Introducing Interaction Value

Interaction Value Mapping is a powerful new methodology from Visceral Business.

When examining the inner operations of an organisation or considering investing in digital business development, this offers a fresh analytical approach and a powerful new metric top enrich your viewpoint.

The concept is straightforward: Effective interactions between organisations and their employees, customers and partner networks forge valuable inter-relationships that yield value.

Interaction Value can be seen as an important ROI metric of the digital organisation. Why? Because, at its core, the fundamental unit of measurement of doing business digitally is interaction.

Looking at Interaction Value levels across an organisation is a powerful way to surface hidden digital value. It is an integrated metric that measures organisational effectiveness and digital maturity combined, a means of developing better connections with people and a practical way to create more efficient, lower cost digital strategies.

Interaction comes in many forms, through many methods, and interaction needs to happen well across every part of an organisation to thrive in the digital economy. Interaction Mapping makes it possible to gain an integrated and comprehensive insight into business critical interaction flows, powered by data.

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Good quality interaction is essentially about getting the best possible desired responses in relation to the minimum organisational effort and outlay. A little effort and lots of return. The advantage of digital business is in the frictionless, low-cost nature of engagement; it makes sense to look at business performance in this way.

As organisations become more digital by default with networked interoperability, neural networks and machine learning are beginning to underpin core operational functions.

Visceral Business has been pioneering work in this area for nearly a decade. We introduced Interaction Value Mapping as a means of illustrating what digital efficacy looks like and how it can work across an entire organisation.

We benchmarked Cost per Transactions metrics (CPT) in our ground-breaking Connected Housing research between 2011 and 2015.

With digital maturity modelling now firmly on the agenda of most organisations, Interaction Value mapping gets under the skin of digital interaction and how it’s working organisation-wide.

Visceral Business was the first digital business consultancy to introduce the idea of the ‘quantified organisation’ in 2010. Interaction Value is a step on from that, about the relationship between what the organisation exists to do and how well interaction throughout the business is working to achieve it. It uses data available across all functions, the service or product relationship lifecycle, as well as user engagement internally.

This is a ‘whole world view’ of the digital organisation that can be used year-on-year to gauge and develop levels of interaction value and digital ROI across any organisation in a way that’s geared to them.

Digital interaction strategies profoundly influence corporate behaviour, performance and reputation, including customer perceptions, experiences and how people respond to them and the learning loop that interaction value metrics establish are the foundations for robust, continual, improved digital performance.

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Haim Mendelson is the Kleiner Perkins Caufield & Byers Professor of Electronic Business, Commerce and Management at the Stanford Graduate School of Business. He puts it like this: 

‘The role of organisational nervous systems is moving away from execution into business model design, strategy, and control. On the one hand, increasing capabilities of artificial intelligence create a need for designing and evaluating new business models – something that automation’s not good at today. On the other hand, I’ve argued that business models will evolve to the point where they’ll be reconfigurable through the intricate interaction of automated agents.’

Understanding Interaction Value levels across an organisation is a crucial part of this perspective, a practical manifestation of the ideas laid out in the notion of ‘business at the speed of thought’ Bill Gates wrote about in 1999.

Interaction value is the evaluation of how well any digital and data strategy is enabling quality interaction across an organisation and with its stakeholders, compared to the resources and costs needed to achieve it.

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Good quality interaction is driven by a range of universal activities common to all organisations - the design of technology and data strategies, the matrix of channels and devices used, and that customers use, the way audience engagement and crm are handled as an interaction process, how user experiences are designed and content is managed to support the core purpose of the business, as well as how business modelling, analytics, internal processes and corporate governance knit together.

We have built a deep understanding about interaction, evaluating it and incorporating it into the way the organisation develops digital maturity across eight core areas, each one supporting the organisation itself.

What knits them together is an integrated picture of the interaction occurring across each of these core areas, and the data points that evidence it. There are ten levels of digital maturity in each area we’ve developed as part of our assessment framework, which we adjust to new technology as it develops and comes onstream. This is an approach that accommodates technological and digital evolution well. It can take on AI, big data, sensors, machine learning or GDPR implementation with ease. And it can do so because each of them, at their root, generate the currency that is interaction data. In this way, interaction value mapping is a methodology that is built to last.

Digital and data strategies can become more efficient and deliver better value with digital activity being benchmarked like this, year-on-year, defining touchpoints, levels of interaction, how they’re developing and adding value across the business as it gets digitally more mature.

Interaction Value levels power digital performance. Thinking about a couple of the world’s biggest commercial organisations by capital value and how Interaction Value applies to them, let’s take the ‘A team’, three of the world’s Top 20 largest companies by market capitalisation, Alphabet, Apple and Amazon. It’s easy to see how their Interaction Value mapping might differ in each case, but each of the core parts of the Interaction Value approach apply in all. There are different points of interaction, different metrics. All can be channelled to create a strategic approach to interaction that can build efficiency and value.

This post was first published on September 17th 2017.