How online communities are faring in 2016

Executive leaders are involved more than ever before in using online communities to solve important business issues ranging from improved customer care to better workplace collaboration. But budgets are not keeping up with demand, and measuring value isn't getting much help from platform vendors.

It was only a half decade ago that digital forums were still a somewhat obscure and arcane way to get help when more traditional channels didn't work or were too much trouble. As I've been charting here on ZDNet for over 10 years, online communities have grown today into a strategic enterprise asset and a substantial industry in their own right. However, as we'll see, the industry and practice is at an inflection point this year that will very much determine its future trajectory.

That the industry has matured, there is ample evidence: The majority of organizations have now deployed some form of community platform to help workers, typically in the form of an enterprise social network. This represents about 65% of all companies as of this year, according to recent research.

Somewhat less prevalent, yet often more impactful and strategic, are customer communities. These are often in my analysis a largely zero sum game by industry -- making it critical to be a leader -- and are now an essential capability that can hold customers closer while better supporting them, capturing their ideas, and enabling them as advocates, among key use cases, all in a highly cost-effective yet easily scalable manner.

State of Online Communities and Social Business in 2016

Least prevalent so far, but still growing, are communities to better support business partners and suppliers, by exchanging vital back office information, creating shared solutions to significant challenges, and pooling ideas and assets where it makes sense.

Each of these types of communities makes it easier to connect people together to work digitally in highly participative and open venues to accomplish work and achieve objectives that they either couldn't do before, or were too difficult or costly using older methods.

What is the state of online community in 2016?

As I noted in my recent round-up of enterprise tech to watch in 2016, the social business industry -- which largely runs on community platforms and is the center of gravity of the practice -- is in the midst of a growth surge, with compound annual growth of 26% expected through 2019 to become a $23 billion industry. This is a significantly higher growth rate than the entire big data industry, and so it's good evidence that we'll continue to see communities become ever more integral to everything we do.

The reason online communities are being used more is simple: Communities have become very efficient and effective vehicles, especially in certain high value functions, for connecting people and information together, while making the resulting knowledge collectively easy to wield and reuse across a wide variety of business functions.

For years now, the respected The Community Roundtable has been tracking the growth of the industry and sharing its data with the world, especially with its widely-followed annual State of Community Management report, or SOCM. The recently released SOCM for 2016 has by far the largest data sampling ever, with data from 339 community programs from around the world.

This year's State of Community Management report is a vast wealth of knowledge on how communities are best planned, organized, staffed, operated, managed and governed. There is so much information in the SOCM this year that it can be challenging at first to find the most valuable nuggets and new insight. So I find that it's often good to decide up front on a certain lens to use in order to work one's way through the report, which often takes several sessions.

The SOCM is perhaps the broadest regularly updated data-based view available of the full community spectrum, from internally-facing, externally facing, and combined community programs. The report covers virtually all the relevant facets of developing and running a community: Budgeting, measuring behavior and value, leadership, culture, community management, content, policy, governance, tools, reporting, and ROI, with detailed data breakdown and analysis for each of these community competencies.

For the purpose of highlighting significant trends in this year's SOCM, I'll take a executive decision maker's point of view with the strategic intent to understand what's new and most important in the report in terms of how to make communities more impactful and successful in the enterprise.

For this, I highlight below the key data points in the report that show how the typical community program can improve their results:

Insight #1: Use metrics that align with community goals

While it sounds obvious to do, when I talked with Rachel Happe, the founder of The Community Roundtable and creator of the SOCM, about this year's report, she found that not capturing goal-related performance metrics was one of the major community program shortfalls in their research this year. In fact, most efforts still do not do this, with only 19% of communities overall measuring activity, behavior or outcomes, leaving them vulnerable to poor allocation of resources and limited organizational buy-in.

The reasons for this issue are complex, ranging from lack of measurement resources to inadequately defined goals. But perhaps the single greatest reason, according to Rachel -- which matches to my industry experience as well -- is that the data that is most readily available are what the underlying community platforms tend to offer themselves. This is mostly simple community vitality metrics, like number of active members, volume of contributed content, and other baseline statistics that aren't tied to business measures such as average question resolution time, successful expert location, or lower customer care costs.

In fact, the SOCM makes the point multiple times: Community practitioners tend to use the data that they have, often from the built-in analytics tools in their community platforms, rather than the data they actually need to demonstrate business impact and value. In 2016, to satisfy the increasingly intense executive scrutiny -- which in reality represents a major opportunity if a compelling story is told with hard data -- community practitioners must focus investment and time in capturing their business value story.

The good news is that this is indeed possible, as most best-in-class communities -- that is, the top 20% of communities reporting data in terms of metrics -- or fully 71% of them, manage to measure the value of their community today:

State of Community Management 2016: Measuring Behavior Change and Value of Online Communities

Insight #2: Advocacy programs should be broadly inclusive and tiered

As I noted in my analysis of last year's SOCM, advocacy programs designed to elicit better community engagement in a sustainable yet systemic way were a hot topic and a key insight. This year the finding is a bit more nuanced:

Last year, we highlighted the operational need for communities to invest in advocacy programs for their best members, giving them real rewards for their very real contributions to the community. But your advocates are just one part of your community membership, and unless you create systems to support members at all levels, you risk neglecting groups of users - or burning yourself out.

This year's research finds a consistent and powerful correlation between systems that give members real opportunity, responsibility and a voice in the community decisions and member engagement.

Correlating with this, Rachel and her research team found that best-in-class communities were much more likely to community leadership development and advocacy program -- especially multi-tiered ones -- in place than the overall baseline:

State of Community Management 2016: Leadership and advocate programs

The implications are clear: If you want a highly engaged community, you have to reach out and enlist members of all kinds to be ambassadors by providing training, education events, content schedules, program-style resources, and operational support.

Insight #3: Member empowerment accelerates growth and success

Beyond involvement in advocacy, enabling a community member to self-actualize by defining and then achieving their goals in the community, related to their interests, is perhaps one of the most important activities any community can achieve. Therefore, the more than members are channeled and restricted by what they can do in the community, the less personal value they perceive in it. Community is ultimately a very two-way street, and this is perhaps one of the most important lessons of the digital age: The more control you try to impose in digital environments, the less value you get back.

Consequently, to succeed, the report strongly recommends that online communities must focus attention on what both the members and the organization together can get out of the community, by proactively ensuring members can meet their needs and achieve their aims. To do this, community programs must take care that the resulting value statements that were expressed by all stakeholders are deeply embedded in their strategy, operations and tactics.

In a fascinating related insight, the report found that organizations that were culturally neutral were just as harmful to communities than cultures that were actively restraining. Practitioners must make sure the community is well situated or otherwise adapted to the local cultural inclinations, with an eye on shifting the culture as well towards a more open and participative one over time:

What was surprising was this - having an organizational culture that was neutral about community was equivalent to having one that was constraining or toxic to community. That suggests that hoping stakeholders "stay out of the way so I can do my job" may be expedient in the short run, but can be harmful to the community in the longer-term.

Insight #4: Create valuable connections between community and business systems

The realization that community activity must be connected to high value business activity in other key line of business applications for the best results is not a new insight. What is new is that data from this year's SOCM that shows how significantly and consistently the best-in-class communities have invested in making sure community is in fact integrated with other channels and business systems.

As I have been bullish for years on the need to better connect our systems of engagement with our systems of record, it's gratifying to see the data that shows the lesson has apparently made its way into the leading communities in the industry.

Best-in-class communities this year are over twice as likely than developing communities to have connections between communities at other channels and applications, with fully 80% reporting having done so:

State of Community Management 2016: Integration with Other Channels and Business Systems

Insight #5: Position subject matter experts as leaders

Communities have two kind of leaders -- as do organizations in general -- those of a formal nature that have the title and roles assigned to them officially, and informal leaders that exhibit leadership naturally yet informally. While network leadership -- or leading through community channels -- is still an emerging, though important discipline, this year's SOCM found that best in class communities benefit from a substantially higher level of engagement from subject matter experts that may not otherwise be formal corporate leaders.

In fact, the SOCM says the data from this year suggests that much stronger participation can be unleashed in community by focusing elsewhere in the organization, in additional to official leadership:

State of Community Management 2016: Leveraging subject matter experts as leaders in community

Other key community insights for 2016

The SOCM report also found that mobile experiences for online communities are generally poor, and will hinder adoption, usage, and access to value as mobile devices continue to increase their share of screen time.

The report also underscores, in a broad theme, that members can and should do much of the work to make the community successful, if they're giving frameworks to do so. Best-in-class communities are far and way more likely to have new member programs that enlist new arrivals in creating content, getting involved in advocacy, sharing their expertise, enforcing guidelines, and so on. These communities also regularly reach out to existing members for the same activities.

Community budgets are continuing to be strained the report notes, as communities grow but resources aren't allocated at the same speed. Perhaps most troublesome: More than half of communities with an approved strategy have not assigned the necessary resources to it. I believe that if we can close the value measurement gap described in the first insight above, the resources issue will shrink over time. But, as this is the big concern this year, as communities gain the fuller attention of enterprise leadership, that attention won't remain for long unless the issue of measuring business impact is adequately addressed.

This then is the potential inflection point, and one that it would be shame if missed. Hopefully the community program managers will see this clear message in the SOCM and build stronger data-based cases backing the already strong anecdotal results they are seeing today. This will unlock more resources and more ability to succeed, especially in funding the critical role of community manager.

Finally, while there are still some communities short on strategy, lacking budget, low on staff, and lacking purpose or executive sponsors, there are now a good many communities that have climbed quite high on the maturity curve, with nearly 25% now in stage 3, the second most advanced state.

Note that 1% of communities this year report being in the most advanced community maturity state: A fully networked organization. This is still a very advanced state, where the community is integral to how the business runs. I've proposed for some time that we're going to see online communities become a prime source of new methods of management and operating our organizations in better, more effective ways. I'll be looking at the 2017 report to see if this cohort expands and forms the vanguard of a new type of organizations of community organization.

In the meantime, set aside plenty of time to pore over many encouraging insights from this year's SOCM. A major congratulations to Rachel Happe and her team, as well as the hundreds of contributing organizations this year, in showing how just far we've come in using the online world to achieve new ways of working together that has real impact.

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