How firms can become ‘social businesses’

There’s a misconception that the transformation into a social business is simply about bringing social networking tools into an enterprise and letting employees have at it. Many organizations are diving into social head first and finding themselves gasping for air.

As companies ramp up their investments in social technologies, many are struggling, because of cultural and organizational issues, to weave these innovations into how business is done. A recent IBM survey, The Business of Social Business, polled more than 1,100 business and tech professionals. The survey found that 62 percent plan to increase how much they spend on social business during the next three years, but only 22 percent believe their managers are ready to make these technologies and approaches part of their daily routine.

Companies realize that the way to connect with customers, clients and employees these days is through social tools. Yet, cultural attitudes, apprehension about change, uncertainty about the returns that can be gained, and concern about the risks of organizational transparency are hurdles organizations face in achieving that goal.

For instance, two-thirds of the survey respondents are not sure they sufficiently understood the impact that social technologies will have on their organizations over the next three years. Nearly three-quarters report they are under-prepared for the cultural changes that adoption of social technologies would require.

At the same time, there’s an explosion in information from structured, such as information stored on a database, and unstructured data, such as photos sent via smartphones. Which is why there’s a lot to be learned from a group of pioneering companies that are making investments in social technologies, whether it’s use of collaboration hubs, private social networks, or analytics based on social activities.

Organizations realize that just rolling out these technologies is not enough. Social business is truly transformative. And just like other truly transformative technologies, whether it’s the Internet or personal computers, companies have to rethink business as usual, reconsider cultural norms, and revamp basic management approaches to get the most out of innovations.

In the process, these leading-edge companies are turning themselves into social businesses. They are taking their external social tools and embedding them into core business processes and capabilities. They are using social approaches not only to communicate better with their customers, but also to share knowledge with their suppliers, business partners and, employees.

Some of the basic approaches that these leaders are using in putting big data to work include:

― Encourage experimentation: Organizations don’t just need to put these tools at employees’ fingertips, they need to give them the room to try out the technologies in their everyday work environment. Start by setting up forums, team rooms, and collaborative spaces. Then have managers and trainers work with employees to help them integrate them into their daily work. Encourage employees to make social practices a part of daily work by, for example, writing internal blog posts about an ongoing project. Demonstrate the usefulness to them of social networks. At my company, for instance, any employee can sign up to give or receive advice by filling out a profile on what we call a Connections site. But most importantly, let people experiment, make mistakes, and discover on their own which tools fit best into their daily work and communications.

― Create a culture of collaboration and networking: Social businesses are defined by the connections that bind people together as well as the information they share. Links form and disappear based on need and interest. People come together in ad hoc communities to solve problems. This is a very different approach from the top-down structure of most organizations. To modify a culture so that it is a true social business, companies should weave collaborative hubs and social networks into how they get work done. Executives can lead by example, using a collaborative hub for a key project, inviting employees to contribute and vet ideas.

For example, when Cemex, Mexico’s global buildings material company, wanted to expand the market for its ready-mix concrete products, it created an internal collaborative platform where employees share ideas and communities of interest are formed to tackle challenges common to locations, marketplaces and skill sets. By using its in-house expertise, Cemex reduced time to market by two-thirds.

Think creatively about social data: To weave social business into the fabric of their organizations, companies need to consider how to incorporate social metrics into their traditional enterprises and processes. Many of the companies surveyed quantify results, but they also realize that gauging the effectiveness of social approaches on cost savings is not enough. Instead, they ran pilot projects to demonstrate the hard and soft benefits of social projects or trials that compared the performance of individuals or groups using social tools against those that did not.

At the same time, by using analytics, companies have also combined traditional data about the supply chain and customers with social data so that they could make smarter decisions. That way they could pinpoint which customers were the most likely to respond to which offer or which employees came up with the most helpful answers to problems.

Social business is here to stay and it’s going to transform companies as much as it is transforming society. The companies that are getting ahead of this transition are the ones that are mapping out ways to adapt to it.

By Park Seung-yol

The writer is an associate partner, Organization & People and Social Business Consulting Service Leader, Global Business Services at IBM Korea. The opinions in this article represent his own views. ― Ed.