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ROI, Scoble and HR- the proof?

by Dennis Howlett on April 3, 2006

Several years ago I presented the results of an HR metrics survey to the Institute of Human Resource Directors in London. The results and my analysis was received with pin-drop silence. I was followed by an HR professor who quietly and laser like ripped the shit out of my analysis, ending on the quip that:

‘The day finance understands HR, we might just take notice of at least some of what they say. Until that time, we need metrics in which we can believe and with which we can imbue candidates with confidence.’

For those that might not be familiar, this is THE definition of being filleted in public. But as I’ve said before, we need ROI style metrics so that both HR and finance can understand the value of blogging. I asked Microsoft uber blogger Robert Scoble to direct me on this. His response:

I know anecdotally that employees have told me they joined specifically because of our blogs and Channel 9, but I don’t have any hard data to back up those anecdotes.

Gretchen Ledgard, who works in Microsoft HR also responded:

In HR, we don’t have any “official” measures for blogging, but we do follow trends like # of applications and hires tied to our HR blogs’ source codes and, of course, anecdotal feedback. However, we realize that those numbers (applications and hires) miss a lot of readers who either don’t apply through an official blog application channel or discover our blogs *after* they’ve applied.

In a follow up email. Gretchen says:

…We have not found a solid way to track ROI, but the positive anecdotal feedback we receive is enough to convince our HR leadership team that it’s well worth our investment.

Ok – so Microsoft is the company we all love to hate and at which we all love to throw bricks. Most of the time. Given what I’ve asked about ROI, given the strictures of Sarbanes-Oxley and given the importance of Microsoft as a global organisation, do these ‘metrics’ impress you? I’m impressed by two things:

I asked Gretchen if it is OK to post her thoughts directly -

  • Answer: ‘post away’
  • The answer is anecdotal, they’ve yet to find a ‘metric’ people can accept yet blogging is deemed to have value they believe exists but are as yet unclear about measuring. So what? Does it matter that we don’t have the pivot table on this?

I think I know how to turn these kinds of answer into metrics that finance and HR can understand at one and the same time.

  • How about blog influence per hire compared with quality of hire?
  • Or…employee hire cost per blog that influenced the hire?
  • Staff retention/satisfaction rating when encouraged to blog?

Anyone want to argue this? Add some more? Am I going in the right direction? Am I going HR soft in my old age? I don’t think so – yet.

Gretchen refers me to these postings, here and here for additional discussion. Thank you both.

PS – I’m categorising this as ‘ethics’ and ‘employee’ and ‘client relationships.’ That’s deliberate.

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  • I've got your numbers right here.
  • Ethan,
    Followed your post, didn't see any numbers, and in any case Jeremiah Owyang put it much more eloquently in his post that Dennis linked in paragraph one of the previous post - the ROi Conundrum. We need more good case studies with hard numbers to get the message across properly.
  • Dennis, I for one appreciate your inclination to want to find some metrics for the value of blogging.

    But what about the impact on valuation? Since blogs add transparency as "windows" for investors into a company -- good or bad -- perhaps we can figure out ways to measure blogs' impact on valuation rather than on profit.

    Does having a CTO with gruff lumberjack image help or hinter the part of your company's valuation that cannot be tied to real assets. Or does having someone in your company who evangelizes blogs but has no clue about communication theory help or hinder the multiple investors are willing to pay on future cash flows?

    Now that would be very interesting...
  • Sorry, just came to me that we could look at stock volatility.

    Presumably if blogs are providing a lot of insight to investors, then companies that allow blogs should have lowever stock volatility relative to those that don't allow blogs.

    If they really ever want to be taken seriously, Bobby & Co. have to be able to speak this language.
  • Recent poll results from Hill & Knowlton say that 17% US financial analysts consider blogs relevant. I'd guess even lower in EU markets. That could well change as blogs become more mainstream. But...analysts willl need filters to figure out which they should listen to and which they ignore. We're in the very early stages here.
  • Stock volatility is an interesting measure of the perceived 'transparency' of an organisation in the market. Hard to place statistical controls on the other variables but it's a start. For publicly traded organisations.

    We need to be careful, and smart at the same time. Just because the latest incarnation of this conversation began with Amazon, we shouldn't forget that it will most likely be smaller, private firms driving business blogging. Any research or models developed should be scalable.

    Start small and when that works, we can apply it to large corporates with confidence.
  • I've done all the hard work for you Dennis - I've come up with an index that tells you whether the blog is a cost centre or profitable. For fun I plugged in the figures for Jonathan Schwartz's blog, taking into account his $900,000 annual salary. See my index and the results of the Schwartz experiment here.
  • Stellar stuff Jason - just one (nit) thing - what about the value that might be ascribed to the mega deal that otherwise might not have happened?
  • Yes my Blogging Value Indexes need some refining before they make it into the academic textbooks!
    As I say Indexes a and b only take into account traffic generated, and leads generated respectively. Including the deals (or megadeals) won as a result of a blog in a historical 12 month period and adding them to the 'leads generated' field could help to reflect their effect, but granted, it won't help put a value on future deals won, especially not a sudden megadeal that the blog helps win.
    Indeed my indexes do currently not take into account deals won, staff recruited, stock price rises and a few other things: some of these are harder to attribute solely to a blog than others....
    I'll give it some more thought as to how I could include at least some of the effect of some of these.
    Cheers
  • Dennis,
    Recent poll results from Hill & Knowlton say that 17% US financial analysts consider blogs relevant.

    I'm not sure about that. I thought the H&K research was "global."

    As reported here only 7.4% of 304 buy- and sell-side analysts surved by Thomson Financial in January 2006 said they used blogs as a resource when researching companies.

    But on an industry basis, you might find that 100% of computer software industry analysts consider them relevant, while 0% of analysts in all other industries think so.
  • Jason: I like the additional ideas around metrics. And sure, they do need refining - maybe some of the acocuntants around here will chip in. :)

    Dominic: Neville Hobson wrote about this a few weeks back, considering the figures as 'glass half full.' He is a PR guy but I admire his pluck on that one.

    I wonder if Gretchen is listening to this?
  • Futurelab's Karl Long has an excellent addition to this discussion.
  • Great discussion Dennis. There are enormous problems with trying to establish an ROI of blogs because in the end "blogs" are as diverse as businesses and we all know that the valuation of businesses has to be done on an industry by industry basis. I find the Amazon example amusing because they are a retailer, and they get a great deal of value from "capturing" customers intellectual capital, but what value would they get from blogging?

    IMHO service businesses gain huge benefits from blogging because it positions the blogger as an expert, it establishes trust, and it's sort of a preview of the service providers character. This is another situation where any measures around volume would vastly undervalue the blog.

    I imagine any companies that have high multiples due to intelectual capital, say for instance Microsoft, gain enormous benefits from blogging because it provides a view into that intelctual capital. Amazon? who cares what they think, i just want my book :-)

    Where Amazon would really benefit from blogging is actually around the development of new products and services, and collaboration with the design community.
  • pagine piuttosto informative, piacevoli =)
  • This website is very nice and colorful too. Its nice to have something to show others where you attend church and to show all the smiling people filled of the goodness of the Lord. You have a wonderful website here. May God rich bless you always.
  • Люблю сообщения в таком духе! Спасибо :)
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