The rise of the social enterprise – McKinsey weighs in

One after another, the most ‘fringe’ of concepts of the Internet Era become the new way of doing business.  Skeptics beware…the most unlikely of web ideas seems to eventually become the norm in business.  We’ve watched YouTube move from “a wild-wild West of content — a place where marketers shied away from uploading their commercials, let along building a branded channel,” to a basic way for companies to advertise and maybe luck out with a viral video.  We’ve watched Facebook, the most social of all sites first become a place to advertise and then a way to create excitement with fans.

Social for the customer

Even Patagonia Jacketsas a customer, I was so inspired by a recent trek to the Himalayas that I posted a photo to the Patagonia Facebook page of my wife and I wearing their products.  In my enthusiasm, Patagonia profited twice…once when I bought their product and once when I gave up my privacy and for no other reason than the desire to share my enthusiasm with like-minded people.

Social within the workplace

As the corporate social trend catches on, the latest is to have ‘internal Facebook’ in the form of Salesforce’s Chatter, Yammer and others.  Done well, our coworkers ‘follow’ us, or even ‘unfollow’ when we waste their time.  How, exactly, does one unfollow the boss?  In the Internet Era every one of us are a brand to be managed.  We build our corporate value through networking socially at work.  A career has become part productivity and part brand management.  Ignore it at your own peril.

The reason that ‘fringe’ became ‘logical’ is simple…people are inspired and energized by the ability to be social connected with their coworkers and customers.  There’s something embedded in our human nature that compels us to do this. At the World’s largest Intranet Era company, ‘Googliness’ is the term used to measure someone’s ability to become part of a completely social culture.  Buzz is their internal Twitter and it is buzzing with people busy creating their work persona.  Jobs are identified not by division or rank, but by the social community where you connect, such as SWE (software engineer) rather than ‘Lead Developer on the X project’.   Community first, loyalty and productivity follow.

McKinsey weighed in a couple of months ago, “Our data show that fully networked enterprises are no only more likely to be market leaders or to be gaining market share but also use management practices that lead to margins higher than those of companies using the Web in more limited ways.

Getting social

McKinsey Quarterly has statistics to back their contentions and concrete steps to follow to bring ‘social’ into your enterprise: Integrate the use of Web 2.0 into employees’ day-to-day work activities.

  • Continue to drive adoption and usage.  Lower usage equates to lower benefits.
  • Break down the barriers to organizational change. Fully networked organizations have have a host of benefits outlined in the piece.
  • Apply Web 2.0 technologies to interactions with customers, business partners, and employees.

I, too, was an early a skeptic of the value of the web and its corporate benefit and remember chuckling as one site after another announced their website address in the television commercials of the late 90’s.  It looked like a concept in search of a benefit.   The benefit is no longer in doubt, as McKinsey shows us.  Companies investing in the technologies to enable social networking inside and out are the ones that will accelerate and lead.

Buyer beware

You can be cynical, though, about the businesses that will quickly capitalize by labeling everything possible as ‘social’.  Plenty of software will be introduced (and reintroduced) as meeting this new market, but it will be only the ones that truly reach out to everyone that will make the impact.  Look carefully before buying into the hype.

Connected means harnessing more than specialists and management.  Connected means involving every person in the enterprise.

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Categories: Future of work, Social / Collaboration

Author:Chris Taylor

Reimagining the way work is done through big data, analytics, and event processing. There's no end to what we can change and improve. I wear myself out...

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2 Comments on “The rise of the social enterprise – McKinsey weighs in”

  1. May 4, 2011 at 11:15 am #

    Good points Chris.

    I also think it’s important to look at the investment community and see where there is major financial backing. A few of the darlings in the social collaborative/enterprise space are Asana, Hearsay, and Huddle – investors are betting that these companies will be big.

    See articles:

    * http://techcrunch.com/2009/11/24/benchmark-andreesen-horowitz-asana-9-millio/

    *http://kara.allthingsd.com/20110321/asana-hires-coo-type-van-sant-first-biz-side-hire-for-group-collaboration-start-up/

    *http://venturebeat.com/2011/02/03/hearsay-social-launch/

    *http://techcrunch.com/2010/05/17/huddle-lands-10-2-million-to-expand-collaborative-workspaces-to-the-u-s/

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