In July this year, the McKinsey Global Institute published their report, ‘The social economy: Unlocking value and productivity through social technologies’, where they noted that the true opportunities of social for business were yet to be realised.
“While 72 percent of companies use social technologies in some way, very few are anywhere near to achieving the full potential benefit. In fact, the most powerful applications of social technologies in the global economy are largely untapped.”
SOURCE: McKinsey Global Institute
The key business opportunities for social are in improved communication and collaboration. Social technologies and real world interactions arising from social connections could improve productivity among interaction workers by 20-25% according to McKinsey – no minor process improvement.
So why are firms failing to embed social technologies and strategies into their business processes thus far? It’s not as if the technologies are immature, or there are literacy problems with their use in business contexts; these are some of the simplest communications systems available.
Part of the reason for this strategic oversight appears to be the way in which social strategies enter a firm. If social is ‘owned’ by marketing in a firm (usually customer-facing), then its use for intra- and inter-organisational communications can take a back seat. Indeed, the more separated a marketing division is from organisational strategy and operations, the less likely it will be for a firm to consider how it could adopt social for alternative purposes – even when there is obvious potential for improvements in productivity.
Of course there are the usual objections to social technology and strategy implementation for business communication in terms of commercial confidentiality and information security, but these matters are often overemphasised. It is perfectly reasonable to limit the implementation of social technolgies and strategies to contexts where private or confidential information is not at risk. Indeed it is likely that productivity improvements will be located in process contexts where confidential information is only obliquely referenced.
For instance, it makes sense for idea sharing about business process improvements to happen throughout a firm, and between a firm and its suppliers. Yet commonly, business processes are established and propogated from on high, limiting opportunities for innovation. Or for manufacturing, logistics management and distribution (still the most expensive layers of operations for tangible goods), social technologies could be used for improved collaboration. It is feasible to deploy social technologies to track conversations, improve demand forecasting, overcome bottlenecks in distribution and report on stock availability.
The skill, of course, is in thinking laterally about how social can be deployed for maximum return and more often than not community managers are not the best people to find those opportunities. It is a strategic process improvement that requires understanding of how an organisation is managed.
Skeptics might say that a report prepared by a global management consultancy would naturally conclude that social technologies are untapped for business process improvements, as it inevitably results in new consultancies for McKinsey, but their reasoning is sound. Social technologies and strategies present all businesses with an opportunity to facilitate conversations that were previously difficult to seed, as well as track conversations previously hidden from view. As such, the advantages of social technologies for business process improvement are obvious. Just as conversations with customers can generate insights about products and services, conversations with employees and suppliers can generate insights about processes.
The challenge for social agencies is to communicate this value effectively. Sometimes this will mean connecting beyond the marketing division in a firm, and engaging with people in roles that would not normally talk to agencies. And sometimes this will involve dragging marketers away from their performance metrics comfort zones of unit sales, brand awareness and brand sentiment to consider other opportunities. But whatever communication mechanism is employed, the key is to think about social strategies and technologies as investments in communication. Because in a social economy, failure to communicate is a fast track to bankruptcy.