The Economy of Reputation: How Social Networking Can Improve Performance


With all the buzz going on right now surrounding MySpace, LinkedIn and, one may now consider social networking as having fully emerged into a formative stage similar to the web circa. 1998-2000. Social networking has become successful enough in the consumer (B2C) markets to attract the attention of the enterprise space. We’ve already begun to see the CRM market beginning to play around social networking scenarios, as well as the baby steps that the HR/Talent Management sectors have begun to take in that direction.

If I’ve learned anything over the years it’s this: no one in the enterprise space makes a move until a clear case for ROI is outlined. While I’m sure that market conditions and the technological ecology will shift drastically in the next two years, I also predict that social networking as we know it will seep over into the enterprise space in the form of social networking platforms that will leverage HR/IS, CRM, Service Desk, Content Management and other internal operations databases.

Let me outline, briefly, a few scenarios where a social networking platform could improve performance and even save real money within an organization. I will be expanding upon this idea in a white paper and case study collection titled: “The Economy of Reputation” which will be available from introNetworks ( in the future.

For now, here’s a couple off the top of my head.

Talent Management
You have a sizeable database full of information about your talent pool such as name, rank, pay grade, location, etc. But what else do you know about your human resources? Take the existing information, put it into a social networking platform and fortify it through the addition of personal information that’s entered by the employees themselves. For example, we know that John Smith is a certified Microsoft DBA and that he reports to Bob Jones. But until we opened up the Socnet input we didn’t know that John spoke fluent Italian and was an avid mountain biker. (He input that data for us, therefore allowing HR to make the association)

Now, you may be asking yourself why this is important and how it would ever save any money. Here’s how; HR has just opened a req. for a position that requires the candidate to speak Italian. The social committee is looking for a person to lead a mountain bike club for the new ‘be healthy’ initiative that the company is spearheading to help lower health care costs. While it is true that the benefit of the second case is partially convenience, saved cycles do equal saved money.

However, with the first case the ROI example is simple. Looking outside your organization for human resources is expensive. Often times HR is unaware that they have qualified candidates within their existing talent pool. Using a matching interface to search, filter and qualify candidates from within the organization can save an average of $1,400+ per instance, according to one study. (The True Cost of Hiring, Tammy Williams). This is only one, very simple example. I’m sure you have already thought of more that apply specifically to your organization.


  1. Excellent article laced with soem really good points. I’ve always thought that applications like MySpace were simply the tip of a very large iceberg.

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