Is ROI an evil MBA term? More on the ROI of blogging

Continuing the blogging ROI discussion…..there was an interesting interchange yesterday between my self and Jane Bozarth on twitter about the topic of ROI.

The scenario

Jane and I talked about proving the ROI of a mythical (I think) training course called “Ethics for Firefighters”. She said to prove the ROI of such a course that first the dollar value of the public perception of ethical behavior needed to be determined. I disagreed with this, asking if the real measurement was  public perception,  a decrease in legal actions (both the action and the cost of defending/prosecuting the action)?

Then I think Jane thought that meant I was turning into a cold corporate numbers person because she asked “So ROI for ethical behavior of public servants is based entirely on legal costs?” And that isn’t where I was going at all.

This exchange made me think that maybe there are translation problems between the terms used in Performance Improvement and the terms used by MBAs.

Lost in Translation

I’m not an MBA. But most of the executives I know are. They use MBA terms to manage their people and environments. In one more semester I’ll have an MS in Instructional Systems. I have been trained to look at organizations as systems, and to troubleshoot what is causing performance problems in these systems. I have been taught a completely different set of terms than the terms the MBAs I work for use and understand.

This could be a problem.

MBAs love to talk about ROI. ROI literally means “return on investment”. Now, just like there are good IDs and bad IDs, there are good MBAs and bad MBAs. The good MBAs also see the organization as a system. The bad MBAs only care about quarter-to-quarter hard numbers. Unfortunately, we need to translate performance terms for good and bad MBAs.

Let’s define the term. If an MBA wants to correct me, please feel free! I got this definition from the business

Earning power of assets measured as the ratio of the net income (profit less depreciation) to the average capital employed (or equity capital) in a firm or project. Expressed usually as a percentage, it is a measure of the profitability which (while not taking the time value of money into account) indicates whether or not a firm is using its resources in an efficient manner. For example, if the ROI of a firm (in the long run) is lower than its cost-of-capital then the firm will be better off by liquidating its assets and depositing the proceeds in a bank. Also called rate of return, or yield.

Sigh. That is why I didn’t get my MBA, that definition just seems so void of human concern. My gut feeling is this is where the translation issues start to happen. So what would be comparable from a systems (or human performance technology) point of view?

The first letter of ADDIE stands for Analysis. In Pershing’s Handbook of Human Performance Technology, there is a chapter written by Dr. Allison Rossett titled Analysis and More. Rosset says “analysis is the process used to figure out what to do”. She provides a this view of what analysis is:

Organizations provide the results of their learning analytics for many reasons. The most popular reason is to showcase the training’s value to the organization. Another common reason is to indicate the quality of the training services provided. Additional reasons are because stakeholders request it or to justify large expenditures.

The way I see it the analysis step, the “A” that is the key repeatable step in every instructional design theory, is central to the MBA concept of ROI. We’re all trying to get at the same thing. MBAs want to prove their organization is using their assets in the most efficient way possible. The problem is that more and more in this age of information, those “assets” are human.

This is where we as performance and learning specialists can come to the aid of our MBA friends. Proving that your human assets, the information workers that hold the means of production inside their heads, are being utilized the best way possible is very different than proving your datacenter or factory equipment is optimally configured.

A potential blogging ROI example

Here’s a real example of how hard this is. Our guys out in the field who install and configure EMC products for customers are very very busy. They usually have much more to do than there are hours in a day. And since they are not machines, there is just no way to configure them to miss sleep and work 24 hours a day so that they can catch up. :)

I’m going to concentrate specifically on blogging in this example. Our field guys are super smart, and are very quick learners. They have to be, or they would not be able to do the jobs put in front of them.

Now I’ve blogged before about blogging being an excellent way to reflect on new concepts. If I think what our field guys do, I would imagine that if they were able to blog about their activities they could reflect on lessons learned, what would have been helpful to know going into an engagement, advice they would give to colleagues in case they faced the same situations, etc. These sort of blog posts would be useful for other field guys, support guys, engineers, training folks, etc. The blogs may also give management a better idea about how much time certain types of engagements take.

The ROI question is which is better for the company: book these guys out for 100% of their time in customer sites to plow through the workload, or give them some time to blog about what they have been through in an engagement, providing them reflection time and providing insight into the experience for other information workers in the company?

Lets say I proposed this, and everyone bought into the plan. How would I prove hard dollar numbers that the time given to these field folks to blog benefits the company? I think this would take planning and analysis throughout the project lifecycle, here are some guesses on what could be measured:

  • Measure time it takes to blog
  • Measure traffic to particular blog posts
  • Measure time it takes for individual blogging to perform similar tasks after the blog was written (after time for reflection)
  • Observe case deflection in the call center (number of calls on topic before and after post is written)
  • Measure engineering enhancements made because of post
  • Measure training enhancements made because of post
  • Measure impact on planning (actual time it takes to do the things talked about in the post vs what was originally planned, utilization rate improvements based on adjustments)

I would think creating a community of support larger than field support colleagues would also have some sort of impact, not sure on how to begin to measure that though.

In conclusion….

I think we have a translation problem between MBAs and ID/performance support folks. ROI is just the end result of analysis. The wrong measurement will always give an incorrect ROI, which is not good for business (is there an MBA term for that?). As education folks, we understand what interventions motivate and support performance for “human assets”. We need to figure out how to communicate this to our MBA colleagues.

I think the problem for the MBAs is getting numbers to prove the ROI of the work information workers are now expected to perform. Those numbers don’t exist in many cases because the analysis is not typically done on the human impact of information work. Its an infinite loop: we don’t do analysis on that sort of thing because we don’t do it, we don’t do it because we don’t have hard numbers, and since we don’t have hard numberswe can’t prove ROI.

What do you think? Am I totally off-base here? Is it wrong to want to collaborate with MBAs to prove ROI?

McKinsey Report: Using technology to improve workforce collaboration

As you know if you are following me on twitter, this semester I am taking two performance classes. This means I’m paying more attention to things that measure performance and performance gaps. Since I’m always hyper-focused on social media, I’m also looking at how emerging tools can be used to close performance gaps.

This report from McKinsey talks about the importance of collaboration to knowledge workers. Interestingly enough, they did an analysis on how things are right now, or the current state of performance of knowledge workers. The report says in some industries knowledge workers make up about 75% of the workplace. The authors found a “performance gap between top and bottom companies in collaboration-intense sectors is nine times that of production- or transaction-intense sectors”. So organizations with knowledge workers have not figured out what sorts of remedies need to be apply to close performace gaps for knowledge workers.

Its actually worse than that – the researches also found that measurements for effective “collaboration productivity” doesn’t really exist. Everyone says they want a highly motivated, highly collaborative workpace, but no one knows how to measure what’s going on now and no one knows how to get people to that highly collaborative state.

The report has a neat tool that breaks up well-known roles by tasks and possible social media tools that could help them be more effective (in a tag cloud no less!).

The report also suggests a very strategic approach to choosing the tools to create the desired collabortive state:

  1. Understand the specific requirements of interactive tasks
  2. Identify which tasks create disproportionate value for the organization
  3. Determining the types of inefficiencies and wasted efforts that bog down many interactions

It is a great report. More and more we’re talking about disruptive technology, but this technology is also going to disrupt our known ways of doing things. We’re going to need folks to get their arms around this idea of measuring performance by what is really going on, not by how things used to get done. And this approach seems like a practical way to blend the new technology into current organizations.

What are you seeing?

If the Gervais principle isn’t working, what is the ideal management structure

A few days ago I wrote about the history of management, and specifically the Gervais Principle.The Gervais Principle states:

Sociopaths, in their own best interests, knowingly promote over-performing losers into middle-management, groom under-performing losers into sociopaths, and leave the average bare-minimum-effort losers to fend for themselves.

This principle was based on this image of Company Hierarchy by Hugh MacLeod. This image is a take on the Peter Principle, or the idea that in a hierarchy a person will rise to his/her level of incompetence.

The Gervais Principle asserts that hierarchies are not the victim of the Peter Principle, but they create this crazy triangle of power out of necessity.

In the previous blog post, I bemoaned the fact that I am learning about the guys who wrote all the top down, command and control management theories in one of my classes this semester. So great – I’m learning the management schemes that prevent collaboration and innovation.

So maybe I should look at this from a performance standpoint. We know the actual performance state of many companies is this chart. We know this because of the popularity in comic devices such as Dilbert, Office Space, and The Office (which has a UK and US version, proving the triangle problem is global).

If this is the actual performance state, what would be the desired performance state of a company’s management system?

Polly Pearson blogged about an inverted triangle. Could this be the desired state?

I think this may be closer. Here is what she had to say:

Today, EMC is moving rapidly toward to the Inverted Pyramid, the one where everyone can have an idea, be passionate about it and facilitate success.  We are transitioning from the world of one spiritual leader/mentor/motivator in a company to Many — all joined by community, customers, and a common goal. This is our 2009 Pyramid, reflective of the faces behind the best ideas from the more than 1,400 submitted by EMCers in 19 countries this past few months.

Here is my idea: manage the organization, from the inside out using value networks.

Take Polly’s inverted triangle, and build one for every organization in the company. Point all the smallest angles of the triangles at each other to form a circle. Put the executives in the middle of the circle, with connections to every part of the organization. Give the little guy like me a way to network and use our expertise to help the business.

I think it would look something like this image:


I need to work on that image, I know. Hopefully my idea comes across. What do you think? Does this sort of management principle already exist?

If we can agree that top-down, command and control management doesn’t work, we know we need to get rid of the triangle. Is my circle idea a desired performance state for management? If so, how do we get there?