The concept of alternative measures isn’t new. Back in b-school, we learned about something called the Balanced Scorecard, a way to determine whether a company’s activities were aligned with its strategic goals. By examining non-financial metrics of business such as operational efficiency, marketing and other components, it brought to light factors that contributed to the bottom line of the company. Ultimately, it helps managers make decisions on what to fix, where to invest and what to do next.

Businesses now live in a hyper-exposed world that demands a new level of transparency and open organizational design. It used to be that companies could force customers to jump through myriad hoops to return a product or get support. Today, that isn’t good enough when a negative experience can be propagated through Facebook, Yelp, YouTube or Twitter within minutes. Some people have been calling social media a fad, but clearly it isn’t going away anytime soon. If anything, it is exposing companies’ shortcomings in customer experience and expectations.

What to do? I propose using something I’ll call the Social Scorecard. It’s a way of indexing how engaged, open and transparent a corporation truly is. It would examine online & offline customer engagement points and assess how well customers are integrated into the company culture. Ultimately, it would include measures that align customer needs into business goals. It can be used as a touchstone for designing customer experiences or even a manifesto for rallying the troops. There would be a whole host of other measures too, such as a company’s adoption of social tools, such as how it uses social networks to find talent or how it uses crowdsourcing to generate product concepts or gather feedback. We could also look at the level of transparency in terms of how it treats its employees, vendors and suppliers and factor in what it’s doing to create a sustainably profitable operation. Collectively, these measures provide added perspective on how to run your business, perspective that can bring value in ways you didn’t realize.

A recent post on Mashable caught my attention, a how-to guide on measuring online influence. It begins with a dictionary-type definition of influence followed by the requisite discussion of personal branding and what it means online. Where things get interesting is how the author dives into mathematical formulae of how to measure influence with the following equations:

Influence = (Personal Brand * Trust * Expertise)

Of course, since Expertise = (Knowledge * Trust), we can further refine the equation to:

Influence = (Personal Brand * Knowledge * Trust2)

I am all for quantifying results but how does one come to these conclusions and more importantly, how does one make these calculations? Whatever happened to integers and real values? I will agree that influence is made up of these components, but to stating it in these terms isn’t helpful nor is it actionable. Some units would be a start.

The next part of the article delves into measuring influence by looking at tings like traffic, connections, track record and so forth. All interesting and valuable metrics. But where the article falls short is defining how these are related  and what to do with the metrics. They are data points without a story to wrap them up in a logical way. They’re sort of like ingredients without a recipe; they’re all important but without knowing what to do with them, they’re just ingredients. I admire the author for putting these ideas together but at the same time, let’s be careful not to position it as a how-to guide when the step-by-step part of it is missing.

I mentioned in an earlier post that quantifying things with rigor is the way to go and in this economy, clients are increasingly expecting this. If it were easy to do, it would have already been done. There are no clearcut accepted ways of doing this yet, so I’m all ears for looking at new methodologies and approaches. Some will work, others won’t. But shying away from facing reality isn’t going to cut the mustard these days. This is something we will be hearing more and more of, so I’ll be revisiting this topic in the future.