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As social media, technologies, and data become more broadly used within global companies, companies are building the processes and the organizational structure to grow globally as social businesses.
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Global companies are maturing in their use of social engagement tools. They are going beyond seeing social as “media” they can use to broadcast marketing messages and, in a very important business trend, weaving social tools and interactions more into their everyday, global operations.
In line with this shift, business executives’ assessment of the value of social is changing rapidly. In a 2011 survey by Deloitte and MIT Sloan Management Review (of 2,500-plus managers across 99 countries and 25 industries), only 18 percent of responding executives said they considered social “important today.” When the study was repeated in 2012, that figure doubled to 36 percent. And most of the rest saw social capabilities quickly becoming more vital: More than half of the 2012 respondents said that social would be “important within the next year.”1 The finding was supported by Deloitte’s 2013 Globalization Survey, a separate polling of 423 global executives. It found that 61 percent of these executives expect social media to become much more or somewhat more important to their company over the next three years (figure 1).2
To succeed in the years ahead, businesses will likely need the right balance of global reach and a local footprint. They will require a sharp awareness of problems when they arise and the flexibility to quickly reconfigure operations in response. Leading companies will innovate by collaborating with others. An increasing number of executives now recognize that “social business”3 offers a promise of progress across all of these dimensions. As corporate ambitions grow, so will the use of social tools. They can allow organizations to “be global” while removing many of the hurdles associated with “going global.”
The foundational change driving companies’ social engagement is the explosive growth in social media over the past decade, and most recently, on mobile devices. In just one year, between 2012 and 2013, the total global social media audience increased by an estimated 18 percent, from 1.47 billion to 1.73 billion—meaning that nearly a quarter of the world’s population is now online using social networks.4Facebook and YouTube are the largest social platforms, while China’s QZone is third.5
An important consequence of this proliferation is the connection of people globally. While North America and Western Europe are the regions with the highest social media penetration on a percentage basis, the fastest increases in social user population are occurring in India, Indonesia, Mexico, China, and Brazil.6 Already, 86 percent of Facebook’s users are outside the United States,7 while nearly 20 percent of LinkedIn’s users are in Asia.8 Unsurprisingly, given its overall population, Asia-Pacific overall has the highest raw numbers of active social media users. Within three years, the region comprising the Middle East and Africa is expected to have the second-largest social media user population.9 More interesting is the intensity of use in the Asia-Pacific region. For example, 82 percent of Thai smartphone owners access social media on their phones daily.10
Despite the explosion of social networking taking place all around them, it has taken a number of years for executives in general to finally “get” social networks and the many ways they can contribute to business performance. Meanwhile, however, individual, ordinary people have embraced the full range of activity available through social networks. They have used them to interact richly, to share content from others they like, to deepen relationships, to express themselves, and to take collective action. Ironically, businesses—which possess the highest-speed networks, the largest networks of contacts, and the deepest histories of interaction in traditional communication channels such as in-person, telephone, e-mail, and web—are today playing catch-up with their own consumers and employees as they try to tap into social networks for business value.
In a recent global study, Deloitte and MIT researchers concluded that companies progress through three stages in their use of social tools:
In a nutshell, most companies experience a social evolution from listening to conversing to collaborating, getting better along the way at managing each of these activities.
The jump in enthusiasm, and the more expansive thinking about the power of social networks, is likely the result of managers and leaders gaining more experience participating in them. Businesses began their social journey by using the new toolkit in limited, linear ways. By now, many have graduated to connections that are more rich and creative. In most industries today, there are innovative leaders whose experimentation with social is paying off, and with every smart, social move they make, their following grows.
Companies are embracing “enterprise social” platforms that provide organizations and their employees with a similar functionality to those provided by social networks like Facebook and Google+. Virgin America, for example, saw the need for an “enterprise social” platform to help address the challenges of business growth while maintaining its reputation for customer experience. Virgin America replaced its existing intranet with VXConnect, a network built on the Salesforce platform. Chatter groups let users collaborate and share critical, time-sensitive information such as weather-related issues and delays—which was used to good effect during recent storms on the East Coast of the United States. Ninety percent of Virgin America’s employees never sit at a desk or in front of a computer, yet they are able to interact regularly, creating a collaborative culture and enhancing the customer experience.14
Because the functionality of Virgin America’s Chatter is so similar to the social networks that employees use in their personal lives, adoption was instantaneous and natural.15 The same was true at Fairfax Media in Australia when, as part of a larger 2012 transformation program, it moved its corporate email to Google’s Gmail platform. During the mandatory changeover to Gmail, employees were also encouraged to adopt other Google applications at their discretion and begin using them to collaborate with their teams. Fairfax Media employees who had used the tools in other settings were invited to act as “change champions” and help their peers understand how to get value from various apps. Within three months, Fairfax Media saw 50 percent of its employees adopt Google Apps—an impressive uptake for a toolkit that was purely voluntary.16
Some companies are pushing further with proprietary social tools to include external parties, and thereby creating broader collaborative networks of customers, strategic partners, and other stakeholders. A good example of an advanced social model is the use of crowdsourcing—going beyond traditional employees as sources of ideas and seeking the input of outsiders through distributed online communities.
Today’s global businesses may have hundreds of different forms of social media presence comprising multiple blogs, platforms, and sites.
Today’s global businesses may have hundreds of different forms of social media presence comprising multiple blogs, platforms, and sites. This large digital footprint presents challenges. It makes brand consistency more difficult to manage. Organizations may not be getting the right information to the right audience. They may lack the resources or infrastructure to monitor sites effectively. The sites might not be engaging their intended audiences or generating the returns the company had hoped.
Some businesses are learning how to unify these campaigns and work at a global scale while still presenting a local feel to the customer. MasterCard, for example, has issued more than 1 billion payment cards worldwide through 25,000 financial institutions in 210 countries.17 Rather than attempt to coordinate all the data on its own, MasterCard used Adobe Social, a tool that enables marketers to collect and monitor social feedback as well as interact through established platforms such as Flickr, Foursquare, Instagram, and LinkedIn. The system allows Mastercard to assess the effectiveness of social campaigns and manage social strategies. MasterCard now has 140 people worldwide using the platform to publish on Facebook, Twitter, and Google+. More importantly, it collects all the information in one streamlined system, giving MasterCard a global view of all social activities in the company.18
Cisco Systems Inc. now incorporates social data into its overall data strategy. Because it knows it is important to monitor, triage, and respond to conversations as they happen across the global organization, it has created a kind of radar screen it calls the Social Media Listening Center. This capture of social activity is configured to allow viewers to focus on whatever aspect of Cisco’s business they are curious about, from products to business unit performance to branding campaigns.19 The scale is global, but the benefits are local.
Deloitte’s study with MIT Sloan Management Review found that many organizations encounter common barriers as they venture into social business. These include a lack of overall strategy, security concerns, and limited understanding by management.20 The result is that more than four in every five businesses has substantial room for development. In a survey conducted by Adobe of 750 marketing professionals, 88 percent of respondents said they couldn’t accurately measure the effectiveness of social campaigns, and the majority responded that determining the true return on their social investments was their biggest challenge.21
To make progress, many organizations will need to institute a strategy, a governance structure, and an education process for aligning their social efforts. They should be thinking creatively about how social business could pervade every major function and goal of the global organization.
In sales, the biggest challenge is to capture the information gained from social conversations with customers and prospects—from personal interests to experiences with competitors’ offerings to usual buying habits—and link it to the enterprise data contained in customer relationship management (CRM) systems. When the dots are connected, a sales force can gain the insight it needs to anticipate customers’ needs, enhance service and support, and even automate the delivery of tailored content and promotions.
In HR, social shows its other side—as a network of connections not to customers but to talent markets. Social engagement tools are now used heavily by recruiters and also play an increasingly important role in employee engagement and retention. In a Deloitte survey in the Asia Pacific region, we found a gap between consumers’ and employees’ needs for social tools and businesses’ ability to provide them. For example, employees without access to flexible IT policies (such as social media access) are less satisfied with their jobs. Data from Australia and New Zealand also suggest that access to social business tools could be a pivotal factor in attracting and retaining key talent.22
In many other functional areas, companies will also continue to find ways to work more effectively as social businesses. They will likely become more collaborative and open in their innovation, more empathetic and responsive in their customer service, more adept in crisis response, more transparent in social responsibility, and more engaged in investor relations. On this last point, an example is the tweet that eBay’s CEO posted on January 22, 2014 as the news swirled that activist investor Carl Icahn was applying pressure on his company to sell its payments processing unit: “Spoke w/Icahn abt PayPal spinoff idea. We believe it’s more valuable as part of @ebayinc. More on call today.”23 Clearly, social business is beginning to transform the practice of leadership.
The company GiffGaff shows how different a business can be when it is designed with a clean slate in the social era. GiffGaff sells prepaid SIM cards in the United Kingdom. It has just 14 employees and no call centers, yet it competes effectively against giant mobile phone providers. GiffGaff took a four-stage approach to social business, starting with a customer dialogue that helped it define and refine its product. All the company’s customer service is online, and it keeps support costs low through notice boards, customer generated “tips and tricks,” and peer-to-peer support. Users are encouraged to participate through a payback scheme that awards them “kudos points,” which can be redeemed for phone service or donated to charity. Kudos points also are awarded to customers who promote GiffGaff through social networks, which are the channel for most of the company’s marketing.24 Almost nothing about GiffGaff’s business, in other words, is untouched by social.
We see the same in the world’s most dynamic organizations and movements—those that are recognized for fundamental innovation. They now use social tools to leverage networks of partners and co-creators to generate value. As globalization continues, and the business environment becomes more complex, most businesses with global ambitions will become increasingly social, both to improve connections and collaboration internally, and to exert influence in networks and communities externally.
Will we see a next level of maturity in the use of social networks and tools? There will be mounting expectations by stakeholders for engagement, transparency, and accessibility, and the effects of these on the shape, management, and mission of the typical organization will be far-reaching. Leadership hierarchies featuring rigid roles and relationships to stakeholders will be examined with a focus on the need for greater flexibility. Organizations will need to define appropriate governance structures for managing their social activities—and global organizations will find this challenge to be multiplied. Indeed, our research shows that those firms claiming the greatest value from social business are also experiencing the most significant challenges with culture, language, and business process issues as they work across countries and regions.25
Social business encourages transparency and distributed innovation, where anyone is empowered to create value. By breaking down functional, organizational, and global barriers, it will upend the nature of work. Business interactions are no longer bilateral conversations with co-workers or customers, but an ongoing dialogue with the world. In the years ahead, social business will likely lead to remarkable shifts in how we define our organizations and their place in the world.
By Lisa Gansky, entrepreneur, investor, speaker, chief instigator of Mesh Labs, and author of the bestselling book The Mesh: Why the Future of Business is Sharing
As organizations mature and embrace social tools, it is important that they see social as the start of something, not just a milestone to reach. Social business means that communication becomes personal, authentic, and timely. It means that the boundaries of businesses get reshaped, the “surface area” increased, so that there are more touchpoints with the world outside and more ways to create value with others. And it means organizations can become pollinators of ideas, both locally and across geographic boundaries.
I see social business as the core asset for improving the connections between different interests and communities within organizations. Even more powerfully, there is more capacity and necessity to interact with the environment outside. Today, global corporations exist within ecosystems along with communities of customers—individuals with incredible talent and investment coming from many different places. Social business creates a semi-permeable membrane that allows ideas to flow more freely than before. We are living in a time when “many-to-many” connections promote vitality and resilience of brands, communities, and our economy.
General Electric is a great example of a well-established, traditional organization that is using social tools in a sophisticated fashion. Look at the company’s website today, and you’ll find it surprising. Instead of an “industrial” outward face describing its technical products and services, the home page invites engagement through Twitter feeds, children’s art, and 3D printing stories. This is a powerful illustration of how conventional value chains are dissolving and how design and manufacturing are being transformed. In 2013, General Electric launched a jet engine bracket challenge on its website. They asked participants to submit designs to optimize an existing bracket. Seven winners were announced (none of which were from the United States), and their designs were prototyped and additively manufactured. The result was a much lighter product, providing promising savings in materials and fuel costs.
General Electric, along with many other organizations, is building its “muscles” around social business. Like exercising, they are starting programs, learning what works, refining their approaches and, over time, building their reputations. Define, refine, and then scale what works. It is also quite likely that no product or business model scales globally without geo-specific modifications. In this way, platforms enable an iterative and continuous cycle of defining and refining models, offers, products, and teams.
I think that global organizations have a tremendous opportunity—and responsibility—to be effective curators and connectors of ideas across both industry and geographical boundaries. We know that there are talented people in all corners of the world—how does one discover, build trust with, and effectively connect with them? There is now an imperative for global organizations to explore how they can utilize social tools to build trust and engagement with pockets of local talent. There is an obvious partnership between nimble and highly specialized independent talent and the reach of a well-established, global corporation. Companies that learn first about how effectively to build trust and pollinate winning ideas will likely reap the benefits for themselves and for the broader ecosystem and community.
While “social media” caught on instantly and globally, “social business” has taken longer to get going. There are few truly sophisticated corporate users of social. But as social media, technologies, and data are more broadly used within global companies, maturity is growing. Executives are realizing that establishing a social media presence and acquiring the associated technology is simply the first step of the journey. They are building the processes and the organizational structure to succeed as social businesses.26
For many, the development of social business will mean very real and radical changes—not only to businesses’ relationships with customers, but to their operations and to the very nature of their organizations. With each year, more businesses will invest in and grow their social business capabilities. They should—both to facilitate coordinated activities across the global enterprise, and to forge connections to the communities and ecosystems that will determine their future success.