO, I have to assume that he knows how to calculate profit on a balance sheet. … The very balance sheet as the one on which Marketing is nothing but “an expense”?

Look, if marketing can’t produce ROI, then it can’t generate a profit. A profit is a function of ROI. Profit is the very manifestation of the expectation of ROI: You invest in something, use it, and hope it generates enough revenue to cover your investment and other operational costs, and… wait for it… turn a profit.

This is Business 101 stuff. Seriously, it is. Little kids running lemonade stands know this.

If you are going to claim that marketing is about profits, then you have to concede that marketing plays a part in cutting costs or generating revenue. Once you realize that, ROI becomes obviously relevant to marketing spend. Marketing does generate ROI, and it doesn’t take a genius to figure that out. And yet, shit like this gets published. (Yes, shit.)

Example #2: David Meerman Scott’s piece entitled “Social Media ROI Hypocrisy.”

The post’s elegant tag-line:

“New research – published here for the first time – proves that executives who demand that Social Media ROI be calculated are hypocrites.”

Nice. Here’s more:

“It’s ridiculous that executives require marketers to calculate ROI (Return on Investment) on one form of real-time communications: Social media like Twitter, Facebook, or YouTube. Yet they happily pay for other real-time communications devices for employees like Blackberrys, iPhones, and iPads without a proven ROI.”

And my favorite:

“My recommendation to you when faced with executives who demand that you prove social media ROI is to point out the hypocrisy by asking them to show you the ROI of their Blackberry.”

Here’s my recommendation to you: Don’t answer an executive who asks you about ROI with “what’s the ROI of your blackberry?”

Why? Because it’s rude, unprofessional, and it only serves to prove two things: 1. You’re an asshole, and 2. you have no idea what you’re talking about.

Here’s a better way: If an executive bothered to ask you a question that matters to his or her business, answer it. If you can’t, recommend someone who can. It’s the least you can do. The idea being to help the client, not show him how much of a smug smartass you are.

Speaking of questions: Either answer them or go home.

I have heard it suggested that many corporate executives use the ROI “question” as an excuse to object to social media spend. Let’s talk about that for a minute.

Corporate execs have very busy schedules. Believe it or not, they don’t waste their time listening to your sales pitches knowing, before they walk into the room, that they are going to turn you down. Do you really think they sit around all day hoping someone will come in to talk to them about social media just so they can use their favorite “ROI objection” trick on them? They have companies to run. Either  produce a way to help them do that or stop wasting their time.

Here’s a double dose of reality for you: When corporate executives ask you about ROI with respect to social media, they are motivated by 2 things:

1. They want to know how social media spend will benefit them so they can justify the expense. Understanding the potential value of an investment is pretty basic business practice, and a sound one. What did you expect? A blank check and a 5-year consulting contract just because you spoke at Blogworld and your Klout score is awesome? What world do you live in?

2. They want to know if you know your shit or if you are just another windbag blogger “guru” with no business management acumen. They get pitched by two dozen bullshit social media experts per week. This is their test. Either pass it or fuck off.

Four final thoughts:

1. When business executives take the time to meet with you, reward their time investment by not being an asshole. (i.e. Not asking them about the ROI of their blackberry is a good start.) Answer their questions. That’s why you’re there in the first place.

2. If you don’t know how to answer an executive’s ROI questions, guess what: You aren’t qualified to advise them on the matter. Sorry. Admit it and carry on.

3. Whether or not you believe that ROI is a relevant topic of discussion when it comes to integrating social dynamics and platforms into a business doesn’t matter. You are mistaking a philosophical discussion with a practical one. Explain the principles first. Answer their questions. Help them get through that first phase (justification). Once the ROI question has been laid out and everyone gets it, THEN discuss with them the positive intangibles of building a more social company (see #6 below). They are testing your knowledge, not your religion. Stop evangelizing and start getting down to brass tacks.

4. If the same executives aren’t measuring the ROI of other things (like advertising campaigns, product development, websites, or even marketing in general,) show them how. It’s a hell of a lot more valuable than calling them hypocrites for not having done it until now. Be a positive agent of change, not just another smug asshole trying to weasel his way onto their payroll.

Doing something a lot teaches you how things work and don’t work. So do more. Talk less. You want to advise companies on how ROI fits into the social media world? Learn how to connect spend to outcomes (results). Once you grasp that the way a baker grasps the baking of bread, then you’ll be qualified to advise companies and other professionals on the matter. Not before. This isn’t theory. It isn’t about opinions. It’s practical everyday business knowledge. You either have it or you don’t.

Moving on…

The rest of this post won’t make you an expert, but it will at least give you the basics.

If you are still having trouble explaining or understanding the intricacies of social media R.O.I., chances are that…

1. You are asking the wrong question.

Do you want to know what one of the worst questions dealing with the digital world is right now? This:

What is the ROI of Social Media?

It isn’t that the idea behind the question is wrong. It comes from the right place. It aims to answer 2 basic business questions: Why should I invest in this, (or rather, why should I invest in this rather than the other thing?), and what kind of financial benefit can I expect from it?

The problem is that the question can’t be answered as asked: Social media in and of itself has no cookie-cutter ROI. The social space is an amalgam of channels, platforms and activities that can produce a broad range of returns (and often none at all). When you ask “what is the social media or ROI,” do you mean to have Facebook’s profit margins figure in the answer? Twitter’s? Youtube’s? Every affiliate marketing blog’s ROI thrown in as well?

The question is too broad. Too general. It is like asking what the ROI of email is. Or the ROI of digital marketing. What is the ROI of social media? I don’t know… what is the ROI of television?

If you are still stuck on this, you have probably been asking the wrong question.

2. To get the right answer, ask the right question.

The question, then, is not what is the ROI of social media, but rather what is the ROI of [insert activity here] in social media?

To ask the question properly, you have to also define the timeframe. Here’s an example:

What was the ROI of [insert activity here] in social media for Q3 2011?

That is a legitimate ROI question that relates to social media. Here are a few more:

What was the ROI of shifting 20% of our customer service resources from a traditional call center to twitter this past year?

What was the ROI of shifting 40% of our digital budget from traditional web to social media in 2011?

What was the ROI of our social media-driven raspberry gum awareness campaign in Q1?

These are proper ROI questions.

3. The unfortunate effect of asking the question incorrectly.

What is the ROI of social media? asks nothing and everything at once. It begs a response in the interrogative: Just how do you mean? In instances where either educational gaps or a lack of discipline prevail, the vagueness of the question leads to an interpretation of the term R.O.I., which has already led many a social media “expert” down a shady path of improvisation.

This is how ROI went from being a simple financial calculation of investment vs. gain from investment to becoming any number of made-up equations mixing unrelated metrics into a mess of nonsense like this:

Social media ROI = [(tweets – followers) ÷ (comments x average monthly posts)] ÷ (Facebook shares x facebook likes) ÷ (mentions x channels used) x engagement

Huh?!

Equations like this are everywhere. Companies large and small have paid good money for the privilege of glimpsing them. Unfortunately, they are complete and utter bullshit. They measure nothing. Their aim is to confuse and extract legal tender from unsuspecting clients, nothing more. Don’t fall for it.

4. Pay attention and all the social media R.O.I. BS you have heard until now will evaporate in the next 90 seconds.

In case you missed it earlier, don’t think of ROI as being medium-specific. Think of it as activity-specific.

Are you using social media to increase sales of your latest product? Then measure the ROI of that. How much are you spending on that activity? What KPIs apply to the outcomes being driven by that activity? What is the ratio of cost to gain for that activity? This, you can measure. Stop here. Take it all in. Grab a pencil and a sheet of paper and work it out.

Once you grasp this, try something bigger. If you want to measure the ROI of specific activities across all media, do that. If you would rather focus only on your social media activity, go for it. It doesn’t really matter where you measure your cost to gain equation. Email, TV, print, mobile, social… it’s all the same. ROI is media-agnostic. Once you realize that your measurement should focus on the relationship between the activity and the outcome(s), the medium becomes a detail. ROI is ROI, regardless of the channel or the technology or the platform.

That’s the basic principle. To scale that model and determine the ROI of the sum of an organization’s social media activities, take your ROI calculations for each desired outcome, each campaign driving these outcomes, and each particular type of activity within their scope, then add them all up. Can measuring all of that be complex? You bet. Does it require a lot of work? Yes. It’s up to you to figure out if it is worth the time and resources.

If you have limited resources, you may decide to calculate the ROI of certain activities and not others. You’re the boss. But if you want to get a glimpse of what the process looks like, that’s it in its most basic form.

5. R.O.I. isn’t an afterthought.

Guess what: Acquiring Twitter followers and Facebook likes won’t drive a whole lot of anything unless you have a plan. In other words, if your social media activity doesn’t deliberately drive ROI, it probably won’t accidentally result in any.

This is pretty key. Don’t just measure a bunch of crap after the fact to see if any metrics jumped during the last measurement period. Think about what you will want to measure ahead of time, what metrics you will be looking to influence. Think more along the lines of business-relevant metrics than social media metrics like “likes” and “follows,” which don’t really tell you a whole lot.

6. R.O.I. isn’t always relevant.

Repeat after me: Not all social media activity needs to drive ROI.

Technical support, accounts receivable, digital reputation management, digital crisis management, R&D, customer service… These types of functions are not always tied directly to financial KPIs. Don’t force them into that box.

This is an important point because it reveals something about the nature of the operational integration of social media within organizations: Social media isn’t simply a “community management” function or a “content” play. Its value to an organization isn’t measured primarily in the obvious and overplayed likesfollowers, retweets and clickthroughs, or even in impressions or estimated media value. Social media’s value to an organization, whether translated into financial terms (ROI) or not, is determined by its ability to influence specific outcomes. This could be anything from the acquisition of new transacting customers to an increase in positive recommendations, from an increase in buy rate for product x to a positive shift in sentiment for product y, or from a boost in customer satisfaction after a contact with a CSR to the attenuation of a PR crisis.

In other words, for an organization, the value of social media depends on two factors:

1. The manner in which social media can be used to pursue a specific business objective.

2. The degree to which specific social media activity helped drive that objective.

In instances where financial investment and financial gain are relevant KPIs, this can turn into ROI. In instances where financial gain is not a relevant outcome, ROI might not matter one bit.

Having said that, you still need to understand these mechanisms in order to make good business decisions, so learn them.

*          *          *

By the way, Social Media ROI – the book – doesn’t just talk about measurement and KPIs. It provides a simple framework with which businesses of all sizes can develop, build and manage social media programs in partnership with digital agencies or all on their own. Check it out at www.smroi.net, or look for it at fine bookstores everywhere.

Click here to read a free chapter.

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